Chrysler Cutting its Workforce Again

Chrysler Cutting its Workforce Again

Chrysler announced another group of job cuts this week, this time targeting 25% of its white-collar salaried workforce. The new cuts were announced just one day after declaring that 1,825 blue-collar employees would be let go by year-end. The newest job cuts will affect 5,000 employees. Chrysler currently employs 17,332 salaried workers and an undisclosed number of contract workers.

The automaker also said it will cut back on all discretionary and overhead expenses and reduce capital expenditures. Additional organizational and restructuring measures will be announced in the near future. Chairman and Chief Executive Officer Bob Nardelli spoke of the adversity in the auto industry and noted, "These are truly unimaginable times for our industry. We continue to be in the most difficult economic period most of us can remember."

Rival General Motors Corp. (GM)is also suffering from the dramatic decline in auto sales and has been in merger talks with Chrysler. General Motors leaders informed employees in a letter that it is planning to make more staff reductions and that it has suspended matching grants in the GM 401(k) program.

Chrysler (DAI) closed this week at $27.86. General Motors Corp. (GM) closed this week at $5.95.

Microsoft Posts First-Quarter Gains

Microsoft posted a fiscal first-quarter profit that topped its own expectations. Increased software and video gaming console sales were a positive contributing factor for the Redmond, Washington company. Microsoft has not mentioned any reduction to its employee count, but has reported that its hiring pace will slow down.

Microsoft's net income for the quarter increased to $4.37 billion or 48 cents a share. This is up slightly from $4.29 billion, or 46 cents a share, in the same period a year earlier. Revenue increased 9% to $15.06 billion. Microsoft said it expects earnings between $2 and $2.10 a share and revenue between $64.9 billion and $66.4 billion for the year.

Microsoft Corporation (MSFT) closed this week at $21.96.

Aflac Plans to Stay Afloat

Aflac reported a 76% decrease in third-quarter profit late last week and stated that it will suffer $110 million in losses. Shares of the giant medical insurer slipped 1% to $35.95 during late trading action on Thursday. Third-quarter net income came in at $100 million, or 21 cents a share. Net income was down 76% from a year earlier when the company made $420 million, or 85 cents a share.

Aflac reported that the sales environment in the U.S. remained challenging, partly because of slowing economic growth and Hurricane Ike, which disrupted sales in Texas, the company's top-producing state. Total new annualized premium sales in the U.S. increased 0.1% to $369 million in the third quarter.

Aflac expects to generate operating earnings growth of 15% in 2008, up slightly from a forecast range of 14% to 15% growth. The company also said its 2009 target of increasing operating earnings per share by 13% to 15% is achievable. Aflac (AFL) closed this week at $38.87.

The Dow started the week at 8,852 and closed at 8,378. The NASDAQ began the week at 1,711 and finished at 1,552. The S&P 500 started at 940 and ended at 876.

Treasuries Soar as Stocks Dive

Treasuries Soar as Stocks Dive

Treasury prices rose up Friday, pushing short-term yields lower. Stock markets around the world plunged and resurrected the attractiveness of U.S. government debt as a relatively safe alternative. Bond prices move inversely to their yields. U.S. equities declined, following global markets as investors confronted fears of global recession.

Interest-rate traders have fully priced in odds that the Federal Reserve will lower its target borrowing rate by next week's meeting. This follows news of sharply decelerating growth in South Korea and England that worried investors.

The 10-year Treasury note began the week at 3.94% and finished at 3.70%. The 30-year Treasury bond began at 4.31% and finished at 4.09%.

Inflation Dwindles and Interest Rates Ease

Inflation Dwindles and Interest Rates Ease

Freddie Mac released its Primary Mortgage Market Survey for the week which showed that the 30-year fixed-rate mortgage (FRM) averaged 6.04%, down from last week when it averaged 6.46%. Last year at this time, the 30-year FRM averaged 6.33%. The 15-year FRM this week averaged 5.72%, down from last week when it averaged 6.14%. A year ago at this time, the 15-year FRM averaged 5.99%.

"Long-term mortgage rates fell this week amid news of tame inflation and a weaker housing market," said Frank Nothaft, Freddie Mac Vice President and Chief Economist. He also commented, "Consumer prices were unchanged in September and core prices, which exclude food and energy products, rose by only 0.1 percentage point, all below the market consensus. On a year-over-year basis growth in core consumer prices remained at a 2.5% clip."

The 30-year loan rate started at 6.35% and finished at 5.96%. The 15-year loan began at 6.04% and finished at 5.59%. The money market fund began at 2.47% and finished at 2.47%. The $10,000 money market fund started at 2.81% and finished at 2.81%. The 1-year CD started at 3.60% and finished at 3.59%.

Stocks - Rite Aid Gets a Warning from the NYSE
Bonds - Treasury Gains Soften as Stock Market Rebounds
Interest Rates - Largest Rate Increase Since 1987 for 30-Year FRM

Stocks - Crude Oil Drops but Squeezes Producers
Bonds - Treasury's Tug-of-War with Government Bailout Efforts
Interest Rates - Housing Data Picks Up, Slight Fall in Rates

Stocks - The Battle for Wachovia
Bonds - Landmark Legislation Raises Treasuries
Interest Rates - Long-Term Rates Stagnant, Short Term Rates Adjust Down

Stocks - WaMu Blues
Bonds - Triumph of the Treasury
Interest Rates - Rates Reverse Course

Stocks - FedEx Fuel Bill a Concern
Bonds - Treasury's Decrease on Announcement of Rescue Plan
Interest Rates - 30-Year (FRM) Falls for Fifth Straight Week