7/19/09 JPM Working on CIT Loan Package

Post #8 The following is brought to you by Intellivest Securities Research, Inc. The following is not intended as advertising by a broker-dealer and is not a research report. At the end of this Dow Monitor Blog is this week's profiled company, AA Alcoa, a company that is not usually in the news compared with the other Dow 30s but was in the news last week as it kicked off the earnings reports for the 2nd quarter as it traditionally does. Following an edited Wikipedia entry on Alcoa is an edited Wikipedia entry on its CEO Klaus Kleinfeld.

The Dow closed Friday at 8743.94 up 32.12 up 0.37% from Thurday's close of 8711.82 and up 597.42 or 7.3% for the week. The Dow Jones remains down 38% from its '07 record close.13 of the Dow 30 gained and 17 companies declined with the biggest gainer being IBM $115.42 +4.78 4.32% 20,063,701 NYSE and the biggest loser being GE $11.65 -0.75 6.05% 180,535,126 NYSE.

A read of Sunday's 7/18/09 print edition of: New York Times and AJC (I didn't see any today) and July 20 edition of Barron's, July/August issue of Institutional Investor, and July 27 issue of Business Week yielded the following stories about Dow Jones 30 component companies:

Inst'l Investor (II) at p21 in a story about Morgan Stanley mentions BAC BofAm's acquisitions of FleetBoston Financial and LaSalle Bank Corp and at p23 has a story "Hunting in a Difficult Year JP Morgan JPM grabs the lead in M&A from Goldman by advising buyers in a lean market."

II at p39 cover story on the alternative energy sector notes that T. Boone Pickens Jr.'s Mesa Powers paid $1.5 billion for 667 GE wind turbines slated for delivery in 2011 that are expected to generate 1,000 megawatts of clean energy.

II a p53 in a story about money managers notes that JP Morgan Asset Management is in fifth place behind Barclays Global Investors, State Street Global Advisors, BlackRock and Fidelity Investments. JPM's unit has $1,133,232,000,000 under management (over a trillion for those who don't want to contact the digits).

Barron's p6 says that JPM JPMorgan Chase, Morgan Stanley and Barclays were working on a $2 - $3 billion loan package for CIT Group, a lender to thousands of small and medium sized businesses that failed to get government bailout funds that would be FIDC backed. BRNs p12 sounds a similar theme under heading "Bankruptcy Watch."

BRNS p12 says JPM had an impressive quarter with profits rising for the first time since '07 to $2.7 billion or .28 per share. Same page it says Big Blue had nice numbers - IBM beat quarterly profit projections by .30 per share and raised its full year forecast; but GE posted a 47% drop in earnings hurt by its finance business. Similar theme at BRNs pM3 "Market Recoups its Losses and Its Optimism" also noting that JPM and INTC Intel "wowed investors."

BRNS p13 says the following Dow 30 companies will report earnings this coming week: CAT Caterpillar on 7/21, PFE Pfizer on Wed. 7/22, AXP Amex and T AT&T on 7/23 Thurs.

BRNS p14 "Future's Brighter for Financial Stocks" says BAC BofA and JPM JPMogan now trade at sizable premiums to tangible book value, a measure for valuing liquidation scenarios. The global chief investment officer of equities at BlackRock, Bob Doll, is quoted as saying he has buy ratings on BAC BofA and JPM.

BRNs pM8 has an options strategy involving selling out of the call options that expire in 3 months on stocks which have modest earnings revisions and or which Goldman's estimates are near consensus such s KFT Kraft, WMT WalMart, CSCO Cisco and PG Procter & Gamble. It also discussed buying one month options on stocks with large earnings revisions for which Goldman's analysts are out of consensus such as BAC BofA and DD DuPont.

BRNs p23 "Dell's Day Will Come" notes that HPQ Hewlett-Packard bought Ibrix last week. Ibrix's data storage software is resold by Dell.

BRNs p20 in the Cover Story about Media provides DIS Disney's latest statistics and gives a price target of #2 (Dis is currently at 24.79).

BRNs p30 in a story about Bed Bath & Behond says its shares have climbed 11% in the past year outpacing WMT which is down at least 10%.

NYTimes has a fascinating story at p1 of the Business Section where it says the rating agencies such as Standard & Poor's and Moody's and Fitch are being sued for "misleading investors." The agencies have hired top first amendment lawyers to argue that the statements of the ratings agencies are protected as 1st amendment speech and compares their reports to editorials published by newspapers. This is exactly my position regarding research reports including mine. The counter argument is that the agencies get paid for their specific reports by the company analyzed so they may not be entitled to full free speech protection just as the tobacco companies can be limited in their advertising.

NYTimes front page, main section profiles Jamie Dimon, CEO of JPM JPMorgan Chase in "In Washington, One Bank Chief Still Holds Sway."

NYT p4 pictures two T AT&T employees who are collaborating with other scientists in a contest to improve Netflix's personalized film ratings on the Internet.

Business Week BW "Idea's says foreign mfgers are making goods such as carbon fiber components for BA Boeing's 787 Dreamliner formerly made by US manufactuers.

BW at p50 in a story about Google says it is losing its battle with MSFT Microsoft and at p51 has a story "Microsoft's Aggressive new Pricing Strategy - CEO Ballmer is increasingly willing to accept lower margins in exchange for higher overall profits."

BW at p63 "A Profitable Prescription" talks about JNJ Johnson & Johnson's $1 billion joint venture with biotech player Elan Corp. to develop an Alzheimer's drug.

BW p66 talks about how Brocade Communications that makes data storage networking products for the high end Ethernet market would make a great acquisition for IBM or HPQ, especially since CSCO Cisco Systems has 65% of the lower end lEthernet makret and has recently moved to compete with IBM and HPQ in the server market. By the way, I forgot to mention that a man in his late 40's was in yesterday's NY Times obituaries who helped develop computer blade servers that allows for stacking of servers.

