Weekly Wrap Up
Local economic news was mixed for the week. The Federal Reserve announced they will stay the course of their bond purchase program, citing steady but slow economic improvement. President Obama’s Sate of the Union address focused around the idea of “winning the future.”
In corporate news, automaker Ford (F: Charts, News, Offers) reported dissapoint earnings results, missing expecations and causing shares to slide double digits on Friday. Intel (INTC: Charts, News, Offers) announced an increase in share buybacks, despite reporting dissapointing earnings the previous week. More Market News
Economic News
Stocks worldwide plunged the most since November, crude oil posted the biggest jump since 2009 and the dollar rose versus the euro after protesters posed the biggest challenge to Egyptian President Hosni Mubarak’s 30-year rule. Egypt’s dollar bonds sank, pushing yields to a record.
The MSCI World All-Country World Index of stocks in 45 countries lost 1.4 percent at 4:59 p.m. New York time. The Dow Jones Industrial Average fell 1.4 percent to 11,823.70, preventing its longest weekly winning streak since 1995. Oil futures increased 4.3 percent to $89.34. The dollar appreciated 0.9 percent to $1.3611. Yields on Egypt bonds due in 2020 surged 22 basis points to 6.51 percent. Gold futures jumped 1.7 percent, the most in 12 weeks.
Egyptian protesters clashed with police throughout the country and into the night, defying a curfew and setting fire to buildings. Mubarak imposed the curfew after tens of thousands of marchers chanted “liberty” and “change.” After U.S. markets closed, Mubarak said he asked the government to resign. The demonstrations offset data showing that growth in U.S. gross domestic product accelerated in the fourth quarter. (Source: InvestorGuide.com) Click here to read the full article
The Federal Reserve’s policy-making arm voted to keep interest rates at near zero levels on Wednesday, saying the economy’s slow improvement warrants maintaining its $600 billion asset-purchase program through mid-2011.
Pointing to the high unemployment rate and low levels of underlying inflation, the Federal Open Market Committee said it would continue with its plan, announced in November 2010, to buy $600 billion of longer-term Treasury securities by the end of 2011′s second quarter. The Committee repeated its promise to monitor market conditions and adjust the pace and size of asset purchases as needed to encourage stable prices and improvements across the labor market. (Source: The Street) Click here to read the full article
Residential real-estate prices dropped in November by the most in a year, signaling housing has yet to join the U.S. rebound.
The S&P/Case-Shiller index of home values in 20 cities fell 1.6 percent from November the prior year, the biggest 12-month decrease since December 2009, the group said today in New York. The decline matched the median forecast of economists surveyed by Bloomberg News.
Mounting foreclosures will probably throw more properties on the market this year, further depressing prices, homeowners’ equity and construction. The lack of a sustained housing rebound and unemployment above 9 percent are among reasons the Federal Reserve may announce this week it’ll complete a second round of stimulus that will pump $600 billion into the economy by June. (Source: Bloomberg) Click here to read the full article
President Obama sought to rouse the nation from complacency in his State of the Union address Tuesday, urging innovation and budget reforms that he said are vital to keep the United States a leader in an increasingly competitive world.
“Sustaining the American dream has never been about standing pat,” Obama said. “It has required each generation to sacrifice, and struggle, and meet the demands of a new age. Now it’s our turn.” (Source: Washington Post) Click here to read the full article
Business News
Shares of Ford Motor headed sharply lower after the company released disappointing quarterly earnings on Friday. In midday trading on the New York Stock Exchange, Ford stock was down 13.5% to $16.31 a share, as investors reacted to news about higher commodity prices and other expenses that resulted in the company reporting earnings about 18 cents-per-share lower than analyst expectations.
Excluding one-time items, the Dearborn, Mich.-based automaker posted an operating profit of 30 cents a share in the fourth quarter, well below the 48 cents analysts had forecast.
The quarterly results marked the first time Ford fell short of Wall Street profit forecasts in two years, Reuters reported. “Anything that comes out that’s a tad disappointing, even if it’s a tad disappointing inside a great story, is going to be punished,” Bernie McGinn, chief investment officer at McGinn Investment Management, told the news agency. (Source: InvestorGuide.com) Click here to read the full article
Google Inc. (GOOG: Charts, News, Offers) clarified ambitious hiring plans for 2011 hinted at during the search giant’s earnings presentation last week, stating Tuesday that its hiring plans could grow its workforce by more than 6,000 employees – or 25% above its current headcount.
