Stocks made significant gains this week after investors were encouraged by central banks vowing to pump dollars into the European banking system to avert a liquidity crisis. All eyes remain on Europe and its leaders' determination to control its debt crisis. On Friday, as concern intensified about Greek debt and the eurozone's financial stability, European finance ministers and U.S. Treasury Secretary Timothy Geithner began a two-day meeting in Wroclaw, Poland, to tackle the crisis.
U.S. and global economic news
Central banks join forces to stem liquidity crisis
The European Central Bank said it will lend dollars to euro-area banks in a series of three-month loans to ensure that the banks have enough U.S. currency through the end of the year. The ECB will coordinate the action with the U.S. Federal Reserve Board and other central banks. The move came this week after two banks borrowed from the ECB's seven-day offerings. The announcement was seen as a sign that the banks are having difficulty accessing U.S. currency as Europe's debt crisis makes financial institutions wary of lending. Earlier in the week, French and German leaders confirmed that they will support Greece's continued participation in the shared euro currency.
SNB vows to defend currency; leaves rate at zero
The Swiss National Bank left its three-month Libor target rate at zero after unexpectedly lowering the benchmark from 0.25% last month. The bank said it is ready to take "further measures" if needed to cap gains in the Swiss franc against the euro.
U.S. economic data show continued slowing
U.S. retail sales remained unchanged in August as the sluggish labor market and limited income growth took a toll on consumers. Prices paid by producers were also unchanged in August, according to the U.S. Department of Labor, while the so-called core costs that exclude food and fuel rose less than forecast. The Consumer Price Index for August showed an inflation rate of 0.4%, with a core rate of 0.2%. Meanwhile, a report from the U.S. Department of Commerce showed inventories rose less than forecast in July. Initial claims for unemployment benefits were worse than expected last week.
Container trade points to weakening global economy
The Port of Long Beach's total container trade fell 6.9% in August. The drop was the largest in five months. Weaker global trade could push the economy closer to recession.
U.S. and global corporate news
Moody's downgrades Société Générale and Crédit Agricole
Moody's Investors Service downgraded its long-term ratings of Société Générale and Crédit Agricole by one notch. Moody's cited the level of state support that SocGen received and Crédit Agricole's significant Greek holdings as reasons behind the downgrade.
UBS trader loses $2 billion; BofA to cut 30,000 jobs; Morgan Stanley's Mack to exit post
UBS shares lost ground after the Swiss bank said it would likely post a third-quarter loss after a rogue trader racked up as much as $2 billion in losses using the firm's own money. The incident raised fears among investors about the bank's ability to manage risk and global regulators' ability to monitor it. Bank of America announced a $5 billion cost reduction plan that would include the elimination of 30,000 jobs. The job cuts represent the largest single work force reduction in a U.S.-based company so far this year. Morgan Stanley's shares got a boost after the firm disclosed that Chairman and Chief Executive John Mack will step down from the board at the end of the year.
Best Buy reports 30% drop in profit
Best Buy, the world's largest electronics chain, reported a 30% drop in quarterly profit and cut its full-year earnings forecast. Best Buy's sales have come under pressure as shoppers, in search of better deals, shift to online rivals. The retailer said market share gains in smartphones and tablets did not offset declines in sales of televisions and computers.
RIM loses ground
Research in Motion's stock tumbled after the maker of BlackBerry announced it saw a year-over-year decline in shipments of its smartphones, the first decline in nearly a decade. RIM shares have lost more than one-half of their value this year as the company loses market share to Apple's iPhone and devices that run off Google's Android system. For the quarter ended August 27, RIM posted a profit 59% lower than for the same quarter last year.
Showing posts with label economic news. Show all posts
Showing posts with label economic news. Show all posts
Friday, September 16, 2011
Tuesday, September 13, 2011
U.S. economic news for the week ended September 9, 2010
Stocks were volatile this week as President Barack Obama's $447 billion plan to generate jobs failed to bolster investor confidence in the U.S. economy, and U.S. Federal Reserve Board Chairman Ben S. Bernanke disappointed markets by not detailing new plans to boost growth. Weakness in overseas markets added to the jitters as concerns over the likelihood of a Greek default mounted ahead of a meeting of finance ministers and central bankers from the Group of Seven leading economies in Marseilles, France. The euro fell to a nine-month low against the U.S. dollar, and Greek credit default swaps soared to record levels. Further unnerving markets this week were reports that the United States had received specific and "credible" information that al Qaeda is planning car and truck bombings in New York and Washington to coincide with the 10-year anniversary of the September 11 terrorist attacks.
