Fannie, Freddie Drive Financials Lower

123jump.com Staff
09 Jul, 2008
New York City

Banks and mortgage lenders remain the focus of nervous investors. Fannie Mae dropped after it sold $3 billion offering at higher yield than its previous offering a month ago. Fannie and Freddie dropped more than 5%. Alcoa second quarter revenue dropped 6% to $7.6 billion and net income declined 24% to $546 million. Aluminum, zinc and copper fall in the morning trading.

[R]11:30AM New York – The continued uncertainty on the health of Fannie Mae and Freddie Mac and weak banks in the U.S. dragged averages lower.[/R]

U.S. stocks traded lower in the morning as financials and mortgage lenders decline. Fannie and Freddie Mac fell this morning as market remains uncertain of their financial health. Metal prices are on the decline in the morning trading in New York and London. Future prices of aluminum drop 5% followed by losses in zinc of 4% and in copper of 2.3%.

Fannie Mae stock ((FNM)) fell 4% or 70 cents to $16.92 after it sold $3 billion of offering at a higher yield than in the previous offering. Yield for bonds maturing in one year were priced at 3.27%, higher than previously estimated. In June, Fannie had placed $3 billion of bonds at 3.03% yield. Freddie Mac stock (FRE)) in the morning dropped 8.5% or $1.16 to $12.30.

Banks fell again as investors face dilutive capital raising and expect more write downs. The weakness in the housing market continues to depress mortgage securities held by large and regional banks. Bank of America, Regions Financial, Wachovia and Citigroup fell between 1% and 4% in the morning trading.

Alcoa Inc, the world''s third-largest aluminum producer said second quarter revenues dropped 6% to $7.62 billion from $8.06 billion a year ago. Net income in the quarter declined 24% to $546 million or 66 cents per diluted share compared to net income of $715 million or 81 cents per share, a year ago.

Alcoa stocks rose 40 cents or 1.2% to $32.72. Alcoa Inc ((AA)) in the last one year traded as high as $48.77 in July 2007 and as low as $26.69 in January 2008. Based on the yesterday’s closing price the company has a market cap of $26.35 billion.

Century Bancorp, Inc, a bank holding company said second quarter net income in the quarter increased 15.6% to $1.88 million or 34 cents per diluted share compared to net income of $1.6 million or 29 cents per share, a year ago.

Century Bancorp stock traded at $16.50 in today’s trading, and in ((CNBKA)) the last one year traded as high as $25.49 in November 2007 and as low as $16.00 in July 2008. Based on the yesterday’s closing price the company has a market cap of $91.47 million.

Premier Exhibitions, Inc, an exhibition management company said first quarter revenues increased 34% to $15.2 million from $11.4 million a year ago. Net loss in the quarter was $0.9 million or 3 cents per diluted share compared to net income of $3.3 million or 10 cents per share, a year ago.

Premier stock fell 79 cents or 20% to $3.18 in today’s trading. Premier Exhibitions, Inc ((PRXI)) in the last one year traded as high as $18.62 in July 2007 and as low as $3.75 in February 2008. Based on the yesterday’s closing price the company has a market cap of $119.76 million.

Sealy Corporation, Mattress maker said second quarter sales declined 7% to $375.4 million from $401.8 million a year ago. Net income in the quarter dropped 26% to $12 million or 13 cents per diluted share compared to net income of $16.1 million or 17 cents per share, a year ago.

Sealy Corporation ((ZZ)) in the last one year traded as high as $16.58 in November 2007 and as low as $5.62 in June 2008. Based on the yesterday’s closing price the company has a market cap of $605.94 million. In today’s trading Sealy stock fell 96 cents or 14.5% to $5.68.

Material Sciences Corporation, a provider of material-based solutions for acoustical and coated applications reported first quarter sales declined 6% to $57.2 million from $60.7 million a year ago. Net loss in the quarter was $1.9 million or 14 cents per diluted share compared to net loss of $0.5 million or 4 cents per share, a year ago.

Material Sciences Corporation ((MSC)) in the last one year traded as high as $13.48 in July 2007 and as low as $5.05 in January 2008. Based on the yesterday’s closing price the company has a market cap of $108.20 million. In today’s trading Materials Sciences fell 4 cents to $7.78.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 19.03 or 0.15% to 13,052.13, Hang Seng index in Hong Kong increased 585.00 or 2.76% closed to 21,805.81. ASX 200 index in Australia increased 79.00 or 1.60% to close 5,011.90. The KL Composite index in Malaysia increased 18.56 or 1.66% closed to 1,139.81.

The Kospi Index in South Korea decreased 14.09 or 0.92% to close at 1,519.38, SET index in Thailand closed lower 1.37 or 0.19% to 721.13 and JSE Index in Indonesia increased 7.05 or 0.31% to 2,286.03. The Sensex index in India increased 614.61 or 4.60% to 13,964.26.