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Spotlight Stocks: Hewlett-Packard, JPMorgan, PetroChina, Rio Tinto

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

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Stocks to watch for Tuesday, August 26, 2008:

  • Delta Airlines (DAL) tapped a $1 billion loan in front of its planned merger with Northwest Airlines (NWA), reported The Wall Street Journal. This loan was made available to the company when it emerged from bankruptcy protection last year and is now aimed at increasing the company's cash balance. Additionally, the company said it had renegotiated its credit-card agreements through the end of 2011 "to ensure that credit-card processors don't begin to "hold back" revenue they collect from the airline's ticket sales," reported the WSJ.

  • Hewlett-Packard (HPQ) is expected to complete an acquisition of Electronic Data Systems (EDS) worth $13.25 billion. A group from both companies has been working on an integration plan for EDS's 140,000 plus employees worldwide, reported the WSJ. HPQ's goal is and has been to focus on software and services, which will be aided by EDS's outsourcing unit.

  • JPMorgan (JPM) said the value of its investments in Fannie Mae (FNM) and Freddie Mac (FRE) was cut in half to $600 million in the quarter, which is expected to decrease its earnings. Concerns are mounting that if the government steps in to bail out these companies, investments like these held by JPM could be wiped out, reported Reuters.

  • PetroChina (PTR) now expects its 1H net profit, due out Wednesday, will fall by at least a third due to losses in its refining business stemming from rising crude oil prices. The Chinese company's market value had briefly topped $1 trillion. In the first quarter, PetroChina reported that net profit plunged 31.5 percent to 28.8 billion yuan.

  • Rio Tinto (RTP) reported 1H results that beat estimates. The mining company posted a 55% increase in profits citing its 2007 takeover of Alcan and strong Chinese demand. Profit for the six months through June 30 surged 112.5 percent to $6.91 billion from $3.25 billion the year before, reported the Associated Press. The company also declared a final dividend of 68 US cents per share, up 31 percent on the previous half.


Market Recap

  • Asian trading closed with the Hang Seng -0.23%, Nikkei -0.78%, Sensex +0.22%, Taiwan -0.94% and Shanghai -2.62%.

  • A quick check of Europe has the CAC -0.60%, DAX -0.23%, FTSE -1.84%, ATX -0.67% and Stockholm -0.24%.

  • In commodities, crude oil is trading lower -1.87 to 113.25 and gold is also down -7.6 to 819.8 this morning.
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No positions in stocks mentioned.

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