Finally, BW at p52 in a story about how bold entrepreneurs exploited tough times to pioneer new industries tells how Bill Hewlett and Dave packard former HPQ in a garage in Northern Cal and its first break though was selling 8 oscillators to Dis Walt Disney.

A read of Saturday's 7/18/09 print editions of: Wall Street Journal, New York Times, Atlanta Journal Constitution and 7/17-23 Atlanta Business Chronicle yielded the following stories about Dow Jones 30 component companies:

Lead story of WSJ A1 "Earnings Uptick Lifts Confidence - Stock Market Soars for the Week as Early Corporate Reports Handily Beat Estimates" says the Dow had its strongest weekly gain since March and attributes this rise to, among other things, positive comments from JPM JP Morgan Chase, IBM and INTC Intel. It also says that even less than great reprots from BAC BofA and GE failed to halt the Dow's advance. Similar theme is at WSJ pB1 "Dow's Gain for Week: 597 Points" and at WSJ pB3 "IBM's 4.3% Rally Boosts the DJIA" the latter article noting that talks between Yahoo and MSFT are accelerating.

WSJ pB1 "Citigroup, BoA Results Shine Light on Failing" says BAC BofA posted 2Q profits that were reliant on one time gains and exposed weaknesses in some businesses, promising more pain for other banks as credit losses continue to rise. BAC's earnings were $3.2 for first half of '09 but its CEO Ken Lewish said it would be much tougher to make money in the second half of '09. AJC pA11 reports BofA had profits as loan losses rise.

WSJ pB10 "GE's Jabs at Reform Plans Lack Sting" says on GE's 2Q investor call Friday, GE expressed opposition to parts of Obama's financial system regulatory reform plan. GE's lending subsidiary, GE Capital, currently isn't regulated but would be under the reforms. The article says compared with BAC BofA, GE Capital's residential mortgage portfolio is in better shape. In a related story WSJ pB5 "GE Net Falls 49% as All Units Hit - Jet Leasing, Power Gear Are the Bright Spots as Finance Troubles Continue" says that GE said the recession took a toll on both its industrial businesses and its struggling finance unit. GE Capital's profits fell 80% to $590 million because of rising loan losses and a 29% decline in revenue. Without a $678 million tax benefit, GE Capital would have lost money. AJC pA11 also reports GE's profits falling 49%.

WSJ pB5 "Verizon Limits Length of Exclusive Phone Deals" saying VZ Wireless said it will shorten the time it holds exclusive arrangements to offer popular cellphone models, allowing small wireless carriers to offer the dvices as well. VZ has been under prssure along with other US wireless providers to end exclusive handset arrangements such as T At&T's multi year deal to carry Applie's iPhone in the US.

WSJ pA4 says George David, the 67 year old chairman and former chief executive of UTX United Technologies have settled their much publicized divorce case.

AJC pA11 Cisco lays off hudnreds of headquarters staff" says 700 workers were load off at CSCO's San Jose, Cal. headquarters.

AJC pA11 European Union signs off on Pfizer-Wyeth deal" says European Union antitrust regulators cleared PFE's $68 billion purchase of rival Wyeth. Pfizer is already the world's largest drug maker by revenue.

The current divisor for the Dow found at today's page B4 of The Wall St. Jrnl is
.132319125 unchanged. With this divisor a $1 change in the price of any DJIA stock equals a 7.56 change in the average

Friday's Dow numerator was 1156.99 up 4.25 from Thursday's Dow closing numerator of1152.74. This is the sum of all 30 closing prices. A short cut to the Dow numerator is to multiply the closing Dow by the Divisor.

Now, if you divide the Dow increase of 4.25 in the Dow numerator by the divisor you get 32.12, the increase in Friday's Dow.

The average closing price of Friday's Dow Jones was 38.57 up .15 from Thursday's average closing price of 38.42. The median closing price of Friday's Dow Jones was 31.79 down .03 from Thursday's Dow Jones median closing price of 31.82.

The highest closing price Friday was IBM $115.42 +4.78 4.32% 20,063,701 NYSE and the lowest closing price Fri. again was AA Alcoa $10.22 -0.22 2.11% 29,369,122 NYSE.

The lowest volume Friday was UTX United Technologies $53.8 -0.17 0.31% 4,417,770 NYSE and the highest volume was BAC Bank of Am $12.89 -0.28 2.13% 453,536,795 NYSE.

If Friday morning before the market opened you had purchased $100 of each of the Dow 30 shares (assuming you could buy fractional shares and assuming no transaction costs) and sold at the close you would have made $450 ($115,710 - $115,260). A $1,000 investment in each stock on 1/1/09 before the market opened, would have returned $31,081, or a gain of 3.60% on the $30,000 investment dividends through 7/17/09 per WSJ 7/18/09 at pB6.

Friday's Closing Dow closing numbers:

