Before the bell: Stocks head higher; FRE, LEH, AAPL, FL, PSUN, GPS …
Posted by: in Latest NewsFiled under: Before the bell, Earnings reports, Analyst reports, Analyst upgrades and downgrades, Deals, Google (GOOG), Apple Inc (AAPL), General Motors (GM), Market matters, Aon Corp (AOC), Federal Natl Mtge (FNM), Gap Inc (GPS), Verizon Communications (VZ), Oil, Lehman Br Holdings (LEH), Federal Reserve
U.S. stock futures were higher this morning, pointing to a potential positive start on Wall Street. Investors this morning await Federal Reserve Chairman Ben Bernanke speech on financial stability scheduled for 10:00 a.m. from the Fed’s annual retreat at Jackson Hole. In the face of current financial turmoil, namely talk of a government bailout for Fannie and Freddie, as well as troubles at Lehman, Bernanke’s speech will likely be today’s highlight. Meanwhile, oil dropped a little from Thursday’s advance.
Indeed, the Wall Street Journal reports that Freddie Mac (NYSE: FRE) “executives are sounding out private-equity firms and other investors about the possibility of buying new common or preferred shares in the mortgage company.” But of course, investors are worries their investments in Freddie or Fannie Mae (NYSE: FNM) may be lost in case of a government bailout. Even Warren Buffett opined on the matter on CNBC this morning, saying he expects the government to take action to support troubled mortgage financiers.
Lehman Brothers (NYSE: LEH) is rebounding this morning after an analyst at Ladenburg Thalmann upgraded LEH to Purchase Thursday, saying it is vulnerable to a hostile takeover.
Verizon Communications (NYSE: VZ) is close to an agreement with Google (NASDAQ: GOOG), according to the Wall Street Journal. Conceding they need help with search, the deal could make Google the default search provider on Verizon devices.
Apparel retailer The Gap, Inc. (NASDAQ: GPS) reported a 51% jump in quarterly profit after the market close Thursday. Cost-cutting efforts and tight inventory controls helped offset a drop in sales. Gap topped estimates on both earnings and sales. Gap shares climbed 3.7% in after-hours trading.
Apple Inc. (NASDAQ: AAPL) is having some controversial news these days. It seems that Orange, Poland’s largest mobile operator, paid people to line up in front of stores as it rolled out the iPhone there Friday. While at least it wasn’t Apple that paid these “actors,” it begs the question of how iPhone sales are faring outside the U.S.
Meanwhile, BusinessWeek clues us into Apple’s ambitious plans for the iPhone, which include making at least 40 million iPhones in the next year. Could Apple plans succeed in light of the global economic downturn?
Big movers this morning include Foot Locker (NYSE: FL) whose shares are climbing over14% in premarket trading after the athletic apparel retailer posted better-than-expected results for the second quarter. Pacific Sunwear (NASDAQ: PSUN) shares, on the other hand, are down over 26% in premarket trading after “the teen retailer issued a weak outlook that resulted in a series of investment downgrades.”
In deal news, Aon (NYSE: AOC) said on Friday it’s going to purchase Britain’s Benfield Group for 738 million pounds ($1.4 billion) — a 29% premium to Thursday’s close — as the reinsurance brokerage tries to expand its operations. Meanwhile, General Motors Corp. (NYSE: GM) actually had “initial expressions of interest from potential buyers of its Hummer brand,” Chief Executive Rick Wagoner stated Thursday.
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