NEWS AT A GLANCE
Merrill books steep losses
Merrill Lynch added $2.9 billion in write-downs to its already-disclosed $5 billion in losses, for a net third-quarter loss of $2.3 billion. “This is a bloodbath for certain,” said analyst William Fitzpatrick at Johnson Asset Management in Racine, Wisc. “It speaks very poorly to Merrill’s risk management practices.” (Reuters) The greater-than-expected loss weighed on stocks Wednesday morning. (MarketWatch) The $7.9 billion charge is the biggest loss in Merrill’s 93-year history, and makes it the only one of the five biggest U.S. securities firms to book a loss from the recent credit crunch. (Bloomberg)
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Amazon’s wild ride
Shares in Amazon jumped 10 percent in regular trading, to an eight-year high of $100.82, as investors anticipated rosy earnings—but then shed 10.8 percent after Amazon reported a rosier-than-forecast 313 percent jump in net profits. (AP in Yahoo! Finance) Analysts cited concerns about falling profit margins for the sell-off. (Reuters) Notably, Amazon sold a record 2.5 million copies of the latest Harry Potter book, but at deep discounts that left it no profit. “Expectations got ahead of themselves,” said Scott Devitt of Stifel Nicolaus. Amazon’s stock “has gone from $30 to $100 in a matter of 15 months, and at some point you crossed fair value,” he added. (The New York Times, free registration required)
What cost, the Southern California fires?
The wildfires ravaging Southern California are shaping up as one of the most expensive fires in U.S. history. The Insurance Information Institute estimated that the insured damage will be at least $500 million. (BusinessWeek.com) And Moody’s Economy put the total damage so far at close to $1 billion, including $45 million a day in lost work and $785 million for the 1,300 homes already destroyed. (MarketWatch) But economists say that with rebuilding outlays and insurance payments, the long-term effects won’t be so bad. “In the odd nature of economic accounting, this will probably be a stimulus,” said University of San Diego economist Alan Gin. (Los Angeles Times, free registration required)
Playing games, selling cars
When Nissan decided to introduce its GT-R sports coupe to U.S. drivers, it opted to do so through videogames. As soon as a new version of the GT-R is unveiled at the Tokyo Motor Show today, gamers will be able to download new games featuring the car. But the average videogame enthusiast might not be in the market for a car that retails in Japan for $70,000. Paul Sakalas, 27, was elated to learn that the GT-R he first fell in love with playing Sony’s Gran Turismo on his PlayStation is coming to the U.S. “But when I heard how much it cost, my dreams were crushed on the rocks of reality,” he said. (The Wall Street Journal)
