Tag - TMA

Shares of Thornburg Mortgage, Inc. (NYSE:TMA) are soaring 37% in pre-market trading after the residential mortgage lending company this morning reported substantially better-than-anticipated second-quarter earnings that bested the consensus on Wall Street.

Results were owed to declines in the fair value of the company’s Principal Participation Agreement, Additional Warrant Liability of $536.9 million, Senior Subordinated Notes of $24.9 million, and a gain on the extinguishment of our remaining asset-backed commercial paper debt of $23 million.

The company also said that the credit performance of its ARM loans remained “excellent” during the quarter and that it would issue preferred stock.

For detailed price information and news stories on Thornburg Mortgage, click TMA.

Thornburg Mortgage, Inc. (NYSE:TMA) said on Tuesday the company had approved a deadline extension for the completion of its preferred stock tender offer to Sept. 30, 2008. According to the terms of the offer, for each share of the residential mortgage lender's Series C, D, E and F Preferred Stock that is validly tendered and accepted upon expiration of the offer, the holder will receive $5 cash and 3.5 shares of common stock, the company said. Successful completion of the offer will result in the annual interest rate for the company’s Senior Subordinated Secure Notes due 2015 to drop from 18% to 12%. This should amount to a savings of $69 million per year in interest payments, the Santa Fe, N.M.-based company said.

Before the open Tuesday, shares of Thornburg Mortgage rose 8.9% to $0.22 apiece.

The Russell 2000 (NYSE: IWM) fell hard today as the stain from the subprime mortgage meltdown spread. The small-cap index let go 20.96 points, or 3.07%, to 662.78. The Dow Jones Industrial Average (INDU) declined 214.60 points, or 1.75%, to 12,040.39.

On a year-to-date basis, the Russell 2000 is down 13.48%, while the Dow has retreated 9.23% and the S&P 500 has shed 11.17%.

The bears completely dominated trading today on news before the start of trading that investment company Carlyle Capital Corp. Ltd. had failed to meet a margin call and received a notice of default from one of the banks that helps finance its portfolio of mortgage securities.

Similarly, Santa Fe, N.M.-based residential mortgage lender Thornburg Mortgage Inc. (NYSE: TMA) announced after the close on Wednesday that it had failed to meet a margin call of about $28 million.

A “margin call” is when banks call in their loans to investors, who are in turn forced to sell off assets to raise cash, leading to a reduction in the price of those assets and more margin calls and losses.

Today’s news raised fears that the credit squeeze and the consequences of the housing downturn will continue plaguing the financial system.

The Russell 2000 (NYSE: IWM) and the other major U.S. indices are posting significant declines less than an hour before the close. At 3:15 p.m. ET, the small-cap index was down 16.67 points, or 2.44%, to 667.07. The Dow Jones Industrial Average (INDU) had retreated 178.29 points, or 1.45%, to 12,076.70.

The bears are running the show on news that residential mortgage lender Thornburg Mortgage Inc. (NYSE: TMA) and investment company Carlyle Capital Corp. Ltd., which has made residential mortgage-backed securities, have failed to meet margins calls.

A “margin call” is when banks call in their loans to investors, who are in turn forced to sell off assets to raise cash, leading to a reduction in the price of those assets and more margin calls and losses.

The subprime mortgage sector started to implode after U.S. home prices began declining in the second half of 2006.

The Russell 2000 (NYSE: IWM) is firmly in negative territory midway through the session. At 1:49 p.m. ET, the small-cap index was down 14.59 points, or 2.13%, to 669.15. The Dow Jones Industrial Average (INDU) had lost 120.89 points, or 0.99%, to 12,134.10.

The bears are running the show on news that residential mortgage lender Thornburg Mortgage Inc. (NYSE: TMA) and investment company Carlyle Capital Corp. Ltd., which has made residential mortgage-backed securities, have failed to meet margins calls.

A “margin call” is when banks call in their loans to investors, who are in turn forced to sell off assets to raise cash, leading to a reduction in the price of those assets and more margin calls and losses.

Separately, a report by the U.S. Labor Department before the start of trading showed that jobless claims for the week ended March 1 fell 24,000 to 351,000, from an upwardly revised 375,000 the preceding week. Economists were expecting to see a smaller decline.

However, the number of people receiving unemployment benefits increased 29,000 to 2.83 million, the highest level in two years.

With stocks small and large falling, shares of airline companies are leading the way down.

Among small-cap airlines, Indianapolis-based Republic Airways Holdings Inc. (Nasdaq: RJET) is flying at a lower altitude.

The Russell 2000 (NYSE: IWM) is declining on news that the strain from the subprime meltdown has spread.

At 12:04 p.m. ET, the small-cap index had retreated 10.53 points, or 1.54%, to 673.21. The Dow Jones Industrial Average (INDU) was off 133.10 points, or 1.09%, to 12,121.89.

Stocks small and large are in the red following news that residential mortgage lender Thornburg Mortgage Inc. (NYSE: TMA) has failed to meet a margin call of about $28 million. Similarly, investment company Carlyle Capital Corp. Ltd. announced before the start of trading that it has also failed to meet a margin call and has received a notice of default from one of the banks that helps finance its portfolio of mortgage securities.

A “margin call” is when banks call in their loans to investors, who are in turn forced to sell off assets to raise cash, leading to a reduction in the price of those assets and more margin calls and losses.

In other news, U.S. retailers generally beat low same-store expectations in February. Leading the way was Wal Mart Stores, Inc. (NYSE: WMT), the world’s largest retailer, which reported a 2.6% increase in same-store sales.

