Archive for March, 2009

Colonial BancGroup near deal for $300 million infusion (Reuters)

Monday, March 30th, 2009 | Finance News

NEW YORK (Reuters) –
Colonial BancGroup (CNB.N), is near a deal to get a $300 million capital infusion, which would put a new group of investors in control of the regional bank, the Wall Street Journal reported on Monday, citing people familiar with the matter.

The newspaper, on its website, reported that the infusion would be spearheaded by Taylor Bean and Whitaker, a Florida-based mortgage lender. The deal would make Colonial, based in Alabama, a thrift.

The bank, which has about $26 billion in assets, must raise $300 million to qualify for $550 million of funds from the Treasury's Troubled Asset Relief Program.

(Reporting by Paul Thomasch; editing by Carol Bishopric)


Wall Street hits the brakes on autos, bank woes (Reuters)

Monday, March 30th, 2009 | Finance News

NEW YORK (Reuters) –
Stocks tumbled on Monday as two major U.S. automakers took a step closer to potential bankruptcy, and a spate of European bank rescues heightened concerns over the financial system's health, putting the brakes on a recent run-up.

In the latest efforts in its campaign to shore up the economy and struggling corporations, the U.S. administration forced out General Motors Corp's (GM.N) CEO, pushed Chrysler LLC toward a merger and threatened bankruptcy for both.

U.S. banks' stocks slid after Spain, Germany and Britain acted to bolster lenders as the sector felt the impact of rising bad loans, while Treasury Secretary Timothy Geithner said over the weekend, some banks still need large amounts of help. The KBW Banks index (.BKX) fell 10.3 percent.

"The biggest concern is what happens with the U.S. banks and do we have another round of losses to be realized, and I think that's what's taking the market down today," said Jim McDonald, chief investment strategist at Northern Trust in Chicago.

"The problems that GM faces today in my opinion are significantly exacerbated by the recession and this is a reminder of the cost of trying to repair the economy."

The Dow Jones industrial average (.DJI) lost 254.16 points, or 3.27 percent, to 7,522.02. The Standard & Poor's 500 Index (.SPX) tumbled 28.41 points, or 3.48 percent, to 787.53. The Nasdaq Composite Index (.IXIC) fell 43.40 points, or 2.81 percent, to 1,501.80.

Before today's sell-off, stocks had rallied around 20 percent after hitting fresh 12-year lows in early March.

Spain was forced to rescue its first bank since the financial crisis began and Germany and Britain also moved to prop up lenders, sending European markets down.

Geithner said on Sunday the government will have about $135 billion left after other banks give back some of the bailout money, but did not say whether he will ask Congress for more.

Citigroup (C.N) slid 11.8 percent to $2.31 and Bank of America (BAC.N) dropped 17.9 percent to $6.03.

"The financials still have major, major issues," said Bill Strazullo, partner and chief investment strategist at Bell Curve Trading in Boston.

"There are a lot of problems there that aren't going to go away any time soon. These banks are going to continue to require assistance from the government."

GM CEO Rick Wagoner, who presided over the company's rapid decline in the past five years and had run the automaker since 2000, was forced out at the request of the government's autos panel headed by former investment banker Steven Rattner.

GM shares tumbled 25.4 percent to $2.70, while shares of supplier companies also fell sharply as investors worried that a potential bankruptcy would send ripple effects through the entire economy. Shares of American Axle & Manufacturing (AXL.N) sank 22.2 percent to $1.37.

U.S. President Barack Obama tried to soothe investor nerves by saying the government did not want to run GM, but added that Wagoner's departure reflected the company's need for a new direction.

Fellow automaker Chrysler LLC, owned by Cerberus Capital Management, a private equity company, said it had reached an agreement on Monday on a framework of an alliance with Italian peer Fiat SpA (FIA.MI) that has the support of the U.S. Treasury.

Trading was moderate on the New York Stock Exchange, with about 1.51 billion shares changing hands, slightly above last year's estimated daily average of 1.49 billion, while on Nasdaq, about 2.04 billion shares traded, below last year's daily average of 2.28 billion.

Declining stocks outnumbered advancing ones on the NYSE by a ratio of more than seven to one, while on the Nasdaq, about three stocks fell for every one that rose.

(Additional reporting by Leah Schnurr; Editing by Jan Paschal)


Home Depot CEO’s 2008 total pay rises (Reuters)

Monday, March 30th, 2009 | Finance News

(Reuters) –
Home Depot Inc (HD.N) Chief Executive Frank Blake took home higher pay in 2008, even after declining a bonus, according to a regulatory filing.

Blake's total 2008 compensation was about $8.6 million, including salary, the value of stock and option awards and other compensation, according to a proxy filed with the U.S. Securities and Exchange Commission.

The 2008 pay compared with about $8.3 million he earned in 2007.

Blake, named CEO in early 2007 after Robert Nardelli resigned, got a bonus of $500,000 in 2007.

"Although Blake was awarded a fiscal 2008 MIP (management incentive plan) bonus of $1,200,888 based on the achievement of pre-established performance targets, he voluntarily waived it and did not accept this portion of his earned compensation," the retailer said in the filing.

Home Depot moved to tie most of Blake's pay to performance in 2007 after criticism that it overpaid Nardelli, who worked for six years at the home improvement chain before he resigned under fire.

Nardelli benefited from accelerated vesting of restricted and deferred shares under the terms of his employment agreement.

Earlier this year, Home Depot warned that profit per share would fall for the third consecutive year as the recession and weak U.S. housing market hurt sales.

Home Depot will hold its annual meeting on May 28 in Atlanta.

Its shares were down 2.6 percent, or 60 cents, at $23.03 on the New York Stock Exchange on Monday.

(Reporting by Dhanya Skariachan in Bangalore; editing by Maureen Bavdek and Jeffrey Benkoe)