Top ranked First Fed Financial struggles with payment option mortgages-WSJ
In 2007a trade magazine ranked FirstFed Financial (FED) one of the top five banks in the U.S. in part because of how well it managed its risky mortgage loans. No more. Now the bank’s losses are mounting and its losses totaled about $70M in the first quarter. Its foreclosed homes doubled from the first to the second quarter. And, the bank is in the unflattering position of being a leader in a new home mortgage problem, namely payment option mortgages, reports the Wall Street Journal. Those loans were to borrowers with good credit who are now facing defaults that could surpass the subprime crisis.
Western countries calls Iran’s response to demands “evasive”-Washington Post
Yesterday, the government of Iran said it will respond to a package the U.S. and other world powers offered once the countries “simultaneously” provide a more detailed explanation of the offer. The U.S., Britain and France, which are said to have offered the incentives package in exchange for suspension of Iran’s uranium-enrichment program, called the response by Iran “evasive”. A spokesman for the U.S. mission to the United Nations says Iran will need to issue a “very clear” response and a European official said asking for further details is a “stalling tactic”. If Iran does not respond positively and unambiguously to the offer, the countries have said they will hold a conference call today to consider a response to the statement.
U.S. equity futures continue to point to a lower open
Equity futures continue to point to a lower open as the markets attempt to consolidate yesterday’s big gains. Corporate profits continue to flow in and there was a surprising gain reported from Ambac Financial Group (ABK). The company reported higher profits due to mark to market gains from the CDO securities it currently holds. Freddie Mac (FRE) on the other hand reported larger than expected losses and said they will raise new capital and cut their dividend to shore up their balance sheet. That news has the financial stocks under pressure as well as the futures.
Google launches a free music search service in China-WSJ
Google (GOOG) has launched its free music in China following a number of negotiations, reports the Wall Street Journal. The venture will be supported by advertising and will be shared between Google, music firms and Top 100.cn, a Chinese music company.
Will Apple release a new touch screen iPod?-BusinessWeek
Will there be a new touch screen iPod from Apple (AAPL) coming soon? BusinessWeek’s “Technology” column speculates that it could happen in time for this year’s holiday sales.
Onyx Pharma-ONXX: 2Q earnings disappointing; growth opportunities remain@LEER
LEER anticipates that as Nexavar becomes available in additional areas of Europe and Asia, that Nexavar sales for liver cancer will drive the stock in the N-T. The firm’s current valuation for the stock is $40; maintain Market Perform rating.
Vertex Pharmaceuticals-VRTX downgraded to Neutral from Positive@SUSQ
Susquehanna downgraded shares to reflect competitor Schering-Plough’s (SGP) Phase II trial results for boceprevir.
American Superconductor-AMSC: Company’s results were misunderstood@KBRO
Kaufman Bros. reported that the company’s operational EPS was (4c) per share compared with their estimate of (3c), but the company’s overall EPS was (15c), due to taxes and other income losses, causing the shares to drop $6 at the open. The firm believes lack of understanding of the company’s results caused the stock to fall $6 at the open, and they reiterated their Buy rating.
Merrill Lynch-MER: Believe dividend should be cut by 64%@BERN
Bernstein believes MER should cut its dividend by 64% to 50c from $1.40, lowering payments to shareholders by $1.54B in 2010. The firm thinks the dividend payout places constraints on the company’s inventory and balance sheet capacity and keeps a Market Perform rating on shares.
Cisco-CSCO: 4Q EPS solid upside results; remain buyers of the stock@FBRC
FBRC modestly reduced their 1Q09 and FY09 EPS estimates, given management’s slightly lowered guidance while maintaining their $31 target price. Valuation still attractive. Reiterate Outperform rating.
Cisco-CSCO: Risk/reward ratio is not very favorable@JMPS
After Cisco reported slightly better than expected EPS for its Q4, JMP Securities does not believe the company’s risk/reward ratio will enable it to outperform the market. The firm maintained their Market Perform rating.
Cleveland Cliffs-CLF: See attractive entry point at current levels@DBAB
Deutsche Bank strongly reiterates their Buy rating and $150 target.
Freeport McMoRan-FCX added to Top Picks Live List@SBSH
Citigroup believes current share levels provide an attractive entry point and reiterates a Buy rating with a $142 target.
