|
| Weekly Wrap Up |
Stocks ended last week with disappointing results. While most of the market struggled during the shortened session, blue chips saw a small gain. Unfortunately, the DOW and NASDAQ failed to close within 20% of March and October highs, producing further evidence of a bear market. The European interest rate saw an increase, and the jobs report was not too reassuring either. The week opened up with a promising start as crude oil prices were falling. However, the decreasing oil prices did not last long. In fact, the price for crude oil only went up the rest of the week, closing at a high of over $145 a barrel before the holiday weekend. There was a brief bounce back in the market midweek, but the increasing oil prices seemed to smother the market’s midweek push. In other big news, General Motors (GM: Charts, News, Offers) managed to reacquire its top sales spot for the month of June, and GE’s (GE: Charts, News, Offers) NBC Universal unit agreed to lead a group that will buy The Weather Channel for an estimated $3.5 billion. More Market News
|
|
| Economic News |
The U.S. economy lost more than 60,000 jobs last month, as Treasury Secretary Henry M. Paulson Jr. warned in London that record-high oil prices will likely mean a longer economic slowdown with no "quick fixes" in sight. New data from the Department of Labor showed that a steady erosion of jobs that began in January continued for a sixth month. In addition to the 62,000 jobs lost in June, the department said the employment decline in April and May was larger than first estimated. Overall, the economy has lost about 438,000 jobs since the first of the year. The unemployment rate, which is affected by the number of people seeking work and other factors, remained steady at 5.5 percent. (Source: Washingtonpost.com) Full Story
|
The Federal Reserve has auctioned another $75 billion in loans to squeezed banks to help them overcome credit problems and announced it will provide a fresh batch of the loans this month. The central bank on Tuesday released the results of its most recent auction - the 15th since the program began in December. It's part of an ongoing effort to ease financial turmoil and credit stresses. In the latest auction, commercial banks paid an interest rate of 2.340 percent for the 28-day loans. There were 77 bidders. The Fed received bids for $90.88 billion worth of the loans. The auction was conducted on Monday with the results made public on Tuesday. The Fed also said it will conduct two auctions in July. Banks will have an opportunity to bid on a slice of $75 billion in short-term loans in each auction. (Source: Forbes.com) Full Story
|
The euro fell further against the dollar Monday as markets continued to mull less-than-hawkish comments from the European Central Bank on its future interest rate course, and industrial production numbers are expected in Britain and Germany. The 15-nation euro bought $1.5617 in European morning trading, down from its level of $1.5699 in New York late Thursday. Markets in the U.S. were closed Friday for the Independence Day holiday. The European Central Bank raised its benchmark interest rate by a quarter percentage point to 4.25% on Thursday to combat rising inflation in the euro zone. (Source: CNN Money) Full Story
|
| Business News |
Brewer InBev turned up the heat in its $46 billion bid for Anheuser-Busch (Bud: Charts, News, Offers), announcing Monday that it will attempt to remove the company's entire board. An alternate board, which would include Adolphus Busch IV, the uncle of Anheuser CEO August Busch IV, will give shareholders "a direct voice" in the takeover, InBev said. InBev plans to file a preliminary consent solicitation with the U.S. Securities and Exchange Commission Monday, asking Anheuser's board to consult shareholders over the firing of 13 current board members. (Source: CNN Money) Full Story
|
A fugitive hedge-fund swindler who faked suicide on a Hudson River bridge and went on the run to avoid a prison sentence surrendered Wednesday in Massachusetts, the U.S. attorney’s office said. Samuel Israel turned himself into Southwick, Mass., police between 9:15 and 9:30 a.m. Wednesday, said Suzanne Anderson, police Chief Mark Krynicki’s assistant. She said he was being processed at Southwick Police headquarters and referred all further questions to federal authorities. U.S. Marshal Joseph Guccione in Manhattan said law enforcement authorities were aggressively pursuing Israel when he surrendered in Southwick, about 95 miles away from the federal prison in Ayer, Mass., where Israel was supposed to have reported last month. (Source: MSNBC) Full Story
|
