STOCKS NEWS US-Stifel Nicolaus picks best bank choices for 2009

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U.S. stock market report [.N] 1045 ET 02Jan2009-Stifel Nicolaus picks best bank choices for 2009 ------------------------------------------------------------------------------

Stifel Nicolaus Friday presented a list of banks it considered its top sector choices for 2009, though it cautioned that issues of credit quality deterioration and capital adequacy were still issues that were unlikely to see near-term improvement.

The firm's list includes: BancorpSouth BXS.N, City Holding CHCO.O, Danvers Bancorp DNBK.O, First Horizon FHN.N, People's United Financial PBCT.O and TCF Financial TCB.N.

“Though not unscathed by the credit cycle, these institutions maintain adequate capital levels, in our view, and, in many cases, will capitalize on weakened competitors,” Stifel Nicolaus wrote. The firm continued that the companies weren’t necessarily stocks that would provide a refuge, saying instead that they had strong balance sheets and compelling valuations.

“The list represents our best ideas in a sector that we believe will remain troubled from an earnings perspective for the next several quarters,” it wrote.

Reuters Messaging: 1028 ET 02Jan2009-Airlines advance on fall in crude oil prices ------------------------------------------------------------------------------

U.S. airline stocks gained ground on Friday, as the price of crude oil continued to slip as investors worried how the recession would impact demand.

The AMEX Airline Index .XAL rose 2.3 percent to 24.81 while February crude futures were off 0.4 percent to $44.43 per barrel. The contract hit a session low of $41.05 a barrel earlier on Friday.

Among the major U.S. airlines, UAL Corp UAUA.O, which owns United Airlines, rose 4.3 percent to $11.50 while U.S. Airways LCC.N gained 2.6 percent to $7.93 and Delta Air Lines DAL.N was up 2.7 percent to $11.77.

Reuters Messaging: 1023 ET 02Jan2009-Factory activity hits 28-year low: ISM ------------------------------------------------------------------------------

U.S. factory activity slid to a 28-year low on Friday, according to an industry report by the Institute for Supply Management. [ID:nWEN2173]

The ISM’s index of national factory activity fell to 32.4, compared with the Reuters Estimate of 35.5 and the November reading of 36.2. Any reading below 50 represents contraction.

Reuters Messaging: 1009 ET 02Jan2009-Fitch upgrades Wachovia after deal closes ------------------------------------------------------------------------------

Fitch Ratings raised its view on Wachovia Corp to “AA” from “A-plus” after Wells Fargo closed its acquisition of the bank and assumed its debt. Wells Fargo’s rating was affirmed at “AA.” [ID:nN02356786]

Following the Wednesday close, Wells Fargo now has one of the largest deposit bases in the country.

Wells Fargo shares slid 2.6 percent to $28.72. 0944 ET 02Jan2009-Nov semiconductor sales down 10 pct: SIA ------------------------------------------------------------------------------

Global semiconductor sales fell almost 10 percent in November, hurt by the economic slowdown, according to the Semiconductor Industry Association (SIA). Sales slid to $20.8 billion from $23.1 billion in November 2007. For the first 11 months of 2008, sales were up 0.2 percent.

The SIA said the slowdown was impacting semiconductor companies less than other sectors, and that it expected the group to remain the second-largest exporter in the U.S. for 2008.” [ID:nBNG424684]

Reuters Messaging: