January 25, 2008

IBD's Top 10 - Friday

Bush Calls For $150 Bil Stimulus

1 President Bush said he'd like to see a stimulus plan equal to 1% of GDP, or $140 bil-$150 bil, to help boost a flagging economy. It should include tax breaks for business investment and quick tax relief for individuals, said Bush, not giving specifics. His comments were generally well-received on Capitol Hill, where there's bipartisan support for quick action.

Stocks Open Strong, Close Down

2 The major averages jumped at the open on IBM's bullish forecast and GE's solid Q4. But gains quickly faded, with the Nasdaq hitting a 15-month low intraday. The tech-laden index ended 0.3% lower. The Dow slid 0.5% and the S&P 500 0.6%. Volume rose across the board. Many financial firms struggled yet again. The 10-year Treasury yield rose 1 tick to 3.63%.

Leading Gauges Signal Trouble

3 The Index of Leading Economic Indicators fell 0.2% in Dec., the 3rd straight monthly drop. Year over year, the LEI sank 1.4%, the worst drop since the '01 recession. Also, ECRI's leading U.S. index rose for a 2nd week. The annualized growth rate edged off a 6-year low to -6.7%, but is still at recessionary levels.

Ambac's Rating Downgraded

4 Fitch cut the bond insurer to AA from AAA, raising fears that debt holders will suffer more write-downs. Moody's and S&P have said they might cut Ambac and rival MBIA (NYSE:MBI - News). Fitch cited Ambac's (NYSE:ABK - News) decision to scrap a controversial plan to raise $1 bil in capital. Warren Buffett's Berkshire Hathaway (NYSE:BRK-A - News) has hinted it might buy a bond insurer. Ambac dipped; MBIA slid 7%.

GE Meets On Overseas Demand

5 The diversified conglomerate met Q4 profit views for a 17% rise to 68 cents a share ex items. Revenue rose 18% to $48.6 bil. GE (NYSE:GE - News) said overseas demand for heavy equipment offset a sluggish U.S. economy. It sees '08 EPS of 50-53 cents vs. views of 51 cents, but warned profit at GE Money could be down 20%. GE shares rose 3%.

Sprint Falls On Job, Store Cuts

6 Shares of the No. 3 U.S. mobile carrier fell 25% to a 5-year low on its plan to ax 4,000 jobs, 125 stores and 4,000 3rd-party distribution points. Sprint Nextel (NYSE:S - News) said it expects weaker subscriber growth and revenue. It sees up to $800 mil a year in savings, but also a Q1 charge for severance costs. Sprint has struggled since it bought Nextel in '05. No. 1 AT&T (NYSE:T - News) fell 3% and No. 2 Verizon (NYSE:VZ - News) slid 4%.

Schlumberger Misses, Falls 4%

7 The oil-field service firm's Q4 profit rose 22% to $1.12 a share, a penny shy of views. An analyst contended Schlumberger (NYSE:SLB - News) missed by 5 cents if an asset sale and tax gain were excluded. Revenue rose 17% to $6.25 bil, topping forecasts. The firm said demand rose in the Eastern Hemisphere and Latin America, but said N. American profit disappointed. It gave a cautious outlook.

Nev., S.C. Hold Weekend Votes

8 GOP candidate Mitt Romney, focusing on Nevada, hoped for a win in that state's Sat. caucuses. Meantime, John McCain seemed to have a edge over Mike Huckabee, Fred Thompson and the absent Romney going into S. Carolina's Sat. primary. Among Dems, Hillary Clinton was favored over Barack Obama in Nevada's vote.

VC Investing Highest In 5 Years

9 Venture capital investments rose 10% in '07 from a year earlier to $29.4 bil, the highest annual total since '01, according PricewaterhouseCoopers and the Nat'l Venture Capital Association. Much of the investment growth centered on alternative energy, biotech and medical devices. First-time financings hit a 6-year high.

Israel Seals Access To Gaza Strip

10 The military closed Gaza border crossings, cutting off vital supplies to the Hamas-controlled territory, amid increasing rocket attacks by militants. Hamas fighters launched 16 rockets into Israel on Fri. Israel responded with airstrikes vs. Hamas offices in Gaza City, killing 2 civilians and 1 militant. Hamas threatened retaliatory suicide attacks.

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