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| Weekly Wrap Up |
The week started off on the right foot as stocks jumped well into positive territory on Monday. The Dow Jones Industrial Average added 221.11 points while the S&P and Nasdaq added 23.73 points and 54.35 points respectively. Investors were encouraged by the day’s various manufacturing sector reports that seemed to indicate that the economy is progressing towards a turnaround. Although, Nasdaq officials did announce that CitiGroup (C: Charts, News, Offers) and General Motors (GM: Charts, News, Offers) will be removed from the index’s stock listings on June 8th. Stocks managed to creep into positive territory again on Tuesday with a last minute rally. Positive news from the housing market helped propel the markets into nominal gains. In other good news, various automakers reported better-than-expected sales figures on Tuesday, most notably Ford (F: Charts, News, Offers). However, the markets’ positive momentum was halted on Wednesday as stocks retreated back into negative territory. Reports of under achieving economic data coupled with Federal Reserve Chairman Ben Bernanke’s warning of the economy’s progress seemed to pull down any upward movement during the session. In corporate news, Williams-Sonoma (WSM: Charts, News, Offers) announced a first quarter loss of $18.7 million, and TiVo Inc. (TIVO: Charts, News, Offers) was awarded $103 million more in its patent infringement battle with EchoStar (SATS: Charts, News, Offers). Stocks battled back into the green on Thursday with the energy, financial, and technology sectors leading the charge. The Dow Jones closed the session up 74.96 points while the Standard and Poor’s 500 Index added 10.70 points and the Nasdaq jumped up 24.10 points. Investors seemed willing to overlook a dip in May’s overall retail sales numbers, which included clothing chains Gap (GPS: Charts, News, Offers) and Abercrombie & Fitch (ANF: Charts, News, Offers). Intel (INTC: Charts, News, Offers) reported that it will buy software developer Wind River for $884 million. Friday capped the week off with mixed results. The Labor Department’s job report for May showed that 345,000 jobs were cut as oppose to the predicated 520,000, but the report did not seem to be convincing enough to spark a rally in the markets. U.S. light crude oil for July delivery fell 59 cents to $68.22 a barrel on the New York Mercantile Exchange, and the yield on the benchmark 10-year note went up to 3.86% from 3.71%. The dollar gained versus the euro and yen. More Market News
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| Economic News |
How do you feel about the economy today? A little worse, maybe, than you did two weeks ago? But a lot better than you did in March? Things feel better to me too, but I can’t explain exactly why. It might be because for most of last fall, I walked around in an apocalyptic trance, and you can’t keep that up forever. I was bewildered by the breadth and intensity of the financial crisis. Among other odd behavior, I convinced myself that if I learned everything there is to know about things like credit-default swaps and "Pick a Pay" Option ARMS, I could defend myself against a dysfunctional future. (Source: New York Magazine) Full Story
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Fewer U.S. workers filed new claims for jobless benefits for a third straight week last week and productivity rose faster-than-expected in the first quarter, data showed on Thursday, supporting budding hope the recession was losing force. The Labor Department said first-time applications for state unemployment insurance benefits fell 4,000 to 621,000 in the week ended May 30. In addition, it said the number of people still on the benefit rolls after an initial filing fell for the first time since the start of the year in the prior week. (Source: Reuters) Full Story
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By the time the U.S. government unveiled its Public Private Investment Partnership in March, the toxic loans and securities clogging bank balance sheets had become "legacy assets." What if deficit hawks took the same tack and marketed the $787 billion fiscal stimulus as "legacy debt?" "The $787 billion the U.S. Treasury will be borrowing or confiscating from you via taxation will saddle future generations with a legacy of debt," the press release might read. "Your children and grandchildren can look forward to higher taxes, a lower standard of living and minimal government support in their old age." (Source: Bloomberg) Full Story
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| Business News |