U.S. and global economic news
Obama calls for extension of unemployment benefits
In the announcement of his $447 billion plan to spur growth, President Obama called on U.S. lawmakers to pass $62 billion in spending to extend unemployment insurance benefits through 2012 and fund programs to alleviate long-term joblessness.
Swiss central bank caps franc
The Swiss National Bank effectively put a cap on its currency, the Swiss franc. The bank said it would buy euros in "unlimited quantities" whenever the eurozone currency falls below 1.20 francs.
ECB and BOE keep rates unchanged
The European Central Bank and the Bank of England kept interest rates unchanged this week. ECB President Jean Claude Trichet warned that the eurozone's economy will grow more slowly than previously expected, between 1.4% and 1.8% in 2011, and between 0.4% and 2.2% in 2012. Trichet also said that risks to medium-term inflation have moderated, but he stopped short of signaling a change in the bank's interest rate path.
Greek credit default swaps hit record
Credit default swaps insuring Greek sovereign bonds jumped 212 basis points to a record 3,238 this week. The surge, which signals that investors believe there is more than a 90% chance that Greece will default, came after reports that the Greek economy shrank more than previously reported. The country's gross domestic product contracted 7.3% in the second quarter.
U.S. trade deficit posts biggest drop in over two years
In July the U.S. trade deficit posted its biggest drop in nearly two-and-one-half years as exports surged to a record high and oil prices fell from the near-three-year highs reached in May.
U.S. jobless claims rise
U.S. jobless claims rose more than expected last week, by 2,000 to 414,000, as the labor market continues its struggle to recover.
U.S. and global corporate news
Groupon cancels roadshow
Groupon canceled its investor roadshow and is reevaluating plans for an initial public offering amid the current market volatility.
Twitter boasts 100 million users
Twitter, the largest U.S. microblogging service, announced that it now has more than 100 million active users worldwide. Usage has increased more than 80% since the beginning of the year.
Google to buy Zagat
Google agreed to buy restaurant review company Zagat Survey as the Internet giant moved to take a share of revenue from local businesses. Earlier this year, Google entered into a two-year agreement with Local.com to implement certain advertising and search services.
Saab Automobile vowed to appeal the refusal of a Swedish court to grant the carmaker protection from creditors. The ruling essentially opens the way for labor unions representing unpaid workers to petition for bankruptcy and reclaim wages.
U.S. and global economic news
Obama calls for extension of unemployment benefits
In the announcement of his $447 billion plan to spur growth, President Obama called on U.S. lawmakers to pass $62 billion in spending to extend unemployment insurance benefits through 2012 and fund programs to alleviate long-term joblessness.
Swiss central bank caps franc
The Swiss National Bank effectively put a cap on its currency, the Swiss franc. The bank said it would buy euros in "unlimited quantities" whenever the eurozone currency falls below 1.20 francs.
ECB and BOE keep rates unchanged
The European Central Bank and the Bank of England kept interest rates unchanged this week. ECB President Jean Claude Trichet warned that the eurozone's economy will grow more slowly than previously expected, between 1.4% and 1.8% in 2011, and between 0.4% and 2.2% in 2012. Trichet also said that risks to medium-term inflation have moderated, but he stopped short of signaling a change in the bank's interest rate path.
Greek credit default swaps hit record
Credit default swaps insuring Greek sovereign bonds jumped 212 basis points to a record 3,238 this week. The surge, which signals that investors believe there is more than a 90% chance that Greece will default, came after reports that the Greek economy shrank more than previously reported. The country's gross domestic product contracted 7.3% in the second quarter.
U.S. trade deficit posts biggest drop in over two years
In July the U.S. trade deficit posted its biggest drop in nearly two-and-one-half years as exports surged to a record high and oil prices fell from the near-three-year highs reached in May.
U.S. jobless claims rise
U.S. jobless claims rose more than expected last week, by 2,000 to 414,000, as the labor market continues its struggle to recover.
