Dodd Says He'll Refinance Countrywide Mortgages

HARTFORD, Conn.--Senate Banking Committee Chairman Chris Dodd, whose two mortgages with a troubled lender are under a Senate ethics investigation, said Monday he will refinance them.

Dodd said he sought no special treatment from Countrywide Financial Corp., when he refinanced his Washington and East Haddam, Conn., homes in 2003. Dodd has acknowledged participating in a VIP program at Countrywide, which he thought referred to upgraded customer service, not reduced rates.

"Knowing what I know now, I regret having ever done business with Countrywide," Dodd said.

The bank, a leading subprime lender at the center of the mortgage meltdown, was sold to Bank of America Corp. (BAC) last year and has been the focus of allegations that it gave favorable loan terms to lawmakers.

Dodd, a five-term Democrat, said he's switching the loans to a new bank because he was wrongfully labeled a friend of Countrywide's former CEO, Angelo Mozilo.

"Let me be very clear. We are not friends of Angelo Mozilo and we have never been a friend of his," said Dodd, who was accompanied by his wife, Jackie, at a news conference. "The first we ever heard of the 'friends of Angelo' list was through press reports last summer."

Dodd, whose committee has oversight over the mortgage and banking industries, faced heavy criticism in his home state for not releasing details of his mortgages when the controversy erupted last year.

Dodd said Monday he received a $275,000 30-year, adjustable rate loan at 4.5% interest for his East Haddam home. The Washington home was financed with a 30-year adjustable loan of $506,000 with a 4.25% rate.

The terms of the mortgages are under investigation by the Senate Ethics Committee.

"I just wanted to put this behind us," said Dodd, speaking to reporters in his Hartford office.

A third party will be involved in choosing the bank for the new loans, he said.

Dodd said he has turned over documents and answered written questions, but has not been called to testify before the Senate committee investigating the loans , Dodd said.

Dodd played a key role in crafting the $700 billion Wall Street rescue plan, which allows the government to spend billions of dollars to buy bad mortgage-related securities and other devalued assets from troubled financial institutions.


Glass-Steagall Could Get Second Chance
GM to end jobs bank Monday
Freddie, Fannie extend eviction freeze a month
Senate Confirms Geithner as Treasury Secretary

February Flop: Stocks End Mixed

It was a matter of “too little too late” for Wall Street on Monday. Despite a wave of late-day buying, it wasn’t enough to carry the Dow into positive territory -- or over the pivotal 8000 threshold -- and rebound from its worst January on record.

Today’s Markets

The Dow Jones Industrial Average lost 64.11 points, or 0.80%, to 7936.75, the S&P 500 fell 0.45 points, or 0.05%, to 825.43 and the Nasdaq Composite jumped 18.01 points, or 1.22%, to 1494.43. The consumer-friendly FOX 50 slid 0.49 points, or 0.08%, to 617.73.

“It kind of feels like a summer Monday today. The volume is low. I don’t know if it’s a little hangover from the Super Bowl yesterday," NYSEtrader Jonathan Corpina of Meridian Equity Partners told FOX Business.

The markets were clearly spooked by a number of bearish headlines, including more potential job cuts for Macy's (M) and Morgan Stanley (MS), $40 crude oil prices, a weaker-than-expected construction report and the first six-month consumer spending drought on record.

The spending report "confirms what we already know. People simply aren't spending," said Ryan Detrick, equities analyst at Schaeffer's Investment Research. "The bad news is just continual.”

Nearly half of the Dow's 30 components ended in the green on Monday, led by tech titans Intel (INTC) and Microsoft (MSFT). On the other hand, Bank of America (BAC), General Motors (GM) and 3M (MMM) suffered the steepest losses on the benchmark index.

It was a vastly different picture for the Nasdaq Composite, however, as tech stocks likeYahoo!(YHOO) and Amazon.com (AMZN) carried the index to big gains. Nvidia(NVDA) and Intel were two of the largest percentage gainers on the Nasdaq 100, canceling out steep losses for Electronic Arts(ERTS) and Bed, Bath & Beyond(BBBY).

“When we rally it’s more hopes and wishes, and when we sell off it’s more reality. In that kind of environment you really have to be quite nimble,” Peter Boockvar, equity strategist at Miller Tabak, told FOX Business.

Even the most nimble investors likely haven't avoided the red so far in 2009 as the Dow fell 773 points last month, the worst January performance in its 113-year history. The ugly start to the year doesn't bode well as the Dow's January performance has been an accurate predictor of the full year's direction 75% of the time.