In a posting on a company website, Alan Eustace, Google’s senior vice president of engineering and research, wrote that 2011 “will be the biggest hiring year in company history.” Eustace noted that Google’s record is for hiring more than 6,000 employees in 2007, followed by the 4,500 hired last year. (Source: InvestorGuide.com) Click here to read the full article
Intel Corp boosted its share buyback plan by $10 billion, seeking to revitalize its flagging stock amid criticism it is getting left behind by rivals like Nvidia (NVDA: Charts, News, Offers) in a red-hot, fast-moving mobile market.
Intel earned record profits last year but its shares have severely underperformed rivals. On Monday, its stock climbed 2 percent after the buyback was announced.
But Nvidia, which early this month announced a spate of tablet wins for its mobile Tegra chip, surged 11 percent after Barron’s said the stock could gain as much as 80 percent. (Source: Reuters) Click here to read the full article
Technology Focus
Now that Verizon (VZ: Charts, News, Offers) has confirmed its data plan price for the iPhone, U.S. customers can compare the ongoing costs of owning an Apple (AAPL: Charts, News, Offers) smartphone.
Verizon’s gotten all the ink lately, especially about the $29.99 a month unlimited data plan.
But is that the deal maker?
We’ve collected plan prices, and run a couple of scenarios through the Computerworld calculator to help you decide before Feb. 10, when Verizon starts selling the iPhone 4. (Source: Computer World) Click here to read the full article
Apple last Friday passed the 10 billion App Store download mark and Gartner forecast today that app downloads will explode in coming years, reaching 185 billion from all app markets by the end of 2014.
One big reason for the expected growth? Tablets.
Gartner sees tablets such as Apple’s iPad and dozens of rival devices that run Android or other OSes — combined with smartphone downloads — as a big reason for the expected jump. “Tablets will boost app downloads,” said Gartner analyst Stephanie Baghdassarian in an interview. “Many are wondering if the app frenzy…is just a fashion. We don’t think so.” (Source: Computer World)
According to Gartner, about 90% of app downloads in 2010 came from Apple’s App Store, which has been open since July 2008. It will likely remain the single best-selling app store through 2014, Baghdassarian said, though its lead may shrink as other stores gain momentum. The App Store’s main competitors are Android Market, Nokia’s Ovi Store, Research in Motion’s App World, Microsoft Marketplace and Samsung Apps, Gartner said. Click here to read the full article
Tumblr is growing like a weed, but “the last four or five months totally overshadow everything that came before it,” founder David Karp tells Chris Dixon in a taping today for TCTV (watch the video above). “We are growing by a quarter billion impressions every week,” he revealed. Last week Tumblr did 1.2 billion impressions, or pageviews, and it is adding 250 million every week. Just think about that for a second. Over the last 30 days, that came to 4.2 billion pageviews.
If you are wondering why Tumblr’s been having so much downtime lately, just take a look at the comScore chart below, which shows its own estimate of 2.5 billion pageviews for the month of December, up from 335 million from the year before. All of that is coming from 19 million unique visitors per month globally, according to comScore. (Karp’s numbers are based on his own internal Google Analytics and they are for a slightly different time period, he also notes that Tumblr reports directly to Quantcast). (Source: InvestorGuide.com) Click here to read the full article
Your Money
When Google announced that co-founder Larry Page was replacing Eric Schmidt as CEO, the official reason was to “streamline decision making” at the top. Instead of a triumvirate, there would be one person clearly in charge. Speculation among Google-watchers, however, is that there were deeper underlying issues that triggered the change, including the fear that Google is losing its “start-up” edge. In an interview following the announcement, Page confirmed this concern by saying, “One of the primary goals I have is to get Google to be a big company that has the nimbleness and soul and passion and speed of a start-up.”
But can a big company like Google really act like a start-up? After all, start-up employees have a totally different psychology and motivation than those in established firms. Joining (or founding) a start-up is an act of faith — the conviction that an idea eventually can become a sustained commercial success. To translate that belief into reality, start-up participants pitch in wherever it’s needed, put in long hours, and forego financial security. In effect, they are rolling the dice in the hope of hitting the jackpot – but willing to take the slim odds because of their strong belief in the new venture, the adrenaline rush of living on the edge, or the potential size of the prize. (Source: Harvard Business Review Blog) Click here to read the full article
At some point during college in between the late night keggers and the 48-hour study sessions you may have caught the entrepreneurial bug. Even though you completed your studies you just can’t see yourself working in your field for a long period of time or for any time at all. That’s cool and all, but are you sure you want to trade in a boss for something worse?
Are you sure that you’re ready to be your own boss? I personally think and want to argue the point that all young entrepreneurs need to hold down a real job at one point.
Why I do think that young entrepreneurs should hold down a job after college? Click here to read the full article
Good DJIA post. Thanks.