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Fed Watch: Is It A 25 or 50 Point Cut?

Tuesday, 11 Dec 2007 | 9:18 AM ET

How aggressive will the Fed be? They are expected to cuttt 25 basis points and many are expecting a 50 basis point cut in the discount rate. Some are also expecting new innovations to encourage banks to use the discount window.

Elsewhere:

1) Washington Mutual down 10 percent as it cuts its dividend and is selling $2.5 billion in preferred stock. Downgraded at Citi. The big worry here is that the company appears to be seeing deterioration in its prime book of business.

Meanwhile, Keefe Bruyette & Woods downgraded a large number of regional banks.

2) Texas Instruments up 4 percent pre-open after guiding higher in its fourth quarter revenue.
3) GE holds it annual analyst conference.
4) Merck reiterates guidance.

5) H&R Block down 7 percent as they delay their quarterly report because of a change in auditor. Still, they expect to report a loss for the quarter of $1.55, which includes a loss of $1.13 a share from discontinued operations. Excluding this, the loss of $0.42 is still worse than analyst consensus loss of $0.35. Remember, they are essentially exiting the mortgage business.

Hewlett-Packard just out with guidance for fiscal 2009; seems like guidance roughly in line with expectations.

While some banks and brokers are cutting dividends, other industries are increasing theirs:

1) AT&T up 3 percent as it boosts its dividend by 12.7 percent, the largest dividend increase in its history. They also announced a new $15.2 billion buyback, about 7 percent of the market capitalization. That will push the company's dividend yield over 4.0 percent.

2) Boeing approved a 14 percent dividend increase.


Questions? Comments? tradertalk@cnbc.com

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  • A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

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