“The good news is they are holding here. The bad news is we’ve got no capability to move anywhere. There is just a tremendous amount of bad news,” said Frank Davis, director of sales at LEK Securities.

Bleak Corporate, Economic Headlines

A mid-afternoon comeback attempt was halted when Macy's (M) unveiled plans to slash 7,000 more jobs and cut its quarterly dividend to fight the recession. Also, The Wall Street Journal reported Monday afternoon that Morgan Stanley (MS) could announce plans to cut 1,500 to 1,800 jobs in layoffs that would impact 3% to 4% of its work force.

“If you can’t go shopping at Macy’s, where are you going to shop? Individually these stories really aren’t significant but it just adds” to the gloom and doom, said Davis.

The government said consumer spending fell by a worse-than-expected 1%in December, a record sixth straight month of declines. For 2008, personal spending, which accounts for more than two-thirds of the nation's GDP, rose just 3.6%, the smallest increase since 1961.

The markets failed to rally around a a better-than-expected manufacturing report from the Institute of Supply Management. The group's index unexpectedly improved in January to a 35.6 reading, up from its record low of 32.9 the month before.

On the other hand, the government said construction spending plunged by 1.4% in December, its third consecutive monthly decline.

All Eyes on Washington

Meanwhile, the markets continue to watch the action in Washington as lawmakers consider President Barack Obama's economic stimulus package. While the House signed off on the $800 billion spending and tax cut bill, it could face more opposition in the Senate.

There is considerably more uncertainty surrounding a new rescue for the nation's shaky financial institutions. The White House hasn't settled on a plan yet but the government could offer a two-pronged rescue to buy a portion of banks' bad assets while offering guarantees against future losses on some of the rest, the Journal reported.Treasury Secretary Timothy Geithner will unveil the new bailout plans in a speech next week, the Journal reported.

"We are kind of in a wait-and-see [mode]for a resolution. Until that happens, unfortunately it’s going to be more of the same," said Detrick.

In the energy market, crude oil futures plummeted at the close of trading, shoving stocks like Hess (HES)and Valero (VLO) deeper into the red. The price of a barrel of crude ended at $40.08, down $1.60 on the day. Amid the economic turbulence, crude oil prices slumped 6.55% in January, its seventh straight monthly decline.

Corporate Movers

Mattel (MAT) lost nearly one-fifth of its market value after the world's largest toy maker widely missed Wall Street’s estimates by posting a quarterly profit of 49 cents per share on an 11% dive in sales.

Ford (F) could need a government bailout by late 2009 as the auto sector continues to deteriorate, a Barclays analyst predicted. Barclays also downgraded Ford to “underweight” from “equal-weight” and slashed its price target to $1 from $4.

American International Group (AIG) could be in line for more government aid. The insurance giant is in talks about the government backstopping some of its toxic assets and is considering selling some of its businesses through IPOs, the Journal reported. The government threw AIG a $150 billion lifeline last year.

Rio Tinto (RTP) confirmed it is in asset sale talks with rival Chinalco in an effort to reportedly cut its debt by up to $8 billion.

Humana (HUM) beat the Street with an adjusted-profit of $1.07 per share and backed its 2009 guidance.

Global Markets

European stock markets ended in the red for the third straight day as the Dow Jones Euro Stoxx 50 Index, which gauges the 50 biggest companies in Europe, fell 1.71% to 2198.74. London’s FTSE 100 sank 1.73% while Germany’s DAX fell 1.55%.

In Asia, Tokyo's Nikkei 225 fell by 1.5% to 7873.98 while Hong Kong's Hang Seng sank 3.14% to 12861.49. Australia's ASX 200 fell by 1.2%.


Market Winners & Losers: Symantec, Textron
As economy falls, more people put money away in savings
U.S. home sales rise in December

Charles Payne: 3 Stocks, Charles' Choice

3 Stocks

What is Amazon (AMZN)?

A member of a nation of woman warriors that lived in ScythiaArguably the largest river in the worldAn Internet success story that keeps getting better with age

In the fourth quarter the company's revenue increased 18% in part to strong sales of the Kindle which Jeff Bezo said enjoyed "unusually string demand". Net income was $225.0 million or $0.52 on revenue of $6.7 billion. The Street was looking for $0.39 on $6.4 billion in revenue. First quarter revenue guidance is $4.53 to $4.93 billion against the current consensus of $4.51 billion.