Symb/Last/Change/% Change/Vol./Market

T $23.98 +0.27 1.14% 25,785,159 NYSE
AA $10.22 -0.22 2.11% 29,369,122 NYSE
AXP $28.03 -0.25 0.88% 17,653,665 NYSE
BAC $12.89 -0.28 2.13% 453,536,795 NYSE
BA $41.36 -0.69 1.64% 5,670,520 NYSE
CAT $33.99 -0.16 0.47% 8,806,526 NYSE
CVX $65.12 +0.23 0.35% 11,884,561 NYSE
CSCO $20.51 +0.39 1.94% 68,795,238 NASDAQ-GS
KO $50.32 -0.47 0.93% 9,904,730 NYSE
DIS $24.51 -0.28 1.13% 10,474,464 NYSE
DD $27.57 +0.13 0.47% 6,861,095 NYSE
XOM $68.52 +0.06 0.09% 25,657,478 NYSE
GE $11.65 -0.75 6.05% 180,535,126 NYSE
HPQ $39.98 +0.31 0.78% 14,579,898 NYSE
HD $24.67 +0.27 1.11% 15,280,967 NYSE
INTC $18.79 +0.29 1.57% 83,885,137 NASDAQ-GS
IBM $115.42 +4.78 4.32% 20,063,701 NYSE
JPM $36.89 +0.76 2.1% 61,104,454 NYSE
JNJ $59.23 -0.02 0.03% 11,295,770 NYSE
KFT $27.43 -0.30 1.08% 7,975,967 NYSE
MCD $57.84 +0.62 1.08% 9,738,660 NYSE
MRK $27.68 0.19 0.68% 10,776,230 NYSE
MSFT $24.29 -0.15 0.61% 51,923,059 NASDAQ-GS
PFE $14.96 -0.11 0.73% 53,094,725 NYSE
PG $55.92 +0.71 1.29% 13,339,527 NYSE
MMM $62.92 -0.48 0.76% 4,578,795 NYSE
TRV $40.42 -0.12 0.3% 4,619,547 NYSE
UTX $53.8 -0.17 0.31% 4,417,770 NYSE
VZ $29.59 +0.09 0.31% 10,757,881 NYSE
WMT $48.49 -0.02 0.04% 14,410,050 NYSE

Today's Dow Jones IA Thought for the Day: There is very little incremental value at this time in digesting all the news stories about BAC Bank of America's acquisition of Merrill Lynch and who, how, and why Ken Lewis and his management team were prssured by former treasurer Henry Paulson and other gov. officials. Yet, my monitoring makes it clear that by far that is the most persistent story currently in the print media. The first three paragraphs are always the most important part of an article so I suggest not drilling too deeply into these articles about BAC, although I will continue to do so.

A read of Friday's 7/17/09 print editions of: Wall Street Journal, New York Times, Atlanta Journal Constitution, Financial Times, Investor's Business Daily and USA Today yielded the following stories about Dow Jones 30 component companies:

The big story is that JPM JP Morgan Chase reported a 36% jump in Q2 earnings Thursday, easily surpassing analysts' forecasts as huge gains in its investment banking business outweighed higher losses per AJC pA13. JPM earned $2.72 billion for Q2, up from $2 billion a year ago. However, JPM shares slipped 0.4% despite their good numbers due to rising loan losses per WSJ pC5. BAC BofA reports their earnings today. WSJ pC10 "Stash is King for JP Morgan" says usually it is a good idea to buy bank stocks somewhere in the middle of a recession and notes that JPM has good reserves and capital. NTY pB2 "JPMorgan: Nice Job" credits CEO Jamie Dimon with JPM's good performance. Fin Times p10 under heading "JPMorgan" explains why rising unemploying and credit card losses still present challenges to JPM. Inv. Bus. Daily Front Page story pA1 "JPMorgan's Q2 EPS Rises, Tops Views, But Credit Losses, Retail Banking Hurt - Underwriting, Trading Hot" says commercial real estate and credit card losses climb. USA Today p3B "JPMorgan profit up, but credit losses expected."

Front page, lead story in today's NYT pA1, "2 Giants Emerge From the Ruins On Wall Street" says that Goldman and JPMorgan took advantage of their competitors' weaknesses and are now the leaders of Wall Street resulting from the narrowing concentration of financial power as a result of the government's bail out actions. WSJ pC1 "JP Morgan Posts $2.7 Billion in Profit" which also says traditional banking remains weaks which bodes poorly for BAC BofA.

Front page story Fin Times p1 "JPMorgan hits at new credit card regulation" says Jamie Dimon, CEO of JPM, lashed out at strict new rules on US credit cards saying the rules will cost JPM's lossmaking card unit up to $700 million next year.

WSJ pC1 "Real Estate Worries Some GE Analysts" says GE is vulnerable due to thei real estate related loans.

On the front page of WSJ pA1 is a picture of former Treasury Sec'y Henry Paulsen with the caption "Paulson Grilled Over Shakedown in Merrill Deal." I don't see how CEO Kenneth Lewis survives this constant negative publicity but he is hanging in there for now. A related story at WSJ pC5 is headlined "Paulson Lambasted for Crisis" criticizing the gov's rescue of BAC BofAm. There is still another related story WSJ pC3 "Hank Paulson Unplugged." NYT pB3 covers this in "Pauslon Counters His Critics - He Argues His Steps Prevented a Collapse." Same theme at Fin Times p3 "Paulson grilled over crisis decision". Lead story USA Today p1B "Cover Story - Paulson endures tough day on Hill - He admits he pressured to get Merrill deal done, and that it wasn't perfect." Enough already with this theme but it just doesn't stop.

WSJ pC3 "Wall Street Backs New Standards" says SIFMA, Wall's Street's main lobbying group (of which my firm is a member) will back the Obama administration's call to hold brokers to a higher fiduciary standard. The SIFMA committee included BofA representatives.

WSJ pA3 in an article about the fight as to the future of the US Defense department's choice of weapons systems says that Lockheed Martin announced 600 layoffs while BA Boeing said it was cutting 1,000 defense jobs because of a stop work order on part of the Army Future Combat Systems program and cutbacks to missile defense efforts. BA Boeing is also mentioned in an article at WSJ pB1 about how it is pursuing a $10 billion contract for 126 fighter jets in India.

WSJ pB1 said IBM jumped 3.2% ahead of its earning reports after the close. AJC pA15 said IBM's, INTC's and Google's better than expected numbers boosted the tech stocks. NYT pB2 "IBM's Profit Rises 12% Eclipsing Expectations." Inv. Bus. pA4 "IBM's Q2 Earnings Shatter Expectations; 2009 Outlook Raised - Sales Fall 13%" saing that IBM's shift to higher margin services and software helped its bottom line in this downturn. Story mentions that rivals HPQ Hewlett-Packard and CSCO Cisco, unlike IBM, get most of their revenue from hardware and that HP'sprofit last quarter was flat and CSCO'shas declined the past 2 quarters.

