Friday, March 19, 2010
Tuesday, December 30, 2008
US STOCKS-Index futures higher after auto bailout expanded
Tue Dec 30, 2008 8:04am EST -- By Leah Schnurr NEW YORK, Dec 30 (Reuters) - U.S. stock index futures pointed to a higher open on Tuesday after Washington expanded its bailout of the auto industry, while volume was expected to be light in the holiday-shortened week.
Investors were also awaiting economic data later in the day, including consumer confidence, a reading on business activity in the U.S. Midwest, and data on home prices.
Late on Monday, the Bush administration said it was increasing a loan to General Motors (GM.N: Quote, Profile, Research, Stock Buzz) by $1 billion and buying $5 billion in equity in GMAC, GM's finance arm.
It was the latest in a string of government moves in an effort to ease tight credit markets and cushion the impact of the year-long recession. For more details, see [ID:nN29320920].
GM's shares were up 11.1 percent at $4.00 in premarket trading, while rival Ford (F.N: Quote, Profile, Research, Stock Buzz) rose 7.2 percent to $2.38.
GM's shares were up 11.1 percent at $4.00 in premarket trading, while rival Ford (F.N: Quote, Profile, Research, Stock Buzz) rose 7.2 percent to $2.38.
Peter Cardillo, chief market economist at Avalon Partners in New York, said that while there could be negative consequences of the series of bailouts in the long term, it limited the fallout in the near term.
"The alternative obviously could be worse, so I think that maybe the market has finally got it -- we have a short-term fix and a long-term problem that we can deal with later," said Cardillo.
S&P 500 futures SPc1 rose 3.40 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract.
Dow Jones industrial average futures DJc1 climbed 27 points, and Nasdaq 100 NDc1 futures added 8.25 points.
Dow Chemical (DOW.N: Quote, Profile, Research, Stock Buzz) could tap a $13 billion bridge loan to or renegotiate the price to salvage its $15 billion takeover of Rohm & Haas (ROH.N: Quote, Profile, Research, Stock Buzz), the Financial Times reported. [ID:nSP413264].
Kuwait decided to scrap a joint venture with Dow Chemical over the weekend, depriving the company of financing it planned to use for the acquisition.
Dow was up 3.3 percent at $15.83 before the opening bell after falling steeply in Monday's session.
Earlier in the month, the U.S. government agreed to throw a lifeline to GM and Chrysler LLC with up to $17.4 billion in emergency loans to head off a potential collapse that would have cost hundreds of thousands of jobs and further hit the already beleaguered economy.
Also in the auto sector, billionaire investor Kirk Kerkorian sold all of his remaining shares of Ford, ending his high profile investment in the automaker. [ID:nN29317184].
Oil prices fell below $40 a barrel as concerns over the outlook for global growth overshadowed tensions in the Middle East.
Israel continued its air strikes on the Gaza Strip and warned its military action could last weeks, while Hamas pledged to keep up rocket attacks on Israeli cities. [ID:nLU691622].
A jump in oil prices on Monday had boosted energy shares, limiting declines in U.S. markets, but higher oil also raised worries of more pressure on already cash-strapped consumers.
On Monday, Wall Street ended lower on concerns about Dow Chemical's planned takeover of Rohm & Haas.
Volume was expected to be light throughout the week shortened by the New Year's holiday. The broad S&P 500 is down about 40 percent for the year, making it one of the worst ever. (Editing by Tom Hals)
Monday, December 29, 2008
Group of investors close to buying IndyMac
J.C. Flowers & Co., Dune Capital Management and Paulson & Co. - a hedge fund - are close to a deal for IndyMac, a person familiar with the matter says.
NEW YORK (Reuters) -- A consortium of private equity and hedge fund firms, including J.C. Flowers & Co, is close to a deal to buy the assets of failed mortgage lender IndyMac, a source familiar with the matter said on Sunday.
The prospective buyers also include Dune Capital Management, a private investment firm run by former Goldman Sachs executives, and hedge fund Paulson & Co, the source said.
The consortium would buy the bank and its 33 branches, IndyMac's reverse-mortgage unit and a $176 billion loan-servicing portfolio, the source said.
The presence of private equity and hedge fund firms comes after the FDIC said last month it was expanding the pool of qualified bidders to include those institutions that do not currently have a bank charter, although they must have conditional approval for a charter from the responsible agency.
The Federal Deposit Insurance Corp and IndyMac as well as the buyers in the consortium could not be immediately reached.
Last week IndyMac spokesman Evan Wagner said a deal was expected before the end of the year. The deadline for final bids for IndyMac's assets was December 15.
FDIC estimates IndyMac's failure cost the agency $8.9 billion. Barclays Capital and Deutsche Bank are advising the FDIC on the sale.
The mortgage specialist's IndyMac Bank unit was taken over by regulators after it failed on July 11 in one of the largest bank failures in U.S. history. At the time, it had $32 billion in assets and $19 billion in deposits.
IndyMac Bancorp Inc (IDMCQ.PK), the holding company, filed for Chapter 7 protection soon after with the U.S. bankruptcy Court in Los Angeles, indicating it plans to liquidate.
Founded in 1985 by Angelo Mozilo and David Loeb, who also founded Countrywide Financial Corp, IndyMac once specialized in "Alt-A" home loans, which often didn't require borrowers to fully document income or assets.
It collapsed after defaults mounted and as tight capital markets caused losses on mortgages it couldn't sell.
The seizure came after panicked customers withdrew more than $1.3 billion of deposits over 11 business days. The withdrawals followed comments in late June by U.S. Sen. Charles Schumer questioning IndyMac's survival.
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