DJIA Losing 3 Trifecta (T, DD, MRK)

It is easy to get pumped up about overseas rate cuts, but there is cautionary data from at least three DJIA components.  Wal-Mart is the economic trade-down so that win in retail sales is a little muted.  AT&T Inc. (NYSE: T), DuPont (NYSE: DD), and Merck (NYSE: MRK) all have cautious news this morning.

AT&T Inc. (NYSE: T) announced this morning that it was cutting 12,000 jobs, or about 4%of its workforce.Unlike others, the pinkslips here are starting almost immediately.  Thecompany sees a Q4 charge of $600 million, which we would tally up as acost of roughly $50,000 per job cut.  The company did not warn, but itdid note that the cuts are on the change in climate in telecom businessmix and economic pressure.  Shares are down about 2.5% at $28.36 andthe 52-week trading range is $20.90 to $42.79.

DuPont (NYSE: DD) also dropped a ball by forecasting a non-GAAP loss of-$0.20 EPS for the quarter, versus estimates of at least positiveearnings with consensus being north of $0.20 EPS.  The company also put2009 guidance at $2.25 to $2.75 EPS.  Wall Street estimates are $2.80on average, and that is already 10% lower than what was expected for2008.  Shares are down almost 7% at $22.00 pre-market and its 52-weektrading range is $21.32 to $52.49.

Merck (NYSE: MRK) offered guidance for next year which was under theofficial estimates.  Shares of the drug giant are indicated lower thismorning after offering guidance of $3.15 to $3.30 EPS, yet ThomsonReuters had estimates of $3.52 EPS.  Shares are indicated down 5.5% at$25.01 and the 52-week trading range is $22.82 to $61.62.

Jon C. Ogg
December 4, 2008