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| Weekly Wrap Up |
The markets experienced a rollercoaster ride last week only to finish in negative territory. Monday’s trading started off strong for investors, but ultimately failed to carry over last week’s positive momentum as the Dow Jones Industrial Average fell by 122.42 points and the Nasdaq lost 26.21 points. However, Tuesday proved to be a more promising day as the markets managed to bounce back into positive territory. The tone of the market was set with an unexpectedly positive housing report. Even the news of Caterpillar (CAT: Charts, News, Offers) cutting 2,400 jobs and Alcoa (AA: Charts, News, Offers) slashing its dividend couldn’t stifle the market’s upward surge. The markets’ strong performance percolated into Wednesday despite General Mills (GIS: Charts, News, Offers) announcing a 30% decline in third quarter profits. Wednesday’s positive movement was jump started by the Federal Reserve stating that it planned to purchase $300 billion in long-term Treasury securities. In addition, the Chinese Commerce Ministry rejected Coca Cola's (KO: Charts, News, Offers) $2.3 billion dollar bid on Huiyuan Juice Group Ltd. The initial positive impact created by the Federal Reserve’s decision quickly died Thursday as stocks retreated back into negative territory. On a brighter note, GE (GE: Charts, News, Offers) announced that it predicts a profitable first quarter for its financing unit and Oracle (ORCL: Charts, News, Offers) reported higher fiscal third-quarter earnings. The markets continued to stumble into Friday after suspicions surfaced that American Express (AXP: Charts, News, Offers) may post a loss for both 2009 and 2010. GE also added to the bad news with its decision to lower its 2009 profit forecast. The price of U.S. light crude oil for April settled 6 cents lower at $51.55 a barrel after a 47 cent increase in Thursday’s markets. More Market News
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| Economic News |
Red and Blue tribal pundits agree that Herbert Hoover and FDR screwed up when they allowed the money supply to contract, kicking off a deflationary spiral, while Smoot Hawley Tariffs decimated world trade. Opinions vary on whether the New Deal failed to deliver a timely recovery because it was too interventionist or not interventionist enough. Yet there is more than one way to turn a credit-deleveraging recession and stock market contraction into a prolonged depression. The most effective public policy ever invented for poisoning the economy stems from a failure to appreciate the differences in the way market actors manage risk versus uncertainty. (Source: Real Clear Markets) Full Story
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Will China dump the dollar? We began hearing about this issue quite a bit last year when the dollar was falling sharply versus other major currencies. At that point, the dollar was falling versus the Euro so the question centered on China's willingness to withstand currency depreciation in its dollar-denominated holdings. Due to the falling dollar, there was also widespread questioning of the dollar as the world’s reserve currency and questions across the media spectrum on whether China would begin phasing out of the dollar and moving to the Euro as the world’s reserve currency. (Source: Fundmastery Blog) Full Story
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Consumer prices rose in February by the largest amount in seven months as gasoline prices surged again and clothing costs jumped the most in nearly two decades. Despite the February blip, the recession was expected to dampen any inflation pressures for at least the rest of this year. The Labor Department reported Wednesday that consumer inflation rose 0.4 percent in February, the biggest one-month jump since a 0.7 percent rise in July. Two-thirds of last month’s increase, which was slightly more than analysts expected, reflected a big jump in gasoline pump prices. Core inflation, which excludes food and energy, rose 0.2 percent in February, also slightly higher than the 0.1 percent rise economists expected. (Source: MSNBC) Full Story
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| Business News |
Despite gaining new customers from the shrinking U.S. presence of DHL and lower fuel prices, the world's two largest package delivery companies are battening down the hatches as they prepare for weak global economic conditions to get even worse. FedEx Corp. (FDX: Charts, News, Offers) said Thursday it will cut more jobs and trim wages again, after reporting its fiscal third-quarter profit tumbled 75 percent on sliding revenue. "Our financial performance was sharply lower during the quarter due to the global recession," Chairman, President and Chief Executive Frederick W. Smith said. "While we are gaining market share in all of our transportation segments, the downturn in our industry and the severity and expected duration of the recession require that we take additional actions." (Source: Yahoo! Finance) Full Story
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Xerox Corp. (XRX: Charts, News, Offers) the world's top supplier of digital printer and document management services, warned first-quarter earnings will fall far short of its earlier forecast as a slowdown in technology spending undercuts revenue. Hurt by falling sales of equipment and printer-based supplies, the company said Friday that revenue in January and February was 18% below year-ago levels. It also blamed poor results from its venture with Fuji (FUJI: Charts, News, Offers), which handles sales for the Xerox group in Asia. (Source: CNN Money) Full Story
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| Technology Focus |
Cisco's (CSCO: Charts, News, Offers) love of video is no secret: As the world's biggest data mover, it sees a gold mine in the Internet's growing collection of information-rich user-generated clips. But when the networking giant announced Thursday that it planned to acquire camcorder maker Pure Digital, it likely had its eye on more than pet-trick and groin-kick videos. In fact, it may be planning to use Pure Digital's technology to extend its telepresence high-end video conferencing system--still an expensive corporate tool--into the home. (Source: Forbes) Full Story
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A potential marriage between tech giants IBM and Sun Microsystems is rattling the tech industry. The two companies are in merger talks, and IBM (IBM: Charts, News, Offers) has offered $6.5 billion in cash, according to a report in The Wall Street Journal. There are plenty of reasons for IBM CEO Sam Palmisano to pursue to want to buy Sun Microsystems (JAVA: Charts, News, Offers). While computer hardware has steadily become a less important part of IBM's business, Sun is much more than a hardware company. It has been one of the most important Silicon Valley innovation factories of the past two decades--much of it in software. Combining IBM, the innovation leader of the East, with Sun, an innovation leader out West, would yield a formidable player. (Source: BusinessWeek) Full Story
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