| Market Summary |
Stocks capped off the week slightly higher after posting gains for a majority of the week. Mixed earnings caused all three major indices to flirt with the flat line for a majority of the session. The Dow Jones Industrial Average stayed mostly higher during afternoon trading and finished the day with a gain of 32.12 points. Positive earnings from Bank of America (BAC: Charts, News, Offers) and Citigroup (C: Charts, News, Offers) proved to be unexpected surprises, but still didn’t cause much reaction in the markets. In other earnings news, Google (GOOG: Charts, News, Offers) reported higher quarterly earnings that topped estimates late Thursday. IBM also reported earnings that topped estimates on lower revenue that missed forecasts. Investors are expecting more declines in the near future as stocks begin to pullback during the summer slowdown. Homebuilders' shares jumped following some positive reports on the housing sector. Construction of new homes and apartments jumped 3.6 percent in June to the highest level in seven months Builder permits also rose to 582,000 in June from a revised rate of 562,000. U.S. light crude oil for August delivery rose $1.89 to $63.91 a barrel on the New York Mercantile Exchange. Treasury prices slumped, raising the yield on the benchmark 10-year note to 3.64%. The dollar gained against the euro and the Japanese yen.
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Slideshow: 13 Biggest Federal Reserve/Treasury Moves in 2008-2009.
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2008 - early 2009 was an unprecedented period for the United States economy. Take a look back at some of the key steps that the Fed and the Treasury took over this time period, most of which were unthinkable before the crisis began.
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View the Slideshow!
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| Market News |
Eddie Bauer Won by Golden Gate With $286 Million Bid
Eddie Bauer Holdings Inc.’s bankruptcy auction was won by Golden Gate Capital, a San Francisco-based private-equity firm, with a $286 million bid and a plan to keep most of the outdoor-clothing chain’s stores open. Golden Gate plans to keep a “substantial majority” of the retailer’s stores and employees, Bellevue, Washington-based Eddie Bauer said in a statement today. Golden Gate’s offer will be presented for court approval July 22, the retailer said. The retailer attracted bidders ranging from Iconix Brand Group Inc., the New York-based owner of the Rocawear clothing brand, to liquidators Hilco Consumer Capital and Gordon Brothers Group LLC, said bankruptcy attorney David Pollack. Eddie Bauer, which opened its first sporting-goods store in Seattle in 1920, has about 370 stores in the U.S. and Canada. (Source: Bloomberg) Click here to read the full article
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GE’s second quarter earnings fall 49 percent
General Electric Co.'s (GE: Charts, News, Offers) second-quarter profit tumbled 49 percent as the recession continued to hurt its finance unit and lowered sales across its wide range of industrial businesses. The conglomerate's earnings edged past Wall Street expectations and GE said its big capital lending unit is on track to post a profit this year. But revenue came up short and GE shares fell more than 6 percent in morning trading. Investors are combing corporate earnings for clues on the direction of the nation's moribund economy and GE, which lends money and makes products ranging from microwaves to wind turbines, is considered a barometer of its health. The company's results suggest the recession is still sapping demand for goods. (Source: MSNBC) Click here to read the full article
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Out of work, out of benefits, out of luck
The next bubble in the recession is about to burst. More than 650,000 Americans will have used up all of their unemployment benefits by September, in what experts say could be the start of a looming crisis. In the early days of the downturn, the government extended unemployment benefits beyond the standard 26 weeks to as many as 79 weeks in hopes of giving the jobless a longer lifeline. Officials predicted the economy worsening and businesses further contracting, resulting in fewer jobs for the newly unemployed to find. With the recession now 18 months deep and the national unemployment rate standing at 9.5%, it appears that the effort wasn't robust enough for those in the crisis' first wave of layoffs. (Source: CNN Money) Click here to read the full article
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| Featured Article from the InvestorGuide University |
Stock Option Plans
Learn more about one of the ways employee's can gain ownership of their employer's company and share in its growth. Includes information on non-qualified stock options and incentive stock options.
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| Market Analysis |
Bleeding the Economy Back to Health
When someone got sick during the Dark Ages, doctors would use leeches to bleed the patient. If the patient got well, then the bleeding worked. If they died, then they were beyond help in the first place. If they remained sick, the doctors attached more leeches. No matter what the outcome, the efficacy of bleeding was never questioned. In early 2008, Dr. George W. Bush prescribed $168 billion of "stimulus" (government spending) to treat an economic patient suffering from recession. In late 2008, the patient got sicker. In early 2009, a new doctor was called in. Dr. Barack Obama prescribed $787 billion of "stimulus". (Source: Real Clear Markets) Click here to read the full article
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Good for Goldman, Bad for America
The American economy remains in dire straits, with one worker in six unemployed or underemployed. Yet Goldman Sachs (GS: Charts, News, Offers) just reported record quarterly profits -- and it’s preparing to hand out huge bonuses, comparable to what it was paying before the crisis. What does this contrast tell us? First, it tells us that Goldman is very good at what it does. Unfortunately, what it does is bad for America. Second, it shows that Wall Street’s bad habits -- above all, the system of compensation that helped cause the financial crisis -- have not gone away. (Source: The New York Times) Click here to read the full article
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The US-China Ponzi scheme
Imagine becoming so successful at your job that you stack up $2 trillion in income, which you conservatively place in short-term U.S. Treasury bonds for safekeeping. Now imagine that when you try to cash in those bonds to buy a few things for your kids, the clerk at the bank abruptly shuts her window and tells you to go away. That is essentially the situation faced by China these days as it wonders whether its plan to manufacture goods for U.S. consumers over the past two decades in exchange for a pile of credit slips was really such a hot idea. (Source: MSN Money) Click here to read the full article
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