Tuesday, June 07, 2005

Quote of the Day

"The rung of a ladder was never meant to rest upon, but only to hold a man's foot long enough to enable him to put the other somewhat higher." -- Thomas H. Huxley

Morning News of Note:

  • WM PVN: WaMu Has Deal To Buy Providian For $6.45 Billion Seeking to plug a big hole in its consumer business, Washington Mutual Inc. agreed to buy credit-card company Providian Financial Corp. in a cash-and-stock deal valued at $6.45 billion, or about $18.71 a share. The acquisition will turn WaMu into one of the nation's largest credit-card issuers at a time of heightened competition in the maturing business. After years of explosive growth that has put more than 900 million general-purpose cards in circulation, credit-card issuers are finding it difficult to add new customers. (Full Story) WSJ
  • GM: GM Plans a New Lineup of Vehicles Auto Maker Is Set to Unleash Seven-Passenger Wagons; Tweaking SUV Gas Mileage Under pressure to revive sales, General Motors Corp. is about to unleash an important element of its turnaround effort: A slew of new, better-looking vehicles. But in a market where the big players are launching new models almost every month, Chief Executive Rick Wagoner and his product czar, Vice Chairman Robert Lutz, face a stiff challenge to persuade investors that the cars, trucks and crossovers GM has coming can reverse a trend that has taken GM's U.S. market share to 26% today from 47% in 1976. (Full Story) WSJ
  • DEO AED: Diageo Aids Pernod's Allied Bid In a move that could give a big boost to Pernod Ricard SA's about £7.4 billion ($13.49 billion or ?10.97 billion) bid to buy Allied Domecq PLC, Diageo PLC agreed to buy two key brands from Pernod -- and pledged not to join a potential rival bidder for the liquor maker. The Diageo-Pernod pact is a big round of brinkmanship in the heated contest for Allied. Divvying up Allied's spirits portfolio marks the last major round of consolidation of the global liquor industry, and is one of the biggest takeover fights going on now. (Full Story) WSJ
  • GOOG: Google Insiders Search for Profits INSIDERS AT Google have been raking in the dough from this high-flying stock's phenomenal performance. Since the beginning of the year, co-founders Sergey Brin and Larry Page each have sold two million shares of the Internet search engine company's stock through automatic sales, taking in over $400 million each. Page still holds about 37,000 shares of Google, while Brin still owns 49,000 (see Inside Scoop, "Google and Autodesk Execs Still Selling," April 22). But the founders aren't the only ones who are plugging in "megabucks" in their Google searches. (Full Story) BARRONS
  • US Economy: Fed Chairman Greenspan said bond yields are falling vritually everywhere due to globalization, doesnt expect yields to change soon; creidble that long rates signaling a weak economy; pension demand doesnt explain falling yields but not sure what inverted yeild curve might mean; no single cause for unusual bond prices; central bank buying had modest yield effects; hedge funds already picked the low hanging fruit; hedge fund industry could temporarily shrink, trading strategies may disappoint; protectionism and rigid economies are worrisome; US uses savings exceptionally efficiently; CNY revaluation wont shrink US deficit (Monday)

Market Commentary: The market opened strong this morning, on the heels of benign comments from Greenspan. The Chairman did not make any remarks that would upset the markets, nor did he take the opportunity to dispel rumors that the Fed is nearing a "pause" in its current rate hike cycle.


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