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Spotlight Stocks: Apple, Fannie Mae, Citigroup, General Electric


Friday's top stories and stocks with potential to move.


Stocks to watch for Friday, July 11, 2008:

  • Apple (AAPL) officially released its much awaited 3G iPhone at midnight and saw long lines of anxious buyers across Europe, Asia and even New Zealand, where the sales kicked off. Softbank Corp, which sells the iPhone in Japan, said over 1,500 people lined up outside its flagship Tokyo store, reported Reuters. The site also said analysts expect the new iPhone to draw as many as 10.5 million buyers worldwide this year, and with 6 million of the older devices already in use, help Apple beat its target of selling 10 million devices by the end of 2008.

  • Ashland (ASH) will purchase chemical company Hercules (HPR) for $2.6 million. This comes in the wake of another chemical deal announced yesterday involving the sale of Rohm & Haas (ROH) to Dow Chemical (DOW) for $15.3 billion. The Wall Street Journal reports Ashland will pay $18.60 in cash and 0.093 share of Ashland for each share of Hercules, valuing that stock at $23.01 each, a 38% premium from Thursday's close.

  • Citigroup (C) has agreed to sell its German retail bank, which includes its Duesseldorf-based Citibank Privatkunden AG & Co. KGaA, along with some affiliates, for $7.7 billion to France's Credit Mutuel. The Associated Press reports the deal is expected to close by 4Q pending regulatory approval. The German operations earned 365 million euros ($573.3 million) in 2007 and had net assets of 944 million euros ($1.5 billion). Citigroup said the deal would result in a post-tax gain of $4 billion.

  • General Electric (GE) reported 2Q earnings of $5.07 billion, or 51 cents a share, down 6% from $5.38 billion, or 52 cents a share a year ago. Total revenue went up to $46.89 billion from $42.38 billion a year earlier. On the basis of continuing operations, GE says it earned $5.39 billion, or 54 cents per share, in line with analyst expectations. The company also will reportedly sell its Japanese consumer finance operation to Shinsei Bank Ltd for 580 billion yen ($5.4 billion).

  • Fannie Mae (FNM) and Freddie Mac (FRE) saw their shares drop sharply again in Thursday trading. FRE fell 22% to $8 in 4 p.m. composite trading on the New York Stock Exchange while FNM fell 14% to $13.20. The Wall Street Journal reported both stocks are down more than 80% from a year ago and at their lowest closing levels in more than 16 years. The possibility for either or both of these companies to fall under government control remains in play.

Market Recap

  • Asian trading closed with the Hang Seng +1.66%, Nikkei -0.21%, Sensex -3.28%, Taiwan +2.39% and Shanghai -0.65%.

  • A quick check across the pond finds the CAC -1.09%, DAX -1.50%, FTSE -0.58%, ATX -0.21%, Swiss Mkt. -0.56% and Stockholm -0.96%.

  • In commodity land, crude oil is higher +3.38 to 145.00 and gold is also rising +10.2 to 952.2 this morning.
No positions in stocks mentioned.

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