Stocks Rally on Data, Mortgage News

(page 2 of 2)

Bond-market guru Bill Gross of PIMCO sees more Fed rate cuts ahead. "Stand by for a tumultuous 2008 as the market struggles to move from the shadows back into the sunlight of sounder banking and financial management, accompanied by Fed Funds levels at 3% or lower," he wrote in a Dec. 5 note.

January crude oil futures fell 97 cents to $87.35 per barrel in NYMEX trading Wednesday as a weekly Dept. of Energy report showed crude oil inventories fell by a more than expected 8.0 million barrels to 305.2 million barrels as imports rose fell an average 980,000 barrels. Inventories are still in upper half of their average range for this time of year. OPEC plans an extraordinary meeting Feb. 1 to assess market conditions.

Among the stocks in the news on Wednesday, mortgage insurer MBIA (MBI) saw its shares slump nearly 16% on the session. Action Economics cites a comment from rating agency Moody's that the bond insurer faced greater risk of a capital shortfall than it had previously reported back in November.

Fannie Mae (FNM) will cut its dividend 30% and raise $7 billion through the sale of preferred stock. The mortgage financier is trying to raise cash, in part to prepare for more losses on mortgage debt.

Comcast (CMCSA) shares slumped after the cable TV giant said it now expects revenue generating units (RGUs) to increase by about 6 million to 57 million in 2007, vs. previous guidance of about 6.5 million additions, reflecting an increasingly challenging economic and competitive environment.

US Airways (LCC) reported revenue passenger miles in November fell 4.6% from a year ago, to 4.7 billion. Total capacity, of 6.1 billion available seat miles, was also down 4.6%.

Jones Soda's (JSDA) chairman and chief executive, Peter van Stolk, will resign at the end of the year as planned.

Western Union (WU) announced a $1 billion stock buyback program, adding to $300 million in share repurchases that it has yet to complete.

MGM Mirage (MGM) set a 20-million share buyback program.

Panera Bread (PNRA) reported November sales for comparable bakery-cafes were up 3.2%.

European stocks finished higher Wednesday. In London, the FTSE 100 index was up 2.83% to 6,493.80. In Paris, the CAC 40 index rose 2.02% to 5,659.07. Germany's DAX index moved 1.74% higher to 7,944.77.

Indexes at major Asian markets were mostly positive as well. Japan's Nikkei 225 index rose 0.83% to 15,608.88. In Hong Kong, the Hang Seng index gained 1.61% to 29,345.45. The Shanghai composite index jumped 2.58% to 5,042.65.

Treasury market

Treasuries fell, pressured by a big increase in the ADP employment report that drove speculation of strong November payrolls data to be released this Friday. Stock market strength also contributed to a bearish backdrop for bonds. The 10-year note fell 07/32 to 102-22/32 for a yield of 4.92%. The 30-year bond tumbled 24/32 to 109-27/32 for a yield of 4.40%.