Stocks Sink on Inflation News

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On Thursday, the airline announced that Lufthansa had agreed to buy 42 million JetBlue shares, 19% of the company, for about $300 million.

Leap Wireless (LEAP) reported a loss in the third quarter of 64 cents, vs. a 1 cent loss a year ago. Revenue rose 40%. Also affecting the stock, which was fell 2.5% Friday: Harbert Management boosted its stake in Leap to 12.3%.

Apparel retailer Quiksilver (ZQK) reported pro forma fourth quarter EPS of 51 cents, the same as a year earlier, despite a 6% revenue rise. The company sees fiscal 2008 revenue of $2.7 billion and EPS of approximately 70 cents; it expects about $600 million in first quarter revenue and a "small" loss, reflecting the effects of a challenging winter equipment market.

Evergreen Solar (ESLR) signed a 10-year polysilicon supply agreement with Silicium de Provence S.A.S. (Silpro) with shipments beginning in mid 2010.

In the energy market Friday, January NYMEX crude oil futures fell 97 cents to $91.28 per barrel. A stronger dollar and worries about a U.S. economic slowdown were behind the price drop, Action Economics says. However, the International Energy Agency raised its forecast for global 2008 crude demand by 115,000 barrels a day to 87.8 million barrels. But crude was off its $93.38 highs as the IEA said there are signs OPEC has been raising supply in December after cutting back in October.

The trade-weighted U.S. dollar index hit a six-week high of 77.36 Friday. Action Economics reports the dollar's tone has improved after Thursday's strong PPI and retail sales data. There is also speculation that some of the dollar demand may been from U.S. banks repatriating dollars to shore up their balance sheets, with reports that the net impact could see amounts anywhere between $10 billion to $20 billion.

In equity markets outside the U.S. Friday, indexes in London, Paris, and Frankfurt were all higher. Tokyo's benchmark index fell 0.14%, Hong Kong fell 0.65%, while Shanghai rose 1.01%.

Treasury Market

Treasury prices fell on inflation fears. The 10-year note dropped 07/32 to 100-04/32 for a yield of 4.23%; 30-year bond also slid 07/32, trading at 105-14/32 for a yield of 4.66%.