NEW YORK (Reuters) -
Shares of Citigroup (C.N) fell 8 percent to $20.69 in pre-market trade after a merger deal was announced between Wachovia Corp (WB.N) and Wells Fargo & Co (WFC.N).
The planned Wachovia-Wells Fargo tie up would scupper a previously announced deal in which Citigroup was to buy parts of Wachovia. Wachovia said on Friday that Citigroup was no longer involved.
NEW YORK (Reuters) - Family Dollar Stores Inc (FDO.N) posted a higher-than-expected quarterly profit on Friday, helped by shoppers who spent tax rebate checks at the discount retailer and by closely controlling costs.
The company, which prices most of its merchandise below $10, forecast fiscal 2009 earnings that could top analysts' expectations, banking on tight cost controls and strong sales of consumable items like food and household cleaners.
Family Dollar's stores have attracted more consumers squeezed by rising food costs, surging fuel prices, a U.S. housing downturn and credit crunch.
Net income rose to $53.2 million, or 38 cents per share, for its fiscal fourth quarter, ended Aug 30, from $37.8 million, or 26 cents per share, a year ago.
Analysts, on average, expected earnings of 34 cents per share, according to Reuters Estimates.
Sales rose 8.2 percent to $1.77 billion. Sales at stores open at least a year, a key retail gauge known as same-store sales, rose 1.2 percent.
When it reported third-quarter results, Family Dollar said June sales were tracking above initial expectations as U.S. government tax rebate checks made their way into shoppers' hands.
But Chief Executive Howard Levine said at the time that the benefits from tax rebate checks would be relatively short-lived, and the retailer was planning conservatively for Christmas holiday sales.
For fiscal 2009, which ends August 29 next year, the company expects sales to increase 3 percent to 5 percent. Same-store sales are expected to rise 1 percent to 3 percent.
Family Dollar expects to earn between $1.58 per share to $1.78 per share for fiscal 2009.
Analysts expect it to earn $1.68 per share for the year.
The company, which operates more than 6,500 stores, expects to open around 200 new stores in fiscal 2009.
For the first quarter of fiscal 2009, the company forecast sales to rise 4 percent to 6 percent and a same-store sales increase of 2 percent to 4 percent. Family Dollar expects to earn 38 cents per share to 42 cents per share in the quarter.
(Reporting by Aarthi Sivaraman; Editing by Steve Orlofsky)
PARIS/LONDON (Reuters) - French Prime Minister Francois Fillon said on Friday the world stood on the "edge of the abyss", gripped by a global financial crisis now threatening industry, trade and jobs worldwide.
Fillon's words echoed a growing sense of alarm sweeping EU capitals ahead of an expected U.S. Congressional vote on Friday on a $700 billion bailout plan for the financial industry. Approval is far from certain.
The House of Representatives shocked world markets on Monday by rejecting a previous draft, wary of popular anger over the housing market collapse that triggered the crisis and high risk financial ventures that collapsed under the burden.
Prime Minister Fillon, whose country is hosting an emergency summit of Italian, British and German leaders on Saturday, said only collective action could solve the financial crisis. He said he would not rule out any solution to stop any bank failing.
"The world is on the edge of the abyss because of an irresponsible system," Fillon said, alluding to widespread anger over past lax regulation of financial markets and excessive lending.
Fillon said President Nicolas Sarkozy would propose at the emergency meeting measures to unfreeze credit and coordinate economic and monetary strategies.
European Central Bank PresidentJean-Claude Trichet sounded an alarm on Friday's expected vote in the U.S. Congress.
"(U.S. Treasury) Secretary (Henry) Paulson's plan obviously must be passed," he told Europe 1 Radio.
"It must be. It is necessary."
Bad news mounted in the European financial sector.
In Switzerland, UBS AG, hardest hit among European banks by its exposure to subprime-related holdings, said it would cut 2,000 investment banking jobs -- on top of the 4,100 positions cut in the past year.
Worries grew that even if Washington agrees on the package, it will not be enough to resolve deeper-rooted weakness. New data showed that a U.S. recession is nearing and Europe's economy is worsening.
"Investors expect the U.S. House to approve the bailout, but even if that happens, it would have a neutral impact on the market as its effectiveness is still questionable," said Takahito Murai, general manager of equities at Nozomi Securities in Tokyo.
A collapse in the U.S. housing market and resulting "bad mortgages" has undermined confidence in the financial sector, with inter-bank lending and credit to businesses and private individuals all but seizing up. Central Banks have injected billions of dollars to maintain some flow of funds.
UNILATERAL ACTION
Divisions have emerged within Europe over the past week, with Ireland offering guarantees on bank deposits, prompting a flight of capital from British lenders to Irish banks, and Greece promising to safeguard savers' cash.
EU partners said Ireland's move could break competition rules and threatened the unity necessary to ensure an ordered approach to turmoil ahead.
U.S. payrolls data due to be released at 1230 GMT were forecast to show that businesses cut jobs for the ninth straight month in September, with 100,000 non-farm jobs expected to be lost, against a drop of 84,000 in August, according to the median in a Reuters poll of economists.
World stocks fell to a fresh three-year low on concerns the bailout would not be enough to prevent the U.S. economy and that of the rest of the world slowing further.
"Paralysis is spreading across the asset markets despite the various attempts by authorities across the globe to shore up confidence," the Calyon brokerage said in a not to clients.
House Speaker Nancy Pelosi said the bailout package would not be brought to the floor without the votes secured to pass it.
New economic data painted a bleak picture. U.S. factory orders tumbled in August and the number of workers seeking jobless benefits rose in the latest week to a seven-year high.
Oil rose above $94, supported by expectations that the House would approve the plan, which would then be passed into law by President George W. Bush.
Wall Street endured a dismal day on Thursday, as stocks dropped 4 percent and a seizing up in money markets drove a rally in the dollar.
(Additional reporting by Reuters reporters in New York, Washington, Singapore, Tokyo and Zurich; Editing by Jean Yoon and Alexander Smith)