[R]10:30AM New York – U.S. stocks struggled after the White House proposed a budget of $3.1 trillion and rising budget deficit on the cost of war and fiscal stimulus.[/R]

The White Budget for the fiscal 2008 which begins in October of this year with higher than expected deficit, lower revenue projections, and rising cost of military operation in the Middle East.

The budget anticipates revenue in 2008 of $2.52 trillion, lower than $2.57 trillion in fiscal 2007. The budget estimates corporate income tax receipts of $345 billion in 2008 and $339 in 2009 and expects to spend only $70 billion in the Middle East. The low estimate on the war in Middle East is not likely to satisfy critics, who estimate that the annual cost is likely to be more like $200 to $280 billion in 2008.

The budget estimated fiscal deficit to be 2.9% in 2008 and 2.7% in 2009 compared to a budget deficit of $162 billion or 1.8% in 2007. The budget projects that by 2012the government accounts will generate a surplus of $61 billion.

The Nation’s fiscal outlook is reflected in both the annual budget deficit and the amount of Federal debt held by the public, which is debt issued to finance past and current deficit spending. Debt held by the public has ranged from 33 to 49 percent of GDP over the past 20 years, and has averaged 35 percent over the past 40 years. For 2006, debt held by the public declined from 37.4 percent to 37.0 percent of GDP. For 2012, debt held by the public is expected to be 32 percent.


Earnings News

Humana (HUM: chart) fourth quarter earnings at the end of December 31, 2007 was at $1.43, significantly above the company’s previous guidance of $1.27 to $1.32 primarily due to a lower income tax rate for 2007 than previously anticipated and a gain from the sale of a venture capital investment in the quarter. The company earned $0.92 per share for the quarter ended December 31, 2006.

For the year ended December 31, 2007, the company reported EPS of $4.90 versus $2.90 for the year ended December 31, 2006. The fiscal 2007 earnings included one-time gains of $0.25 per share that are not anticipated to recur in future periods.

The company raised its earnings projection for the fiscal year 2008 to reflect a lower tax rate than previously anticipated, with EPS now expected to be in the range of $5.35 to $5.55, an increase of 9% to 13% over the year 2007.

Fourth consolidated revenues rose 12% to $6.34 billion from $5.66 billion from a year ago, with total premium and administrative services fees up 12% compared to the prior year’s quarter.

Fiscal year 2007 consolidated revenues rose 18% to $25.29 billion from $21.42 billion from a year ago with total premium and administrative services fees up 18% compared to a year ago on higher enrollment in Medicare and individual plans.

Wendy’s (WEN: chart) reported fourth quarter earnings of $86.6 million, a rise of 134% from a year ago of $37 million. Diluted earnings per share increased 200% to 96 cents from 32 cents in the same period in 2006.

For the fiscal 2007, the company reported adjusted earnings of $108 million up 50% or $1.20 per share from $72 million or 62 cents per share.

The Company met its revised 2007 full-year EBITDA guidance of $295 million to $315 million, and its revised 2007 full-year EPS guidance of $1.09 to $1.23 which excluded expenses related to restructuring.

Total company-operated restaurant EBITDA margins improved 180 basis points to 10.7% in 2007, compared to 8.9% one year ago. This includes U.S., Canada and International operations. Annual same-store sales at U.S. franchise restaurants increased 1.4%, compared to a 0.6% increase in 2006.

The fourth-quarter same-store sales at U.S. franchise restaurants increased 0.2%, compared to an increase of 2.7% a year ago, and fourth-quarter same-store sales at U.S. company-operated restaurants decreased 0.8%, compared to an increase of 3.1% in the fourth quarter of 2006.

International Markets

In Tokyo Nikkei 225 Index closed higher 362.54 or 2.69% to 13,859.70, in Hong Kong Hang Seng index increased 908.50 or 3.77% closed to 25,032.08, in Australia ASX 200 index higher 24.50 or 0.42% to close 5,867.40.

In South Korea Kospi Index increased 55.60 or 3.40% to close at 1,690.13, in Thailand SET index closed higher 0.73 or 0.09% to 811.56, and Indonesia JSE Index edged increased 54.81 or 2.07% to 2,701.63. Sensex index in India increased 417.70 or 2.29% to 18,660.32.