Markets & Finance

New Century, Other Subprime Lenders Tumble


Celanese plans refinancing; A&P puts Pathmark in its cart; plus more of Monday's headlines

From Standard & Poor's Equity ResearchNew Century Financial (NEW) shares plunged Monday following the company's disclosure on Friday that a U.S. attorney and the New York Stock Exchange are conducting investigations into the trading of the company's stock. Stifel Nicolaus downgrades to sell from hold.

Fremont General (FMT) shares dropped monday after the company said it intends to exit its subprime residential real estate lending operations. To assist in evaluation of its alternatives, Fremont has retained Credit Suisse Securities LLC as its financial advisor.

Lehman reportedly downgrades Countrywide Financial (CFC) to equal-weight from overweight. Shares were lower.

Stifel Nicolaus downgrades Accredited Home Lenders (LEND) and NovaStar Financial (NFI) to sell from hold. Shares of both copmpanies were lower.

Banc of America cut its price target on IndyMac Bancorp (BKS) to $27 from $33, and reiterated its sell rating. The shares declined Monday.

Barnes & Noble (BKS) shares fell after the bookseller affirmed it will be in the low-to-mid range of previously announced fourth quarter and full year EPS of $1.86-$1.96, $2.20-$2.30, respectively. The company posted a slight drop in fourth-quarter same-store sales. S&P reiterates hold.

JP Morgan reportedly downgrades Palm (PALM) to underweight. The stock rose on Friday on continued takeover speculation.

Glaxosmithkline (GSK) says new studies indicate the company's pre-pandemic influenza vaccine can protect against different strains of H5N1.

Credit Suisse upgrades Chicago Mercantile Exchange Holdings (CME) to outperform from neutral, raises target to $650. The firm says continuing market volatility should offer fundamental support to the Merc.

Telephone & Data Systems (TDS) says it will not offer to buy remaining stake in U.S. Cellular (USM) it does not currently own. TDS currently holds 80.7% stock in U.S. Cellular.

Celanese (CE) plans to refinance its senior debt and credit lines, and buy back about $400 million of its shares in a modified Dutch auction tender offer. The company says the refinancing, upon completion, will reduce its debt by more than $200 million.

Banc of America upgrades Fresenius Medical (FMS) to buy from neutral, and raises its price target on the shares to $57.

Pathmark Stores (PTMK) agrees to be acquired by Great Atlantic & Pacific Tea Co. (GAP) in a deal valued at about $1.3 billion in cash, stock, and debt assumption. Terms of the deal call for Pathmark holders to get $9.00 in cash and 0.12963 share of A&P stock for each share held.

Regal Entertainment (RGC) declares an extraordinary dividend of $2 per Cl. A and Cl. B share, payable April 13 to holders of record March 28.

Nokia (NOK) says Vice President Paul J. Collins has reached the company board's retirement age of 70 years, and will therefore not stand for re-election. The company notes a board committee in May plans to propose the number of board members be 11.


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