Figuring out the market: Good luck. Just as Tuesday's session took a nosedive in the last hour or so, Wednesday's trading trended lower for most of the day when, out of nowhere, the Dow made a quick turnaround, gaining 150 points (roughly what it lost the day before). It's the same story: generally positive earnings results clashing with ongoing worries about the depth of Wall Street's credit problems. After almost two hours of trading, the Dow is up 28 points. By the way, Calabasas-based Countrywide Financial continues to get socked. It’s down 3.3 percent.
Amgen still down: Shares of the Thousand Oaks-based biotech giant keep dropping this morning, though not nearly as badly as Wednesday's 3.1 percent drubbing (it's now down 1.2 percent). The stock is at its lowest level in more than four years, as Monday's decision by the government's Medicare and Medicaid offices on use of the company's top-selling anemia drug is being viewed more negatively than first thought. This week was "a big step backwards," Thomas Weisel Partners biotech analyst M. Ian Somaiya told the LAT.
Mattel recall: The El Segundo-based toymaker says it prevented more than two-thirds of the toys from reaching consumers by stopping the products in its distribution centers and by contacting retailers. But that leaves more than 300,000 that have been bought by consumers. The Fisher-Price toys, including those featuring Sesame Street and Nickelodeon characters, were found to contain high levels of lead paint. (they may have a date code from 109-7LF to 187-7LF on the product or packaging). So why was this story buried inside the LAT biz section? From the NYT:
In early July, according to Mattel executives, one of the European retailers that sells Mattel toys discovered the lead on some products. On July 6, Mattel stopped operations at the factory that produced the toys and initiated an investigation. On July 18, Mattel took a reporter for The New York Times on a tour of a factory in Guanyao, China, and of Mattel’s toy safety lab in Shenzhen. At that time, Mattel executives say, it was unclear whether Mattel was facing a widespread lead paint problem, or if the European case was an anomaly. Last Thursday, the same day The Times ran an article about Mattel’s toy safety procedures, the company’s executives say they received conclusive data that persuaded them to recall the 83 products. Then, the company contacted retailers who stocked the toys. “This is a vendor plant with whom we’ve worked for 15 years; this isn’t somebody that just started making toys for us,” Robert A. Eckert, the chief executive of Mattel, said in an interview. “They understand our regulations, they understand our program, and something went wrong. That hurts.”
Student loan probe: UCLA's athletic department is among 40 being invested by the NY state Attorney General's office as part of AG Andrew Cuomo's ongoing push into the college loan industry. The question is whether kickbacks were accepted for steering students to loan providers. Besides the athletic departments, a Florida-based loan provider, Student Financial Services Inc. (doing business as University Financial Services), was subpoenaed. A UCLA spokeswoman said the university has never had any kind of arrangement with the student loan company. From USA Today:
At Kansas, associate athletic director Jim Marchiony reacted angrily. The school "does not have a relationship with UFS," he said, explaining that KU's multimedia rights-holder — formerly ESPN Regional, now Host Communications — contracted with UFS. Schools often sell television, radio and other media rights to Host and other companies, which recoup their costs by selling sponsorships. There is a link to UFS on the Kansas athletics department home page. "We don't refer anyone to them. We don't suggest they go to UFS. UFS has bought the same sponsorship your local grocery store will buy," Marchiony said.
Hollywood numbers: It's no longer a case of live by the movie, die by the movie. Viacom, which owns Paramount, today posted a drop in net income, even though its numbers were boosted by DVD sales and the box office hit "Shrek the Third" (and they beat estimates). All told, movie studio revenue rose 20 percent, to $1.3 billion, and profit increased $17 million, to $21.4 million. (Reuters). Meanwhile, Walt Disney Co. had some trouble in its studio division, with income falling 20 percent, to $192 million. The Mouse House had two major studio releases in the quarter, "Pirates of the Caribbean: At World's End" and "Ratatouille," which has been a critical success but hasn't performed as well domestically as other Pixar films. Even so, the company reported better-than-expected earnings, based on strong results in other divisions. (Marketwatch)
Labor agreement: Representatives of Teamsters Local 399, along with basic crafts unions representing such workers as electricians, plumbers, laborers and plasterers, reached a three-year tentative contract with studios and TV networks. The agreement with studios and networks was reached after negotiating more than an hour past the midnight deadline. The deal, which must still be ratified by the rank and file, clears the way for a resumption of talks with the Writers Guild. (Broadcasting & Cable)
Scalping now OK?: Kind of. Major League Baseball today announces a plan in which fans looking to sell their tickets or buy tickets from other fans will be directed to Stubhub, an online market owned by eBay that acts as a middleman. Even now, most of the league’s teams participate in ticket resales from their own Web sites (and some haven't been so crazy about having to share the action with Stubhub). The deal also represents a defeat for West Hollywood-based TicketMaster, which has deals with the Dodgers and other teams to operate their secondary ticketing exchanges. (NYT)
Report on Tesco: Forget about being socially responsible - the British-based grocery giant delivers a lot less than it promises, according to Occidental College's Robert Gottlieb. His Urban and Environmental Policy Institute is issuing a report today suggesting that Tesco seeks a massive Wal-Mart-like presence in the U.S. Currently, the company only plans to introduce a chain of small neighborhood markets. Tesco rejects the criticism. (LAT)