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| Weekly Wrap Up |
After six weeks of gains, the major stock indices closed mixed on Friday. The Dow Jones, NYSE, and S&P all ended slightly down, while the NASDAQ posted a slight gain. The markets alternated between ups and downs all week, and although they ended on a strong note, it wasn't enough to erase the losses from earlier in the week. Bank shares were extremely volatile, as many of the major banks went through a "stress test" early in the week, but the sector eventually trended up after some positive comments from Treasury Secretary Timothy Geithner. Earnings reports were across the board, with Bank of American (BAC: Charts, News, Offers), Wells-Fargo (WFC: Charts, News, Offers), and Microsoft (MSFT: Charts, News, Offers) posting positive results, while reports from other companies including 3M (MMM: Charts, News, Offers), United Airlines (UAUA: Charts, News, Offers) and Merck (MRK: Charts, News, Offers) were more disappointing. In the auto industry, bankruptcy proceedings are underway for Chrysler, and General Motors (GM: Charts, News, Offers) announced they will be temporarily shutting down 13 plants and also will probably be unable to pay an upcoming $1 billion debt payment. Overall economic news was better than expected, with home sale prices rising, jobless claims no higher than expected, and a smaller than expected drop in durable goods orders. Crude oil futures ended the week slightly higher than the week before, closing at $51.56 a barrel. More Market News
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| Economic News |
A key gauge of future economic activity fell for a third month in March, showing the recession may persist through the summer, a nonprofit research group said Monday. "The recession may continue through the summer, but the intensity will ease," said Ken Goldstein, an economist at the Conference Board. That view is in line with the latest quarterly survey by the National Association for Business Economics (NABE), released Monday, which indicates the economy is at an inflection point, but not quite a turning point, said Sara Johnson, lead analyst on the survey and an economist at HIS Global Insight. The results, however, show the recession is abating, she says. (Source: USA Today) Full Story
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Sales of existing U.S. homes in March stayed near a four-month average, and prices rose from February, a sign the housing recession has stopped getting worse. While today’s figures from the National Association of Realtors showed purchases fell more than forecast to an annual rate of 4.57 million, economists noted that the sales level is hovering near the level it reached in November. The Labor Department said separately that U.S. jobless claims rose to 640,000 last week, matching analysts’ forecasts. Prices for home resales posted their biggest monthly gain since June 2005, and NAR chief economist Lawrence Yun said that some regions are seeing multiple bids on properties. Today’s housing figures indicate that the record-low mortgage rates fueled by the Federal Reserve are stanching the industry’s hemorrhage. (Source: Bloomberg) Full Story
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Demand for big-ticket manufactured goods and new home sales both were better than expected in March, raising hopes that the long slides in manufacturing and housing are slowly coming to an end. The Commerce Department said Friday that orders for durable goods dropped 0.8 percent last month, about half the 1.5 percent decline that economists expected. A rise in orders for commercial and military aircraft helped cushion weakness elsewhere. The small drop followed a 2.1 percent increase in orders in February. That was the first gain after six straight monthly declines. New home sales fell 0.6 percent last month to a seasonally adjusted annual rate of 356,000 from an upwardly revised February rate of 358,000, the department said. Economists surveyed by Thomson Reuters expected a sales pace of 340,000 units. The inventory of new homes for sale dropped 5 percent from February levels. (Source: Yahoo! Finance) Full Story
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| Business News |
Bank of America Corp. (BAC: Charts, News, Offers) posted strong first-quarter earnings Monday as higher revenue from the purchase of Merrill Lynch & Co. helped offset a surge in credit costs. Wall Street, concerned about banks’ continuing loan problems, looked past Bank of America’s profit and fell sharply. Bank of America’s results surpassed analysts’ expectations. But like other banking companies, it is still struggling with fallout from the recession, taking a hefty $13.4 billion provision for credit losses. The bank’s stock fell as the overall stock market slid. Although Wall Street was happy last week with better-than-expected results from JPMorgan Chase & Co. (JPM: Charts, News, Offers), Goldman Sachs Group Inc. (GS: Charts, News, Offers) and Citigroup Inc. (C: Charts, News, Offers), banking companies generally benefited during the quarter from unusually strong bond trading, a trend not expected to continue while loan problems persist. (Source: MSNBC) Full Story
