MBIA Inc (MBI: chart) plunged 25% or $6.88 to $20.22 after it disclosed surprised exposure to risk collaterized debt obligation bonds popularly known as CDOs.

MBIA, part of the S&P 500 index led the decliners in the widely followed index.

The bond insurer reported on its web site total of $30.606 billion exposure in coverage to multi-sector CDOs of which $8.14 billion are in the CDOs of multi-sector high grade collateral, $1.068 billion are in CDOs of mezzanine U.S. asset backed securities containing RMBS collateral, $16.126 billion are in CDOs of high grade U.S. ABS containing RMBS collateral.

Yesterday the rating agency S&P affirmed its AAA insurance financial strength rating for MBIA Insurance Corporation, however, the rating agency has changed its outlook on the company and insurance subsidiary to negative from stable.

Last week Moody’s changed its outlook on the company to negative from stable pending $1 billion investment from Warburg Pincus.

Even though stock plunged on the news analysts believe that stock the degree of the sell-off is not warranted. Warburg Pincus, venture capital and risk management investment house is agreed to invest $500 million in the company on Dec 10th at $31 and has right to invest additional $500 million under certain conditions.


12:30PM New York – U.S. stocks traded sideways after losses from Bear Stearns, lower earnings from FedEx, and higher earnings from Oracle, Nike, and Accenture.

Dow Jones Industrial Average fell 20.48 to 13,186.38, Nasdaq added 9.00 to 2,610.01, and S&P 500 declined 3.89 to 1,449.11.

The Commerce Department final read on the gross domestic product for the third quarter was 4.9%. The economy had record growth of 3.8% in the second quarter. The Labor Department reported weekly claims of unemployment rose 12,000 at the end of the last week 346,000.

Bear Stearns reported first quarterly loss on $1.9 billion in mortgage securities related losses and write-downs. The capital market business and prime brokerage business also seem to suffer from the client worries of the capital adequacy at the brokerage firm.

FedEx (FDX: chart) earnings for the fiscal second quarter declined to $1.54 from $1.64 a year ago on higher fuel prices and weak domestic economic growth. The chairman Frederick W. Smith said that the international growth is solid but the domestic industrial production related shipment remains soft.

Second quarter revenue rose 6% to $9.45 billion and but income decreased 6% to $479 million. Operating margin declined to 8.3% from 9.4% and operating income fell 7% to $783 million from a year ago.

Oracle (ORCL: chart) reported fiscal second quarter 2008 earnings per share increased 36% to 25 cents on net income increase of 35% to $1.3 billion on revenue rise of 28% to $5.3 billion. Total software revenues were up 29% to $4.2 billion with new software license revenues up 38% to $1.7 billion. Database and middleware new license revenues were up 28% and applications new license revenues were up 63%. Services revenues were up 22% to $1.2 billion, compared to the same quarter last year.

Oracle jumped 7% or $1.45 to $22.21 in the morning trading.

Separately Oracle founder Larry Ellison controlled Netsuite priced its initial public offering of 6.2 million shares at $26 per share and raised $114 million. The initial filing range for the offering was between $19 and $22 per share. At mid-day nearly 1.05 million shares changed hands and Netsuite stock traded between $23.86 and $27.65 price range.

Orion Energy Systems (OESX: chart) priced its initial public offering of 7.6 million shares at $13 per share and raised $123.80 million. The energy management company stock opened at $17 and jumped to $21 on its first day of trading, yesterday. Today the stock has traded between $22.15 and $19.98.

Gushan Environmental Energy Limited (GU: chart) priced its offering of 18 million shares at $10 yesterday. The stock traded as high as $10.48 before settling just under the initial offer price. Today the stock of the bio-diesel maker traded between $10.05 and $9.62.


Nike (NKE: chart) fiscal second quarter revenue increased 14% to $4.3 billion and revenue increased 10% when adjusted for constant currency. Net income in the quarter increased 10% to $359.4 million and earnings per share rose 11% to 71 cents.