Wall Street Rumors - June 12, 2008

Daily rumors covering the global markets. Subscribe to the update feed here.

Citigroup to Close Hedge Fund; Blow to CEO

Citigroup Inc. (NYSE:C) is closing a hedge fund co-founded by Chief Executive Vikram Pandit, 11 months after Citigroup bought the fund’s management company for more than $800 million.

Stimulus Checks Bolster Retail Sales

U.S. retail sales increased in May, rising double the rate expected in a sign consumers were using stimulus payments and that the economy might not be as weak as feared.

InBev Uncorks Anheuser Takeover Bid

InBev NV (EBR:INB) launched an unsolicited bid to acquire Anheuser-Busch Cos. (NYSE:BUD) for $46.4 billion, offering a substantial premium to Anheuser shareholders in a move that would place the 132 year-old iconic Budweiser brand in the hands of a Belgian-Brazilian giant.

Thornburg Swings to a Loss

Thornburg Mortgage Inc. (NYSE:TMA) swung to a first-quarter net loss as it booked unrealized market-value losses and financing-related charges.

KeyCorp Plans to Raise Capital Through Common, Preferred Sale

KeyCorp, (NYSEPKEY) which disclosed plans to record big credit losses in the second quarter, announced it will raise some $1.5 billion from the sale of common and preferred stock while slashing its dividend in half, blaming a federal ruling in a dispute over tax treatment of leveraged leases.

AIG Holders Add Change In the Board to Demands

Angry shareholders at American International Group Inc. (NYSE:AIG) are ratcheting up their campaign against the insurer, demanding changes to the board in addition to management changes they sought earlier.

Live Nation’s Leaders Battle Over Strategy

A fierce battle has broken out among top executives at Live Nation Inc. (NYSE:LYV) over the concert-promotion company’s ambitious strategy to reshape the struggling music industry by making wide-ranging but expensive deals with artists such as Madonna and Jay-Z.

China’s Inflation Rate Moderates

China reported a moderation in headline and core rates of inflation for May, though high global prices for food and raw materials continue to strain the government controls that have helped contain inflation so far.

Lehman’s Callan, Gregory Step Down, Lowitt Named Finance Cheif

Lehman Brothers Holdings Inc. (NYSE:LEH) replaced Chief Financial Officer Erin Callan and President Joseph Gregory three days after the firm raised $6 billion to help survive the collapse of the mortgage market and said it would report the first quarterly loss since the company went public in 1994.

U.S. Retail Sales Increase Twice as Much as Forecast

Retail sales in the U.S. rose twice as much as forecast in May as Americans used their tax rebates to shop at electronics and department stores, and record gasoline prices swelled service-station receipts.

Oil Declines as Rising Dollar Prompts Traders to Sell Contracts

Crude oil fell as the rising U.S. dollar reduced the appeal of commodities as a hedge against the currency.

Freddie Sees Home Sales Rising in ‘09

Though home buyers will be in for some big bargains through the end of 2009, they may have missed the best opportunities for low mortgage rates, according to Freddie Mac’s (NYSE:FRE) economic outlook released today.

Beige Book Highlights Price Concerns

U.S. economic activity remained generally weak between mid-April and May, with concerns over inflationary pressures taking center stage, the Federal Reserve reported Wednesday in its regional survey known as the beige book.