Consumer Confidence Hits Record Low; JPMorgan Slashes Dividend; Bernanke Urges Strong Action for 2010 Recovery; Target Profit Tumbles; Oil Pushing Back to $40; Home Depot Beats Estimates
U.S. consumer confidence fell to a record low in February, according to the Conference Board index. "Just when you think confidence can't go any lower, the bottom falls out of it, and you can be sure the rest of the economy is not far behind," Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, told Bloomberg.
JPMorgan Chase & Co. (JPM) slashed its common-stock dividend by 87% Monday, a move that will save the company about $5 billion of common equity annually. "Extraordinary times must call for extraordinary measures," Chief Executive Jamie Dimon said on a conference call, Reuters reported.
Federal Reserve Chairman Ben Bernanke warned the recession could last into 2010 "only if" lawmakers are successful in restoring stability to the financial system. Speaking to the Senate Banking Committee, Bernanke said the U.S. economy is in a severe contraction, Bloomberg reported.
Quarterly profits for Target Corp. (TGT) fell almost 41%, below Wall Street estimates, marking the sixth consecutive quarterly drop, Reuters reported. "The company faces a number of challenges on many different fronts - merchandising, how to utilize square footage, how to compete, how to increase sales incentives," said Richard Hastings, consumer strategist with Global Hunter Securities. "The current fiscal year should be viewed very cautiously."
Light, sweet crude for April delivery rose $1.52, or 4%, yesterday (Tuesday) to settle at $39.96 a barrel on the New York Mercantile Exchange. Oil prices have failed to settle above $40 for more than two weeks.
Home Depot Inc. (HD) posted stronger-than-expected results yesterday (Tuesday). The hardware company posted a net loss of $54 million, or 3 cents a share, for the quarter ended February 1, compared with earnings of $671 million, or 40 cents a share, a year earlier. The latest results included a pretax charge of $387 million tied to the elimination of 7,000 jobs from the closure of the Expo Design Center chain and other corporate cuts. There was also a $163 million writedown of an investment. Excluding those items, profit from continuing operations was 19 cents a share, exceeding the analysts' average forecast of 15 cents, according to ReutersEstimates.