Mexico Freezes Food Prices; FedEx Doesn't Deliver Earnings, Dow Drops Below 12,000; Bear Stearns Execs to be Indicted; Somanetics Reports Healthy Profit; LinkedIn's Loot; More Cut-Backs for Delta; Gas Guzzler Price Decline
- Mexican President Felipe Calderon announced yesterday (Wednesday) that the government will freeze the prices of more than 150 basic foods, a bid to quell inflation. The freeze was immediately effective and will last until the end of the year, Reuters reported.
- FedEx Corp. (FDX) posted a fiscal fourth-quarter loss yesterday (Wednsday), as rising fuel prices and weak domestic demand hampered the Memphis-based shipping business. The company posted a loss of $241 million, or 78 cents a share, compared with profit of $610 million, or $1.96 a share, in the year-earlier period, MarketWatch reported.
- Stocks tumbled yesterday (Wednesday) with the Dow Jones Industrial Average Index briefly dipping below the 12,000 mark for the first time since mid-March. "I think the 12,000 level is probably more psychological than anything else, but in reality for the general investing public, crossing below that threshold is going to be a big headline grabber and runs the risk of pulling down sentiment," Craig Peckham, market strategist at Jefferies & Co. told the Associated Press.
- Two Bear Stearns Cos. Inc. (BSC) hedge fund managers are expected to be indicted for securities fraud in connection with a fund tied to the subprime lending market, CNBC reported. According to the report, the U.S. Attorney's Office for the Eastern District of New York has its sights set on Ralph Cioffi and Matthew Tannin, who ran the two Bear Stearns hedge funds that imploded and signaled the start of the subprime crisis.
- Medical device maker Somanetics Corp. (SMTS) said yesterday (Wednesday) that its fiscal 2008 second-quarter profit rose 27% on a jump in sales of the company's patient-monitoring systems, the Associated Press reported. The company earned $3.1 million, or 21 cents per share, compared with profit of $2.4 million, or 17 cents per share, a year ago. Revenue was up 40% from $9.1 million to $12.7 million.
- LinkedIn Corp., a social-networking Web site, announced yesterday (Wednesday) that it had raised $53 million in venture capital, currently valuing the firm at around $1 billion. The site, which targets business and professional users, had 8.7 million unique users in April, MarketWatch reported.
- Struggling carrier Delta Air Lines Inc. (DAL) announced yesterday (Wednesday) that it would further reduce capacity by 13%, more than originally anticipated. Citing high jet fuel prices and costs associated with the Northwest Airlines Corp. (NWA) merger, Delta said reductions would begin in the second half of the year in a regulatory filing, Bloomberg News reported.
- Used car wholesaler CarMax Inc. (KMX) reported yesterday (Wednesday) that retail prices for used trucks and sport utility vehicles dropped 25% for its fiscal quarter ended in May. "It's the longest-lasting depreciation of any segment we have ever seen, and I don't know when it will turn," CarMax Chief Executive Tom Folliard said, DowJones reported.