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| Weekly Wrap Up |
Last week started off a little shaky for the markets, but managed to finish on a high note. The S&P and Nasdaq posted nominal gains on Monday, but the Dow Jones dropped 25.57 points. Increasing speculation that General Motors (GM: Charts, News, Offers) will need to file for bankruptcy seemed to stifle any positive movement for the markets. In addition, Boeing's (BA: Charts, News, Offers) disappointing financial outlook report only added to the day's bad news. The Dow Jones' slide continued into Tuesday as it lost 137.63 points and closed at 7,920.18 for the day. This drop in the Dow seemed to be further fueled by the government's announcement that retail sales in March fell an unexpected 1.1%. The other markets also posted losses. Johnson & Johnson (JNJ: Charts, News, Offers) reported a 2.5% decline in its first quarter net income as it continues to battle with declining sales numbers. In other news, Goldman Sachs (GS: Charts, News, Offers) announced that it would raise $5 billion in order to pay back the government issued TARP funds. Fortunately, the week's negative momentum was quickly halted on Wednesday as the Nasdaq, Dow Jones, and S&P all posted gains. The Dow Jones led the charge with a positive 109.44 points while the Nasdaq and S&P climbed 1.08 and 10.56 points respectfully. Intel's (INTC: Charts, News, Offers) first quarter report beat Wall Street expectations despite its 55% drop in profit. However, it was not all good news as UBS (UBS: Charts, News, Offers) announced it would cut another 9,000 jobs. The markets continued to rally throughout Thursday. JP Morgan (JPM: Charts, News, Offers) added to investors' optimism as it beat out analysts' expectations for the first quarter. Unfortunately, Nokia disclosed that its operating profit has fallen 90% from this time a year ago. Overall, the markets managed to post their sixth consecutive week of gains. Friday continued the markets' upward trend with optimistic earnings reports from Google (GOOG: Charts, News, Offers), Citigroup (C: Charts, News, Offers), and General Electric (GE: Charts, News, Offers). Treasury prices continued to fall as the yield on the benchmark 10-year note increased to 2.87%. U.S. light crude oil for May delivery rose 29 cents to $50.27 a barrel. More Market News
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| Economic News |
Recession? Financial crisis? Never mind. The stock market just finished an extraordinary month, a big surprise for even the most optimistic observers. Stocks, measured by the broad Standard & Poor's 500-stock index, hit a low for the current bear market on Mar. 9. A month later, by the close on Apr. 9, the S&P 500 was 26.6% higher. If this March-April advance were a calendar month, it would be the best month for the S&P 500 since 1933. "The rally has been surprising in its length and how far it's come," says William Rutherford, president of Rutherford Investment Management. Stock gains are boosting confidence, not just among investors but in the U.S. economy as a whole, he says. (Source: BusinessWeek) Full Story
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Retail sales fell unexpectedly in March, delivering a setback to hopes that the economy's steep slide could be bottoming out. President Barack Obama and Federal Reserve Chairman Ben Bernanke said in separate speeches Tuesday that while other recent economic signs have been hopeful, problems persist and a true recovery will take more time. The Commerce Department said retail sales dipped 1.1 percent in March. It was the biggest decline in three months and a much weaker showing than the 0.3 percent increase that analysts expected. A big drop in auto sales led the overall slump in demand. Sales also plunged at clothing stores, appliance outlets and furniture stores. (Source: Yahoo! Finance) Full Story
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Federal Reserve Chairman Ben S. Bernanke said there are signs that the "sharp decline" in the U.S. economy is slowing, indicating a potential "first step" toward a recovery from the worst recession in a generation. "I am fundamentally optimistic about our economy," Bernanke said today in a speech in Atlanta. "Today's economic conditions are difficult, but the foundations of our economy are strong, and we face no problems that cannot be overcome with insight, patience, and persistence." The Fed chief's remarks suggest he is increasingly confident the central bank's efforts to revive lending are slowing the contraction and setting the stage for a recovery. The Fed is committed to achieving financial stability, a prerequisite for renewed growth, Bernanke said. (Source: Bloomberg) Full Story
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| Business News |
