Markets & Finance

Movers: Bank of America, Genentech, Schering-Plough, Merck


Stocks in the news on Monday

From Standard & Poor's Equity ResearchBank of America (BAC) posts better-than-expected $0.72, vs. $1.28 a year ago, second quarter EPS as merger and restructuring costs offset 3.5% revenue rise, 26% rise in net interest income. Says provision for credit losses increased by $3.45 billion to $6.55 billion compared with a year earlier. Notes results excl. Countrywide Financial Corp., which was acquired on July 1.

Merck (MRK) and Schering-Plough (SGP) shares fall after the SEAS (Simvastatin and Ezetimibe in Aortic Stenosis) study investigating effects of intensive cholesterol lowering with combo of simvastatin and ezetimibe in patients with aortic stenosis showed no significant difference between treatment groups and placebo for primary endpoint (major cardiovascular events), nor for secondary endpoint of aortic valve disease events alone. Also, a total of 158 patients were recorded with a serious adverse event attributed to cancer, and there were slightly more cancer deaths in treatment group. Earlier today, Goldman said MRK shares were weak given uncertainty around SEAS event. Earlier today, SGP said it will release its Q2 financial results after today's market close, instead of previously scheduled 8 a.m. EDT. Also earlier, S&P maintained hold on SGP.

Fannie Mae (FNM) and Freddie Mac (FRE) shares rise on news that Securities and Exchange Commission's emergency rule limiting short-selling of 19 financial stocks takes effect today. Freddie Mac shares were up after the second-largest U.S. mortgage-finance company said it may purchase fewer home loans from banks and bonds backed by housing debt to fortify its capital amid record delinquencies. The company is also considering selling securities and cutting its dividend as it prepares to issue $5.5 billion of stock.

Yahoo (YHOO) announces that it has reached an agreement with Carl Icahn to settle their pending proxy contest. As such, YHOO's 8 members of the current Board of Directors will stand for re-election at the 2008 annual meeting; Robert Kotick has decided not to stand for re-election. Following annual meeting, YHOO board will be expanded to 11 members. Carl Icahn will be appointed to its Board.

Roche Holding (RHHBY) bids to acquire outstanding publicly held interest in Genentech (DNA) for $89.00 cash per DNA share, or total payment of about $43.7 billion to equity holders of DNA other than RHHBY. RHHBY currently owns 55.9% of all outstanding DNA shares.

Hasbro (HAS) posts $0.25, vs. $0.03 a year ago, second quarter EPS on 13% revenue rise.

Winnebago Industries (WGO) shares are weak on Reuters newswire report that WGO's CEO Olson said in an interview that the economic challenges confronting motor home makers had only intensified in the month since reporting its quarterly earnings tumbled 73%, and with only one month into Q4, the headwinds the company has been facing is probably even worse than they were at the end of Q3.

Timken (TKR) now sees third quarter EPS of about $0.96 and 2008 EPS of $2.95-$3.10, both excluding impact of special items; prior guidance, excluding special items, was $0.73-$0.83 second quarter EPS and $2.75-$2.95 '08. Says it expects continued strong global industrial demand to more than offset weakness in North American automotive market.

IMS Health (RX) posts $0.42, vs. $0.36, second quarter GAAP EPS (excluding forex hedge gains and losses) on 12% revenue rise.

RPM International (RPM) posts $0.75, vs. $0.65, fourth quarter adjusted EPS on 7% sales rise, which excludes charge to extend asbestos accrual. Sees $1.85 fiscal year 2009 EPS. Says fiscal year 2009 will also be another active year for acquisitions, which will provide upside opportunities to its core growth outlook.

Herbalife Ltd. (HLF) announces that China's Ministry of Commerce has granted 5 additional licenses for HLF to conduct direct-selling business in the provinces of Beijing, Guangdong, Shandong, Zhejiang and Guizhou. All licenses are effective immediately, except Beijing which will be activated after the company opens service outlets.

Sinoenergy (SINE) sees third quarter net revenue of at least $10 million and net income of at least $3.3 million, vs. earlier guidance for $8-$9 million and $2.8-$3.2 million, respectively.


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