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Spotlight Stocks: Boeing, Fannie Mae, Heinz, Lehman


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


Stocks to watch for Thursday, August 21, 2008:

  • Boeing (BA) will begin negotiations with its union machinists in order to avoid a potential strike as it hopes to make inroads against mounting pension and health-insurance costs, reported The Wall Street Journal. The International Association of Machinists and Aerospace Workers will seek improved policy on health care, pensions and job security.

  • Fannie Mae (FNM) and Freddie Mac (FRE) have been assured by the US Treasury that it does not expect to have to use bailout action in order to rescue the beleaguered mortgage giants. This despite being given the green light by Congress to extend credit lines to the companies. The Treasury faces the issue of rising borrowing costs at FNM and FRE, which could translate into higher mortgage rates for prospective homebuyers, thereby prolonging the housing slump, reported the Financial Times.

  • Heinz (HNZ) reported fiscal 1Q net income of $229 million, or 72 cents a share, up 11% from $205 million or 63 cents a share a year ago. The numbers beat analyst expectations by 6 cents. Sales at the company rose to $2.58 billion. HNZ cited strong sales of frozen entrees in the U.S. and dumplings in China for the gain. Additionally, the company raised its forecast for full-year earnings.

  • Lehman Brothers (LEH) failed to reach an agreement with South Korean and Chinese parties in secret meetings held to discuss the sale of up to a 50% stake in the bank's shares. Sources told the FT that Lehman's asking price was too high. The company's 3Q earnings report, due out in September, are expected to include writedowns of $4 billion. Additionally, Lehman is considering selling all or part of its holdings, including its troubled $40 billion commercial real estate portfolio and its asset management arm, which includes Neuberger Berman.

Market Recap

  • Asian trading closed with the Hang Seng -2.58%, Nikkei -0.77%, Sensex -2.96%, Taiwan -1.74% and Shanghai -3.63%.

  • Over in Europe, we find the CAC -1.11%, DAX -0.79%, FTSE -0.37%, ATX -0.29%, Swiss Market -0.97% and Stockholm -0.16%.

  • In commodities, crude oil is trading higher +1.66 to 117.22 and gold is also up +1.5 to 811.8 this morning.
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No positions in stocks mentioned.

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