Briefcase
Stocks jump on hopes for action in Europe
NEW YORK – Stocks had their biggest gains in more than two weeks Monday after European officials vowed to take action to resolve the region’s debt problems. The Dow Jones industrial average jumped 272 points, making up about a third of last week’s losses.
Financial officials met in Washington this weekend and pledged to take bolder steps to fight Europe’s debt crisis, which threatens to slow the global economy. German leaders want banks and private institutions that hold Greek bonds to take a bigger loss on those holdings to reduce Greece’s debt burden. European officials have talked about increasing the size of Europe’s $595 billion rescue fund by allowing it to take loans from the European Central Bank.
Associated Press
Netflix locks up DreamWorks rights
SAN FRANCISCO – Netflix unveiled a coming attraction its disillusioned subscribers might like: the Internet video rights to films and television specials from DreamWorks Animation.
The multiyear deal announced Monday will give Netflix Inc.’s streaming service the exclusive rights to show the latest content from DreamWorks, the studio behind a list of popular franchises that includes “Shrek,” “Kung Fu Panda” and “Madagascar.” It comes after weeks of disruptive changes that irked Netflix’s 24.6 million U.S. customers and spooked its shareholders.
But even this bit of good news had a downside. The DreamWorks rights don’t kick in until 2013, so the studio’s material won’t immediately placate Netflix customers who are clamoring for Netflix’s streaming library to widen its selection of box office hits.
Associated Press
Berkshire Hathaway announces buyback plan
OMAHA, Neb. – Warren Buffett is sending a clear signal that he believes Berkshire Hathaway’s stock is undervalued by announcing a plan to repurchase stock for the first time since taking over in 1965.
Berkshire said Monday that the company Buffett leads will repurchase its Class A and B shares anytime they are trading at less than 110 percent of book value.
Book value is a measure of a company’s value that Buffett often cites because it is similar to the intrinsic value figure he calculates to determine if an investment is overpriced. At the end of June, Berkshire estimated its assets were worth $98,716 per Class A share after liabilities were deducted.
Stifel Nicolaus analyst Meyer Shields said the repurchase announcement came as a surprise, but investors should realize that Buffett left the terms flexible so he hasn’t committed to buying back any stock.
“He’s just giving himself another tool to play defense with,” Shields said.
Associated Press
Kodak shares plunge after drawing on credit
ROCHESTER, N.Y. – Shares of Eastman Kodak Co. lost more than one-quarter of their value Monday after the 131-year-old photography pioneer, scrambling to redefine itself in a cutthroat digital arena, drew down $160 million from its revolving credit line.
Some analysts worried the borrowing was a troubling sign that Kodak is running out of cash in its battle to return to profitability. Others dismissed the concerns, maintaining that Kodak dipped into a $400 million credit line because most of its available cash is deposited overseas.
Kodak said in a statement that the revolving credit line is intended to “bridge timing differences between cash outflows and inflows, which is a common practice at many corporations.”
“As we have said in the past, our cash flow is highly seasonal,” it said. “This is a tool to help manage that seasonality.”
Kodak’s stock fell 64 cents, or 26.9 percent, to close at $1.74.
Associated Press