Express Scripts Inc. (ESRX: Charts, News, Offers) stands to gain considerable negotiating clout from its $4.68 billion deal to buy the pharmacy benefits management businesses of health insurer WellPoint Inc. (WLP: Charts, News, Offers), and experts say that could mean savings for customers buying prescription drugs. St. Louis-based Express Scripts said Monday it planned to buy WellPoint's NextRx subsidiaries in a cash-and-stock deal. Express Scripts is the third-largest pharmacy benefits manager, and the deal likely would vault it past No. 2 CVS Caremark (CVS: Charts, News, Offers), and push it close to the top stand-alone company, Medco Health Solutions Inc., based on prescriptions managed. (Source: MSNBC) Full Story
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Rosetta Stone Inc shares rose 42 percent in their trading debut Thursday, following the company's initial public offering, putting it on pace for the strongest start of a new stock in a year. Rosetta Stone, which provides language instruction products, opened trading at $25, on the morning after it priced its IPO at $18, exceeding the estimate range. In morning trade, Rosetta Stone shares were changing hands at $25.59 on the New York Stock Exchange. Rosetta Stone is on pace for the strongest first-day performance since fertilizer maker Intrepid Potash Inc. (IPI: Charts, News, Offers) rose 58 percent in its debut in April 2008. (Source: Yahoo! Finance) Full Story
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American International Group Inc. (AIG: Charts, News, Offers) agreed to sell its U.S. auto insurance business to Zurich Financial Services AG for about $1.9 billion, the firm's biggest divestiture since being rescued by the government. The purchase price matches the tangible book value of the business, Zurich said in a statement today. Zurich becomes the third-largest auto insurer in the U.S., passing the Geico unit at Warren Buffett's Berkshire Hathaway Inc., according to 2008 data from the National Association of Insurance Commissioners. AIG Chief Executive Officer Edward Liddy is working to dismantle most of the New York-based company, once the world's biggest insurer, to help repay parts of a $182.5 billion government bailout. AIG had been in intermittent talks with Zurich over the auto unit, one of the most resilient parts of its insurance holdings, since last year. AIG had announced deals worth $2.4 billion before today's agreement. (Source: Bloomberg) Full Story
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| Technology Focus |
Yahoo Inc. (YHOO: Charts, News, Offers) is gearing up for its third round of mass layoffs in 14 months, signaling the long-slumping Internet company is still struggling to snap out of its financial malaise under a new leadership team. The cuts will likely affect several hundred employees, a person familiar with the plan said late Tuesday, confirming a report first published on The New York Times' web site. The person asked to remain anonymous because Yahoo isn't publicly discussing anything that might affect its stock price until the April 21 release of the Sunnyvale, Calif.-based company's first-quarter earnings report. (Source: MSNBC) Full Story
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Behind Skype's IPO hype is a glimpse of some of the pressure on CEO John Donahoe to turnaround eBay's (EBAY: Charts, News, Offers) slumping core business. eBay announced plans Tuesday to spin Skype off in a public offering next year, a move seen by analysts as a way to put a price on the business. The founders of the Luxembourg-based Internet calling shop have reportedly explored financing to buy Skype back. Skype never made sense as a supplement to eBay's ecommerce business. And the $3.1 billion eBay paid for it, including performance payments, continues to look like a zany mistake. The largely free social networking service generates annual revenue per user of $1.49. (Source: TheStreet) Full Story
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Google Inc., (GOOG: Charts, News, Offers) owner of the world's most popular search engine, reported slower profit and sales growth in the first quarter as the recession discouraged users from clicking on ads. Net income climbed 8.9 percent to $1.42 billion, or $4.49 a share, the company said yesterday. Excluding revenue passed on to partner sites, sales were $4.07 billion, compared with the average analyst estimate of $4.1 billion in a Bloomberg survey. The slump in advertising spending led to Google's first sequential drop in quarterly sales since it went public in 2004. The company is now cutting research, marketing and side projects to cope with the economy, which shrank 6.3 percent last quarter. (Source: Bloomberg) Full Story
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| Your Money |
Gasoline prices are expected to be relatively low this summer, so motorists might want to take to the road despite the dismal economy if the federal government projections hold. The Energy Information Administration said regular-grade gasoline is expected to average $2.23 a gallon during the April-through-September driving season, although it will likely fluctuate and could jump to more than $2.30 a gallon during the peak driving period in late summer. But that's still a bargain compared with last summer, when gasoline cost an average of $3.81 a gallon. (Source: Yahoo! Finance) Full Story
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