Updated with Best Buy margin comments, PPI data, New York Fed manufacturing index




) -- Here are the top stock market headlines for the morning of Tuesday, Dec. 15, 2009.

Tuesday's Early Headlines

  • Wells Fargo Next in Line to Repay TARP Funds -- Wells Fargo (WFC) - Get Report late Monday said it would repay the government's $25 billion preferred equity investment after completing a $10.4 billion stock offering, becoming the last of the major banks to repay the U.S. bailout from the height of the financial crisis. Wells Fargo said it will raise $1.35 billion by issuing common stock, and it also intends to raise another $1.5 billion by selling assets agreed to by the Federal Reserve. The announcement came hours after Citigroup (C) - Get Report said it would repay $20 billion in bailout funds.
  • Wholesale Price Inflation Up, Manufacturing Down -- The Labor Department said its producer price index rose 1.8% in November, greater than the 0.8% rise economists had predicted. The core number, which excludes food and energy, ticked 0.5% higher, more than doubling expectations. Meanwhile, the New York Federal Reserve said its Empire State manufacturing index sank to a reading of 2.55 this month, down from 23.51 in November and well below the consensus target of 24.
  • Airlines Could Lose $56 Billion Next Year -- The International Air Transport Association revised its financial outlook for 2010 and now expects airlines to report $5.6 billion in losses as compared to earlier loss forecasts of $3.8 billion. IATA said in 2010 air passenger traffic will return to its 2007 peak and air cargo demand also would rebound as depleted inventories are restocked. However, the authority expects high fuel costs and low yields will likely contribute to mounting losses.
  • Fed's Policy-Making Arm Begins Two-Day Meeting on Interest Rates -- The Federal Open Market Committee begins a two-day meeting on interest rates Tuesday morning, with a decision expected Wednesday at 2:15 p.m. EST. Economists do not expect the Fed will raise interest rates from the target range of zero to 0.25%, as recent comments from Fed officials indicate that the "extended period" phrase in the Fed's statement will not yet be removed.
  • Goldman Sachs Faces Lawsuit Over "Improper" Bonus Payments -- Reuters reports that an institutional investor is suing Goldman Sachs (GS) - Get Report, claiming the firm is preparing to pay out improper bonuses. The lawsuit, filed with the New York Supreme Court by the Security Police and Fire Professionals of America Retirement Fund, accuses Goldman executives, including CEO Lloyd Blankfein, of "blindly" rewarding executives "for corporate performance that has absolutely nothing to do with the skill of the company's employees." The lawsuit states that Goldman is estimated to issue payouts in excess of $22 billion, the Reuters report said.
  • Google Talks to T-Mobile About Nexus One Phone -- The Wall Street Journal reports that Google (GOOG) - Get Report is in talks with Deutsche Telekom's (DT) - Get Report T-Mobile USA to sell its upcoming phone at a discounted price for the carrier's customers. The Internet search giant also is holding discussions with other wireless carriers on similar lines, the report said, citing sources familiar with the development. According to the deal, Google would offer the phone, dubbed the Nexus One, at a cheaper price to T-Mobile carrier's subscribers because T-Mobile would pay Google for helping sign up a new customer.

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Tuesday's Earnings Roundup

  • Best Buy (BBY) - Get Report reported third-quarter earnings of 53 cents a share, topping the Thomson Reuters average estimate by 10 cents a share. Sales in the quarter climbed 4.6% from a year ago to $12.02 billion, also exceeding estimates. Looking ahead, Best Buy raised earnings guidance for 2010 to a range of $3 to $3.15 a share from the previous range of $2.70 to $3 a share. Analysts, on average, are looking for full-year 2010 earnings of $2.96 a share. Revenue for 2010 should fall between $49 billion and $49.5 billion, the company said, compared to the consensus target of $48.6 billion. However, Best Buy said it anticipates a lower fiscal fourth quarter gross profit rate due to notebook computers and entry price-point televisions, which carry lower gross profit rates.
  • Adobe Systems (ADBE) - Get Report will release quarterly results after the end of trading. The software maker is expected to report earnings of 37 cents a share on $752.5 million, according to analysts polled by Thomson Reuters.

-- Written by Robert Holmes in Boston


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