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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.
More Insider Trading Arrests Coming; Icahn Offers CIT Bailout; Oil Pushes $80; Treasury Steps In To Support HFAs; N.Y. Times to Cut 100 Newsroom Jobs; Hasbro Shares Fall Amid Soft Sales, Inventory Concerns; Business IT Spending to Return to Growth in 2010
- Federal investigators are planning to charge a minimum of 10 securities professionals for insider trading, Bloomberg News reported, citing people familiar with the matter. Some of those under investigations are linked to Galleon Group hedge fund manager Raj Rajaratnam, who was arrested Friday along with six others on charges of an insider trading scam that generated more than $25 million in illegal profits. Rajaratnam was originally going to be arrested this week as part of a broader sweep, but authorities expedited the process when they learned he bought a plane ticket to London on Thursday.
- Billionaire investor Carl Icahn said he's willing to loan ailing commercial lender CIT Group Inc. (NYSE: CIT) $6 billion to replace the debt exchange offer the company is attempting as a last-ditch effort to avoid bankruptcy. CIT acknowledged the letter stating Icahn's offer yesterday (Monday), saying it was the first indication it had of the outspoken investor's interest in providing alternative financing. Icahn said in a Bloomberg News interview there's "no question in my mind" he's CIT's largest shareholder, declining to say how much of the lender he held.
- Light, sweet crude for November delivery yesterday (Monday) once again reached a 2009 high, rising 1.4% to $79.61 on the New York Mercantile Exchange (NYMEX). "Oil has broken out," said Phil Flynn, vice president at futures trading and research firm PFG BEST Research told MarketWatch, adding that crude could reach $80 soon. Still, analysts said last week that a 2008-like price spike was unlikely amid high inventories and sluggish demand in the United States.
- The U.S. Treasury will begin purchasing securities from Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) that are backed by new housing bonds issued by local and state housing finance agencies (HFAs), which provide low-interest mortgages for low- and moderate-income families and fund the development of affordable rental housing. " , but the housing downturn has hit these organizations too," said Treasury Secretary Timothy Geithner. Additionally, Fannie and Freddie will provide replacement credit and liquidity facilities available to HFAs that the Treasury says will help reduce the costs of maintaining existing financing for the HFAs.
- The New York Times Co. (NYSE: NYT) plans to eliminate 100 newsroom jobs at its flagship newspaper, offering buyouts to both union and non-union employees, The New York Times reported. Should not enough people take the buyouts, the newspaper will resort to layoffs. The move mirrors one The Times made in the spring of 2008, in which the paper eliminated 100 newsroom jobs, including 15 to 20 journalists. Newspapers are being forced to find new revenue streams amid declining ad revenue, which plunged 16.7% industry-wide last year.
- Shares of Hasbro Inc. (NYSE: HAS) fell 3.73% to close yesterday (Monday) at $28.42 after soft sales and growing concerns over shrinking retail inventories. The toy maker reported a net income of $150.4 million, or 99 cents a share on revenue of $1.28 billion for the quarter ended Sept. 27. That compares to a net income of $138.2 million, or 89 cents a share on revenue of $1.30 billion in the same quarter last year. Rival Mattel Inc. (NYSE: MAT) said retail inventories have fallen by "double digits" compared to this time last year, MarketWatch reported.
- Market research firm Gartner Inc. (NYSE: IT) said it expects business IT spending to fall 6.9% this year, the worst drop on record. The industry will return to growth next year, with spending totaling $3.3 trillion, a 3.3% rise from this year. "While the IT industry will return to growth in 2010, the market will not recover to 2008 revenue levels before 2012," said Peter Sondergaard, senior vice president at Gartner and global head of research. " ." In the meantime, technology companies will rely on consumer spending to carry them through the worst economic downturn since World War II.