Markets & Finance

Movers: Ambac, MBIA, Verizon, Borders, Continental, Wal-Mart, BJ's Wholesale


Thursday's stocks in the news

From Standard & Poor's Equity ResearchS&P's Ratings Services (which operates separately from S&P Equity Research) downgrades Ambac Financial Group (ABK) and MBIA Inc.(MBI) to 'A' and 'A-' from 'AA' and 'AA-', respectively, and placed on them CreditWatch with negative implications. S&P Ratings also also lowers its financial strength ratings on Ambac Assurance Corp. and MBIA Insurance Corp. to 'AA' from 'AAA' and placed the ratings on CreditWatch with negative implications.

Verizon Wireless, a joint venture of Verizon (VZ) and Vodafone (VOD), agrees to acquire Alltel Corp. in a cash merger. Under the terms of the agreement, Verizon Wireless will acquire the equity of Alltel for approximately $5.9 billion. Based on Alltel's projected net debt at closing of $22.2 billion, the aggregate value of the transaction is $28.1 billion. S&P maintains buy on Verizon shares.

Borders Group (BGP) says its will sell of its Australia/New Zealand/Singapore businesses -- which includes 30 Borders superstores -- to A&R Whitcoulls, an Australasian retailer of books and related products owned by private equity firm Pacific Equity Partners, for approximately $110 million. S&P maintains hold.

UAL Corp. (UAUA) moves up 0.91 to 10.05 after Lehman upgrades its airline group to positive from neutral; ups UAUA and Northwest Airlines (NWA) to overweight from equal-weight.

Dr. Pepper Snapple Group (DPS) rises 1.82 to 25.72 after the drink maker posts $0.38 (including charge related to restructure actions), vs. $0.27 a year ago, first quarter EPS (basic) on 3% sales rise. Expects 3%-5% 2008 net sales growth and EPS of at least $1.67.

Nucor (NUE) expects second quarter EPS of $1.75-$1.80, vs. $1.55-$1.60 prior forecast. Says continued strength in its sheet, plate, beam and bar businesses due to the solid global demand for steel and better-than-expected margins have favorably impacted the quarter, while upstream and downstream businesses also continue to perform well. S&P reiterates hold.

Wal-Mart Stores (WMT) posts 4.0% higher May same-store sales at Wal-Mart Stores, 3.6% higher at Sam's Club, 3.9% higher total U.S. same-store sales (all ex-fuel). Also posts 9.8% higher total sales. It sees U.S. same-store sales growth (ex-fuel) of 2%-4% for June.

Continental Airlines (CAL) CEO and its president, said in an employee bulletin that the company will reduce its flights, with fourth quarter domestic mainline departures down 16% year-over-year, available seat miles 11% lower. As a result, CAL will eliminate about 3,000 employee positions, including some in management. The carrier will also accelerate fleet retirements, retiring 67 aircraft in 2008 and 2009.

Lehman Brothers Holdings (LEH) is up 1.69 to 33.09 after Deutsche Bank maintains buy. Yesterday, shares moved higher as Merrill Lynch upgraded the stock to buy, and WSJ reported LEH had reached out to overseas investors to raise fresh capital.

Smithfield Foods (SFD) posts $0.01, vs. $0.46 a year ago, fourth quarter EPS from continuing operations as lower live-hog prices, higher raising costs offset 20% sales rise.

Ciena (CIEN) posts $0.40, vs. $0.26, second quarter non-GAAP EPS on 25% revenue rise. Sees fiscal year 2008 revenue growth of 27%.

The Gap (GPS) posts 14% lower May same-store sales, 8% lower total sales.

Costco Wholesale (COST) posts 7% higher May same-store sales, 15% higher International sales, 9% higher total company same-store sales, 12% higher total sales.

BJ's Wholesale Club (BJ) posts 13% higher May comp club sales (including contribution from sales of gasoline worth 6.6%), 16% higher total sales.

Del Monte Foods (DLM) posts $0.25, vs. $0.18, fourth quarter EPS from continuing operations on 11% sales rise. Expects net sales growth of 5% to 7% in fiscal year 2009, EPS from continuing operations of $0.58-$0.62.

Abercrombie & Fitch (ANF) posts 1% lower May same-store sales, 8% higher total sales. Posts 35% higher May total company direct-to-consumer net sales.

American Eagle Outfitters (AEO) posts 9% lower May same-store sales, slightly higher total sales. Maintains its second quarter EPS guidance of $0.28-$0.29.

Monsanto Company (MON) says it will tell investors today at the Merrill Lynch Agricultural Chemicals Conference that it targets doubling its 2007 gross profit by 2012. Also says, with the third quarter just completed, it will indicate that its 2008 progress on its six identified growth drivers continue to set the stage for further growth in 2009 and beyond.

ADC Telecommunications (ADCT) posts $0.14, vs. $0.72, second quarter GAAP EPS as inclusion of certain items totaling $0.25 per share offset 16% revenue rise. On a continuing operations basis, expects fiscal year 2008 sales to be in the range of $1.52-$1.54 billion, an increase of 15%-16%, up from previous sales guidance of $1.48-$1.505 billion. It sees GAAP EPS from continuing operations of $0.31-$0.39.

Immucor (BLUD) sees $1.11-$1.15 fiscal year 2009 EPS on revenue of $292-$300 million, with gross margin in range of 70%-71%.


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