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CME Bids for NYMEX; Sears Ousts CEO; Record Year for McDonald's; Countrywide CEO Relinquishes Severance; New Home Sales Plummet; Investors Bancorp Gets a Lift From Share Buyback; Citigroup to Team Up with Central China Securities; American Express Hits 4Q Bump
- CME Group Inc. (CME), the result of a July merger between the Chicago Mercantile Exchange and the Chicago Board of Trade, is pursuing an acquisition of NYMEX Holdings Inc. (NMX) in a deal currently valued at more than $11 billion, Bloomberg News reported. CME Group has proposed to pay about $119.20 for each share of NYMEX in a combination of cash and stock, but both companies were quick to say negotiations were still in the early stages and a final agreement had not yet been reached. NYMEX's energy and metals futures markets are seen as a natural extension to CME, already the world's largest futures market.
- Sears Holdings Corp. (SHLD) announced Chief Executive Officer and President Aylwin Lewis would step down effective Feb. 2, the end of the firm's fiscal year, following disappointing holiday season for retail sales. W. Bruce Johnson will serve as interim CEO. "As we realign Sears into five different types of focused business units, we will be redefining how our leaders operate by giving them greater autonomy and accountability," Chairman Edward S. "Eddie" Lampert said in a statement.
- McDonald's Corp. (MCD) released fourth-quarter and full-year earnings yesterday (Monday). Revenues reached a record high of $22.8 billion for 2007. U.S. sales slowed and European sales were strong, but most of the growth was attributable to emerging markets. "Asia/Pacific, Middle East and Africa delivered outstanding quarterly results driven by an 11.4% comparable sales increase – marking the segment's highest annual comparable result in more than 15 years. Strong results in most markets, led by China, Japan and Australia contributed to the segment's robust performance for the year," Chief Executive Officer Jim Skinner said in a statement.
- Countrywide Financial Corp. (CFC) Chairman and Chief Executive Officer Angelo R. Mozilo announced yesterday (Monday) that he would forgo his rights to cash severance payments, valued at approximately $37.5 million, in connection with the Bank of America Corp. (BAC) merger. "My primary focus today — as it has been for the past 40 years — is to do what is in the best interests of Countrywide's employees, customers and shareholders," Mr. Mozilo said. "I believe this decision is the right thing to do as Countrywide works toward the successful completion of the merger with Bank of America."
- Sales of new U.S. single-family homes plummeted a record 26% in 2007 and builders slashed prices by the most since 1970, a government report showed yesterday (Monday). Sales in December fell 4.7% to an annual rate of 604,000, the slowest pace since 1995. The report offered little hope for a turnaround any time soon as a record one-month drop in the median home price for December failed to stir demand and the number of months needed to clear the inventory of unsold homes rose.
- Investors Bancorp Inc. (ISBC) announced yesterday (Monday) that its board has approved the company's third buyback program, authorizing the repurchase of an additional 4.3 million shares. The new program will begin upon completion of the previous repurchase authorization for 4.8 million shares. Shares of the company's stock closed at $14.98 a share, up 3.31%.
- Citigroup Inc. (C) has signed an agreement with an unnamed Chinese partner to establish a mainland investment banking joint venture, the Financial Times reported. The mystery partner is rumored to be Central China Securities, a mid-sized brokerage. Citigroup's move follows those of Credit Suisse (CS) and Morgan Stanley (MS), which last month signed separate agreements with Chinese partners to establish mainland investment banking joint ventures. Banks have flocked to Beijing as the government readies to relax a two-year ban on foreign investment in the country's booming domestic securities industry.
- American Express Co. (AXP) said yesterday (Monday) that profit slumped nearly 10% in the fourth quarter, Reuters reported. The drop was the result of a rising level of defaults, which indicates the average American is struggling with debt, and a steeper decline in consumer spending may be on the horizon. The credit-card issuer posted net income of $831 million, or 71 cents per share, down 9.9% from $922 million, or 75 cents per share, in the prior year's fourth quarter. For the full year, the company posted net income of $4.01 billion, up from $3.71 billion in 2006, and revenue of $24.14 billion, up from $22.16 billion in 2006.