IBM, which had a great day yesterday closing over $110 is the subject of a front page WSJ pB1 story, "IBM Battles a Reluctance to Spend" that says its Q2 profits rose 12% as it hones its operations but sales fell amid signs that businesses are not prepared to resume spending. INTC CEO Paul Otellini is quoted saying he thinks buying will pick up in the second half. Inv. Bus. Daily has an article about network management vendors are doing well and mentions one vendor, Brocade, has benefitted from partnerships with IBM and HPQ and that CSCO recently announced its plan to enter the market for blade server computers against IBM and HP. Inv Bus Daily pB3 "Chipmakers Leading Amid Firming Outlook" says INTC, the largest semicondutor group member "blew past Q2 sales and earnings views."

NYT pB2 in a story mentioning Google's profit rising 18% of course mentions its rivals MSFT, Yahoo and AOL, all who have suffered declines in revenue.

WSJ pB5 "Cisco Moves Ahead with More Layoffs" saying it laid off 700 people at their San Jose headquarters in order to control its costs amid declining sales.

WSJ pB6 "Microsoft Ads Rankle Apple" saying Apple wants MSFT to stop runing ads suggesting Apple's computers are expensive.

WSJ pC5 Large Stock Focus, "Upgrade Adds 3.9% to Amex" says DIS Diseny was up 2.9% after Sanford Bernstein raised its rating to "outperform."

The Purpose of this Dow Monitor Blog

The purpose of this Blog is to study and comment on the Dow Jones Industrial Average and its 30 component companies. Why waste time trying to predict the stock market? It is more intelligent and efficient to study major public companies. For the first time in history, the average investor has at his or her fingertips vast amounts of information provided through the government at www.sec.gov, the Internet and the print media. Yet, there are thousands of public companies which are too many to know. The solution is to pick, somewhat admittedly arbitrarily, the 30 most well known companies, the blue chip companies that comprise the Dow Jones Industrial Average. Remember when you were in school and you had approximately 30 classmates? By the end of the year, you were fairly knowledgeable about your 30 classmates. At that point, if you were to predict who would be successful, who might end up in jail, who might succeed at sports or in business you could do so. In other words, to know 30 companies is not that difficult if you persist. The result is that by understanding the fundamentals of these 30 companies and how they intereact with each other, you will have a bellweather not only for the stock market but also for society at large in terms of politics, economic, technological and cultural trends. Join with me in becoming a student of the Dow Jones Industrial Average. To belong to the Dow Monitor Club you must be able to identify all 30 companies unassisted. This is easier than you think - they are all household names. Once you can name all 30 companies, to be a Premium Member you need to do the following:

1. Learn all 30 trading symbols and the exchange on which they trade (CSCO, INTC, MSFT are traded on NASDAQ, the other 27 are NYSE).

2. Learn the range of the daily closing price within a range of five dollars.

3. Learn the names of the CEOs - they are listed at the end of this Blog.

Once you are a Premium Member the following is recommended to increase your knowledge:

4. Track the SEC filings of the Dow 30 each weekend (I will try to do this and give the results at the end of this Blog.)

5. Each morning read the print editions of Wall Street Journal, New York Times, Atlanta Journal Constitution (or your local paper), Financial Times, Investor's Business Daily and USA Today for stories and information about Dow Jones 30 component companies. (I willI try to do this and give the results on this Blog.)

6. Each afternoon give the closing price and volume of each of the Dow Jones 30 component companies. (I will try to do this and give the results on this Blog.)

7. Each weekend read the print edition of Barron's, Forbes, Business Week, CEO, CFO, Time, NewsWeek and various other print periodicals such as The Atlanta Business Chronicle for stories and information about Dow Jones 30 component companies. (I willI try to do this and give the results on this Blog.) Recently, the Dow Jones Company has started a economic sentiment indicator that monitors 15 major print newspapers for mentions of certain "key" words, such as recession. Using this information, they feel they can spot trends. If you follow the print media as we will do, we will not only learn information but we will learn which companies are being discussed which is valuable in and of itself. During the few months of the beta stage of this Dow Monitor Blog I have learned that CAT Caterpillar is hardly ever mentioned. Other companies that don't get in the print media much are KRAFT, Travelers, and MMM. On the other hand, by far, the most mentioned companies are BAC Bank of America and MSFT.

8. Learn the intricacies of the Dow Jones Industrial Average itself. It is really a very simple process. You add the closing prices of all 30 companies and then multiply by a divisor which is found daily at page C4 of the Wall Street Journal(pB4 on Saturdays). The divisor is currently 0.132319125 and changes for stock splits, stock dividends and other recapitalizations. I learned if you dispense with the divisor and just add the 30 prices to get a numerator, you get a different, and arguably better, feel for what the Dow is doing. (You can also track the average daily close and median closing price this way, which is helpful.) The divisor really just multiplies by approximately 7 the increase or decrease in the market. In other words, if at the end of the day all Dow Jones IA stocks closed down .01 at their opening price except IBM moved up 5 points from 100 to 105, that would not be such a big deal but the DJIA would move up 35.59 (4.71 divided by .132319125) and that would seem like a good day on the Dow and people would get all excited even though 29 of the Dow 30 declined. A dollar increase in a price has the same effect on the Dow whether it is low priced Alcoa going from 9.50 to 10.50 (a significant movement) or high priced IBM going from 100 to 101 (no big deal). I will try to tell you the daily divisor on this Dow Monitor Blog. A student of the Dow Jones should memorize it - this will come naturally form looking at it daily and using it as I do to find your own metrics.

9. Learn the dividend habits of the Dow Jones 30.

10. Learn the price earnings ratios of the Dow Jones 30.

11. Read the annual reports on 10K, quarterly reports on 10Q, special reports on 8K on the Dow Jones 30, all available at www.sec.gov by putting in the ticker symbol. Also check Wikipedia on the company and its CEO. The CEO's of the Dow Jones Industrial Average should be "celebritized" (my word) because they are under the radar but are, in my opinion, the most powerful group in America and possibly the world.