U.S. and global corporate news
Groupon cancels roadshow
Groupon canceled its investor roadshow and is reevaluating plans for an initial public offering amid the current market volatility.
Twitter boasts 100 million users
Twitter, the largest U.S. microblogging service, announced that it now has more than 100 million active users worldwide. Usage has increased more than 80% since the beginning of the year.
Google to buy Zagat
Google agreed to buy restaurant review company Zagat Survey as the Internet giant moved to take a share of revenue from local businesses. Earlier this year, Google entered into a two-year agreement with Local.com to implement certain advertising and search services.
Saab Automobile vowed to appeal the refusal of a Swedish court to grant the carmaker protection from creditors. The ruling essentially opens the way for labor unions representing unpaid workers to petition for bankruptcy and reclaim wages.
Monday, July 25, 2011
U.S. Economic News Week Ending July 22, 2011
Global stocks were mostly higher for the week as European leaders agreed on a plan to reduce Greece's debt burden and U.S. legislators appeared to be heading toward a deficit-reduction deal. Numerous positive earnings announcements further supported the markets as financial and technology heavyweights reported better-than-expected results.
U.S. and global economic news
European leaders agreed to aid package for Greece
European leaders on Thursday agreed on a plan to reduce Greece's debt burden in an effort to prevent contagion to other weak economies in the eurozone. The overall size of the bailout package to cover Greece's financial gap is 109 billion and will include the participation of the International Monetary Fund and the private sector. The plan also cuts interest rates on bailout loans to Greece and doubles the repayment period to 15 years. Officials said the interest rates on Ireland's and Portugal's bailout loans will be cut to the same low level. European leaders also agreed on new steps to prevent the spread of Greece's debt problems. In the wake of the debt deal, Fitch Ratings said the role of the private sector in the Greek bailout plan would constitute a "restrictive default." In other words, the proposed debt exchange implies a 20% net present value loss for banks and Greek government debt holders.
U.S. lawmakers continue debate over deficit reduction deal
In the United States, Congress and the White House continued negotiations to cement a deal to increase the government's borrowing authority while cutting spending and overhauling the tax code. The White House has said if the government's $14.29 trillion debt ceiling is not raised by August 2, the United States will run out of cash to pay its bills. Standard & Poor's repeated a warning that there is a 50% chance that it will lower the U.S. credit rating within three months. The company first warned of this possibility on July 14.
Weekly U.S. jobless claims rise
U.S. jobless claims unexpectedly rose last week after declining for two weeks in a row. Claims increased by 10,000 to a seasonally adjusted 418,000, after declining for two weeks in a row. The four-week moving average of new claims, considered a more reliable indicator of the performance of the labor market, fell last week by 2,750 to 421,250. Economists consider the economy to be adding more jobs than it is shedding when the weekly claims number falls below 400,000.
German business confidence falls
German business confidence fell more than expected in July, according to the Ifo Institute's business climate index, which dropped to its lowest level in nine months.
U.S. home sales fall
Sales of previously owned homes fell 0.8% in June to a seasonally adjusted annual rate of 4.77 million, the lowest level in seven months, amid weakness in the job market and overall economy. It was the third-straight monthly decline and worse than forecast. Also in June home construction rose to the highest level in five months. Compared with the same month a year earlier, new home construction was up 16.7%; however construction is still below a healthy level, which economists say would be a pace of 1 million to 1.5 million units. In June, that annual level was at 629,000. Meanwhile, the National Association of Home Builders reported that confidence among homebuilders rose in July from June but remained at depressed levels as the housing market continued to struggle.
U.S. leading indicators rise
The Conference Board reported that its index of U.S. leading indicators rose 0.3% in June from a 0.8% increase in May. The gauge measures the outlook for the next three to six months.
U.S. and global corporate news
Morgan Stanley performance surprises investors
Morgan Stanley posted a smaller-than-expected second-quarter loss, which sent the company's stock surging the most in two years. The loss came from a $1.7 billion charge related to the conversion of Mitsubishi UFJ Financial Group's preferred Morgan Stanley stake. Morgan Stanley posted a 14% gain in trading revenue and was the only major U.S. bank to report a gain in this area. Bank of America reported losses of $8.83 billion in the second quarter as mortgage-related charges outweighed lower credit costs. Goldman Sachs Group's second-quarter profit came in at $1.05 billion, significantly lower than expectations, after market conditions led the firm to reduce risk taking to the lowest levels in five years. Even so, profits rose 77% from $613 million a year ago.
