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| Weekly Wrap Up |
Last week started off a little rough for the markets as investors became more and more anxious over the government's stimulus plan. The markets were relatively quiet on Monday as the Dow Jones Industrial Average dropped by 9.72 points while the Nasdaq finished at 1,591.56, a 0.15 point loss. However, both the Nasdaq and Dow Jones took hits by the close of markets on Tuesday. In the wake of Treasury Secretary Timothy Geithner's speech on the bank rescue plan, both the Nasdaq and the Dow Jones had dipped significantly. The Nasdaq dropped to 1,524.73 and the Dow Jones fell to 7,888.88. General Motors (GM: Charts, News, Offers) and UBS (UBS: Charts, News, Offers) also added to the markets' poor performance with announcements of considerable job cuts. GM stated that it will be cutting 10,000 jobs while UBS will be removing 2,000 jobs from its investment banking section. On the positive side, Qwest (Q: Charts, News, Offers) announced better-than-expected earnings and saw its stock price improve. For the most part, stocks seem to rebound a little on Thursday even though a report surfaced that showed home prices dipped 12.4% in the fourth quarter of 2008. However, the positive momentum that some stocks appeared to be experiencing was slowed down on Friday as the overall markets suffered a slight loss. The Dow Jones Industrial Average finished the week lower by 82.35 points while the Nasdaq ended the day down by 7.35 points. The S&P also fell 8.35 points by Friday's close. In addition, Sirius XM (SIRI: Charts, News, Offers) stated that it may be forced to file for bankruptcy due to outstanding debts as soon as Tuesday. Bank of America (BAC: Charts, News, Offers) assured investors that it is financially secure and has enough cash to finance its operations for at least two more years. Gold finished the week on the rise at $942.20 per troy ounce, and the price of crude oil also went up with the March delivery settling at $37.51 per barrel, a 9 percent increase. The US dollar managed to fall in relation to the other major currencies with the exception of the Yen. More Market News
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| Economic News |
The Senate lined up to advance the $827 billion economic stimulus legislation backed by the White House on Monday, and Democratic leaders vowed to deliver a bill to President Barack Obama's desk within days. Still, key lawmakers braced for a difficult round of further negotiations aimed at producing a final House-Senate compromise. "There is no reason we can't do this by the end of the week," said Senate Majority Leader Harry Reid of Nevada. He said he was prepared to hold the Senate in session into the Presidents Day weekend if necessary, and cautioned Republicans not to try and delay final progress. He said passage would mark "the first step on the long road to recovery." It takes 60 votes in the Senate to push the bill past a procedural hurdle raised by Republicans, and Democratic leaders expressed confidence they had the necessary support after Friday's agreement to trim the bill by about $100 billion. Another 60-vote majority would be needed Tuesday for Senate passage. (Source: Associated Press) Full Story
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Wall Street's message to the Obama administration was clear Tuesday, even if the plan to save the banking industry wasn't. Unhappy with a lack of clarity in Treasury Secretary Timothy Geithner's new financial rescue plan, investors launched a massive stock selloff, raising further questions about when confidence would be restored to the market. From the squishy rhetoric about how complex the problem is to the lack of a clear time-frame for when specific weaknesses in the financial sector would be addressed, Geithner's speech did nothing to assuage the market's concerns about the nation's future. (Source: CNBC.com) Full Story
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U.S. retail sales jumped 1 percent in January, reversing a six-month declining trend and defying economists' expectations by posting the biggest increase in 14 months. But higher gasoline prices and sales, and buyers snapping up other items on post-holiday discounts appeared to aid last month's results. Analysts cautioned that the relief is unlikely to last. The Commerce Department reported Thursday that January retail sales rose 1 percent from December after having fallen for six straight months. Wall Street economists surveyed by Thomson Reuters had expected January sales to show a drop of 0.8 percent. They plunged a revised lower 3 percent in December, which marked the weakest holiday selling season since at least 1969. (Source: Forbes.com) Full Story
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| Business News |
Shares of Qwest (Q: Charts, News, Offers) surged Tuesday after the telecom firm reported better-than-expected fourth-quarter profit and outlined its cost-cutting plans. Investors responded positively to Qwest's announcement that it had cut 1,700 jobs during the quarter, pushing the company's shares up 17 cents (5.04%) to $3.54. Other telecom stocks, however, retreated with the broader market Tuesday with AT&T (T: Charts, News, Offers), Sprint Nextel (S: Charts, News, Offers) and Verizon (VZ: Charts, News, Offers) slipping 4.06%, 6.11% and 3.22% respectively. The Denver phone and data services provider also explained that it will not make any cash contributions to its pension plan during 2009, although was unwilling to give revenue guidance for the coming quarters, citing lack of visibility into customer demand. Qwest said it had a third-quarter profit of $185 million, or 11 cents a share, down 49% from $366 million and 20 cents a year ago, but just above analysts' estimate of 10 cents. (Source: TheStreet.com) Full Story
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Last September, Sirius Satellite Radio (SIRI: Charts, News, Offers) chief executive Mel Karmazin was fresh off the 18-month regulatory battle that led to the merger with XM Radio. In his characteristically outspoken fashion, he recognized the poor timing of combining the nation's only two satellite radio providers: The newly formed and heavily debt-saddled company debuted just as credit markets froze to a standstill. "Am I going to lend the company the money? I hope not. I hope we don't get to that," he said to analysts at an investors conference. (Source: Washington Post) Full Story
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The news spooked investors, who had run up RIM's (RIMM: Charts, News, Offers) shares by more than 40% over the past six weeks. The stock slid nearly 17% to trade at $47.43 by midday Wednesday. "I think the way people are interpreting the spread is that they are selling lower-priced devices," said Todd Coupland of CIBC Capital Markets. "I think it's the [BlackBerry] Pearl and other low-end devices that are getting the uptake here." (Source: Market Watch) Full Story
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| Technology Focus |
This is set up almost too perfectly. We're in the midst of the worst economic downturn since the Great Depression, retail sales are plummeting, consumer spending is way down and so what does Microsoft (MSFT: Charts, News, Offers) decide to do? Open retail stores. Insert two paragraphs of punch-line here. But I'm going to surprise you here and go the other way. I think this is actually a smart move by Microsoft -- in theory, at least. First of all, if you have the money (which Microsoft does), now's the time to buy. That is to say, they can probably get some great deals on retail spaces around the country as stores go out of business and rents trend lower. Things could still get worse, but this is likely a much better time to be looking around for prime real estate than any time in recent history. (Source: Venturebeat.com) Full Story
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The unveiling of a hotly anticipated new product. An exuberant chief executive thumbing through slides. A surprise appearance by an A-list guest. Amazon's (AMZN: Charts, News, Offers) Feb. 9 introduction of the Kindle 2 had all the makings of a product launch by consumer electronics wunderkind Apple (AAPL: Charts, News, Offers). "That was parallel to the performances at iPod launches," says Ross Rubin, consumer technology analyst with NPD Group. That's where the comparisons with Apple should end. As much as some might try to draw parallels between Amazon's approach to books and Apple's take on music, analysts are clear that the latest generation of Amazon's sleek, white little electronic book reader is no iPod for the book world. (Source: BusinessWeek Online) Full Story
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| Your Money |
October's cascade of stock selling shaved 22% off of the Dow Jones industrial average in just eight days and frayed the nerves and finances of the 48 million American workers who invest for retirement through 401(k) plans. Many of these workers discovered that they had crossed their thresholds for risk and decided to step back and sell out of stocks, even if their timing may have been less than optimal. (Source: Forbes.com) Full Story
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