Movers: General Motors, AIG, Circuit City, American Capital

Stocks in the news Monday

From Standard & Poor's Equity Research

General Motors (GM) - Deutsche Bank reportedly downgrades GM to sell from hold, with an price target put at $0.00. Barclays downgrades to underweight from equal-weight.

American International Group (AIG) - The Federal Reserve and U.S. Treasury restructure the government's financial support to AIG. The Treasury will buy $40 billion of newly issued AIG preferred shares under TARP (allows Fed to reduce from $85 billion to $60 billion the total amount available under credit facility established by New York Fed on Sept. 16, 2008); interest rate on facility will be reduced to 3-month Libor plus 300 bps from current rate of 3-month Libor plus 850 bps, and fee on undrawn funds will be reduced to 75 bps from 850 bps. Separately, AIG posts $9.05 third quarter loss, vs. EPS of $1.19. S&P keeps hold.

Circuit City Stores (CC) files for Chapter 11 bankruptcy protection, saying it has $3.4 billion in assets and $2.32 billion in debt as of Aug. 31.

American Capital Ltd. (ACAS) posts $0.72, vs. $1.18, third quarter EPS on 10% drop in total operating income. To pay no further dividends for the remainder of 2008. Separately, ACAS to acquire all shares of European Capital held by other investors (32.3%) for total consideration of $158 million; ACAS currently owns 67.7% of European Capital.

AT&T (T) and Centennial Communications (CYCL) announce that AT&T plans to acquire CYCL for $944 million in cash, or $8.50 per share.

Fannie Mae (FNM) posts $13.00 third quarter loss, vs. $1.56 loss a year ago, on $21.4 billion non-cash charge to establish a valuation allowance against deferred tax assets, $9.2 billion in credit-related expenses arising from the ongoing deterioration in mortgage credit conditions and declining home prices, and 6.2% drop in total interest income.

McDonald's (MCD) posts 8.2% higher October global comp-store sales. Reports 5.3% higher U.S. sales, 9.8% higher sales in Europe, 11.5% higher sales in Asia/Pacific, Middle East and Africa.

Fairchild Semiconductor International (FCS) now expects fourth quarter revenue to be between $338-$360 million, a sequential decline of 16%-21%. Gross margin is now expected to be down 100bps-200bps due to lower revenue, and co. expects to cut R&D, SG&A spend to $73-$76 million.

Beazer Homes USA (BZH) says fourth quarter home closings were down 38.2% from same period year ago, net new home orders were up 10.3%, but fourth quarter cancellation rate of 45.7% was sequentially higher than the 36.8% rate for third quarter of this year, as market conditions continued to deteriorate during fourth quarter amid further erosion of consumer confidence, heightened concerns about the overall economy, and disruptions in the financial and credit markets.

MBIA Inc. (MBI) - Moody's Investors Service announces that it has downgraded to Baa1 from A2 the insurance financial strength rating of MBIA Insurance Corp. ("MBIA") and supported insurance companies. Moody's also downgrades the debt ratings of MBIA (senior unsecured debt to Ba1 from Baa2) and related financing trusts.

Brocade Communications (BRCD) expects fourth quarter revenue to be in the range of $396-$400 million, above previous guidance range of $375-$385 million. Expects fourth quarter non-GAAP EPS of about $0.18-$0.20, above previous forecast of $0.15-$0.16.

Foundry Networks (FDRY) and Brocade sign an amendment to the definitive agreement, which provides for the acquisition of the outstanding shares of FDRY by BRCD. Under revised terms, FDRY stockholders would be entitled to receive $16.50 per share in an all-cash transaction at the closing of the deal, as previously announced on Oct. 29.

Energy Conversion Devices (ENER) posts $0.29, vs. $0.24, first quarter EPS on 16% revenue rise. Sees $100-$108 million second quarter revenue, $455-$485 million 2009 revenue.

Xenoport (XNPT) and GlaxoSmithKline (GSK) say New Drug Application (NDA) for Solzira Extended Release Tablets for the treatment of moderate-to-severe primary Restless Legs Syndrome (RLS) has been withdrawn. FDA has requested that the data in a single study be reformatted. Resubmission will lead to a delay in the receipt by XNPT of milestone payments of $23 million from GSK and Astellas Pharma, which are associated with the acceptance by FDA of the NDA for Solzira.