Pepsi Falls, J&J Rises; XL Surges

123jump.com Staff
14 Oct, 2008
New York City

Financials gained after the U.S. Treasury injected $250 billion in nine largest financial institutions. XL Capital rebounded after the chairman was forced to meet margin call. Johnson & Johnson rose on 30% rise in earnings. Pepsi fell on 9% drop in third quarter earnings.

[R]1:40PM New York – Financials gained on Treasury capital injection. Johnson & Johnson gained but Pepsi fell after earnings. Rackable Systems dropped on earnings warnings.[/R]

3M Company ((MMM)) rose 3.86% or $2.29 to $61.92 after the diversified technology company entered into an agreement to acquire Financiere Burgienne, a provider of finished license plates in France. The company operates 20,000 retail locations to register license plates. 3M provides reflective sheeting and other enhancements and accessories to French vehicle owners.

ADTRAN, Inc ((ADTN)) fell 9.70% or $1.88 to $17.53 after the provider of networking and communications equipment maker reported third quarter revenues increase of 11% to $137.2 million from $123.8 million a year ago. Net income in the quarter rose 4% to $22.41 million or 35 cents per diluted share compared to net income of $21.45 million or 31 cents per share, a year ago.

Bank of America Corporation ((BAC)) climbed 12.86% or $2.94 to $25.65 after Stifel Nicolaus revised the rating to “buy” from “hold” and set a target price of $30 despite it lowered earnings estimate.

Citigroup Inc ((C)) gained 15.24% or $2.39 to $18.13 after the bank ended negotiation with Wells Fargo on Wachovia transaction.

The Goldman Sachs Group, Inc ((GS)) rose 13% or $14.42 to $125.43 after the U.S. Treasury pressured nine largest banks and financial institutions to sell stake in exchange for capital injection.

Infineon Technologies AG ((IFX)) fell 15.54% or 68 cents to $3.76 after Deutsche Bank downgraded stock rating to “hold” from “buy” and cut its price target to 4 euros from 7.20 euros. The rating revision was first reported on newratings.com.

Johnson & Johnson ((JNJ)) gained 4.42% or $2.79 to $65.45 after the health-care giant reported third quarter revenues increase of 6.3% to $15.9 billion from $14.97 billion a year ago. Net income in the quarter rose 30% to $3.31 billion or $1.17 per diluted share compared to net income of $2.55 billion or 88 cents per share a year ago.

PepsiCo, Inc ((PEP)) lost 7.72% or $4.80 to $56.99 after the global snack and beverage company reported third quarter revenues rose 11% to $11.24 billion from $10.17 billion a year ago. Net income in the quarter fell 9% to $1.58 billion or 99 cents per diluted share compared to net income of $1.74 billion or $1.06 per share, a year ago.

Rackable Systems, Inc ((RACK)) lost 14.42% or $1.25 to $7.52 after the provider of servers, storage and data center solutions targeting data centers lowered the revenue forecast for the year and predicted a loss for the year. The company revised the revenue guidance to between $275 million and $300 million from $353 million to $374 million and a loss between 8 cents and 16 cents a share.

W.W. Grainger, Inc. ((GWW)) added 6.89% or $5.43 to $85.77 after the maintenance products distributor reported third quarter sales increase of 11% to $1.84 billion from $1.66 billion a year ago. Net income in the quarter rose 28% to $140 million or $1.79 per diluted share compared to net income of $109.2 million or $1.29 per share a year ago.

Wells Fargo & Company ((WFC)) added 5.72% or $1.74 to $32.14 after the Fed approved the purchase of Wachovia Corporation.

XL Capital Ltd ((XL)) surged 41.72% or $3.10 to $10.58 after a provider of insurance and reinsurance coverage estimated third quarter 2008 net loss to ordinary shareholders of $1.65 billion to $1.67 billion or a net loss of $6.08 to $6.17 per ordinary share. The company chairman Brian O’Hara disclosed that he was forced to sell 640,000 shares between $3.45 and $6.19 a share because of margin call to fund purchase of company stock to be issued through options. O’Hara was replaced as chief executive by Michael McGavick and XL Capital stock has fallen more than 75% in last three weeks of trading.