General Motors Corp. (GM: Charts, News, Offers) soundly beat Toyota Motor Corp. in June to retain its traditional U.S. sales lead, but GM sales still dropped 18.2 percent during a dismal month for most large automakers. Toyota's (TM: Charts, News, Offers) U.S. sales fell 21.4 percent, while Ford Motor Co. said it sales tumbled nearly 28 percent. GM's shares bounced nearly 6 percent higher in afternoon trading Tuesday after sinking to their lowest level in more than a half century during Monday's session. The nation's biggest automaker on Tuesday reported selling 262,329 vehicles for the month, compared with Toyota's 193,234. Some industry analysts had expected Toyota to beat GM in the U.S. for the first time, but both companies were hurt by a sluggish economy and poor sales of trucks and sport utility vehicles. Toyota car sales fell 9.4 percent in June while its truck sales were off 38.8 percent. (Source: Yahoo! Finance) Full Story
|
|
| Technology Focus |
Yahoo Inc. (YHOO: Charts, News, Offers) began pressing a case to major shareholders Monday that its board and management deserve a chance to prove they made the right move when they rejected a $47.5 billion takeover offer from Microsoft Corp (MSFT: Charts, News, Offers). The missed opportunity to sell to Microsoft infuriated many Yahoo shareholders, prompting activist investor Carl Icahn to agitate for replacing Yahoo's nine directors and reviving negotiations with Microsoft. If he gains control of the board, Icahn intends to fire Yahoo co-founder Jerry Yang as chief executive. In response, Yahoo has assembled a 32-page shareholder presentation to elaborate on the points it has been emphasizing since Microsoft withdrew its bid May 3. (Source: Yahoo! Finance) Full Story
|
Normally, a company that hasn't done anything significantly different in its first five years of being a publicly traded company is usually a good candidate to short. While we don't discount the importance of being able to do one thing well, most successful public companies have to do several things well if they are going to grow in this highly competitive business world. Netflix (NFLX: Charts, News, Offers) continues to deliver movies and does it better than anyone else. But should anyone invest in a company that only does one thing well? (Source: Stockhouse) Full Story
|
Left at the altar by Blockbuster (BBI: Charts, News, Offers), Circuit City Stores (CC: Charts, News, Offers) will face some tough sledding in the near future as the poor U.S. economy constrains consumer spending, but should be able to avoid bankruptcy court for the time being. Circuit City, whose shares are now trading at around 20-year lows, might seek a deal with another buyer but must also focus on turning around its business and luring customers back into its stores. "The biggest concern that continues is the ability of the company to be successful in its turnaround with the incessant economic headwinds," said Scott Tilghman, an analyst with Soleil Securities. (Source: Reuters.com) Full Story
|
| Your Money |
When hackers infiltrated Citibank ATMs at 7-Eleven stores, they revived the fear of everyone looking to get out a few bucks for a Slurpee - is using this machine safe? Experts say the answer is that an ATM's safety depends on where it is. If it's at a bank, an ATM is somewhat safer than it is in a public place, such as a ballpark, a train station or a convenience store. "You should never use ATM machines at convenience stores if you can help it because those are much more susceptible to tampering," added Avivah Litan, a security analyst with the Gartner research firm. While consumers can't do much when hackers break into back-end computers that approve cash withdrawals in order to steal PIN codes - such as happened during last year's Citi ATM breach - the odds are slim that it will happen to you. (Source: CNN Money) Full Story
|
If you live in the United States and read the ever shrinking newspapers or watch the increasingly repetitive comments on television, you already know that original thinking is in very short supply. You and I have been told over and over and over again that the U.S. is falling by the wayside as a global kingpin and that we had better learn from Great Britain as to how to conduct ourselves as a fallen leader in the decades to come. Surely, the BRIC countries: Brazil, Russia, India and China are taking over the future, if not the world. Recent events, however, indicate that this may not be the right investment conclusion at all. Unless you live under a rock, we all know that the investment world is off to a poor start in this new millennium. We ended 2000 at 10,786 on the Dow, and as of July 2, 2008, we are at 11,215, almost unchanged 7.5 years later. In 2005-2007, many overseas indexes rose meteorically. (Source: Forbes.com) Full Story
|
|
|
|
|
