(By Salman - iStockAnalyst Writer)US stocks barely budged early Friday as investors remained cautious after a five-session rally that has sent the Dow, S&P 500 and Nasdaq to nearly 1-year highs.
AIG (NYSE:
AIG): Shares of AIG fell over 2.30% in early trade after Wells Fargo Securities analyst John Hall downgraded the shares of the insurer to "underperform," saying the company has virtually no tangible book value at the moment and that its shares are overvalued. "Absent government support the company would be out of business and at present, the market value of AIG's businesses is less than its obligations to the government," Hall said in a note to clients. Earlier this week, Credit Suisse also downgraded the company to "underperform" from "neutral", and halved its price target to $15 from $30. The company posted a $99 billion net loss last year and was saved from the brink of collapse by a $60 billion credit line, a Treasury Department investment of as much as $70 billion, and $52.5 billion to buy mortgage-linked assets owned or backed by the insurer. The insurer owes more than $38 billion on a Federal Reserve credit line and has so far announced asset sales of about $9.8 billion. Late in August, AIG's newly appointed AIG CEO Robert Benmosche that said that he expects that the insurer will be able to pay back the government. AIG shares more than doubled last month. However, shares of the company have lost over 5% this week.
FedEx Corp. (NYSE:
FDX): The world's second largest package delivery company, hiked its first-quarter earnings guidance on Friday, citing better-than-expected international shipments and cost-cutting. The Memphis, Tenn.-based company said that it expects earnings of 58 cents per share for the first quarter ended Aug. 31. That's down 53 percent from a year ago, but well above the company's previous projection of 30 cents to 45 cents per share. Analysts, on average, had been looking for a quarterly profit of 44 cents per share. FedEx is set to report full results on Sept. 17. Still, FedEx expects to report second-quarter earnings in the range of 65 cents to 95 cents. Analysts are currently expecting earnings of 70 cents per share. The second-quarter forecast "reflects the current outlook for fuel prices and a continued modest recovery in the global economy," the company said in the statement. FedEx is seen by many as a bellwether of U.S. economic activity. The company's bottomline has been pressured during the recession as shipping volumes have fallen.