12. Approach the Dow Jones Industrial Average as you would sports or other hobbies you may have. Just as you know the batting average of your favorite baseball habit, pick a favorite Dow Jones 30 stock and learn about it. (Currently, may favorite Dow company, not necessarily because of its metrics, is Boeing BA.) I guarantee you that not only will you become an expert on the stock market, but your brain will get a good work out and you will find benefits in other aspects of your life. You'll see.

Here are the latest SEC filings as of 7/15/09 other than ownership filings and, except for certain cases, I do not include third party shareholder proposals:

Symbol & Co. Name/Date of Filing/Form Filed/ Comments

T AT&T 6/30/09 11K Annual Report of Employee Stock Purchase Plan
AA Alcoa 7/13/09 8K 2nd Quarter Earnings Results
AXP 6/30/08 8K Settlement w/FDIC re: convenience checks
BAC Bank of Am 7/1/09 8A Regis. of Securities
BA Boeing 7/7/09 8K Acquisition of Vought Aircraft
CAT Caterpiller 6/23/09 11K Annual Report of Employee Stock Purchase Plan
CSCO Cisco 6/2/08 S8 Regis. of securities to employees
KO Coke 6/25/09 11K Annual Report of Employee Stock Purchase Plan
DIS Disney 6/26/09 11K Annual Report of Employee Stock Purchase Plan
DD DuPont 6/29/09 11K Annual Report of Employee Stock Purchase Plan
XOM Exxon 6/24/09 11K Annual Report of Employee Stock Purchase Plan
GE 6/25/09 11K Annual Report of Employee Stock Purchase Plan
HPQ Hewlett-Pack 6/30/09 11K Annual Report of Employee Stock Purchase Plan
HD Home Depot 6/29/09 11K Annual Report of Employee Stock Purchase Plan
INTC Intel 7/14/09 8K Financial results 3rd quarter
IBM 6/29/09 11K Annual Report of Employee Stock Purchase Plan
JPM JPMorgan 7/14/09 Freewriting Prospectus
JNJ Johnson 6/28/09 8K Press release re: financial results
KFT Kraft 6/22/09 8K re: personnel changes
MCD McDonalds 6/22/09 Prospectus
MRK Merck 7/1/09 8K Closing of sale of notes
MSFT Microsoft 6.29.09 11K Annual Report of Employee Stock Purchase Plan
PFE Pfizer 6/29/09 11K Annual Report of Employee Stock Purchase Plan
PG Procter Gam 7/13/09 8K re: 0.44 dividend
MMM 3M 7/7/09 8K settlement of shareholder derivative suit
TRV Travelers 6/24/09 11K Annual Report of Employee Stock Purchase Plan.
UTX United Tech 6/26/09 11K Annual Report of Employee Stock Purchase Plan
VZ Verizon 6/29 11K Annual Report of Employee Stock Purchase Plan
WMT Wal-Mart 6/5/09 10Q

Here are the CEOs of the Dow 30 Companies:

T Randall L. Stephenson
AA Klaus Kleinfeld
AXP Kenneth I. Chenault
BAC Kenneth D. Lewis
BA W. James McNerney, Jr.
CAT James W. Owens
CVX David O'Reilly
CSCO John Chambers
KO Muhtar Kent
DIS Rogert Iger
DD Ellen Kullman
XOM Rex W. Tillerson
GE Jeffrey R. Immelt
HPQ Mark Hurd
HD Frank Blake
INTC Paul S. Otellini
IBM Samuel J. Palmisano
JPM Jamie Dimon
JNJ William C. Weldon
KFT Irene Rosenfeld
MCD Jim Skinner
MRK Robert Clark
MSFT Steve Ballmer
PFE Jeffrey Kindler
PG Bob McDonald
MMM George W. Buckley
TRV Jay S. Fishman
UTX Louis Chenevert
VZ Ivan Seidenberg
WMT Mike Duke

Today's Profiled Company is AA Alcoa (originally published Post #4 7/16/09 pm).

AA $ 10.44 0.30 2.96%
Jul. 16, 2009 Market Closed
Market : NYSE
Last Sale: $ 10.44
Share Volume: 32,484,471
Today's High: $ 10.48
Best Bid: N/A
52 Week High: $ 34.90
Market Value: $ 10,171,441,440
Earnings Per Share (EPS): $ -0.76
NASDAQ Official Open Price: $ 10.06
NASDAQ Official Close Price: $ 10.43
Net Change: 0.30 2.96%
Previous Close: $ 10.14
Today's Low: $ 10
Best Ask: N/A
52 Week Low: $ 4.97
Shares Outstanding: 974,276,000
P/E Ratio: NE
Date of Open Price: Jul. 16, 2009
Date of Close Price: Jul. 16, 2009

From Wikipedia, the free encyclopedia
Alcoa, Inc.
Type Public (NYSE: AA)
Founded Pittsburgh, Pennsylvania, U.S. (1888)
Founder(s) Charles Martin Hall
Headquarters New York, New York
Pittsburgh, Pennsylvania
Area served Worldwide
Key people Alain J. P. Belda
(Chairman)
Klaus Kleinfeld
(CEO), (President) & (Director)
Industry Aluminum
Revenue ▲ US$ 30.748 billion (2007)
Operating income ▲ US$ 4.491 billion (2007)
Net income ▲ US$ 2.564 billion (2007)
Total assets ▲ US$ 38.803 billion (2007)
Total equity ▲ US$ 16.016 billion (2007)
Employees 107,000 (2008)
Subsidiaries Reynolds Metals
Halco Mining
Kawneer
Howmet Castings
Website Alcoa.com
Alcoa, Inc. (NYSE: AA) (from ALuminum Company Of America) is the world's third largest producer of aluminum, behind Rio Tinto Alcan and Rusal. From its operational headquarters in Pittsburgh, Pennsylvania, Alcoa conducts operations in 44 countries. In May 2007 Alcoa made a $27 billion hostile takeover bid for Alcan, a former subsidiary, aiming to unite the two companies and form the world's largest aluminum producer. The takeover bid was withdrawn after Alcan announced a friendly takeover by Rio Tinto in July 2007.

