Fed Cuts Interest Rate
- Dec 17, 2008
Stocks advanced after the Fed cut a key short-term interest rate to the lowest level on record to a range between zero and 0.25 percent, but the excitement wavered this morning as U.S. stock futures appear to be returning to their dismal status quo today, according to CNNMoney.com. Wall Street firm Morgan Stanley is due to post quarterly results before the market opens with an expected report of big losses on the heels of the Goldman Sachs deeper-than-expected quarterly loss of $2.1 billion reported Tuesday, the report stated. The Washington Post reported that the loss was its first since going public in 1999. Unfortunately, it’s not the only big firm continuing to tank. An Associated Press article on General Electric indicated that firm will stop offering quarterly earnings per share forecasts. GE did not provide specific targets for 2009, but reaffirmed its dividend and said its industrial division may still generate profit growth next year despite the threat of global recession, which is good news. The decision to stop providing specific earnings guidance comes after the company struggled this year to meet its own forecasts, Associated Press stated. In making the change, the company follows other big corporate names like Coca-Cola, AT&T and Google that have dropped annual or quarterly earnings per share guidance.Bloomberg reported that Midway Games Inc., the video-game maker sold this month by Sumner Redstone, will eliminate 25 percent of its work force and suspend development of some titles to scale back expenses as the company works to repay creditors. Midway, based in Chicago, will have severance costs of about $1.6 million for 180 workers and will close its Austin studio, according to a regulatory filing today, Bloomberg reported. Not only are domestic automakers suffering, but so are the foreign manufacturers. Bloomberg reported that Honda Motor Co., Japan’s second- largest automaker, slashed its full-year profit forecast by 62 percent and Nissan Motor Co., Japan’s third- largest automaker, will reduce domestic production by 78,000 vehicles starting in January.