With our investment news briefs, Money Morning provides investors with a quick overview of the most important investing news stories from all around the world.
Dollars for Dryers, GM Ogles Opel, BofA Defends Settlement, Warner Does Debt, Dollar Dances Higher
First it was "Cash for Clunkers." Now it's "Dollars for Dryers." With sales of big-ticket home appliances in the trash compactor, the Obama administration has allocated $300 million for its "Energy Efficient Appliance Rebate Program." The initiative is on tap for this fall. Shipments of washers, dryers, refrigerators and ovens dropped 10% in 2008 and are down 15% through July, according to a report by the Association of Home Appliance Manufacturers. Home-appliance retailers - Home Depot Inc. (NYSE: HD), Sears Holdings Corp. (Nasdaq: SHLD) and The Lowes Cos. Inc. (NYSE: LOW) - have been forced to slash prices on big-ticket items - though with little success, TheStreet.com reported. Retailers probably shouldn't anticipate a big rush of sales, as was the case in the auto sector with the soon-to-be defunct "Cash for Clunkers" program.
Top executives at General Motors Co. are apparently working on a $4.3 billion financing plan that would enable the embattled Big Three carmaker to maintain control of its European Adam Opel GmbH business unit, The Wall Street Journal reported. GM has been talking for months to potential Opel suitors, but remains concerned about the impact some of the possible deals could have on its European sales. Sources told The Journal GM Chief Executive Officer Frederick "Fritz" Henderson is aiming to have the Opel financing plan done by General Motors' next regularly-scheduled board meeting, now set for early September.
In a federal court filing submitted yesterday (Monday), Bank of America Corp. (NYSE: BAC) defended the fairness of a proposed settlement it reached with U.S. securities regulators in the Merrill Lynch bonus scandal. According to a CNNMoney.com report, the settlement calling for payment of $33 million in penalties reached earlier this month with the U.S. Securities and Exchange Commission (SEC) was intended to bring about a "constructive conclusion" to the controversy, BofA said in the filing. The controversy stems from $3.6 billion in bonus payments that the Charlotte, N.C.-based Bank of America made to Merrill executives earlier this year.
Warner Chilcott PLC (Nasdaq: WCRX), the Dublin-based drug maker whose products range from acne medicine to birth control pills, says it will use bank debt for 100% of the funding of its $3.1 billion buyout of Procter & Gamble Co.'s (NYSE: PG) prescription-drug unit, Bloomberg Newsreported. JPMorgan Chase & Co. (NYSE: JPM), Bank of America Corp. (NYSE: BAC), Credit Suisse Group AG (NYSE ADR: CS), Morgan Stanley (NYSE: MS), Barclays Capital (NYSE ADR: BCS) and Citigroup Inc. (NYSE: C) will provide the Irish firm with so-called "bridge" financing, as well secured debt for the deal, Warner Chilcott officials said on a conference call yesterday (Monday). Warner Chilcott shares surged 27.09%, or $4.35 each, to close at $20.41 yesterday.
A late-afternoon decline in U.S. stocks helped helped propel investors into such "safe-haven" currencies as the U.S. dollar and Japanese yen yesterday (Monday). The European euro lost ground as a result as currency markets continue a recent trend of following global stock markets, John McCarthy, manager of currency trading at ING Capital Markets in New York, told Dow Jones News.. According to McCarthy, the yen and dollar both strengthened against the higher-yielding euro because investors the decline in U.S. stocks induced investors to "unwind" risky trades. Since the global financial system nearly collapsed last year, analysts say that currency investors still can't decide whether to base their trades on risk-focused strategies, or on economic fundamentals.