Movers: Countrywide, Delta Air Lines, Capital One, Target, Gap

Thursday's stocks in the news

From Standard & Poor's Equity Research

Countrywide Financial (CFC) shares surge 48% on a Wall Street Journal report that Bank of America (BAC) is close to buying the struggling mortgage lender.

Delta Air Lines (DAL) rises after the Wall Street Journal reports DAL board to consider formal merger talks with Northwest Airlines (NWA) and UAL (UAUA). S&P reiterates hold on DAL.

Gap (GPS) falls after posting 6% December same-store sales drop, 6% total sales drop.

Capital One Financial (COF) sees fourth quarter EPS of about $0.60, 2007 EPS of about $3.97, below its prior expectation of about $5.00. It says the reduction in expected EPS is driven primarily by increased provision expense, additional legal reserves established in the fourth quarter.

Target (TGT) posts 5% lower December same-store sales (reported basis), 0.1% higher total sales. On adjusted basis, December same-store sale rose 0.6%. Says Decmber sales were in line with mid-month update provided on Decmber 24; as a result, it continues to believe that fourth quarter EPS will not meet last year's performance.

Wal-Mart Stores (WMT) expects January same-store sales to run at about 2%. It anticipates fourth quarter EPS guidance within previously stated guidance of $0.99-$1.03 from continuing operations, however, notes fourth quarter EPS will be pressured by higher interest expense vs. last year. Posts 2.4% higher Decmber total U.S. comp-store sales (excluding fuel), 8.4% higher total sales.

Alcoa (AA) posts $0.74 (including $0.38 gain from restructuring adjustment and a tax benefit) vs. $0.29 a year ago, fourth quarter EPS from continuing ops despite 5.4% revenue decline, due to lower LME prices and the exclusion of results from the soft alloy extrusion business.

Freddie Mac (FRE) falls after Moody's Investors Services places FRE A-Bank Financial Strength Rating (BFSR) on review for possible downgrade reflecting the rating agency's view that it may experience higher credit losses than Moody's previous expectations.

The Wall Street Journal reports that Citigroup (C) and Merrill Lynch (MER) are in talks to get additional capital infusions from investors, primarily foreign governments. Citigroup could get as much as $10 billion, while Merill is expected to get $3-$4 billion.

Huntington Bancshares (HBAN) sees fourth quarter loss of $0.65 per share, which reflects net negative impact from significant items of $1.00 consisting of costs associated with Franklin Credit Management Corp., market-related losses, merger-related costs, VISA indemnification charge, additions to litigation reserves on existing cases.

Men's Wearhouse (MW) cuts $0.43-$0.48 fourth quarter EPS guidance to $0.16-$0.18, bringing the fiscal year 2008 view to $2.60-$2.62 (from previous estimate of $2.87-$2.92). It says "substantially" lower traffic levels in Decmber at all of its retail stores, in both U.S. and Canada, drove weaker-than-planned comparable store sales results. It expects continued weak traffic trends this month.

GameStop (GME) posts a 35% rise in total sales for 2007 holiday period, 20% rise in comp-store sales.

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