| Market Summary |
Wall Street continued its positive start to the week as all three major indices ended higher. Better-than-expected earnings and comments from Federal Reserve Chairman Ben Bernanke steered the session during morning trading. Today’s advances were modest as investors remained cautious ahead of a number of earnings reports that are slated for release this week. CIT Group (CIT: Charts, News, Offers) was once again in focus today as concerns resurfaced following a statement that suggested that the $3B loan from bondholders may not be enough to keep the company afloat. Bernanke spoke before a House committee today and said that the pace of economic decline has "slowed significantly" but the labor market has gotten worse. In earnings news, Apple (AAPL: Charts, News, Offers), Starbucks (SBUX: Charts, News, Offers), and Yahoo (YHOO: Charts, News, Offers) are all slated to report earnings late on Tuesday. In corporate news, Exelon Corp. (EXC: Charts, News, Offers) ended its $7.5 billion hostile bid for NRG Energy Inc. (NRG: Charts, News, Offers) Tuesday after NRG shareholders rejected Exelon's board nominees. Freddie Mac (FRE: Charts, News, Offers) named Chareles E. Haldeman, Jr. as its new CEO. U.S. light crude oil settled up 74 cents to $64.72 a barrel on the New York Mercantile Exchange. Treasury prices advanced, lowering the yield on the benchmark 10-year note falling to 3.46%.
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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 |
Caterpillar 2Q profit falls 66 pct on weak demand
Caterpillar Inc.'s (CAT: Charts, News, Offers) second-quarter profit tumbled on slumping sales of heavy equipment and the cost of staff cuts, but it saw signs that the global economy is starting to stabilize after a prolonged slide. The company boosted its 2009 profit forecast, citing evidence that government stimulus plans, particularly in China, are beginning to work. The company's global reach and diverse products -- from bulldozers to mining trucks to cargo ship engines -- give a snapshot of industrial strength. The optimistic forecast lifted shares nearly 8 percent in late afternoon trading. (Source: Yahoo! Finance) Click here to read the full article
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Freddie Mac names new top executive
Charles "Ed" Haldeman Jr., a former mutual fund executive, will take the helm of Freddie Mac (FRE: Charts, News, Offers) next month, the mortgage finance company said Tuesday. Three weeks ago, Haldeman, 60, stepped down as chairman of Boston-based Putnam Investments’ mutual fund unit. He replaces John Koskinen, who has been serving as Freddie Mac’s interim CEO since the March resignation of David Moffett. The move comes at a critical time for Freddie Mac, which is struggling under the weight of mounting loan defaults and faces uncertainty about its future role in the mortgage industry. (Source: MSNBC) Click here to read the full article
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Coke tops view despite currency hit, shares off
Coca-Cola Co's (KO: Charts, News, Offers) better-than-expected quarterly profit was not enough to please investors who looked for stocks with stronger growth potential on Tuesday, as weaker foreign currencies reduced Coke's gains in emerging markets. Coke's broad geographic footprint, especially in developing markets such as India and China, is helping it weather a slowdown in the United States and other pockets of pressure such as the slowdown in sales of coffee for offices in Japan. But currency translation reduced comparable operating income by 14 percent. (Source: Reuters) Click here to read the full article
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| Featured Article from the InvestorGuide University |
Social Security
Here we cover the fundamentals of Social Security and how it affects you. Topics include retirement, disability, family benefits, survivors, Medicare, taxes, and health care.
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| Market Analysis |
The Fed’s Exit Strategy
The depth and breadth of the global recession has required a highly accommodative monetary policy. Since the onset of the financial crisis nearly two years ago, the Federal Reserve has reduced the interest-rate target for overnight lending between banks (the federal-funds rate) nearly to zero. We have also greatly expanded the size of the Fed’s balance sheet through purchases of longer-term securities and through targeted lending programs aimed at restarting the flow of credit. These actions have softened the economic impact of the financial crisis. They have also improved the functioning of key credit markets, including the markets for interbank lending, commercial paper, consumer and small-business credit, and residential mortgages. (Source: Wall Street Journal) Click here to read the full article
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CIT may be saved - but now what?
Bondholders are throwing CIT a lifeline. But salvaging the small business lender could still test the company and its CEO, Jeffrey Peek. CIT Group (CIT: Charts, News, Offers), the New York-based lender that came up short last week in its bid for a second federal bailout, lined up new financing from a group of creditors. The arrangement allows CIT to avoid what would have been the fifth-biggest U.S. bankruptcy filing, according to BankruptcyData.com, and continue operating as it prepares to restructure its debt. The deal represents a reprieve for CIT's customers, many of whom would have had trouble lining up new credit in the event of a Chapter 11 filing. News of the financing agreement also provided a big lift for CIT shareholders. (Source: Fortune) Click here to read the full article
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Rich Harvard, Poor Harvard
Only a year ago, Harvard had a $36.9 billion endowment, the largest in academia. Now that endowment has imploded, and the university faces the worst financial crisis in its 373-year history. Could the same lethal mix of uncurbed expansion, colossal debt, arrogance, and mismanagement that ravaged Wall Street bring down America’s most famous university? And how much of the turmoil is the fault of former Harvard president Larry Summers, now a top economic adviser to President Obama? As students demonstrate, administrators impose Draconian cuts, and construction is halted on an over-ambitious $1.2 billion science complex, the author follows the finger-pointing. (Source: Vanity Fair) Click here to read the full article
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