|
| Weekly Wrap Up |
Markets continued their rally this past week with the DOW ending up 362 points. Stocks were boosted on Monday when the National Association of Realtors reported that the March pending home sales index jumped 3.2%. Investors were expecting the index to hold steady, but not gain. Another report showed that construction spending rose 0.3% versus forecasts for a decline of 1.6%. On Tuesday Kraft Foods (KFT: Charts, News, Offers) reported higher quarterly earnings that topped estimates. Confidence on Wall Street received another boost after the ADP National Employment Report showed that private sector employment fell by 491,000 last month. Although the number was high, it was much better than the 708,000 jobs lost in March. It was also reported that American Express (AXP: Charts, News, Offers) JPMorgan Chase (JPM: Charts, News, Offers) and Bank of New York Mellon Corp. (BK: Charts, News, Offers) successfully passed the government’s stress test. On Thursday the Labor Department reported that the number of Americans filing new claims for unemployment fell to 601,000 last week from a revised 635,000 the prior week. Another report showed that first-quarter productivity rose 0.8%. In corporate news, General Electric Co. (GE: Charts, News, Offers) is launching a $6 billion health care initiative focused on improving health care for more people at reduced cost. Microsoft (MSFT: Charts, News, Offers) announced plans to purchase gaming company BigPark Inc. for an undisclosed amount. The big news on Friday was that Bank of America (BAC: Charts, News, Offers), Wells Fargo (WFC: Charts, News, Offers) and Citigroup (C: Charts, News, Offers) will need to raise almost $75 billion to remain stable if the economy falls into a deeper recession. The results still gave investors reassurance that the worst of the crisis in the financial sector is over. In other news, the United States Postal Service reported a $1.9 billion second quarter loss. Oil prices have been creeping up over the last week and as a result energy shares such as Chevron (CVX: Charts, News, Offers) Exxon Mobil (XOM: Charts, News, Offers) and ConocoPhillips (COP: Charts, News, Offers) were a few of the biggest advancers have been performing well. Crude oil closed the week at $58.63 a barrel. The dollar was lower for the week. More Market News
|
|
| Economic News |
U.S. mortgage rates rose in the latest week, rising from a record low matched during the previous week and countering government efforts to bring rates down to levels that will spur demand and help the hard-hit housing market begin to recover. Interest rates on U.S. 30-year fixed-rate mortgages rose to 4.84 percent for the week ending May 7, up from the previous week's 4.78 percent, equaling the all-time low, according to a survey released on Thursday by home funding company Freddie Mac (FRE: Charts, News, Offers) (Source: CNBC) Full Story
|
Companies in the U.S. cut fewer jobs in April, indicating the worst of the recession’s employment losses may have passed, a private report showed today. Payrolls fell by an estimated 491,000 workers last month, less than economists forecast and the fewest since October, figures from ADP Employer Services today showed. March’s reading was revised to show a reduction of 708,000 workers, down from a previous estimate of 742,000. Stabilization in consumer spending following the worst slump in three decades is stoking expectations that the recession will end in the second half of the year. (Source: Bloomberg) Full Story
|
This afternoon, Treasury, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency and the Federal Reserve will announce the results of an unprecedented review of the capital position of the nation's largest banks. This will be an important step forward in President Obama's program to help repair the financial system, restore the flow of credit and put our nation on the path to economic recovery. The president came into office facing a deep recession and a damaged financial system. Credit had dried up, forcing businesses to lay off workers and defer investment. Families were finding it difficult to borrow to finance a new house, buy a car or pay college tuition. Without action to restore lending, we faced the prospect of a much deeper and longer recession. (Source: The New York Times) Full Story
|
| Business News |
Specialty coffee retailers, now including the nation's biggest hamburger chain, are hoping new ad campaigns and price cuts that start this week will entice more latte lovers to take a sip. McDonald's Corp. (MCD: Charts, News, Offers)on Tuesday began a more than $100 million marketing campaign including TV, radio, print, online and outdoor ads for its McCafe line of espresso drinks. The drinks are now being rolled out to the chain's 14,000 U.S. locations. The ads portray the drinks as the antidote to a miserable day and aim to get consumers to see the beverages as affordable, quality alternatives to lattes at more gourmet chains like Starbucks Corp (SBUX: Charts, News, Offers). (Source: MSNBC) Full Story
