Filed under: Before the bell, Analyst reports, Analyst upgrades and downgrades, Deals, Apple Inc (AAPL), Market matters, Nokia Corp. (NOK), Advanced Micro Dev (AMD), Altria Group (MO), Boeing Co (BA), Federal Natl Mtge (FNM), ConocoPhillips (COP), Goldman Sachs Group (GS), Washington Mutual (WM), Economic data, Marvell Technology Group (MRVL), Lehman Br Holdings (LEH)
Stock futures jumped higher, signaling a stock markets could have a significant rally when they open this morning Monday morning. Investors were relieved the government bailed out Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE), taking over the mortgage financiers giants, perhaps triggering a bottom of the credit crisis as trillions of dollars in mortgage-backed securities won’t default now.
Still, Merrill Lynch analysts said Monday they believe it’s still too early for investors to be overweight in financial stocks. Instead, rallies in the sector should still be used as opportunities to sell, Merrill stated. The Fannie/Freddie bailout is solution to a one-off problem rather than solution of a systemic problem, it added. Indeed, it was only Friday that regulators shut down the 11th bank this year, Silver State Bank. There’s no pre-market trading on FNM and FRE stocks. Analyst calls at the end.
Meanwhile, adding to positive sentiment, Altria (NYSE: MO) closed the deal talked about Friday to buy smokeless tobacco maker UST (NYSE: UST) for $11.7 billion, including the assumption of $1.3 billion in assumed debt. That’s $69.50 per share in cash, which is a 29% premium to its three-month average stock price. Altria expects the acquisition to increase adjusted diluted earnings per share within twelve months of closing. Altria stock is trading 1.3% higher in pre-market trading.
And another deal is in the works as ConocoPhillips (NYSE: COP) has concurred to pay up to $8 billion for a half-share in the coal seam gas assets of Australia’s Origin Energy Ltd. Origin will handle the coal seam gas production while ConocoPhillips will operate the downstream refinery.
The rattle of machines working won’t be heard at Boeing (NYSE: BA) today as members of its largest labor group walked off the job Saturday after they voted to strike Wednesday and extended contract negotiations failed. The most recent strike of Boeing machinists lasted four weeks and hurt the company, and no doubt this time Boeing, which is already late on its delivery on the 787 Dreamliner, will injured again. For each day that the union members refuse to assemble airplanes, Boeing loses $100 million.
And while investors might hail the government action on Fannie/Freddie, not all is well with financials yet. Lehman Brothers Holdings Inc. (NYSE: LEH) is shaking up its senior management, including the departure of some of its international operations chiefs. CEO Fuld, however, remains in place. Lehman might also split into two separately-listed companies so as to rid itself of debt tied to bad commercial mortgages, the British newspaper Sunday Times reported. LEH stock is up 8.4% in pre-market trading, partly due to the news, partly due to overall financials rally following the Fannie/Freddie action, and partly due to a Merrill Lynch upgrade from Underperform to Neutral.
Over at Washington Mutual Inc. (NYSE: WM) the CEO has been forced out. Kerry Killinger is being ousted as chief executive, and succeeding him will be Alan Fishman, currently chairman of New York commercial mortgage broker Meridian Capital Group. WM shares are jumping over 16.5% in pre-market trading.
The Mail Online states that Apple Inc. (NASDAQ: AAPL) has finally admitted that Kane Kramer, a British man who left school at 15, is the inventor behind the iPod, but has still not seen a penny from his invention.
More analyst calls:
- Banc of America upgraded Advanced Micro Devices (NYSE: AMD) from Sell to Neutral.
- Morgan Keegan upgraded Marvell (NASDAQ: MRVL) from Market Perform to Outperform.
- Merrill Lynch upgraded Goldman Sachs Group Inc. (NYSE: GS) from Underperform to Purchase.
- Deutsche Securities downgraded Nokia (NYSE: NOK) from Buy to Hold.
- Many firms downgraded and updated target prices on Fannie and Freddie. Goldman’s target prices are $1, Merril’s are 50 cents.
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