Deere & Co. (DE: Charts, News, Offers) said Monday its board had elected Samuel Allen to succeed Robert Lane as chief executive of the farm equipment maker starting Aug. 1. Allen, 55, has also been elected president, chief operating officer and a board member of the world's largest maker of agricultural equipment, effective Monday. He will succeed 59-year-old Lane as board chairman. Moline, Ill.-based Deere has seen its fortunes fall in recent months as the global economic crisis undermines demand for its products. Last month, the company reported a 38% drop in second-quarter profit as farmers and other customers cut spending on tractors, mowers and construction equipment. It also slashed its profit forecast for the second time this year. (Source: USA Today) Full Story
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Toll Brothers Inc. (TOL: Charts, News, Offers) said Wednesday it trimmed its losses in the second fiscal quarter and is seeing a pickup in the number of homebuyers who are ready to put down deposits. New home buyers are responding to falling prices and low interest rates, which have made homes more affordable than they have been in years, CEO Robert Toll said in a statement. Since late March, Toll has seen an increase in homebuyer deposits during nine of the past 11 weeks, compared to weekly figures from fiscal 2008. Throughout the industry, major homebuilders say they are seeing pockets of strength and even some signs that prices are stabilizing. (Source: Yahoo! Finance) Full Story
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General Motors Corp (GM: Charts, News, Offers) has reached a preliminary agreement to sell its Saturn brand to Penske Automotive Group in a deal that could preserve more than 350 dealerships and 13,000 jobs, the companies said on Friday. The tentative deal for Saturn, which the companies hope to complete in the third quarter, would be the second sale of a brand announced by GM since it filed for bankruptcy on Monday in an effort to drop unprofitable lines and leave court protection as a leaner company. Penske, the No. 2 U.S. auto dealership group, would acquire rights to the Saturn brand and other assets, while bankrupt GM would continue production of the Saturn Aura, Vue and Outlook on a contract basis if the transaction were completed, GM and Penske said. Terms were not disclosed. (Source: Reuters) Full Story
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| Technology Focus |
"We live in an era of rapid innovation." I'm sure you've heard that phrase, or some variant, over and over again. The evidence appears to be all around us: Google (GOOG: Charts, News, Offers), Facebook, Twitter, smartphones, flat-screen televisions, the Internet itself. But what if the conventional wisdom is wrong? What if outside of a few high-profile areas, the past decade has seen far too few commercial innovations that can transform lives and move the economy forward? What if, rather than being an era of rapid innovation, this has been an era of innovation interrupted? And if that's true, is there any reason to expect the next decade to be any better? (Source: BusinessWeek) Full Story
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Hewlett-Packard (HPQ: Charts, News, Offers) wasn't winning much new tech business with Allstate Insurance (ALL: Charts, News, Offers) until Thomas Hogan came calling. Hogan, the former chief of dot-com software firm Vignette, took over HP's software unit in 2006 and quickly launched a turnaround. He also began lavishing attention on customers like Allstate. The charm offensive paid off: Catherine Brune, Allstate's technology chief, says HP is now "winning more and more" software business from Allstate, some related consulting business--and even personal computer sales. A few months ago Allstate replaced Dell (DELL: Charts, News, Offers) PCs with HP machines for its 39,000 employees. (Source: Forbes) Full Story
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| Your Money |
Strong recent results mask plenty of pitfalls.Their unsexy name aside, there's something undeniably seductive about equity-indexed annuities (EIA). Sold by insurance companies, these combination investment and insurance products promise investors a piece of any stock market gains while limiting downside when the market tanks. At the end of the investment, or accumulation, period, the annuity's owner is typically offered either a lump-sum distribution of the proceeds or regular payments based on the ending balance. (Source: Forbes) Full Story
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Target-date funds, once considered the be-all, end-all mutual-fund product for investors who don't have the time or inclination to build their own retirement portfolios, are about to be scrutinized by federal regulators. Given the rising popularity of these funds and their dismal performance last year, that's a good thing. Regulators from the Labor Department's Employee Benefits Securities Administration and the Securities and Exchange Commission will hold a public hearing on June 18 "to examine the need for additional guidance given the importance of these investments to the retirement savings of investors." (Source: MarketWatch) Full Story
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