The Russell 2000 (NYSE: IWM) and the Dow are falling on news of more fallout from the subprime mess.

At 10:13 a.m. ET, the small-cap index was down 6.04 points, or 0.88%, to 677.70. The Dow Jones Industrial Average (INDU) had shed 103.47 points, or 0.84%, to 12,151.52.

Stocks opened in the red following news that investment company Carlyle Capital Corp. Ltd, which invests in fixed income asset classes and residential mortgage-backed securities, has failed to meet margin calls on its portfolio.

Carlyle Capital announced before the start of trading that it has received a notice of default from one of the banks that helps finance its portfolio of mortgage securities and expects to receive one more.

Similarly, Thornburg Mortgage Inc. (NYSE: TMA), a residential mortgage lender which buys investments in adjustable-rate and variable-rate mortgage assets, reported after the close on Wednesday that it has failed to meet a margin call of about $28 million.

The Russell 2000 (NYSE: IWM) and the Dow posted solid gains today, propelled by news that the U.S. Federal Reserve was united in its decision to cut interest rates on Sept. 18. The small-cap index added 5.58 points, or 0.66%, to 845.72. The Dow Jones Industrial Average (INDU) climbed 120.80 points, or 0.86%, to a new record close of 14,164.53. The previous record close was 14,087.55, on Oct. 1.

The U.S. Federal Reserve’s decision to lower the federal funds rate on Sept. 18 was unanimous, according to the meeting’s minutes released today. The federal funds rate is the rate at which commercial banks make overnight loans to each other.

The minutes show that all 10 members of the Federal Open Market Committee (FOMC) agreed to lower the target interest rate to 4.75% from 5.25%.

“In order to help forestall some of the adverse effects on the economy that might otherwise arise, all members agreed that a rate cut of 50 basis points at this meeting was the most prudent course of action.”

The FOMC left the meeting without a set plan of action for the future, instead deciding to monitor the situation and act as needed “to mitigate the adverse effects on the economy arising from the disruptions in financial markets.”

Stocks reacted to the news, which was released at 2 p.m. ET, with an immediate jump. The Russell 2000 climbed into negative territory after spending most of the afternoon on its back, while the Dow turned small gains into strong gains.

The Russell 2000 (NYSE: IWM) is the only major U.S. index in the red as investors await the release of the Fed’s minutes. At 1:57 p.m. ET, the small-cap index had lost 1.33 points, or 0.60%, to 838.81. The Dow Jones Industrial Average (INDU) was up 13.74 points, or 0.10%, to 14,057.47.

Investors are holding their breath ahead of the 2 p.m. ET release of the U.S. Federal Reserve’s minutes from its latest meeting. The Fed voted on Sept. 18 to lower its target interest rate to 4.75% from 5.25%. The minutes will be analyzed for clues about possible future rate cuts.

The session began on a bullish note following news that YUM! Brands, Inc. (NYSE: YUM) reported better-than-expected quarterly results.

The Louisville, Ky.-based operator of fast food restaurants KFC, Taco Bell, Pizza Hut and Long John Silver’s, said that net income increased to $270 million, or $0.50 per share, while 15 analysts polled by Thomson Financial were expecting earnings of $0.45 per share. A year earlier the company had a profit of $230 million, or $0.42 per share.

The profit increase was due to the strong performance of YUM!’s international divisions, particularly in China. Net income in the U.S. division improved a paltry 1%, while revenues fell 6%.

The Russell 2000 has been trading on both sides of the flat line this morning, but small caps have spent the majority of the day so far in negative territory.

The Russell 2000 (NYSE: IWM) and the Dow closed with slim gains on a quiet day marked by news of strong earnings from a major retailer and renewed credit fears. The small-cap index added 1.42 points, or 0.18%, to 787.45. The Dow Jones Industrial Average (INDU) added 42.27 points, or 0.32%, to 13,121.35.

Trading began on a positive note following news that Lowe’s Companies, Inc. (NYSE: LOW) reported that its second-quarter profit rose 9% to $1.02 billion, or $0.67 per share, above analysts’ forecasted earnings of $0.61 per share. A year earlier the Mooresville, N.C.-based home improvement retailer had a profit of $935 million, or $0.60 per share.

That’s a sign that some companies can withstand the decline in the U.S. housing sector without their earnings taking a hit.

Stocks were also helped by the remaining momentum from the U.S. Federal Reserve’s decision on Friday, August 17, to cut the discount rate to 5.75% from 6.25% in order to stabilize money markets. The discount rate is the rate the central bank charges commercial banks on loans they receive.

The Russell 2000 (NYSE: IWM) and the Dow are falling on more fears of losses in the credit markets. At 2:17 p.m. the small-cap index was down 6.07 points, or 0.77%, to 779.96. The Dow Jones Industrial Average (INDU) had shed 77.71 points, or 0.59%, to 13,001.37.

Trading was choppy but stocks generally stayed above the flat line until the bears took charge around 12 p.m. ET on news that residential mortgage lender Thornburg Mortgage Inc. (NYSE: TMA) has sold more than 35% of its mortgage-backed securities, over $20 billion in total, and reduced its borrowing in order to minimize risk.

The Santa Fe, N.M.-based company is the latest example of mortgage lenders experiencing difficulties financing their operations as institutional investors turn a cold shoulder to mortgage-backed securities in the midst of a slumping U.S. housing sector and a higher level of delinquencies and foreclosures.