US HOT STOCKS TO WATCH: Lehman, Merrill Lynch, AIG, WaMu
By Daniel at 15 September, 2008, 10:15 am
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
US HOT STOCKS TO WATCH: Lehman, Merrill Lynch, AIG, WaMu
Last Update: 9/15/2008 7:18:23 AM
By Dow Jones
Among the companies whose shares are expected to see active trading on Monday are
Lehman Brothers Holdings Inc. (LEH), Merrill Lynch & Co. (MER) and American
International Group Inc. (AIG).
Lehman plunged 89% in premarket trading after saying overnight that it intends to
file for Chapter 11 bankruptcy protection. The investment bank, which failed to
find a buyer over the weekend and the government declined to bail it out of
trouble, said none of its broker-dealer subsidiaries or other units would be
included in the filing and will continue to operate as is.
Merrill Lynch agreed late Sunday to sell itself to Bank of America Corp. (BAC)
for $50 billion, or $29 a share. The combination, if approved by shareholders,
would create a bank of vast reach, involved in nearly every nook and cranny of
the financial system. Merrill rose 37% in premarket trading, while Bank of
America slid 14%.
AIG, succumbing to relentless investor pressure that has cratered its stock and
pushed it down another 42% in premarket action, is pulling together a survival
plan that includes selling off some of its most valuable assets, raising $40
billion in more capital and going to the Federal Reserve for help, people
familiar with the situation told the Wall Street Journal.
With the bad news piling up in the financial sector, shares at Washington Mutual
Inc. (WM) continued their recent slide, down 32% in recent trades. The surviving
giants of investment firms Goldman Sachs Group Inc. (GS) and Morgan Stanley (MS)
were both getting hit by Lehman’s collapse and speculation they could be next,
trading down 8.9% and 11%, respectively. Other financials falling included Ambac
Financial Group Inc. (ABK), down 31%; Wachovia Corp. (WB), off 22%; Royal Bank of
Scotland Group PLC (RBS), which fell 18%; and UBS AG (UBS), which declined 15%.
The rivalry between drugstore chains Walgreen Co. (WAG) and CVS Caremark Corp.
(CVS) entered a more heated stage with Walgreen’s surprise $75-a-share bid for
Longs Drug Stores Corp. (LDG). The $2.7 billion offer for the California-based
Longs tops a $2.57 billion deal the company has with CVS. Shares of Longs rose 4%
in postmarket trading Friday.
Watch List
German chemical giant BASF SE (BASFY) announced it would acquire Swiss peer Ciba
Holding AG (CSBHY) for $5.5 billion, which some analysts considered too
expensive.
General Motors Corp. (GM) would contribute an additional $4.6 billion to help
Delphi Corp. (DPHIQ) emerge from bankruptcy under a plan that the auto supplier
will submit to the bankruptcy court this month, bringing its total support to
about $10.6 billion. GM was off 0.5% recently.
Health Management Associates Inc. (HMA) appointed Gary D. Newsome as president
and chief executive, succeeding Burke W. Whitman, who “has chosen to leave the
company” to pursue new military-service responsibilities offered to him.
Nearly seven months after announcing an unsolicited offer to acquire Take-Two
Interactive Software Inc. (TTWO) for $2 billion, Electronic Arts Inc. (ERTS)
dropped its for its videogame rival. Take-Two was off 18% recently, while
Electronic Arts fell 1.8%.
Fitch Ratings Inc. raised its debt ratings on Tyson Foods Inc. (TSN), moving the
meat processor to investment-grade level, after Tyson said it would raise $705
million through the sale of stock and convertible notes.
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
No comments yet.