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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.
Senate Approves Bernanke Nomination; Commodities, Markets Fall as Dollar Gains; Citi Shares Fall After Lower-Than-Expected Price for Stock Sale; Weekly Jobless Claims Rise; Whitney Reduces EPS Estimates for Goldman, Morgan Stanley; Report: AIG Asian Subsidiary to Have Hong Kong IPO; RIM Beats Estimates on BlackBerry Shipments; Palm Q2 EPS Misses Wall Street Expectations
- As expected, the Senate Banking Committee yesterday (Thursday) approved U.S. President Barack Obama's nomination of Federal Reserve Chairman Ben Bernanke to a second four-year term. While the debate prior to the vote was contentious, 16 Senators voted in favor of Bernanke's second term while seven were against it. Bernanke was named Time magazine's Person of the Year 2009 on Wednesday.
- The U.S. dollar rose to its highest level in three months against the euro as investors unloaded risky assets yesterday (Thursday). The dollar was trading at 1.4345 per euro yesterday afternoon, driving down stocks and commodities. Gold futures for February delivery closed at $1,134 per ounce on the New York Mercantile Exchange (NYMEX). The Dow Jones Industrial Average was down 1.27% to close at 10,308.26, the Standard & Poor's 500 Index fell 1.18% to settle at 1,096.07 and the Nasdaq Composite Index dropped 1.22% to close at 2,180.05.
- Investors dumped shares of Citigroup Inc. (NYSE: C) yesterday (Thursday) after the bank said it would sell 5.4 billion shares of stock at a price of $3.15 per share – 9% less than what shares were trading before the announcement – to help pay off the $20 billion in bailout money it received from the U.S. government. This prompted the Treasury Department to balk at the deal, and step away from selling a portion of its 34% stake in Citi, The Associated Press reported. Citi stock closed at $3.20, down 7.25%.
- Initial jobless claims in the United States rose by 7,000 to 480,000 for the week ended Dec. 12, the Labor Department said yesterday (Thursday). However, the key four-week moving average fell by 5,250 to 467,500, which is significant, because it irons out week-to-week volatility in the data.
- Meredith Whitney, an analyst who runs an advisory group that bears her name, reduced earnings estimates for Goldman Sachs Group Inc. (NYSE: GS) to $6 a share in the fourth quarter, $19.65 a share in 2010 and $20.60 a share in 2011. She previously forecast profit of $6.38 a share in the fourth quarter, $21.73 in 2010 and $24.04 a share in 2011. She also expects Morgan Stanley (NYSE: MS) to earn $2.60 a share next year and $2.75 a share in 2011, down from $2.63 a share next year and $3.28 a share in 2011.
- American International Group Inc. (NYSE: AIG) is planning to raise billions of dollars next year by listing its Asian life insurance unit on the Hong Kong Stock Exchange, people familiar with the plan told The New York Times. The planned listing, which could raise as much as $20 billion, is expected to help AIG repay some of its huge debt to the U.S. government, which has an 80% stake in the company.
- Strong shipments of its popular BlackBerry smartphone helped Canada's Research in Motion Ltd. (Nasdaq: RIMM) grow its revenue by 41% in its third fiscal quarter ended Nov. 30. RIM reported a net income of $628.4 million, or $1.10 per share, on sales of $3.92 billion for the quarter. That compares to a profit of $386.3 million, or 69 cents per share on revenue of $3.53 billion in the same quarter last year. The company shipped 10.1 million smartphones in the quarter, beating analyst estimates of 9.5 million, MarketWatch.com reported.
- Palm Inc. (Nasdaq: PALM) posted a wider-than-expected loss of $81.9 million, or 54 cents per share, on sales of $78.1 million for its second fiscal quarter ended Nov. 30. That compares to a net loss of $506.2 million, or $4.64 per share, on revenue of $191.6 million a year ago. Excluding items, Palm posted a loss of 37 cents a share, which fell below average analyst forecast for a loss of 32 cents, Reuters reports. The maker of the Pre and Pixi smartphones said it shipped 783,000 devices in the quarter, up 41% from a year ago.