Money Odds & Ends

Wisconsin Energy replaces MGIC in S&P 500
The stock of Wisconsin Energy Corp., which had been listed in the Standard & Poor’s MidCap 400 Index, replaced MGIC Investment Corp. in the Standard & Poor’s 500 Index. Wisconsin Energy also was added to the S&P 500 GICS (Global Industry Classification Standard) Multi-Utilities Sub-Industry Index.

Battered by the collapse of the housing market, MGIC’s stock has fallen dramatically over the last year from highs of more than $32 per share. Last week, it traded between $1.70 and $1.80 per share, but rose to $3.80 Monday morning. The company recently cancelled its third quarter dividend payment.

Downturn does not deter Northwestern Mutual
The board of trustees of Northwestern Mutual Life Insurance Company last week announced an estimated dividend payout of $4.6 billion to be paid to participating policyowners in 2009.

The financial security company said strong operating fundamentals and a diversified investment strategy enabled it to deliver the payout, while it continues to maintain a capital surplus that ensures long-term financial strength.

The dividend interest rate on un-borrowed funds for most permanent life insurance policies will be 6.5 percent in 2009.

"We are proud to continue to lead our industry in total life insurance dividends paid to policy owners," said Edward Zore, president and chief executive officer of Northwestern Mutual. "Our dividend payout is evidence that our long-term investment strategy, strong operating fundamentals and capital strength deliver exceptional value to policy owners."

Unlike stock companies, which may pay dividends to shareholders, Northwestern Mutual’s structure as a mutual company allows it to return a portion of its investment gains and favorable results from mortality and expense experience to participating policy owners in the form of dividends.

Northwestern Mutual pays more in total individual life insurance dividends to policy owners than any other company in the industry. While dividends are not guaranteed, Northwestern Mutual has paid dividends to policy owners every year since 1872.

"The current market turmoil is unprecedented and presents significant challenges to all financial companies," Zore said. "Northwestern Mutual is not immune to market changes. But as a mutual company with more than 150 years of experience, we can maintain our focus on the long-term interest of our clients and policy owners – and help them achieve financial security."

M&I named one of U.S.’ best middle market biz banks
M&I Bank was awarded seven national and two regional awards last week for excellence in middle market banking, following a national survey by Greenwich Associates.

At the national level, M&I was recognized for overall satisfaction, online services, personal banking overall satisfaction, relationship manager performance, overall satisfaction treasury management, accuracy of operations treasury management, and customer service treasury management.

The bank was also recognized for overall satisfaction and overall satisfaction treasury management on the regional level.

The awards were based on surveys of nearly 17,000 businesses across the country with sales between $10 million and $500 million. Only 29 banks were cited for distinctive quality. M&I Bank was the only Wisconsin bank to receive the awards.

Baird industrial survey indicates recession
The third quarter Baird Industrial Distribution Survey indicates that "the industrial economy is heading into recession."

On average, respondents’ third quarter revenues were down slightly, with increased pricing offsetting unit volume declines. Over the next six months, respondents expect revenue growth to be both slower than the current quarter and well below the second quarter outlook.

The negative outlook is consistent with Baird’s outlook for declining unit volumes and positive but moderating pricing in the sector.   

Baird’s Industrial Distribution Research Team, led by senior research analyst David Manthey, collected feedback on third quarter results from nearly 300 independent and captive distributors with combined annual revenue in excess of $25 billion. Key survey findings include:

Slight revenue decline, deteriorating outlook – Third quarter revenue declined -0.1 percent on average, compared to an increase of +1.9 percent during the second quarter. Over the next six months, respondents now expect revenue to decline -0.3 percent year over year, compared to growth expectations of +2.5 percent in the second quarter survey.

Solid pricing – Respondents reported an average pricing increase of +2.9 percent compared to +3.6 percent in the second quarter. When considered in relation to total revenue growth of -0.1 percent, it appears unit growth declined during the third quarter.

Economy clearly decelerating: 77 percent of respondents believed that the economy was decelerating in the third quarter, while only 2 percent said it was accelerating.

Areas of strength – Over the next six months, distributors of gases, rental equipment and janitorial/sanitation products expect the most growth, while the most promising end markets appear to be utilities and mining, industrial manufacturing and medical.

The survey also indicated the credit crisis is starting to affect businesses, with greater impact expected in the fourth quarter.

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