Ford Taunts GM, Chrysler With Stock Offering

The Wall Street Journal off-leads and Bloomberg reports that Ford Motor Co. (F), the most robust of the Big Three, plans to issue 300 million shares of common stock in a public offering that will further distance itself from its crosstown rivals and will take advantage of an 11-week stock rally. The New York Times highlights that "dull" small-town banks are doing fine just as they are, thankyouverymuch, and the Washington Post says that retailers, including Starbucks (SBUX) and teen-clothier American Eagle (AEO), have begun developing low-cost products to help stay in business "in the post-splurge era."

At least some of the money raised by Ford in the impending stock offering—perhaps up to half—will be used for a union-run medical trust. The rest will simply be used to stave off federal aid. With the offering, Ford could raise $1.7 billion to $2 billion. According to the WSJ, the offering "indicates the company believes investors will pin their hopes on it as General Motors Corp. and Chrysler are consumed by uncertain reorganizations." Ford also thinks that raising the cash is worthwhile, despite any "backlash from current stockholders" who don't want their shares to be diluted. Ford is facing close to $10 billion in health costs for retired union workers.

At a recent gathering hosted by the Indiana Bankers Association, community banks played up their own plain vanilla-ness, casting themselves as diametric opposites to their big-city counterparts, the NYT says. And they are so fed up with being grouped together in the banking crisis, they've launched a diffuse public relations campaign to let consumers and investors know: "We ain't like the big guys." In covering the banking crisis, they said, the media have grouped the 7,630 community banks together—"the vast majority of which have watched the crisis like bystanders at a 10-car pileup." And though they outnumber the national and regional banks, community banks "have barely registered in any of the fallout from the credit crisis." So, stop saying "the banks" when you're only referring to Citigroup (C) and Bank of America (BAC), and you'll make at least a few Indiana bankers very happy.

Starbucks, in response to penny-conscious consumers, dropped the price of a medium iced coffee last week, and American Eagle has cut out the ribbon from the inside waistband of its khakis to lower the cost. These are just two examples of many that show how retailers are dealing with a different beast of consumer—one that is less beastly, according to the WP. "The new consumer has curtailed spending and increased savings to 10-year highs. Smaller houses are newly coveted, bringing the average size of a new home down in 2008 for the first time in 35 years, according to the National Association of Home Builders." So retailers, which revisit their prices and product assortment seasonally, are being "particularly conservative" this summer. Whether lower prices will boost the stores' bottom lines is yet to be seen.

The WSJ leads its business news box with the decline in stocks Monday after a strong-ish rally as banks pulled out of financials and economically sensitive holdings. In fact, the S&P 500's 2.2 percent decline was the deepest for financial industry stocks since April 20. The Dow Jones Industrial Average went down 155.88 points, or 1.8 percent, to end at 8418.77.The S&P 500 lost 19.99 points, closing at 909.24. The NASDAQ Composite Index fared the best, falling only 7.76 points, or 0.5 percent, to 1731.24. CNNMoney explains, "Gains have been predicated on bets that the financial sector and economy are close to stabilizing. But with little economic news to focus on Monday, investors opted to back off."

Bloomberg and Reuters highlight a speech by Federal Reserve Chairman Ben Bernanke yesterday at Jekyll Island, Ga., where he said that banks' efforts to raise capital in response to results of bank stress tests and plans to issue debt not secured by the Federal Deposit Insurance Corp. were "encouraging." However, the chairman added, it will take a while to see if the stress tests will be able to fully restore investor confidence. He also said the dollar would be strong because the U.S. central bank plans to keep inflation in check by raising interest rates when necessary. The Fed's interest-rate cuts and billions of capital injections have sparked fear that the dollar will weaken in coming years as inflation takes hold. Jekyll Island is where "top Wall Street bankers conceived of the modern U.S. central bank at a secretive meeting nearly 100 years ago," Reuters points out. For the video of the speech, posted by Bloomberg, click here.

In a complementing article, Bloomberg reports that Bank of America has risen about $7.3 billion by selling 5.8 percent stake in China Construction Bank Corp. The buyer, according to sources, is private-equity house and Goldman Sachs (GS) subsidiary Hopu Investment Management, which led investors in buying 13.5 billion shares from Bank of America Chief Executive Kenneth Lewis, has been instructed to raise $33.9 billion as a result of the stress tests.

Tucked into the NYT business section, is an interesting article on patient-scavenging hospitals, which are setting up walk-in clinics in stores like CVS (CVS) and Wal-Mart (WMT), a realm occupied by typically low-end facilities and formerly derided by primary-care physicians. These new providers, that count the Mayo Clinic among them, say that as the government warms "of a shortage of primary-care physicians, the hospital-linked retail clinics are filling a vital public need." What's more, people who use the clinics are often "exactly the customers that hospitals want—women of child-bearing age," Margaret Laws, a policy expert at the California Health Care Foundation, told the paper. "The hospitals want to deliver babies," she said.

But while the facilities have been lauded as convenient and affordable, particularly for patients without insurance, critics say the structure goes against the "ideal of a primary-care doctor's office," which is to get to know a patient's medical history and "coordinates his or her care." Either way, it appears these new clinics are here to stay: Wal-Mart said it planned to open up dozens more retail clinics in coming months. It already has 26 outposts.