|
| Weekly Wrap Up |
Stocks continued their decline for the second week in a row, during this shortened trading week. The market was closed on Monday for the President's Day holiday, and reopened Tuesday to experience daily losses around 4%, as President Obama signed the $787 billion stimulus bill. Housing data continued to fall on Wednesday, but a lack of any significant news caused the markets to close pretty much unchanged. Thursday and Friday saw a continuation of Tuesday's losses, and the Dow Jones index reached a low it hadn't hit in six years. In addition, the Federal Reserve decreased their forecast for the first half of 2009, which was yet another discouraging sign for investors. A barrel of crude oil ended the week around $39, as gold prices jumped to close over $1,000 per troy ounce. In corporate news, Trump Entertainment Resorts (TRMP: Charts, News, Offers) filed for bankruptcy, as General Motors (GM: Charts, News, Offers) and Chrysler asked the government for additional aid. Bank of America (BAC: Charts, News, Offers) stocks continued to drop, on concerns about the overall banking industry, but also on concerns regarding the details of the company's acquisition of Merrill Lynch. The losses that the indexes experienced this week were even steeper than the week before, so the question is will these trends continue to get worse, or is there any chance that the markets will recover? More Market News
|
|
| Economic News |
The number of laid-off workers receiving unemployment benefits has jumped to an all-time high near 5 million while new jobless claims remain well above 600,000. Both figures were worse than expected and new projections from the Federal Reserve show unemployment rising for the rest of this year. The Labor Department reported Thursday that the number of people receiving regular unemployment benefits rose 170,000 to 4.99 million for the week ending Feb. 7, marking the fourth straight week those receiving benefits have been at a record level on data going back to 1967. The continuing claims figure also was significantly above the year-ago level of 2.77 million and underscored the difficulty people are having in this recession finding another job once they are laid off. (Source: BusinessWeek) Full Story
|
Gold for April delivery finished at $1,002.20 an ounce, up $25.70, or 2.6%, on the day. It earlier touched a high of $1,007.70. With rising fear that the U.S. government may nationalize some banks, blue-chip stocks hit fresh bear-market lows before recovering Friday afternoon, with the Dow Jones Industrial Average recently down 43 points at 7,305. "There is a risk here of a panic sell-off in stock markets, and the next leg down in the stock bear market looks imminent, as the ills of the global financial system virulently infect the global economy," wrote Mark O'Byrne, executive director at Gold and Silver Investments Limited, in a research note. "While gold has become overbought in the short term, its medium- and long-term fundamentals are as sound as ever." Gold for February delivery, the front-month contract that registered very little volume, finished up $25.70, or 2.6%, at $1,001.80 an ounce on Globex. The February contract expires on Feb. 25. Earlier, February gold hit an intraday high of $1,000.40 an ounce. (Source: MarketWatch.com) Full Story
|
Hoping to halt what it called "a fraud of shocking magnitude that has spread its tentacles throughout the world," the Securities and Exchange Commission charged billionaire R. Allen Stanford and other executives at his massive financial services company, Stanford Financial Group, with operating a multibillion-dollar fraudulent investment scheme. In a complaint filed early Tuesday in U.S. District Court in Dallas, the SEC alleged Antigua-based Stanford International Bank (SIB) fabricated investment returns in order to market and sell high-yielding certificates of deposits. The complaint charged SIB with selling approximately $8 billion of CDs to investors by promising improbable and unsubstantiated interest rates. The bank falsely claimed it was able to pay high interest rates because of its unique investment strategy, which allowed it to achieve double-digit returns on its investments for the past 15 years, according to the complaint. (Source: Forbes.com) Full Story
|
| Business News |
Trump Entertainment Resorts Inc (TRMP: Charts, News, Offers), the casino operator named for Donald Trump, filed for bankruptcy protection on Tuesday as recession and declining gambling revenues battered the company and its rivals. The Chapter 11 filing marks the third plunge into bankruptcy for the company, which was created out of a restructuring in 2005. It also underscores the struggles facing the casino business as recession squeezes casino gambling. Trump Entertainment owns and operates three casino hotels in Atlantic City, New Jersey, including the Trump Taj Mahal, Trump Plaza and Trump Marina. The company did not request debtor-in-possession financing to operate during its restructuring and said it would continue to run as normal. "This filing will result in no immediate change in our daily operations, and we expect to make no changes regarding our operating structure or philosophy," Trump Chief Executive Mark Juliano said in a statement. (Source: Reuters) Full Story
