Updated from 8:40 a.m. EDT(At 4:30 p.m. EDT)
Earnings Begins EarlyMonday's session was barely in the books before Goldman Sachs ( GS) decided to surprise investors by reporting its quarterly results early. One analyst who recommended buying shares of Goldman Sachs ahead of the report nailed it, as the company reported earnings of $3.39 a share (compared to forecasts of $1.60 a share, according to Thomson Reuters) on revenue of $9.43 billion (compared to forecasts of $7.08 billion). Goldman Sachs also announced a public offering of $5 billion of its common stock, adding that if permitted by its supervisors and if supported by the results of the government's stress test, it would like to use the capital raised plus additional resources to redeem all of the TARP capital.
Economic Reports Set to HitSeveral economic releases will certainly sway trading tomorrow, too. The March read on the producer price index is set for 8:30 a.m. EDT alongside retail sales data for March. The PPI reading should be flat, with the core number (which excludes food and energy) expected to increase 0.1%. Meanwhile, retail sales are expected to have increased 0.3% last month, although may have been flat when autos are taken out. Later in the session, the February read on business inventories will be released, with economists expecting a 1.2% decline.
MetLife Opts Out of TARPWhile Goldman wants to quickly pay back the TARP money it borrowed, MetLife ( MET) said it has elected not to participate in the program at all. "MetLife is well positioned, with approximately $5 billion in excess capital, a strong balance sheet and leading market positions in our core group and individual insurance businesses, where our revenues continue to be healthy," said C. Robert Henrikson, chairman, president and chief executive officer of MetLife, in a statement late Monday. Meanwhile, Talbot's ( TLB) rallied 16.9% ahead of its earnings release Monday, but the stock was plummeting 15.8% in the after-hours session following the release of its fourth-quarter report. The retailer reported a loss, excluding items, of $1.17 a share, although that number may not be comparable to the Thomson Reuters average target of a loss of 65 cents a share. Still, sales fell 23.3% from a year ago to $327.9 million, coming up short of Wall Street's forecast of $328.4 million. Meanwhile, Dress Barn ( DBRN) said it expects fiscal third-quarter earnings to fall in a range of 30 cents to 32 cents a share, compared with the average estimate of 21 cents a share. The company said it expects to offer a narrower fiscal 2009 earnings guidance range when it reports its fiscal third-quarter results on May 21. Still, the stock was up 7.7% in late trading. Coupled with the retail sales report set for release Tuesday morning, it could be a wild day for apparel sellers.
(At 7:45 a.m. EDT)
General Motors Weighs on FuturesIt's the big headline of the day, but it should really come as no surprise: General Motors ( GM) is being directed by the Treasury Department to lay the groundwork for a possible bankruptcy filing by June 1. GM has insisted it can still restructure outside of bankruptcy, but it appears the Obama administration isn't so sure. The pre-arranged bankruptcy plan is reported to be a swift process in order to preserve the GM name, one that could last as little as two weeks. One government plan for the struggling automaker would be to create a new company that would buy the "good" assets of GM after a bankruptcy is declared, according to The New York Times. The unwanted assets would be liquidated over a period of time. Obviously, GM bondholders are against a pre-arranged bankruptcy as they would be forced to accept hefty losses. Shareholders would also likely be completely wiped out. GM shares weighed on Dow futures early Monday, falling more than 14% in the premarket session to $1.75 a share. In the grand scheme of things, a 29-cent decline is nothing compared to the $17.58 that has been lopped off shares over the past year.
Credit Suisse Shutters Offshore AccountsAccording to a Sunday report in Sonntagszeitung, a Swiss newspaper, Credit Suisse ( CS) has begun closing down offshore accounts of U.S. clients who have not declared the money to U.S. tax authorities.
UBS Job CutsIn a separate Sonntagszeitung report Sunday, UBS is said to cut more jobs soon, with its Swiss offices and marketing department expected to absorb most of the losses. Managers have already started telling their departments about the cuts, according to the report.
Microsoft and Yahoo! in Talks...AgainI'm assuming you're all as sick as I am of the rumors of a deal between Microsoft ( MSFT) and Yahoo! ( YHOO), but we're forced to hear more "chatter" about some sort of relationship once again. Reports Friday said that Microsoft CEO Steve Ballmer and new Yahoo! chief Carol Bartz met face to face to discuss possible business deals, including one scenario where Microsoft would sell Yahoo's search ads while Yahoo would manage Microsoft's display ads. With any luck, this story will not stretch out for months with Yahoo! ultimately walking away from whatever proposed deal pops up.
Monday Brings More DealsIn other deal news, Express Scripts ( ESRX) will buy WellPoint's ( WLP) NextRx pharmaceutical benefit management subsidiaries for just under $4.68 billion. The companies expect the deal to close in the second half of 2009. Meanwhile, HSBC ( HBC) is reportedly mulling a sale of three office buildings in London, New York and Paris in order to raise cash and avoid taking government funds. A sale is expected to net HSBC about $4 billion, and the bank would likely lease the buildings back from the buyers.
Earnings and Economic DataThe earnings calendar is quiet Monday ahead of the torrent of reports expected the rest of the week. Talbot's ( TLB) is one of few names expected to report after Monday's close. Meanwhile, the economic docket is empty on Monday, but much like the earnings schedule, a flurry of reports will come later in the week, including the producer price index and the consumer price index, as well as housing starts and retail sales.
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