Stocks Slump in Post-FOMC Reversal

(page 2 of 2)

Fed officials have started talks with bond dealers to use so-called reverse repurchase agreements to drain some of the cash the central bank has pumped into the economy, according to people with knowledge of the discussions cited by Bloomberg.

Treasury Secretary Timothy Geithner said in Congressional testimony Wednesday that strengthening the financial system to the point that failure of large firms could occur without significant collateral damage was the main goal of reforms. He argued that separating rule writing from enforcement is a recipe for bad regulation and he wants to keep financial firms from facing a choice of either losing revenue or matching risk practices of competitors.

According to press reports, the U.S. will urge world leaders this week to launch a new push in November to rebalance the world economy. A document outlining the U.S. position ahead of the Sept. 24-25 Group of 20 summit in Pittsburgh said exporters should consume more, while debtors like the United States ought to boost savings.

In economic news Wednesday, the MBA mortgage applications index rebounded 12.8% in the week ended Sept. 18.

The ABC News consumer comfort index rose 3 points to -46 in the week ended Sept. 20 from -49 a week earlier. The survey said 10% of respondents expressed confidence in the economy, compared with 9% the week before. Also, 45% of those polled said their own finances were in good standing, up from 44% in the prior week. In assessing the buying climate, 26% of respondents said it was good, up from 24% a week earlier.

In company news Wednesday, General Mills (GIS) posted first-quarter earnings per share (EPS) of $1.25, vs. $0.79 one yer earlier, on a 0.6% sales rise. Wall Street Street was looking for EPS of $1.03. The maker of Cheerios and Betty Crocker products cited solid growth in US retail net sales. The company raised its $4.20-$4.25 EPS estimate for 2009 to $4.40-$4.45.

Disk-drive maker Seagate Technology (STX) expects first-quarter revenue to be at or slightly above high end of its original guidance of $2.4 billion-$2.6 billion.

H.B. Fuller (FUL), a maker of adhasives and paints, eported third-quartr EPS of $0.72, vs. $0.44 one year earlier, on an $18.8 million (pre-tax) one-time gain related to settlement of a lawsuit filed against the former owners of the Roanoke Cos. Group, a business acquired by Fuller in 2006. Excluding the settlement, EPS were $0.48, vs. Wall Street's forecast of $0.38. Revenue fell 13% due to lower volume and unfavorable foreign currency translation.

Freddie Mac (FRE) announced that Ross J. Kari, a veteran finance executive, has been appointed CFO, effective Oct. 12.

Business Exchange

Track and share business topics across the Web.