|
CVS Caremark Corp. (CVS: Charts, News, Offers) said Tuesday that charges and higher costs outweighed a boost in the drugstore operator's pharmacy sales, pushing first-quarter profit down slightly. But overall, CVS' results showed some resilience to the tough economy, which has battered even sales of essential items like prescriptions. CVS said revenue from both prescriptions and discretionary items increased, with most products selling well aside from cough and cold treatments. That was a break with competitor Walgreen Co., which reported weaker sales of nonessential items in its most recent quarter as consumers cut back amid the recession. (Source: Yahoo! Finance) Full Story
|
Bank of America stock (BAC: Charts, News, Offers)stock rose as investors appeared comforted by reports that the bank has the means to cover a potential $34 billion shortfall in capital. The New York Times and The Wall Street Journal reported that regulators are telling the bank it needs about $34 billion in capital based on results of government "stress tests." The New York Times quoted a bank executive, while the Journal report cited unnamed people familiar with the situation. Bank of America was not immediately available to comment on the reports. (Source: USA Today) Full Story
|
|
| Technology Focus |
To judge by the green on my stock screens last Monday, you'd have thought Lam Research (LRCX: Charts, News, Offers) Research In Motion (RIMM: Charts, News, Offers), IBM (IBM : Charts, News, Offers)or perhaps a few other companies had some solution to the swine flu outbreak. As a friend commented with tongue in cheek: "Buy some RIMM. People will lose jobs, stay home and e-mail nonstop from RIMM-a-phones." In that way, I guess RIMM would be a "play" on both swine flu and unemployment. Certainly, there is nothing to commend the travel/tourism sector, as companies such as Royal Caribbean Cruises (RCL: Charts, News, Offers)and Carnival (CCL: Charts, News, Offers)will clearly be hurt by the flu outbreak (not that their businesses weren't already in trouble, thanks to the recession). (Source: MSN Money) Full Story
|
Apple (AAPL: Charts, News, Offers) already sells iPods through kiosks in airports and stores, but the company also has plans for units that will let people load up on digital movies and music on the go. AppleInsider dug up a patent detailing Apple's plan to develop a kiosk that will let owners of iPods, iPhones and other devices buy content through "virtual physical connection," meaning the units would eliminate the need for a user to have wireless access to download the content. Apple isn't commenting on the news, but the implications for travelers could be big. Placing an iTunes kiosk where there's limited Wi-Fi, such as in an airport or bus terminal or actually on the plane or bus, as Apple proposes could save them frustration (and huge roaming charges, if the kiosks were set up overseas). (Source: Forbes.com) Full Story
|
WHEN cars run on electric power they not only save fuel and cut emissions but also run more quietly. Ordinarily, people might welcome quieter cars on the roads. However, as the use of hybrid and electric vehicles grows, a new concern is growing too: pedestrians and cyclists find it hard to hear them coming, especially when the cars are moving slowly through a busy town or manoeuvring in a car park. Some drivers say that when their cars are in electric mode people are more likely to step out in front of them. The solution, many now believe, is to fit electric and hybrid cars with external sound systems. A bill going through the American Congress wants to establish a minimum level of sound for vehicles that are not using an internal-combustion engine, so that blind people and other pedestrians can hear them coming. (Source: The Economist) Full Story
|
| Your Money |
President Barack Obama vowed Monday to "detect and pursue" U.S tax evaders and go after their offshore tax shelters. In announcing a series of steps aimed at overhauling the U.S. tax code, Obama complained that existing law makes it possible to "pay lower taxes if you create a job in Bangalore, India, than if you create one in Buffalo, New York. " The president said he wants to prevent U.S. companies from deferring tax payments by keeping profits in foreign countries rather than recording them at home and called for more transparency in bank accounts that Americans hold in notorious tax havens like the Cayman Islands. (Source: Yahoo! Finance) Full Story
|
|
|
|
|
