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| Weekly Wrap Up |
All major indices were down this week with the Dow Jones Industrial Average losing over 400 points. Weak retail sales for December and high unemployment rates weighed heavily on investors' minds. The nation's automakers reported December sales results during Monday's session. Ford (F: Charts, News, Offers) General Motors (GM: Charts, News, Offers)and Toyota (TM: Charts, News, Offers) all reported a decline in December sales. Stocks managed to stay in positive territory on Tuesday despite the Fed's release of its meeting minutes which showed that they believe that the economy will be stuck in this downturn for some time. However, stocks declined sharply on Wednesday after fears about the depth of the recession were revisited. Payroll-services firm ADP reported that private employers eliminated 693,000 jobs from their payrolls in December. The number was higher than analysts expected. In other news, the government reported that the nation's budget deficit will likely rise to a record $1.2 trillion in 2009. On Thursday, Wal-Mart (WMT: Charts, News, Offers) Sear Holdings (SHLD: Charts, News, Offers) and Gap (GPS: Charts, News, Offers) all reported dismal December results. On Friday the Labor Department reported that employers cut 524,000 jobs in December. The number was smaller-than-expected, but nonetheless disappointing. The unemployment rate has now reached 7.2%. U.S. light crude oil for February delivery ended the week down to $40.05 a barrel on the New York Mercantile Exchange. More Market News
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| Economic News |
Major indexes slid Friday morning after the U.S. Labor Department reported that the national unemployment rate had jumped to a higher than expected 7.2% during the month of December and an additional 524,000 nonfarm jobs had been shed, leaving more than 10 million Americans out of work. Economists had expected a loss of 500,000 jobs, with an unemployment rate of 7.0%. Further evidence of weakening in the labor market reinforces concerns that the American economy may be heading into a deeper and more prolonged recession than previously expected. It also increases pressure on the incoming administration to quickly forge a comprehensive stimulus program to stem the bleeding. (Source: Forbes.com) Full Story
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President-elect Barack Obama urged dubious lawmakers Thursday to work with him "day and night, on weekends if necessary" to approve the largest taxpayer-funded stimulus ever, warning in almost apocalyptic terms that a dire economic future was certain without it. Obama's speech, an extraordinary move for a president-in-waiting that reflected the grim urgency of the times and perhaps the crack in congressional support, came amid a flurry of new activity in the negotiations on Capitol Hill over the massive proposal's details. Not long after Obama spoke, some senators from his own party publicly criticized his plan to include tax cuts. (Source: Yahoo! Finance) Full Story
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The federal budget deficit will hit an unparalleled $1.2 trillion for the 2009 budget year and the U.S. economy will likely contract by more than 2 percent, according to a new Congressional Budget Office report. The eye-popping estimates reflect plummeting tax revenues because of the recession and about $400 billion spent to bail out the financial industry and take over mortgage finance companies Fannie Mae and Freddie Mac. Last year's deficit was $455 billion. The CBO estimate released Wednesday also sees the U.S. economy shrinking by 2.2 percent this year and recovering only slightly to grow by 1.5 percent in 2010. (Source: MSNBC) Full Story
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| Business News |
In two weeks, investors will look under the hood of JPMorgan Chase (JPM: Charts, News, Offers) to see how the big bank fared in its first full quarter since it acquired failed thrift Washington Mutual. JPMorgan Chase has thus far largely skirted big losses from the credit crisis, but the bank is expected to reveal that it succumbed to the difficult environment that has hit many of its peers when it unveils fourth-quarter results on Jan. 21. Analysts on average expect the bank to post earnings of just 6 cents a share, according to Thomson Reuters. In the year ago quarter, JPMorgan Chase made 86 cents a share. (Source: TheStreet) Full Story
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Mortgage giants Fannie Mae (FNM: Charts, News, Offers) and Freddie Mac (FRE: Charts, News, Offers)have extended a moratorium on foreclosure suspensions for another three weeks, directing the mortgage servicers they work with to postpone any foreclosure or eviction proceedings through January 31. Fannie and Freddie projected that, under the original moratorium, which began Nov. 26 and was scheduled to lapse on Jan. 9, 6,000 homeowners would avoid bank repossession and eventually qualify for mortgage modifications. The companies don't have any actual statistics tracking how many borrowers the moratorium has helped. The extension should give servicers more time to help these at-risk homeowners enroll in the companies' Streamlined Modification Program. (Source: CNN Money) Full Story
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Media company Time Warner Inc. (TWC: Charts, News, Offers) said Wednesday that it expects a fourth-quarter charge of $25 billion to write down the value of its cable, publishing and AOL assets, leading to a loss for the year. New York-based Time Warner said its results, particularly for its AOL and publishing unit's advertising operations, have been pressured by economic conditions that are more difficult than it initially anticipated. Time Warner's cable television arm Time Warner Cable Inc. will account for $15 billion of the charge, with the remaining $10 billion related to its publishing and AOL divisions, spokesman Edward Adler said, declining to give further specifics. (Source: Yahoo! Finance) Full Story
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| Technology Focus |
Apple (AAPL: Charts, News, Offers) unveiled a change in the pricing structure for its iTunes music downloads Tuesday, ending the 99- cents-a-song pricing that has helped iTunes dominate the industry. At the Macworld 2009 show for developers in San Francisco, the computer maker also revealed a new 17-inch version of its MacBook Pro laptop that the company said offers a longer battery life. Additionally, Apple announced revisions to its iLife and iWork software packages. The announcements were made by Senior Vice President Phil Schiller, who delivered the show keynote in place of CEO Steve Jobs. (Source: CNN Money) Full Story
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President-elect Barack Obama backs a move to delay a mandatory switch to digital television signals, on fears that viewers are unprepared and as the government has run out of coupons to help pay for converter boxes."The Feb. 17 cutoff date for analog signals should be reconsidered and extended," John Podesta, co-chairman of the Obama-Biden transition team said in a letter to key lawmakers on Thursday. Congress mandated the Feb. 17 switch to digital television, which will affect some 20 million consumers who don't already use the technology (Source: Reuters) Full Story
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The company, which also develops the Sansa music player, No. 2 behind Apple Inc.'s (AAPL: Charts, News, Offers) iPod, launched a new digital music device designed for tech neophytes. The device, called the slotRadio player, comes pre-loaded with 1,000 songs, in several different genres, such as rock, country, urban. The device also plays FM radio stations via a built-in antenna. It was built on the theory that downloading music and creating playlists is too time-consuming and complicated for some consumers. "Not everyone loves computers," said Daniel Schreiber, a senior vice president at SanDisk (SNDK: Charts, News, Offers). He went on to show a video of consumers in the street, who described how their kids or their significant others put their music on their iPod for them, because they don't want to deal with downloading music from the Internet. (Source: Marketwatch) Full Story
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| Your Money |
The nation's investor class voted for a zero return on their money in a historical record move to the safety of cash from anything with a whiff of risk: equities, bonds, real estate, currencies, commodities or derivatives. This is nothing short of a revolution in portfolio allocation. For the first time in history, investors now have more of their savings in money market funds than equity funds. They own $3.759 trillion in money market funds that yield them practically nothing in order that their $3.759 trillion does not disappear. This is a sign of investor fright and their lack of trust in private sector institutions like banks and corporations as well as public sector regulatory institutions like the Securities and Exchange Commission and the Treasury Department that have not protected their interests fervently. (Source: Forbes.com) Full Story
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