Freddie Mac, Whole Foods Down 15%

123jump.com Staff
06 Aug, 2008
New York City

Larger than expected loss at Freddie Mac and sharply lower earnings at Whole Foods turned tradning sentiment negative. Benchmark indexes opened lower and quickly fell more. Freddie Mac slashed its dividend by 80% and reported three times more than expected loss. Whole Foods third quarter earnings of 24 cents a share, the stock fell 20%. Cisco revenue fourth quarter revenue rose 10% and earnings gained 4%.

[R]11:00AM New York – U.S. stocks edged lower after a batch of mixed earnings. Freddie Mac wider than expected loss dragged Fannie and Freddie lower.[/R]

Freddie Mac ((FRE)) dropped $1.25 or 15.5% to $6.79 after it reported wider than expected loss and slashed its dividend. The troubled second largest mortgage agency reported second quarter net loss of $821 million or $1.63 a share compared to profit of $764 million or $1.02 a share a year ago.

The lender lowered its quarterly dividend to 5 cents from 25 cents a share increased its losses related to mortgage loans to $2.8 billion, nearly twice the amount recorded in the first quarter. The lender cut its dividend in half in November of last year. Freddie is likely to raise more than previously announced capital of $5.5 billion.

Cisco ((CSCO)) rose $1.01 to $23.66 after it reported fourth quarter sales rise of 10% to $10.4 billion and earnings increase of 4% to $2.1 billion or 33 cents a share compared to 31 cents a share.

Whole Foods ((WFMI)), the expensive grocery store, fell 20% after it reported third quarter net income of $33.9 million or 24 cents a share on higher costs related to the purchase of Wild Oats Markets.

Priceline.com ((PCLN)) dropped 14% or $17.73 to $99.31 after it reported lower than expected travel booking increase in the third quarter of 54%.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 340.23 or 2.63% to 13,254.89. ASX 200 index in Australia increased 148.70 or 3.08% to close 4,969.10. The KL Composite index in Malaysia increased 4.73 or 0.42% closed to 1,133.59. Market of Hong Kong was closed today.

The Kospi Index in South Korea increased 43.17 or 2.81% to close at 1,578.71, SET index in Thailand closed higher 9.23 or 1.38% to 676.35 and JSE Index in Indonesia increased 1.59 or 0.07% to 2,187.20. The Sensex index in India increased 112.47 or 0.75% to 15,073.54.

Europe Markets Review

In London FTSE 100 Index traded lower 8.40 or 0.15% to 5,446.10, in Paris CAC 40 Index increased 25.20 or 0.57% to 4,411.55 and in Frankfurt DAX index edged lower 15.15 or 0.23% to 6,503.55. In Zurich trading SMI decreased 0.35 or 0.00% to 7,190.43.