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Stocks to Watch: Freddie Mac, MBIA, Washington Mutual


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


Stocks to watch for Tuesday, December 11, 2007:

  • Boeing's (BA) board has approved a 14% increase in quarterly dividend to 40 cents a share payable March 7 to shareholders of record Feb. 8.
  • Freddie Mac (FRE) announced it will reduce the amount of overdue loans it purchases from investors in mortgage securities guaranteed by the company, allowing it to suffer less large, immediate losses associated with these loans. The Wall Street Journal reports Fannie Mae (FNM) plans to follow FRE's lead.
  • Lam Research (LRCX) has agreed to purchase SEZ Group, which supplies single-wafer clean technology and products, for $568 mln and will also buy SEZ's outstanding shares at $33.69 a share.
  • MBIA (MBI) has received a commitment of at least $1 bln from private-equity firm Warburg Pincus, aimed at helping the MBI's capital level and maintaining its triple-A credit rating. Warburg will purchase MBIA shares at $31 apiece and also will receive warrants allowing it to buy an additional 16.1 mln common shares at $40 per share over the next seven years.
  • Texas Instruments (TXN) now expects its quarterly revenue to be between $3.5 bln and $3.66 bln, narrowing from the previous range of $3.4 bln to $3.68 bln. It also said it expects earnings of between 50 and 54 cents a share, compared with previous estimates of 48 to 54 cents a share.
  • Washington Mutual (WM) plans to raise $2.5 bln in a preferred stock offering. The company will also cut its dividend to 15 cents from 56 cents in an attempt to raise $3.7 bln in additional capital. WM will be cutting $500 mln in non-interest expenses through its Home-Loan business and other expenses. Lastly, WM will discontinue all remaining lending through its subprime mortgage channel; close 190 of 336 home loan centers and sales offices; and eliminate 2,600 Home Loans positions, or about 22% percent of its Home Loans staff.

Market Recap

  • Asian trading closed with the Hang Seng +2.55%, Nikkei +0.76%, Sensex +1.81%, Taiwan +0.47% and Shanghai +0.25%.
  • A quick check across the pond finds the CAC -0.44%, DAX -0.16%, FTSE -0.41%, ATX -0.33%, Swiss Mkt. -0.32% and Stockholm -0.39%.
  • Crude oil is trading higher +0.49 to 88.35 while gold is lower -2.9 to 810.6 this morning.
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