Declines Accelerate Following Bernanke’s Comments

Word on the Street

• President Obama signed the financial reform legislation into law, which promises to end the risky practices that sparked the country’s financial crisis. Mr. Obama vowed that because of the law, “the American people will never again be asked to foot the bill for Wall Street’s mistakes. There will be no more taxpayer-funded bailouts. Period.”
• Federal Reserve Chairman Ben S. Bernanke testified in front of the Senate Banking Committee regarding the semiannual monetary policy report to Congress. For now, he said the Fed expects economic conditions will warrant an exceptionally low benchmark federal funds rate for an extended period.
• Wells Fargo & Co. (WFC) rose as much as 6.5 percent in New York trading after the lender posted second- quarter profit that beat most estimates and said credit quality is improving faster than expected.
• Coca-Cola 2Q Net Income Up – Coca-Cola (KO) said that it earned $2.37 billion, or $1.02 per share during the second quarter, up from $2.04 billion, or 88 cents, last year. The increase in earnings was a result of the company selling more sodas and juices in North America for the first time in four years.
• Apple (AAPL) was able to blow past Wall Street’s forecasts for the June quarter, thanks in large part to strong sales of the iPhone and newly launched iPad tablet computer. In its fiscal third quarter, Apple sold 9.4 million iPods for a total revenue of over $1.5 billion. Total desktop and portable computer sales came up to almost 3.5 million units, bringing in revenues of nearly $4.4 billion.
• Connecticut Attorney General Richard Blumenthal said he asked Google Inc. (GOOG) whether it tested its Street View software before using it, which he said should have revealed the unauthorized collection of personal data from wireless computer networks.
• Sallie Mae (SLM) swung to a profit during the second-quarter, but reported that loan originations declined and uncollectible debts increased for the second quarter. The company extended $219 million in private loans in the second quarter, compared with $387 million during the year-ago period
• Yahoo’s (YHOO) second-quarter earnings were up only slightly , but display advertising at its owned-and-operated sites rose 19 percent from the same quarter last year as the ad market has bounced back a bit from the dregs of the media recession.

Other Interesting Tidbits

• ‘New Normal’ Nowhere In Sight – Productivity growth is strong, monetary policy is easy, inventories are thin and corporate profits are growing.
• Setting the Table for Fiscal Restraint – A Federal Reserve program of buying longer-term securities is the right policy for now and makes the right policy more likely in the future.
• Lessons From Apple’s ‘Antennagate’ – Sometimes how you handle a problem is more important than the solution.
• The 10 Biggest Brand Disasters of 2010