Among Alcoa's other businesses are fastening systems, building products (Kawneer), Howmet Castings, and electrical distribution systems for cars. The sale of the packaging unit was announced on December 21, 2007 and closed in the first quarter of 2008.

History
In 1886, Charles Martin Hall, a graduate of Ohio's Oberlin College, discovered the process of smelting aluminum, almost simultaneously with Paul Héroult in France. He realized that by passing an electrical current through a bath of cryolite and aluminum oxide, the then semi-rare metal aluminum remained as a byproduct. This discovery, now called the Hall-Héroult process, is still the only process used to make aluminum worldwide.

Probably fewer than ten sites in the United States and Europe produced any aluminum at the time. In 1887, Hall made an agreement to try his process at the Electric Smelting and Aluminum Company plant in Lockport, New York but it was not used and Hall left after one year. On Thanksgiving day 1888, with the help of Alfred E. Hunt, he started the Pittsburgh Reduction Company with an experimental smelting plant on Smallman Street in Pittsburgh, Pennsylvania. In 1891, the company went into production in New Kensington, Pennsylvania. In 1895 a third site opened at Niagara Falls. By about 1903, after a settlement with Hall's former employer, and while its patents were in force, the company was the only legal supplier of aluminum in the US.

"The Aluminum Company of America" -- became the firm's new name in 1907. The acronym "Alcoa" was coined in 1910, given as a name to two of the locales where major corporate facilities were located (although one of these has since been changed), and in 1999 was adopted as the official corporate name.

Under President Franklin D. Roosevelt, the Justice Department charged Alcoa with illegal monopolization, and demanded that the company be dissolved. Trial began on June 1, 1938. Four years later, the trial judge dismissed the case. The government appealed.

Two more years passed, and in 1944, the Supreme Court announced that it couldn’t assemble a quorum to hear the case so it referred the matter to the U.S. Court of Appeals for the Second Circuit.

The following year this litigation came to its end. Learned Hand wrote the opinion for the Second Circuit.

Hand wrote that he could consider only the percentage of the market in "virgin aluminum" for which Alcoa accounted. Alcoa had argued that it was in the position of having to compete with scrap. Even if the scrap was aluminum that Alcoa had manufactured in the first instance, it no longer controlled its marketing. But no, Hand defined the relevant market narrowly in accord with the prosecution's theory.

Alcoa said that if it was in fact deemed a monopoly, it acquired that position honestly, through outcompeting other companies through greater efficiencies. Hand applied a rule concerning practices that are illegal per se here, saying that it doesn’t matter how Alcoa became a monopoly, since its offense was simply to become one.

Hand acknowledged the possibility that a monopoly might just happen, without anyone's having planned for it. If it did, then there would be no wrong, no liability, and no need to remedy the result. But that acknowledgement has generally been seen as an empty one in the context of the rest of the opinion, because of course rivals in a market routinely plan to outdo one another, at the least by increasing efficiency and appealing more effectively to actual and potential customers. If one competitor succeeds through such plans to the extent of 90% of the market, that planning can be described given Hand's reasoning as the successful and illegal monopolization of the market.

This leaves the question, what is the proper remedy once a wrongful monopolization is found? Here Hand remanded the matter to the trial court, and the whole narrative comes to an unsatisfactory conclusion – more of a dissipation, really, than a
conclusion. In 1947, Alcoa made the argument to the court that there were two effective new entrants into the aluminum market – Reynolds and Kaiser – as a result of demobilization after the war and the government's divestiture of defense plants. In other words, the problem had solved itself and no judicial action would be required. On this basis, the district court judge ruled against divestiture in 1950, but the court retained jurisdiction over the case for five years, so that it could look over Alcoa's shoulder and ensure that there was no re-monopolization.

Until 1950, Alcoa was concerned with its domestic market, while its Canadian subsidiary Aluminum Limited (Alcan) took care of the international markets. Alcoa, Reynolds, and Kaiser were soon joined in the growing market by Anaconda Aluminum Company, a subsidiary of the copper-industry giant. In 1958 Harvey Machine Tools Company began primary aluminum production, marking the end of Alcoa's monopoly over the process which had led to its domination of the American market.

Noted economist and former Federal Reserve chairman Alan Greenspan criticized the judgment of monopoly against Alcoa (Capitalism: The Unknown Ideal;) quotes Learned Hand, the judge in U.S. v Alcoa, who remarked, "It was not inevitable that it should always anticipate increases in the demand for ingot and be prepared to supply them. Nothing compelled it to keep doubling and redoubling its capacity before others entered the field. It insists that it never excluded competitors; but we can think of no more effective exclusion than progressively to embrace each new opportunity as it opened, and to face every newcomer with new capacity already geared into a great organization, having the advantage of experience, trade connections and the elite of personnel." Greenspan believes that the characterization of Alcoa as a threat to competition is erroneous, as "ALCOA is being condemned for being too successful, too efficient, and too good a competitor. Whatever damage the antitrust laws may have done to our economy, whatever distortions of the structure of the nation's capital they may have created, these are less disastrous than the fact that the effective purpose, the hidden intent, and the actual practice of the antitrust laws in the United States have led to the condemnation of the productive and efficient members of our society because they are productive and efficient." Greenspan grants that Alcoa was a monopoly, but maintains that it was not a coercive monopoly and, hence, should not have been subject to anti-trust action.

Alcoa established an 8% stake in China's state-run aluminum industry and has formed a strategic alliance with Aluminium Corporation of China (Chalco), China's largest aluminum producer, at its Pingguo facility. Alcoa sold this stake on September 12, 2007.