Tech companies report strong profits
Apple's fiscal third-quarter earnings more than doubled, exceeding analysts' expectations, as the company reported surging sales of the iPhone and iPad. Microsoft's profit rose 30% in its fiscal fourth quarter helped by the software and service contracts of its corporate customers. IBM reported an 8% increase in net income as the 100-year-old company got a boost from robust sales of new models of its mainframes. The company also lifted its profit forecast amid buoyant demand for software. Intel, the world's largest chipmaker, reported that its sales rose 21% while net income rose to $2.95 billion from $2.89 billion in the year-earlier quarter. The company also forecast third-quarter sales that exceeded some analysts' estimates. EMC reported a 28% gain in second-quarter earnings as companies increased spending on storage products and software for Internet-based computing, and eBay reported a 25% jump in revenue, while net income fell 31%.
Coke, Johnson & Johnson, and Harley-Davidson announce results
Coca-Cola's second-quarter profit rose 18%. The company got a boost from a bottler acquisition and from strong volume growth overseas. Johnson & Johnson reported a 20% decline in second-quarter profit on costs associated with its exit from its heart-device business and product recalls. Profits, however, exceeded Wall Street expectations. Harley-Davidson, the largest U.S. motorcycle manufacturer, said profit rose after it increased sales in the U.S. market for the first time in almost five years.
Borders to liquidate remaining stores
Borders was forced to liquidate its remaining 399 stores after receiving too few bids in a bankruptcy auction. The company, which employs about 10,700 people, is now expected to go out of business by the end of September.
Zillow raises $69.2 million in IPO
Zillow, the online real estate information service, raised $69.2 million in its initial public offering.
Express Scripts to buy Medco; CNOOC to purchase OPTI Canada
Express Scripts agreed to buy Medco Health Solutions for $29.1 billion in cash and stock. In merging, the companies will form the largest manager of drug prescription services with nearly a third of the market. China's largest offshore-oil producer, CNOOC, agreed to buy bankrupt Canadian oil sands developer OPTI Canada for about $2.1 billion. The agreement comes as China seeks to invest in energy projects amid a global commodities boom. In past deals, Chinese firms have targeted minority stakes in Canadian companies.
Harry Potter movie sales set record
The last of the long-running series of Harry Potter films, Harry Potter and the Deathly Hallows Part 2, from Time Warner's Warner Bros. Pictures set a sales record for its U.S. opening and took in nearly one half a billion dollars worldwide.back to top
U.S. and global economic news
European leaders agreed to aid package for Greece
European leaders on Thursday agreed on a plan to reduce Greece's debt burden in an effort to prevent contagion to other weak economies in the eurozone. The overall size of the bailout package to cover Greece's financial gap is 109 billion and will include the participation of the International Monetary Fund and the private sector. The plan also cuts interest rates on bailout loans to Greece and doubles the repayment period to 15 years. Officials said the interest rates on Ireland's and Portugal's bailout loans will be cut to the same low level. European leaders also agreed on new steps to prevent the spread of Greece's debt problems. In the wake of the debt deal, Fitch Ratings said the role of the private sector in the Greek bailout plan would constitute a "restrictive default." In other words, the proposed debt exchange implies a 20% net present value loss for banks and Greek government debt holders.
U.S. lawmakers continue debate over deficit reduction deal
In the United States, Congress and the White House continued negotiations to cement a deal to increase the government's borrowing authority while cutting spending and overhauling the tax code. The White House has said if the government's $14.29 trillion debt ceiling is not raised by August 2, the United States will run out of cash to pay its bills. Standard & Poor's repeated a warning that there is a 50% chance that it will lower the U.S. credit rating within three months. The company first warned of this possibility on July 14.
Weekly U.S. jobless claims rise
U.S. jobless claims unexpectedly rose last week after declining for two weeks in a row. Claims increased by 10,000 to a seasonally adjusted 418,000, after declining for two weeks in a row. The four-week moving average of new claims, considered a more reliable indicator of the performance of the labor market, fell last week by 2,750 to 421,250. Economists consider the economy to be adding more jobs than it is shedding when the weekly claims number falls below 400,000.
