) -- Here are the top stock market headlines for the morning of Wednesday, Dec. 16, 2009.

Wednesday's Early Headlines

  • Fed Expected to Stay Put with Interest Rates -- The Federal Open Market Committee is widely expected to keep interest rates unchanged when it delivers its statement at 2:15 p.m. EST. While economists do not expect the Fed will change the target fed funds range of zero to 0.25%, they will watch to see if the FOMC includes the terms "exceptionally low" and "extended period" in its accompanying statement.
  • Abu Dhabi Files Claim Against Citigroup -- Citigroup (C) - Get Report said a claim filed by the Abu Dhabi Investment Authority against the bank that seeks to either terminate an agreement to buy $7.5 billion worth of Citigroup stock or receive damages of more than $4 billion, is "entirely without merit." Abu Dhabi invested $7.5 billion in Citigroup in November 2007 and the fund received equity units that paid a high annual dividend. The units were to be converted into Citigroup common stock at up to $37.24 a share between March 15, 2010, and Sept. 15, 2011, giving the fund a 4.9% stake in Citigroup.
  • U.S. Forgoes Billions in Taxes on Citigroup -- In other Citigroup news, The Washington Post reports that the U.S. government quietly agreed to forgo billions of dollars in potential tax payments from Citigroup as part of the bank's plan to repay $20 billion in funds from the Troubled Asset Relief Program, or TARP. The Internal Revenue Service Friday issued an exception to long-standing tax rules for the benefit of Citigroup and a few other companies partially owned by the government, the paper reported. As a result of that exception, Citigroup is allowed to retain billions of dollars worth of tax breaks that otherwise would decline in value when the government sells its stake to private investors.
  • Mortgage Applications, Interest Rates Rise -- The Mortgage Bankers Association said mortgage loan application volume rose by 0.3% on a seasonally adjusted basis last week from one week earlier, the third consecutive weekly increase. The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.92% from 4.88%, the MBA said.
  • Honeywell Projects 2010 Adjusted Profit -- Honeywell (HON) - Get Report offered its view for 2010, saying it expects to earn between $2.20 to $2.40 a share next year on revenue in a range between $31.3 billion to $32.3 billion. On an adjusted basis, the industrial giant said it anticipates a profit of $3 to $3.20 a share, compared to the Thomson Reuters average estimate for earnings of $2.51 a share.

Wednesday's Earnings Roundup

  • Joy Global (JOYG) reported fourth-quarter earnings of $1.20 a share, rising from a year ago to beat the consensus target of $1.01 a share, according to Thomson Reuters. Revenue slid 6.6% from a year earlier to $963.5 million, but topped estimates of $931.1 million.
  • Adobe Systems (ADBE) - Get Report late Tuesday reported an adjusted fourth-quarter profit of 39 cents a share, better than the Thomson Reuters average estimate of 37 cents a share. Sales fell 17.3% from a year ago to $757.3 million, although that was also better than analysts had anticipated. Looking ahead to the first quarter, Adobe expects earnings in a range of 34 cents to 39 cents a share, compared to the average analyst target of 37 cents a share. Revenue should come in between $800 million and $850 million, better than the $799 million consensus target.

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-- Written by Robert Holmes in Boston


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