Alcoa has also acquired two facilities in Russia, at Samara and Belaya Kalitva. Alcoa recently launched an offer to purchase the remaining 18% of the Belaya Kalitva plant from minority shareholders, giving it complete ownership in the facility.

In 2004, Alcoa's specialty chemicals division was sold, taking on the name Almatis, Inc.

In 2005, under heavy criticism by local and international NGOs related to a controversial dam project exclusively dedicated to supplying electricity to this smelter, Alcoa began construction in Iceland on Alcoa Fjardaal, a state-of-the-art aluminum smelter and the company's first greenfield smelter in more than 20 years. Alcoa also signed a memorandum of understanding with the government of the Republic of Trinidad and Tobago to build a low-emissions aluminum smelter and related facilities there. However, there has been strong objection of this by the residents of the area of the proposed smelter sparking protests and marches frequently. Also, Alcoa is working with the government of Ghana on the development of the aluminum industry in that country. Furthermore, Alcoa has completed or is undergoing primary aluminum expansion projects in Brazil, Jamaica, and Pinjarra, Western Australia.

In 2006, Alcoa relocated its top executives from its headquarters in Pittsburgh to New York City. Although the company's principal office is located in New York City, the company's operational headquarters are still located at its Corporate Center in Pittsburgh. Alcoa employs approximately 2,000 people at its Corporate Center in Pittsburgh and 60 at its principal office in New York.

Alcoa was named one of the top three most sustainable corporations in the world at the World Economic Forum in Davos, Switzerland.

On 8 May 2008, Klaus Kleinfeld was appointed new CEO of ALCOA substituting Alain Belda.

Environmental record
Alcoa is ranked 15th in the Political Economy Research Institute's (PERI) Toxic 100 of 2008. The company released 13.11 million pounds of toxic air in 2008. In April 2003, Alcoa Inc. agreed to spend an estimated $330 million to install a new coal-fired power plant with state-of-the-art pollution controls to eliminate the vast majority of sulfur dioxide and nitrogen dioxide emissions from the power plant at Alcoa's aluminum production facility in Rockdale, Texas. The settlement was the ninth case the Bush administration pursued to bring the coal-fired power plant industry into full compliance with the Clean Air Act. Alcoa was unlawfully operated at the Rockdale facility since it overhauled the Rockdale power plant without installing necessary pollution controls and without first obtaining proper permits required by "New Source Review" program of the Clean Air Act. In February 1999, Alcoa cleaned soils and sediment contaminated with polychlorinated biphenyls (PCB) and lead at the York Oil federal Superfund site in Moira, New York in accordance with the Environmental Protection Agency. The site, a former waste oil recycling storage facility, accepted waste oil from a number of companies, including Alcoa. The facility was improperly managed and operated and, as a result, soils on the York Oil Property and nearby wetlands sediments and groundwater were contaminated. The United States Environmental Protection Agency‎ (EPA) issued a Superfund Unilateral Order on December 31, 1998 requiring Alcoa to excavate, treat and dispose of the contaminated wetlands sediments.

On the other hand, In 2005, BusinessWeek magazine, in conjunction with the Climate Group, ranked Alcoa as No.5 of "The Top Green Companies." in cutting their carbon gas emissions.


Alcoa in Ghana
Alcoa's affiliate in Ghana, the Volta Aluminum Company, was completely closed between May 2003 and early 2006, due to problems with its electricity supply.

Alcoa in Iceland
By the middle of September, over 50% of the Alcoa Fjardaál smelter construction in Iceland has been finished. The total workforce on site is 1,750 people, of which 80% are of Polish origin. It was expected to be on line by 2007. Alcoa and the government of Iceland have signed an agreement on instigating a thorough feasibility study for a new 250,000 tpy (Tons Per Year) smelter in Bakki by Húsavík in Northern Iceland. In order to power Alcoa's new smelters in Iceland, tracts of wilderness are being flooded to provide hydroelectric energy.[citation needed] Alcoa does not own the kárahnjúkar powerplant.

Alcoa in the United Kingdom
Kitts Green, Birmingham, England

Established shortly before World War II, the facility at Kitts Green, Birmingham has produced many aluminium products. Throughout the 1960s, 70's and 80's the plant became focused on flat-rolled products for the aerospace industry. As of 2007 the plant employed approx 530 employees.

Swansea, South Wales

On November 21, 2006, Alcoa announced that it planned to close the Waunarlwydd works in Swansea, with the loss of 298 jobs. Production ceased at the Swansea plant on January 27, 2007 and it has since been sold by Alcoa.

Alcoa in Australia
Alcoa operates bauxite mines, alumina refineries and aluminum smelters through Alcoa World Alumina and Chemicals, which is a joint venture between Alumina Limited and Alcoa. Alcoa operates two bauxite mines in Western Australia - the Huntly and Willowdale mines. Alcoa World Alumina and Chemicals owns and operates three alumina refineries in Western Australia: Kwinana, Pinjarra and Wagerup. The Wagerup expasion plans have been put on hold due to the Global Financial Crisis. Two aluminum smelters are also operated in the state of Victoria at Portland and Point Henry. Alcoa Australia Rolled Products a 100% Alcoa Inc. venture, operates two rolling mills. The Point Henry Rolling mill in Victoria and the Yennora rolling mill in N.S.W. have a combined rolling capacity of approx. 200,000 tonnes. Alcoa uses 12,600 GW or 28% of Victoria's electricity annually.

Alcoa in the United States
Alcoa created a plant just outside of Maryville, TN in Blount County, Tennessee, which was the biggest provider of aluminum in the South. The area needed housing for workers, so Alcoa built many houses. The area eventually turned into a city and decided to name itself after the company. Alcoa, Tennessee, was founded 1919.