German business confidence falls
German business confidence fell more than expected in July, according to the Ifo Institute's business climate index, which dropped to its lowest level in nine months.
U.S. home sales fall
Sales of previously owned homes fell 0.8% in June to a seasonally adjusted annual rate of 4.77 million, the lowest level in seven months, amid weakness in the job market and overall economy. It was the third-straight monthly decline and worse than forecast. Also in June home construction rose to the highest level in five months. Compared with the same month a year earlier, new home construction was up 16.7%; however construction is still below a healthy level, which economists say would be a pace of 1 million to 1.5 million units. In June, that annual level was at 629,000. Meanwhile, the National Association of Home Builders reported that confidence among homebuilders rose in July from June but remained at depressed levels as the housing market continued to struggle.
U.S. leading indicators rise
The Conference Board reported that its index of U.S. leading indicators rose 0.3% in June from a 0.8% increase in May. The gauge measures the outlook for the next three to six months.
U.S. and global corporate news
Morgan Stanley performance surprises investors
Morgan Stanley posted a smaller-than-expected second-quarter loss, which sent the company's stock surging the most in two years. The loss came from a $1.7 billion charge related to the conversion of Mitsubishi UFJ Financial Group's preferred Morgan Stanley stake. Morgan Stanley posted a 14% gain in trading revenue and was the only major U.S. bank to report a gain in this area. Bank of America reported losses of $8.83 billion in the second quarter as mortgage-related charges outweighed lower credit costs. Goldman Sachs Group's second-quarter profit came in at $1.05 billion, significantly lower than expectations, after market conditions led the firm to reduce risk taking to the lowest levels in five years. Even so, profits rose 77% from $613 million a year ago.
Tech companies report strong profits
Apple's fiscal third-quarter earnings more than doubled, exceeding analysts' expectations, as the company reported surging sales of the iPhone and iPad. Microsoft's profit rose 30% in its fiscal fourth quarter helped by the software and service contracts of its corporate customers. IBM reported an 8% increase in net income as the 100-year-old company got a boost from robust sales of new models of its mainframes. The company also lifted its profit forecast amid buoyant demand for software. Intel, the world's largest chipmaker, reported that its sales rose 21% while net income rose to $2.95 billion from $2.89 billion in the year-earlier quarter. The company also forecast third-quarter sales that exceeded some analysts' estimates. EMC reported a 28% gain in second-quarter earnings as companies increased spending on storage products and software for Internet-based computing, and eBay reported a 25% jump in revenue, while net income fell 31%.
Coke, Johnson & Johnson, and Harley-Davidson announce results
Coca-Cola's second-quarter profit rose 18%. The company got a boost from a bottler acquisition and from strong volume growth overseas. Johnson & Johnson reported a 20% decline in second-quarter profit on costs associated with its exit from its heart-device business and product recalls. Profits, however, exceeded Wall Street expectations. Harley-Davidson, the largest U.S. motorcycle manufacturer, said profit rose after it increased sales in the U.S. market for the first time in almost five years.
Borders to liquidate remaining stores
Borders was forced to liquidate its remaining 399 stores after receiving too few bids in a bankruptcy auction. The company, which employs about 10,700 people, is now expected to go out of business by the end of September.
Zillow raises $69.2 million in IPO
Zillow, the online real estate information service, raised $69.2 million in its initial public offering.
Express Scripts to buy Medco; CNOOC to purchase OPTI Canada
Express Scripts agreed to buy Medco Health Solutions for $29.1 billion in cash and stock. In merging, the companies will form the largest manager of drug prescription services with nearly a third of the market. China's largest offshore-oil producer, CNOOC, agreed to buy bankrupt Canadian oil sands developer OPTI Canada for about $2.1 billion. The agreement comes as China seeks to invest in energy projects amid a global commodities boom. In past deals, Chinese firms have targeted minority stakes in Canadian companies.
Harry Potter movie sales set record
The last of the long-running series of Harry Potter films, Harry Potter and the Deathly Hallows Part 2, from Time Warner's Warner Bros. Pictures set a sales record for its U.S. opening and took in nearly one half a billion dollars worldwide.back to top
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