IBM investors felt the Big Blues as third quarter revenue at the low end of expectations sent its stock down more than 3 percent. The information technology hardware giant said that total services signings—an indicator of future growth—climbed to $12.3 billion. Expectations ranged between $12 billion and $13 billion, The New York Times reports. Revenue rose 8 percent to $26.2 billion, which was just under the average forecast of $26.26 billion. The stock, which closed at an unprecedented high of $190.53 on Friday, fell 3.7 percent to $179.70. "The company exceeded published expectations, but the underlying expectations were even higher," Annex Research analyst Bob Djurdjevic told the Times. "Investors who have been very bullish on IBM are probably taking some profits now."
World Stocks Fall
World stocks stumbled and government bonds rose as investors were compelled to cut risks in the wake of slower-than-expected Chinese growth data, a threat to France's triple-A sovereign credit rating and cautionary comments by the German finance minister about Europe's debt crisis, Reuters reports. China's annual gross domestic product growth eased in July-September to 9.1 percent, its slowest pace since the second quarter of 2009. Meanwhile, Moody's ratings agency said it might lower France's credit rating to negative in the next three months prompting a 16-year high in the spread between French and German 10-year government bond yields. Concerns have been rising over the costs to Europe's major economies if they have to bail out more banks or weaker euro zone members, Reuters said. Germany's finance minister Wolfgang Schaeuble cautioned Monday that a definitive solution to the two-years-old crisis would not be reached at the European Union summit next week
Air France Grounds its Chief Executive
The board of Air France-KLM, Europe's largest airline by revenue, voted Monday to dismiss its group chief executive Pierre-Henri Gourgeon less than four months after it had appointed him to a new four-year term, The New York Times reports. Investors has grown dissatisfied with Gourgeon, who has struggled to contain high operating costs and increased scrutiny of the carrier's safety culture since a crash killed more than 200 people more than two years ago, The Times said. His successor is expected to be Alexandre de Juniac, an advisor to the French foreign minister, His appointment is subject to approval by a government ethics committee.
Mortgage and Credit Card Delinquencies Hit Banks Where They Live
Citigroup and Wells Fargo joined JPMorgan Chase in reporting new signs that homeowners and credit-card borrowers are falling behind on their payments, Financial Times reports. In addition to expected declines in investment banking, the banks’ third-quarter results were also impacted by the consumer side of their businesses. Wells Fargo reported delinquencies of more than 90 days in its main portfolio of consumer loans – including mortgages and credit cards – rose 4 percent, the first increase since 2009. Citigroup said the percentage of mortgages that were 90 days delinquent rose for the first time in almost two years, FT said.
Frank McCourt Gets the Dodgers but Team Still Not Safe at Home
Following divorce proceedings that went into extra innings, Frank and Jamie McCourt have settled with Jamie relinquishing her ownership claim of the Los Angeles Dodgers. Jamie, who once proclaimed herself to be "the face of the Dodgers," will get around $130 million in the settlement, the Los Angeles Times reports. The McCourts have owned the Dodgers since 2004. A dispute over ownership of the team has fouled up the divorce, which is said to be the costliest in California history. Frank McCourt is now seeking to auction the team's TV rights to raise the $130 million.