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JetBlue Airways (JBLU: Charts, News, Offers)Thursday said it will "aggressively defend" itself against growing competition on routes and pricing from rivals including Southwest Airlines and Virgin America, after posting a first-quarter profit that topped Wall Street expectations. Aiming directly at the growing presence of Southwest at major eastern airports, JetBlue said it will launch four daily nonstop flights from Boston's Logan Airport to Baltimore/Washington International Thurgood Marshall Airport (BWI) on Sept. 9. Dallas-based Southwest last week announced plans to start flying that route and expects to begin service on Oct. 1. (Source: USA Today) Full Story
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Profits at American Express (AXP: Charts, News, Offers) declined by more than half in the latest quarter, the company said Thursday, as spending by cardmembers slowed and credit troubles continued to mount. The credit card giant also said, however, that it was hoping to soon pay back money it received from the government as part of last fall's financial rescue package. AmEx said it earned $437 million, or 31 cents a share during the first quarter ending in March, down 56% from $991 million, or 85 cents, during the same period a year ago. Revenues came in at $5.9 billion, down 18% from a year ago. (Source: CNN Money) Full Story
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| Technology Focus |
Oracle Corp. (ORCL: Charts, News, Offers) snapped up computer server and software maker Sun Microsystems Inc. (JAVA: Charts, News, Offers) for $7.4 billion Monday, trumping rival IBM Corp.'s attempt to buy one of Silicon Valley's best known -- and most troubled -- companies. The deal would end Sun's 27-year history as Silicon Valley's brash independent and shake up the computing industry. It comes after a monthlong drama that entered its final chapter last week. IBM (IBM: Charts, News, Offers) had retracted an earlier buyout offer for Sun after the two sides couldn't agree on key details. Last Thursday, Sun reached out to longtime business ally Oracle to make a bid, two people familiar with the discussions told The Associated Press. These people spoke on condition of anonymity because the details of the talks were considered confidential. (Source: Yahoo Finance) Full Story
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Apple Inc. (AAPL: Charts, News, Offers) said Wednesday that a surge in iPhone sales helped offset a decline in Mac sales as the company reported quarterly profit and revenue that thrashed Wall Street forecasts.
The Cupertino, Calif.-based company reported a 15% jump in net income to $1.21 billion, or $1.33 per share, in its second quarter. Analysts polled by Thomson Reuters forecasted earnings of $1.09 per share.
iPhone sales more than doubled, boosting the company's overall revenue, which rose 8.7% to $8.2 billion during the second quarter. That topped analysts' forecast for sales of $7.96 billion. (Source: CNN Money) Full Story
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Amazon.com (AMZN: Charts, News, Offers) surprised Wall Street Thursday afternoon with strong earnings growth for the first quarter as the online retailer was able to maintain strong sales growth without having to resort to massive price cuts in the slowing economy.
The online retail giant saw its shares rise more than 2% in after-hours trading Thursday. The stock had already surged 60% since the company's last quarterly report in January, when it also reported surprisingly strong earnings results for what was a relatively weak holiday season for retailers.
Amazon also said it saw particularly strong demand for its Kindle e-reader device in the recent quarter. (Source: MarketWatch) Full Story
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| Your Money |
Just in time for Earth Day on Wednesday, the IRS published detailed rules to help taxpayers take advantage of the many new incentives for going 'green' at home and on the road.
In the American Recovery and Reinvestment Act of 2009, signed into law in February, there are at least thirteen sections designed to encourage Americans to reduce reliance on fossil fuels. Some of the new laws (or extensions of old laws) apply to individuals, others to businesses. We'll focus on the personal credits here.
As usual with the U.S. Congress, effective dates for implementing the energy reduction systems are all over the calendar. (Source: MarketWatch) Full Story
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Interview with investing superstar Bruce Berkowitz in outstanding investor digest. Full Story
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