Altria (MO) saw revenue increase 3% even as cigarette smokers both 2.1% fewer Marlboros and Parliaments and other brands. The company has pricing power and it needs it as there will be a federal tax hike in cigarettes on April 1 of this year. The company will still have to raise prices on top of the extra buck the fed tax will add to a pack. Earnings were in line for the quarter.

Sun Power (SPWRA) enjoyed a great quarter and added credence to solar-power hype. For the quarter the company earned $29.6 million or $0.35 a share up from $0.06 a year earlier. For the year the company added 350 more dealership to sell panels to residential and small businesses. Management says the long term fundamentals remain "very positive".

Outrageous!

President Obama was rightfully outraged yesterday when he discovered the amount of bonuses lavished on Wall Street in 2008. According to the office of the New York Comptroller, total bonuses for Wall Street firms came to $18.4 billion a decline of 44% but still a hell of a lot of money for an industry that lost $34 billion. The payout comes to $112,000 per person from $180,420 in the year ago period (in 2007, the average bonus at Goldman was $661,400).

While it is true that Wall Street workers have low salaries and rely on bonuses, rewarding cataclysmic failure like this has to be what led to the fall of the Roman Empire and even the U.S. automobile industry among many other nations and industries. The point is, there is still a sense of entitlement, greed and a series discount from the real world.

I will say, the number is misleading, as there are a lot of regular folks working on Wall Street that aren’t fat cats by any stretch of the imagination.

Last year employment on Wall Street declined to 168,600 from 187,800 in 2007. It really is outrageous, and will be another arrow in the quiver of those looking to push capitalism aside.

However, since we are on the topic of outrageous bonuses and uses of money, let's talk about the stimulus plan. A significant portion of the funds will go to create government jobs. Government job unemployment rate is current an enviable 2.3% but as much as $646,214 will be spent to create each of these new positions.

Maybe it's not just executives on Wall Street out of touch.

Be that as it may, President Obama was visibly angry but did say there will be times for making money, an assurance there will be no nationalization and suffocating regulations or salary caps, perhaps?

Ironically, almost a year ago to the day I was bitterly upset about the Wall Street bonus payouts for 2007. I could have used the update from January 18, 2008 for today’s comments -- it is a shame that nothing has changed.

In 1985, Wall Street bonuses totaled $1.9 billion, or $13,970 per person. By 2006, the amount was $34.1 billion. If a loaf of bread was $1.90 in 1985 it would cost $3.62 in 2006 and $3.71 in 2008. That means Wall Street bonuses, even after decreasing 44% last year, still almost ran five times the rate of inflation.

The last time bonuses were down two years in a row, the next year they surged 61%. Of course, there will be incredible opposition to any Wall Street bonuses for a long time but it would be nice for the backdrop to improve that dramatically.

The bottom line: If Wall Street didn’t have to go to Washington hat in hand their bonuses wouldn’t be anyone’s business but employees and shareholders. I would say there is the notion of unadulterated greed that is an internal struggle and challenge and ultimately judged as shameful or not by a higher power than the U.S. government.


48 Home Depot stores will close; Nashville loses 1
Market Winners & Losers: Symantec, Textron
Consol Net Jumps on Coal Prices; Dominion Results Mixed
Dell to close part of Lebanon facility as PC sales slow

NEC to Cut 20K Workers as Losses Widen

TOKYO--Japanese electronics giant NEC Corp. said it will cut 20,000 workers worldwide as it tries to stanch widening losses from semiconductors and other businesses that have been hard hit by competition and the global economic slump.

NEC's net loss for October-December swelled to 130 billion yen ($1.46 billion) from 5.2 billion yen a year earlier, it said Friday. Tokyo-based NEC said it would sink into the red for the full year through March as well.

The company hopes the job cuts, which will be split equally between Japan and overseas, will help save 80 billion yen over the next two years.

As Japanese electronics makers struggled to stay afloat in a shrinking market, a Japanese newspaper reported Friday that NEC was in talks with Toshiba Corp. to seek a possible chip alliance.

The Nikkei business daily said the talks focused on the possibility of Toshiba spinning off its system chip operations and incorporating them with NEC Electronics Corp., a semiconductor unit owned by NEC.

NEC declined to confirm the report, saying it was not based on an official company announcement.

NEC said its operations worsened all round, from information technology to mobile and electronic devices, as the company was faced with a deepening global slump and escalating competition in the electronics industry. NEC also blamed the stronger yen for squeezing profits.

Revenue for the fiscal third quarter was down slightly at 948 billion yen from 1.05 trillion yen a year earlier.