|
When Starbucks (SBUX: Charts, News, Offers) Chief Executive Howard Schultz announced that he was taking back the reins at the company he had built to glory, the recession had just begun and the foreclosure and banking crises were far from apparent. A little more than a year later, the economy is considerably more troubled and so, potentially, is Starbucks. Over the past 12 months, the Seattle-based coffee chain has said it would close hundreds of stores and lay off thousands of workers, and made substantial changes in its management ranks. Shares in Starbucks have fallen by nearly 50 percent. Meanwhile, the company has rolled out an increasingly broad array of products and initiatives aimed at helping Starbucks find its footing in a vastly different economic environment. The latest, and perhaps most surprising: instant coffee, launched this week. (Source: MSNBC) Full Story
|
Bank of America Corp (BAC: Charts, News, Offers) Chief Executive Ken Lewis has received a subpoena from the New York state attorney general's office in connection with Merrill Lynch's payment of employee bonuses before the companies combined on Jan. 1. Former Merrill CEO John Thain, who was subpoenaed last month, also was questioned by investigators on Thursday about the bonuses that were paid in late December, just days before Bank of America completed its purchase of New York-based Merrill, according to a person familiar with the investigation. The person requested anonymity because of the ongoing nature of the matter. Bank of America spokesman Robert Stickler on Friday declined to comment directly on the matter, adding "we do not comment on questions about subpoenas." (Source: Associated Press) Full Story
|
|
| Technology Focus |
In a last-minute deal, Liberty Media (LINT.A: Charts, News, Offers) saved Sirius XM (SIRI: Charts, News, Offers) from bankruptcy with a $530 million loan infusion giving John Malone's company a 40% stake in the satellite radio shop.
As reported, Sirius CEO Mel Karmazin was scrambling Monday to close the deal with Liberty Media and not only save Sirius XM from bankruptcy, but also fend off a takeover bid by Dish Network (DISH: Charts, News, Offers) operator Charles Ergen, who has sought to oust Karmazin.
The deal -- news of which sent shares soaring more than 50% -- has two phases. The first installment is an immediate $280 million secured loan to pay off a $171.6 million obligation that was due Tuesday. The remaining money will be used to keep Sirius operating and to cover transaction costs. The second stage of the Liberty investment calls for another $150 million loan to XM Satellite Radio, with an agreement to buy $100 million in XM loans outstanding. (Source: The Street) Full Story
|
Sprint Nextel (S: Charts, News, Offers) has yet to fully recover from the swath of technical and operational problems that the company has grappled with since buying Nextel in 2005, yet it still managed to beat Wall Street's expectations in the fourth quarter.
Shares of Sprint jumped 11.8%, or 32 cents, to $3.03 in premarket trading on Thursday, after the company reported a loss excluding write-downs of 1 cents per share, beating analyst expectations of a 3 cent per share loss. Sales dropped 14.3% to $8.4 billion.
The entire telecom sector has been hurting as customers drop landlines for wireless communications, and shift over to companies that offer a more favorable rate. Sprint Nextel has been losing out to its two larger competitors, AT&T (T: Charts, News, Offers) and Verizon Wireless (VZ: Charts, News, Offers), as customers flock to their larger coverage areas and hi-tech phone offerings. (Source: Forbes) Full Story
|
Amid a broad-based decline in its core personal computer and printer businesses, Hewlett-Packard (HPQ: Charts, News, Offers) on Feb. 18 reported that first-quarter earnings tumbled 13%, despite a slight 1% rise in revenue. The company predicted no quick rebound in its fortunes and cut its full-year earnings forecast.
Despite the weaker performance, the technology giant's broad portfolio of products and services and intense cost-cutting efforts appear to be helping it weather the global economic downturn better than most of its peers. "HP executed well in a challenging market," said Mark Hurd, HP chairman and chief executive officer.
HP appears to be benefitting from it early focus several years ago on trimming the fat across the company's expansive operations. (Source: BusinessWeek) Full Story
|
| Your Money |
Banks say they are lending. But many consumers and small business owners disagree. So where's the disconnect?
Bankers say they are lending but try telling that to consumers having difficulty getting approved for mortgages, credit cards or auto loans.
In recent weeks, politicians have accused financial institutions of failing to extend credit, despite taking in billions of dollars in taxpayers' funds during the past few months.
But financial executives, including the CEOs of eight banks that testified before Congress last week, have maintained that they are making new loans and that the nation would face an even more severe credit crunch had the government not thrown the industry a lifeline. (Source: Yahoo Finance) Full Story
|
|
|
|
|
