JetBlue falls with market; Countrywide fades after brief, false rally; Euronet up after 'advertising' move

By Evan Weinberger

New York, Dec. 14 - The bloom was off the rose a bit for New York-based JetBlue Airways Corp. a day after the announcement that German air carrier Lufthansa was taking a 19% stake in the struggling discount air carrier.

Much of the commentary surrounding the deal can be summed up with one word: befuddlement.

"I am struggling with why this makes sense," airline consultant Bob Mann told the Associated Press Thursday.

It appears that Lufthansa may be trying to ensure access to John F. Kennedy International Airport, media reports said, which will be under review soon. Restricting the number of flights into JFK has been one proposal floating around to cut back delays at the three major New York area airports.

The sagging dollar and positioning Europe's second-largest air carrier as a player in the American market may have also played into Lufthansa's thinking.

The deal was first reported Thursday morning by the New York Times and caused a rush on JetBlue stock, which has been sawed in half over the last year. JetBlue stock (Nasdaq: JBLU) surged 90 cents, or 14.4%, for a $7.15 close Thursday.

The deal pushed a Bear Stearns analyst to upgrade the stock to "Peer Perform" from "Underperform" on Friday.

JetBlue stock was unable to maintain Thursday's momentum, however, and it fell 6 cents, or 0.84%, to $7.09 on the day.

Part of the drag on JetBlue was probably the general stock market plunge Friday.

An unexpected rise of 0.8% in the Consumer Price Index - driven by rising gas prices - and the placing of Citigroup's structured investment vehicle debt onto the company's balance sheet helped smack stocks. Citigroup said late Thursday that the SIVs will cost it up to $49 billion.

The Dow Jones Industrial Average tumbled 178.11 points, or 1.32%, to close at 13,339.85.

The Nasdaq screeched to a halt at 2,635.74, a loss of 32.75 points, or 1.23%.

The Standard & Poor's 500 dove 20.46 points, or 1.37%, at 1,467.95.

Mergers and acquisition activity was subdued Friday, market watchers said.

Countrywide has false rally

There was a brief rally in Calabasas, Calif.-based Countrywide Financial Corp. stock at around 11 a.m. ET Friday. A report crossed the wires saying that CFC's counterparty credit ratings were affirmed by S&P.

The company in question, National Rural Utilities Cooperative Finance Corp., is a non-profit cooperative association that provides financing to help build rural electrical and telephone utilities by supplementing loans made by the Rural Utilities Service of the U. S. Department of Agriculture, not America's largest home lender. Based in Herndon, Va., it goes by the acronym CFC.

Beleaguered investors jumped at the letters C-F-C and there was a brief spike at around 11 a.m. ET, where Countrywide stock (NYSE: CFC) jumped to around $10.50, over 40 cents above Thursday's close of $10.08.

The Dow and other stock indices rallied on the word of CFC's stabilizing credit also.

And then reality set in. Countrywide's stock ended up closing down 28 cents, or 2.78%, at $9.80.

"Look at the daily charts and see how that headline moved the whole Dow higher," the trader said. "It goes to show, however, how hungry this market is for that kind of news."

MoneyGram down, Euronet up

So maybe that brewing battle between MoneyGram International Inc. and Euronet Worldwide Inc. may turn into much ado about nothing in the end.

On Thursday, Leawood, Kan.-based money transfer processor Euronet presented troubled Minneapolis money transfer agent MoneyGram with a $1.65 billion buyout offer. When MoneyGram, which has somewhere around $280 million in mortgage-related debt hanging over its head, said that it wasn't interested in a takeover, Euronet got nasty.

Euronet sent a Christmas card trashing MoneyGram's management and shareholders and informed them that they would be taking MoneyGram over in a hostile takeover whether they liked it or not.

And then, after all that noise Thursday, there was nothing Friday.

When asked if he had heard anything new about the deal, one trader said, "Just that the bid was rejected."

An analyst was far more dismissive of the move, calling it a publicity stunt. "That's quiet," he said. "People are starting to see that the people making the bid were just doing it for advertising."

The advertising ploy may have worked for Euronet. Its stock (Nasdaq: EEFT) gained 32 cents, or 1.12%, to close at $28.86 on Friday.

Struggling MoneyGram (NYSE: MGI) took a fall Friday, losing $1.49, or 8.63%, to close at $15.78.

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