Alcoa maintains several Research and Development Centers in the United States. The largest one, Alcoa Technical Center, is located East of its Pittsburgh Headquarters at Alcoa Center, PA. The "Tech Center" is as large as some college campuses, has its own Zip Code and maintains an extensive intellectual and physical resource for innovation. Alcoa's extensive safety program continuously improves safety at the Tech Center while enhancing quality of life and efficiency for the hundreds of elite level Researchers who are creating new avenues of business growth and technological development for the Company. Some experimental processes can be dangerous but Alcoa's 6S Culture of Safety and Environmental Responsibility has ensured Researcher safety and minimized environmental impact while enhancing cost effectiveness of development work and accelerating time to market.

The Physical plant of the Tech Center is situated in a rural area and has managed to cultivate a large wooded area which acts as a nature preserve, sheltering deer and other wildlife. It is not uncommon to see Deer and other wildlife freely circulating through the environs of the Tech Center at all hours of the day.

Alcoa World Alumina and Chemicals
Alcoa owns and operates the majority of its alumina refineries through its 60% share of Alcoa World Alumina and Chemicals.

Alcoa primary aluminum smelters
Alcoa has interests in 25 primary aluminum smelters in 8 countries.

Alcoa smelters Country Location Equity ownership Plant Total Nameplate capacity (kt per year) Alcoa's Capacity (kt per year)
Australia Point Henry 100% 185 185
Australia Portland 55% 353 194
Brazil Poços de Caldas 100% 96 96
Brazil São Luís (Alumar) 60% 438 263
Canada Baie Comeau 100% 438 438
Canada Bécancour 75% 409 307
Canada Deschambault 100% 254 254
Italy Fusina 100% 44 44
Italy Portovesme 100% 150 150
Spain Avilés 100% 90 90
Spain A Coruña 100% 84 84
Spain San Cibrao 100% 225 225
United States Alcoa, TN 100% 215 215
United States Badin, NC 100% 60 60
United States Evansville, IN (Warrick) 100% 309 309
United States Ferndale, WA (Intalco) 100% 279 279
United States Frederick, MD (Eastalco) 100% 195 195
United States Massena (East Plant), NY 100% 125 125
United States Massena (West Plant), NY 100% 130 130
United States Mount Holly, SC 50% 229 115
United States Rockdale, TX 100% 267 267
United States Wenatchee, WA 100% 184 184
Ghana Tema 10% 200 20
Norway Lista 100% 94 47
Norway Mosjøen 100% 188 94

Klaus Kleinfeld
Klaus Kleinfeld (born November 6, 1957 in Bremen, Germany) is chief executive officer (CEO) of Alcoa Inc., and former CEO of Siemens AG.

In August 2007, Kleinfeld was appointed COO of Alcoa Inc. Beginning October 1st, 2007, he oversaw the operative business for the US Aluminum concern. In May 2008, Kleinfeld was appointed as CEO of Alcoa, thus succeeding Alain Belda.

While CEO of Alcoa in 2008, Klaus Kleinfeld earned a total compensation of $9,705,899, which included an annualized base salary of $1,400,000, a cash bonus of $1,884,000, stocks granted of $3,021,377, and options granted of $2,564,000.

Kleinfeld was CEO of Siemens AG from 2005 until July 2007.On April 25, 2007, Siemens AG distributed a press release announcing that Kleinfeld was not available for a renewal of his contract. This was preceded by the supervisory board's indecisiveness in light of the ongoing corruption investigations at Siemens.

He started his career in 1982 by joining a specialized marketing consulting firm and worked with clients like Siemens, Henkel, Citibank, EFFEN, and industry associations.

History
Kleinfeld received a business degree from Georg August University in Göttingen, Germany and a Ph.D. in management, University of Würzburg.

In 1986, he joined Ciba-Geigy in Basel (Switzerland), where he was a product manager in the Pharmaceutical Division.

Kleinfeld has worked for Siemens AG since 1987. His first position was in the company’s Corporate Sales and Marketing unit.

In January 2001, Kleinfeld moved to the United States, where he served first as chief operating officer (COO) and then – from 2002 to 2004 – as president and chief executive officer (CEO) of Siemens USA.

In January 2004, Klaus Kleinfeld was appointed to Siemens’ Corporate Executive Committee. Kleinfeld was appointed Vice President of Siemens AG in the middle of 2004 and Chief Executive Officer (CEO) on January 27, 2005, succeeding Dr. Heinrich von Pierer. As CEO, Kleinfeld set about restructuring Siemens. This led to the company turning in profits last year of $3.96 billion (up 35%) and increasing Siemens share price by 40%. His attempts at modernization, however, brought him into conflict with the defenders of Siemens business culture, both inside and outside the company. While generally viewed positively by the worldwide financial press, Kleinfeld regularly received criticism from the media in Germany, mostly for lack of social responsility against Siemens workers.

Under his leadership, the company's financially stricken mobile handset business was sold for a negative charge to Taiwan's BenQ in June 2005. The German subsidiary, BenQ Mobile GmbH & Co. OHG, declared bankruptcy about one year later when the Taiwanese parent enterprise stopped all funding, resulting in extensive redundancies. This led to speculation in the German media that Siemens had off-loaded the division to avoid dealing with the fallout of its imminent demise.[ At about the same time, Siemens' Supervisory Board increased the salary of the Siemens Board of Directors by 30% although, in an attempt at damage limitation over the negative publicity involved in the redundancies, the board pledged their pay rises to a relief fund set up by Siemens to aid the workers affected.

In Autumn 2006, a series of corruption charges were laid against Siemens and there was speculation in the media about Kleinfeld's involvement. An independent law firm, Debevoise & Plimpton, were appointed to do a complete audit of the company. Indications are that the problem is far greater than originally thought, although their reports have found no links between Kleinsfeld and the slush funds. Kleinfeld is a member of the board of directors of Alcoa Inc., of Bayer AG and of Citigroup Inc. After the announcement that he would be joining Alcoa, he resigned from the Citigroup board as Alcoa’s then CEO was the lead director for the board.