By segment, electronic parts and semiconductor operations took the worst beating, with sales falling nearly 30 percent on declining demand for personal computers and display, as well as semiconductors for automobiles. Mobile and networking businesses also suffered because of falling investment by service providers.

NEC now expects a net loss of 290 billion yen for the full fiscal year through March, a steep plunge into the red from the 15 billion yen net profit projected in October. The company also cut its sales estimate to 4.2 trillion yen for the full fiscal year, compared with the previous forecast of 4.6 trillion yen.

NEC shares declined 6.5 percent Friday in Tokyo. The company announced earnings results after trading closed.


Obama Pushes Stimulus as TARP Worries Loom
Dell to close part of Lebanon facility as PC sales slow

FOXBusiness.com's Week in Review: Jan. 26-30, 2009

Monday, Jan. 26, 2009

Will the job cuts end? Not yet, it seems. Several corporations announced cuts Monday that amounted to a total of about 55,000 jobs.

A good chunk of these were from Caterpillar (CAT), which said it would cut about 20,000 over the next few months. Other companies included Sprint Nextel (S) [8,000 jobs], Home Depot (HD)[7,000], GM(GM) [2,000], and after the planned merger of Pfizer (PFE) and Wyeth (WYE), they plan to cut 18,000, combining their work forces.

Pfizer’s acquisition of Wyeth would create the world’s biggest drug maker and cost Pfizer about $68 billion. Both companies’ boards approved the deal and the combined company will use the Pfizer name. Many say Pfizer is working to extend its sales scope to other products besides just patented prescriptions like Lipitor, many of which are close to losing their patents in the U.S.

The existing home sales report came in Monday from the National Association of Realtors, showing a jump of 6.5% last month. This was helped by sales of foreclosed houses.

Pfizer and Wyeth CEOs on DEAL


FOXBusiness.com’s Week in Review: Jan. 19-23, 2009
Dell to close part of Lebanon facility as PC sales slow
Market Winners & Losers: Lennar, AFLAC
U.S. home sales rise in December

Not All Signs Point to Depression

Missed tonight's Cavuto ? Catch "The Deal" right here on FOXBusiness.com

Economy not as bad as we feared...

But that doesn't mean stimulus not as big as we thought.

Here's the deal:

It's still the economy, stupid.

And it's still about trashing the economy, stupid.

Because it's still about selling a huge stimulus package to deal with that economy, stupid.

And you'd be stupid selling that, saying the economy might not warrant that.

...kind of the dilemma the president was in today, rightly claiming the 3.8% slide in fourth-quarter GDP was alarming...but conveniently leaving out it wasn't nearly as alarming as some had feared.

Taken with surprising strength on the existing home sales front, nothing happening on the inflation front, and signs of more lending on the consumer and corporate front...

Well, let's say a very different front than the one stimulus-pushers are selling.

They're building a rescue for a depression, and ignoring the very real possibility, this might at best be a run-of-the-mill recession.

Neither are fun, of course.

But a depression is huge, and spending for it really huge.

A recession is not, so spending for it really shouldn't be.


Cavuto: Our Bucks Are Slipping Away
Markets Saying Much More Than Washington
As economy falls, more people put money away in savings
Good product at right price is no longer enough

Aiming for Youth Appeal, Coca-Cola Ditches 'Classic'

The world’s leading soda company, Coca-Cola Co. (KO), will drop the word “Classic” from its top-selling cola after nearly two decades in an attempt to refresh the brand’s image and attract a younger customer base, an industry report said Friday.

The soft-drink maker hopes that the removal will appeal to younger consumers who may be turned off by the word “Classic.”

“Some people interpreted it like a vintage car,” Hendrik Steckhan, president of Coke North America’s carbonated business told the publication.

The company has been reducing the size of the word in recent years, and it will completely disappear from the label by the middle of this year, although it will still appear in small print on the back of the product in the phrase, “Coke Classic Original Formula,” Beverage Digest reported.

The word was added to its flagship product in 1985 in an attempt to distinguish the original formula from the unpopular New Coke formula. The New Coke formula, which was a slight modification of the secret original formula introduced in 1886, caused a backlash among consumers and production was eventually halted.

The removal of “Classic” will better align the products in the U.S. with products sold abroad, as the word only appears on cans and bottles sold in the U.S.

Coca-Cola shares ended down nearly 2%. The shares have dropped 26% in the past 12 months.


PlayStation 2 finally goes country with new game
Al Lewis: Thain’s $35,000 Commode That Doesn’t Flush
Cummings Inc. founder dies at 89