Thread: Worries mount on Intel, jobs report

Worries mount on Intel, jobs report
The chip maker warns for the quarter. Alcoa slashes 13,500 jobs to deal with the weak economy. ADP says 693,000 jobs were lost in December. India faces an Enron-like scandal at Satyam Computer Services.

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[BRIEFING.COM] Crude oil has come under selling pressure in the early going. The commodity was recently indicated 2.2% lower at roughly $47.50 per barrel.

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Intel (INTC, news, msgs) this morning added more weight to the market's woes.

The chip maker said fourth-quarter revenue would fall 23% from 2007 levels because of weak demand. Intel said revenue would be $8.2 billion, short of the consensus estimate of $8.74 billion and lower than the company's previous guidance of $9 billion.

Shares of Intel, a Dow component, fell 76 cents, or 4.9%, to $14.61 on the news.

More broadly, stocks were moving lower this morning. At 9:45 a.m. ET, the Dow Jones Industrial Average was down 130 points to 8,885. The Nasdaq Composite Index had shed 35 points to 1,617, and the Standard & Poor's 500 Index had lost 17 points to 918.

Intel ships about 80% of the world's microprocessors.

Alcoa to cut jobs
Alcoa (AA, news, msgs) late Tuesday became the latest company to slash jobs.

The aluminum maker said it will eliminate 13,500 jobs, or 13% of its work force, in an effort to combat the global economic slowdown.


"These are extraordinary times, requiring speed and decisiveness to address the current economic downturn," Alcoa's Chief Executive Officer Klaus Kleinfeld said in a statement.

Shares of Alcoa, a Dow component, fell $1.11, or 9.2%, to $11.01 in morning trading.

Alcoa's measures will lower annual output by 18%. The company also projected capital expenditures would fall 50% in 2009 to $1.8 billion.

Weak unemployment data ahead of Friday's jobs report
There was terrible news about unemployment this morning. ADP Employer Services' payroll survey showed a whopping loss of 693,000 jobs in December, far worse than economists had expected.

The ADP report comes just two days ahead of the government's monthly report on nonfarm payrolls, which is expected to show a loss of 500,000 jobs in the last month of 2008, wrapping up one of the worst years for job losses since the end of World War II. Friday's report is also likely to show that the unemployment rate rose to 7% from 6.7%.

The ADP report is a measure of nonfarm private employment based on a subset of aggregated payroll data that represents approximately 24 million employees working in all 19 of the major North American industrial sectors.

GM says it doesn't need more bailout help
On the brighter side, General Motors (GM, news, msgs) announced today that it won't require more bailout funding, at least for the time being. GM is to receive a total of $13.4 billion in rescue funds, of which it has so far taken in $4 billion, and its finance arm, GMAC, will get $6 billion more. Stock Charts (Year)
Intel

Alcoa
"The U.S. Treasury's $13.4 billion bridge loan to GM, coupled with the separate transaction for GMAC, meets our liquidity needs under the scenarios outlined in our December plan to Congress," GM spokesman Greg Martin said on Tuesday.

GM is in the midst of restructuring, and renegotiating its agreements with unions. The company has until March 31 to provide a viable plan for a return to profitability if it is receive the full rescue funding and can avoid bankruptcy.

India's 'Enron' scandal
The chairman of India's Satyam Computer Services (SAY, news, msgs) resigned this morning after he admitted to inflating revenue and profit for a number of quarters. Shares of the stock tanked 71%, to $2.70, on the news. After India's Sensex Index closed, the stock fell an additional 20%.

Chairman B. Ramalinga Raju, who founded the fourth-biggest software company in India, said he is "now prepared to subject (himself) to the laws of the land and face consequences" in a letter to the company's board.

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"It's a major blow to sentiment," Gurunath Mudlapur, managing director at Atherstone Capital Market in Mumbai, told MarketWatch.com. "Market sentiment had just about started to improve after a long period of time, but with this development, the confidence is again getting shattered."

India's

Russia halts gas flow to Europe
The dispute between Russia and the Ukraine over a natural gas pipeline is now starting to affect Europe.

The two countries blame each other for the standoff, which started on New Year's Eve, when the two could not agree on a new pricing deal.

European supplies that pass through the Ukraine are slowing, just as winter temperatures are starting to set in; 80% of Russian gas is shipped to Europe through Ukraine. Eastern European countries including Bulgaria, Greece, Macedonia and Serbia have reported halts in their natural gas shipments, and countries farther west, including France and Austria, have reported a big drop in Russian supplies.

Talks between the two are scheduled for Thursday.

In related news, crude oil fell $1.00 to $47.58 a barrel this morning.

Bank of America CEO doesn't want bonus
Bank of America (BAC, news, msgs) CEO Ken Lewis late Tuesday said that he and other top executives at the bank should not get a bonus for 2008, following a path paved by Goldman Sachs' (GS, news, msgs) Lloyd Blankfein, Morgan Stanley's (MS, news, msgs) John Mack and Citigroup's (C, news, msgs) Vikram Pandit.

"This was a difficult decision because we have worked hard and made progress on many projects that will create value for our company in future years," Lewis said in a memo to employees Tuesday. "Nonetheless we are a pay-for-performance company."

Lewis also named Dan Sontag to replace Bob McCann as the head of its Merrill Lynch brokerage business. Bank of America completed its acquisition of Merrill on Jan. 1, and McCann resigned on Tuesday.

Dow Chemical could miss deadline for Rohm & Haas purchase
Dow Chemical (DOW, news, msgs) could miss the Dec. 12 deadline to complete its acquisition of rival chemicals maker Rohm & Haas (ROH, news, msgs), the Financial Times reported today.

In an interview, Dow CEO Andrew Liveris said that the company was prepared to pay the $100 milllion per-month penalty if it did not complete the acquisition by that day. Liveris insisted that the deal would be completed in the near future, however.

Dow Chemical was hurt by the breakdown of its separate deal with Kuwait for a petrochemicals joint venture. Liveris said that Dow intended to take legal action against the Gulf state for damages, although he did not specify how this legal remedy would be pursued.

Andrew Rosenbaum contributed to this report.

http://articles.moneycentral.msn.com/In ... tch_090107

But never fear the idiots in congress are here.......They will improve the economy by granting amnesty to 20 million impoverished illegal aliens who will import their impoverished immediate, extended family members, friends and neighbors along for the ride fraudulently claiming family connections all who will compete with unemployed Americans for what few jobs there are including any arising from the phony baloney stimulus. Employers will shed them now that they are legal since they will fall under EEOC guidelines, have collective bargaining rights and WILL hire more cheap labor pouring across the border which is the only reason this congress is proposing this b.s. stimulus which will be a massive taxpayer subsidized illegal alien job and benefits giveaway. Congress will continue to bring in millions more H1B, H2A, H2B and L1 visas using the recapture provision retroactive to 1991 even while companies as Intel are laying off employees and replacing them with lower paid H1B holders along with many other industries, many who applied for bailouts but continue to lay off Americans for lower paid foreign workers. When are the American people going to realize we are being led to the slaughter only to be replaced by cheap foreign labor and to hell with the American people, our sovereignty and way of life.......

About 2 million work visas issued in 2008. Includes foreign students, H1-B white collar, and work authorization for green card immigrants and others. What is our government doing to the american middle class? Just taxing and destroying/unemploying it?