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| Weekly Wrap Up |
Stocks finished a third consecutive week lower as economic indicators pointed to no immediate end to the recession. Federal Reserve Chairman Ben Bernanke stated that while it may take years for the US to recover from the financial crisis, it would be possible for it to step out of the recession in 2009. This positive statement was offset by housing data, which indicated that new home sales and existing home sales fell to record lows. The consumer confidence index also painted a dismal picture indicating that households are choosing to save money as conditions continue to worsen. Gold prices also dropped for five consecutive days. The precious metal ended the week lower by 6 percent. By contrast, the week before the price reached as high as $1,000 per troy ounce. Oil, on the other hand, ended the week slightly higher at selling for just under $44 per barrel. Financials like Citigroup (C: Charts, News, Offers) and the Bank of America (BAC: Charts, News, Offers) dominated headlines most of the week, as investors grew concerned over a possible bank nationalization plan. Yahoo (YHOO: Charts, News, Offers) also announced that Blake Jorgensen, the current CFO, would be leaving the company as soon as a suitable replacement could be found. Also from the tech sector, Dell (DELL: Charts, News, Offers) reported earnings which missed analysts' expectations. However, due to some cost-cutting measures, the computer manufacturer was able to prevent shares from further declining. In the car manufacturing industry, the President of Honda Motors (HMC: Charts, News, Offers) said he would be stepping down to allow Takanobu Ito to take over the reins. Mr. Ito has comes from within the company and will be the first President since 1982 to head both Honda R&D and Honda Motor. More Market News
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| Economic News |
Consumer confidence plummets to new low in Feb.
Americans' already battered confidence in the economy went into free fall in February, sinking to new lows as consumers grow more fearful over massive job cuts and shrinking retirement accounts. Fresh economic news out Tuesday likely will compound their gloom. Major retailers including Target Corp. (TGT: Charts, News, Offers), Home Depot (HD: Charts, News, Offers) and Macy's Inc. (M: Charts, News, Offers) reported depressed fourth-quarter results. Another widely watched index showed home prices tumbled by the sharpest annual rate on record and Federal Reserve Chairman Ben Bernanke said the economy is suffering through a "severe contraction" that's likely to keep shrinking in the first half of this year. (Source: Yahoo! Finance)
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New home sales at all-time low
Sales of newly constructed homes fell 10% in January, sinking to the lowest level on record, according to a government report released Thursday. The U.S. Census Bureau reported that new home sales fell to a seasonally adjusted annual rate of 309,000 in January from a revised 344,000 in December. It was the lowest level since the Census Bureau began keeping records in 1963. Economists were expecting a sales rate of 324,000, according to consensus estimates compiled by Briefing.com. The report also showed that the median sales price of new houses sold in January was $201,000, down 15% from $232,400 a year ago. (Source: CNNMoney.com)
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U.S. jobless claims tally tops 5 million mark
New jobless claims rose more than expected last week and the number of Americans continuing to receive unemployment benefits has topped 5.1 million, fresh evidence the recession is increasingly forcing employers to shed jobs. The Labor Department said Thursday that first-time requests for unemployment benefits jumped to 667,000 from the previous week's figure of 631,000. Analysts had expected a slight drop in claims. The 667,000 new claims are the most since October 1982, though the labor force has grown by about half since then. The four-week average of initial claims, which smooths out fluctuations, rose to 639,000, the highest in more than 26 years. (Source: MSNBC)
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| Business News |
Top two Ford execs to take 30 percent pay cuts
Hourly workers at Ford Motor Co. (F: Charts, News, Offers) will get yet another round of buyout and early retirement offers, and the company's top two executives will take 30 percent pay cuts as Ford tries to find a way out of the worst auto sales slump in 26 years. Chief Executive Alan Mulally and Executive Chairman Bill Ford Jr. will see the salary reductions this year and next, according to a memo obtained by The Associated Press. In addition, local union leaders were told Tuesday that the company will make buyout or early retirement offers to all 42,000 U.S. hourly workers. The offers are part of a series of contract concessions in a tentative agreement reached between the United Auto Workers and the company, according to two union officials briefed on the deal. (Source: MSNBC)
