Tuesday's Early Headlines
- Goldman Sachs Earnings Handily Beat Expectations. - Goldman Sachs (GS) said it earned $3.44 billion, or $4.93 a share, in the second quarter, rising from $2.05 billion, or $4.58 a share, in the year-ago period. Results included a charge of 78 cents a share related to the bank's paying back TARP funds. Excluding that, earnings were $5.71 a share. Revenue jumped 46% from a year ago to $13.76 billion. Analysts polled by Thomson Reuters were expecting earnings of $3.54 a share on revenue of $10.7 billion.
- J&J Second-Quarter Profit Tops Estimates. - Johnson & Johnson (JNJ) said it earned $3.2 billion, or $1.15 a share, in the second quarter on sales of $15.2 billion, which were down 7.4% from the year-earlier period. Analysts expected earnings of $1.11 a share on revenue of $15.02 billion, according to Thomson Reuters. Johnson & Johnson also confirmed its 2009 guidance.
- Rattner to Leave Auto Task Force. - Steven Rattner is stepping down from the Obama administration's auto task force after six months on the job, Treasury Secretary Tim Geithner said in a prepared statement. Rattner will be replaced by Ron Bloom, who had been a senior adviser to the task force. Reuters reports Tuesday that a probe has intensified into how the private-equity firm Rattner co-founded gained New York pension business.
- CIT, Regulators in 'Advanced Talks' on Aid. - CIT Group (CIT) and federal regulators were in "advanced talks" about a government aid package late Monday, according to published reports. One possible source of aid for the troubled commercial lender is participating in the Federal Deposit Insurance Corp.'s Temporary Liquidity Guarantee Program, The Wall Street Journal reported
- Dell Offers Disappointing Financial Update. - Late Monday, Dell (DELL) offered a financial update Monday calling for sequentially improved sales, which would be in line with Wall Street's expectations. The gains, however, come with a narrowing of gross margins, says Dell, blaming expensive parts and heated price competition. Looking ahead at the long-range forecast, Dell says it expects sales to grow between 5% and 7% annually. That is slightly higher than the 4.7% growth rate analysts are expecting for 2010.
- Exxon Mobil Bets on Biofuels. - Exxon Mobil (XOM) has teamed with Synthetic Genomics in a $600 million partnership to research and develop next generation biofuels from photosynthetic algae
- Justice Dept. Probes CDS Market. - The U.S. Justice Department is investigating the market for credit-default swaps, Bloomberg reports, citing Markit Group, the London-based data provider that is majority-owned by Wall Street's largest banks.
- Starwood Capital Bidding for Corus. - Private-equity firm Starwood Capital Group is bidding on assets of Corus Bankshares (CORS), The Wall Street Journal reports, citing people familiar with the matter. Barry Sternlicht, who controls Starwood Capital, wouldn't name the bank in a conference call Monday but said his firm was bidding on a bank that is heavily concentrated in real-estate lending and has more than 110 construction loans. People with knowledge of the matter identified the bank as Corus, the Journal reports.
Tuesday's Economic Data
- Producer Price Index Hotter Than Expected - The Labor Department said the June reading for its producer price index came in at 1.8%, the largest jump since Nov. 2007. Economists expected the headline number, which measures inflation at the producer level, to rise 1% after a 0.2% increase in May. The core number, which excludes food and energy, climbed a larger-than-expected 0.5% last month after falling fractionally in May.
- Retail Sales Data a Mixed Bag in June - The Census Bureau said retail sales data showed a 0.6% advance in June, compared to economists' forecasts of a 0.4% rise. Excluding auto sales, retail sales climbed 0.3%, slightly below expectations. May's retail sales data excluding auto sales were revised down to a 0.4% gain from an increase of 0.5%.