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Citigroup Stock Rises on Reports of Bailout Changes
Citigroup (C: Charts, News, Offers) stock rose as high as $2.77 and remains 4.6% higher at $2.72 in recent trading after reports that it is seeking changes to the government bailout plan. The latest alterations Citi is reportedly seeking to its federal bailout may be aimed largely at an accounting measure that investors paid scant attention to until recently: tangible common equity. Citi, according to published reports this week, is negotiating to convert some or all of the government's $45 billion preferred equity stake into common shares. The stock rallied, even though such a move would not give the bank any new capital and would dilute current common shareholders. (Source: TheStreet)
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UBS hands reins to former CEO of rival Credit Suisse
Troubled Swiss banking giant UBS (UBS: Charts, News, Offers) replaced its CEO on Thursday, appointing Oswald Gruebel -- former head of crosstown rival Credit Suisse Group -- to take over immediately. Gruebel's experience in leading Credit Suisse through a turnaround before he left the company two years ago will prove invaluable, UBS said. He replaces Marcel Rohner, who has resigned. "With his previous employer Credit Suisse, Mr. Gruebel was the architect of a successful turnaround and restored confidence in the company in turbulent times," said a statement from the Zurich-based bank. (Source: USA Today)
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| Technology Focus |
Garmin Moves In The Right Direction
While Garmin's (GRMN: Charts, News, Offers) global-positioning gear can pierce the fog to pinpoint your location, the company's financial officers can't see through the murky economic scenario, and the electronics maker said Monday it would not offer guidance for its 2009 results until the clouds clear. In the current climate, that, combined with a fourth-quarter earnings report that missed estimates by a nickel, wasn't so bad. "People have been fearing the worst, but it wasn't so bad," said Scott Sutherland, an analyst at Wedbush Morgan Securities, "things have been down, but it hasn't been the disaster people have been pricing into the stock." (Source: Forbes.com)
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Yahoo Chief Rearranges Managers Once Again
Carol Bartz, the new chief executive of Yahoo(YHOO: Charts, News, Offers), announced a corporate reorganization on Thursday that put her stamp on the company with a more top-down management structure. Like the more than half a dozen management shake-ups at Yahoo over the last two years or so, this reorganization is intended to streamline the company, make managers more accountable and accelerate decision making. It largely does away with a matrix organization under which many employees and managers reported to multiple bosses. "Today I'm rolling out a new management structure that I believe will make Yahoo a lot faster on its feet," Ms. Bartz wrote in a corporate blog post announcing the changes. "For us working at Yahoo, it means everything gets simpler. We'll be able to make speedier decisions, the notorious silos are gone, and we have a renewed focus on the customer." (Source: NYTimes.com)
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Microsoft says no new cost cuts, shares hit 11-year low
Microsoft Corp (MSFT: Charts, News, Offers) outlined plans to offset revenue declines as the PC market shifts to low-cost netbooks, but it failed to announce more cost cuts, sending its shares to an 11-year low. Chief Executive Steve Ballmer told an analysts' meeting in New York on Tuesday that Microsoft will offer robust versions of its yet-to-be-released Windows 7 operating software for netbooks, as the company looks to boost revenue from these hot-selling, low-cost computers. But Microsoft shares fell more than 3 percent after Ballmer quashed the hopes of some investors for accelerated cost cuts. Microsoft had announced plans to lay off 5,000 workers on January 22 as part of a plan to save $1.5 billion in annual costs. (Source: Reuters)
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| Your Money |
Used-car peace of mind -- cheap
It took 16 years and a lawsuit, but the federal government has finally launched its long-awaited national wreck registry. It's meant to help state motor vehicle departments check a used vehicle's history for any record of theft or damage before issuing a new title. But consumers can use the registry, too, making it a second cheap way -- along with the insurance industry's own database -- to check out a used car. The new National Motor Vehicle Title Information System is far from perfect. But its major contribution will be to require insurance companies, starting March 1, to share the vehicle identification numbers, or VINs, of cars they've declared a total loss. (Source: MSN.com)
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