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| Weekly Wrap Up |
Stocks closed mixed last week amid tumultuous energy prices. The Dow Jones Industrial Average and the New York Stock Exchange closed lower by 20.84 and 16.43 points accordingly. The Nasdaq and the S&P 500 both closed slightly higher by 12.08 and 6.5 respectively. Last Monday started off with a selloff all throughout the market as investors were concerned about the performance of financial stocks which proved investors were too conservative on their stocks. On Tuesday and Wednesday, stocks rallied and were on the rise only to close slightly lower on Thursday and Friday amid disappointing unemployment news. Nintendo Co.'s profit was higher than anticipated by analysts and Motorola (MOT: Charts, News, Offers) showed they turned a profit. Walt Disney Co. (DIS: Charts, News, Offers) also beat expectations but still turned up a loss. Among the losers on Friday last week included General Motors Corp (GM: Charts, News, Offers) having posted a $15.5 billion loss for the end of the second quarter. This was the company's third worst loss in its history. Oil prices fluctuated to beat the prices down of the rallying stocks and closing slightly higher than when it opened on Monday. The dollar continued to grow stronger throughout even as gold prices continued to descend. More Market News
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| Economic News |
The Bush administration expressed confidence Wednesday that the United States would be able to maintain its top-notch credit rating even as the government scrambles to find new ways of expanding debt sales to cope with soaring budget deficits. "It is a huge advantage to have that AAA-status and we are committed to that," Anthony Ryan, Treasury's acting undersecretary for domestic finance, told reporters as he unveiled plans for financing $171 billion in borrowing during the current July-September quarter, the second highest total on record. Those borrowing needs have exploded this year as the government has had to cope with a sagging economy and the need to finance more than $90 billion in economic stimulus payments made over the past three months to individuals in an effort to keep the country out of deep recession. (Source: Yahoo! Finance) Full Story
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An increasingly jobs-obsessed U.S. economy got some mostly bad news on Friday as the July unemployment rate jumped to 5.7%, with young people bearing the brunt of the losses. The level was higher than expected by economists, who were looking for 5.6% on average, although the number of jobs actually lost was not as severe as expected, coming in at 51,000 instead of the predicted 72,000. Still, coming a day after a troubling weekly unemployment report, the figures cast a pall. "Overall, the pace of employment growth indicates the economy is settling into a troubling malaise," said Peter Morici, a professor at the University of Maryland School of Business and a columnist for Forbes.com. Even though the economic stimulus plan boosted consumer spending in May and enabled gross domestic product to increase 1.9% in the second quarter, retail sales fell in June and aren't likely to rebound in July. (Source: Forbes.com) Full Story
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Prudence and virtue do not always receive their just desserts. Earlier this year, the prospects for the euro area’s economy seemed, if not bright, then less dim than for some other parts of the rich world. High oil prices and scarcer credit were bigger worries for gas-guzzling, debt-ridden America than for the high-saving, fuel-efficient countries of continental Europe. (source: The Economist.com) Full Story
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| Business News |
Connecticut sued three of the nation's leading credit rating firms Wednesday, alleging they gave artificially low credit ratings to cities and towns that ultimately cost taxpayers millions of dollars in unnecessary insurance and higher interest payments. State Attorney General Richard Blumenthal and state Consumer Protection Commissioner Jerry Farrell Jr. filed the lawsuit in Hartford Superior Court against Moody's Corp., Fitch Inc., and the McGraw-Hill Cos., the parent company of Standard & Poor's. The lawsuit accuses the agencies of establishing a dual ratings system that gives lower credit ratings to bonds issued by states, municipalities and other public entities than corporate debt. (Source: Forbes.com) Full Story
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Finance company GMAC LLC (GJM: Charts, News, Offers) posted a $2.48 billion second-quarter loss on Thursday, as rising gas prices forced it to write down sport-utility vehicle leases, while losses in its mortgage lending unit soared. The lender's fourth straight quarterly loss compared with a profit of $293 million a year earlier, and was larger than the $2.33 billion that GMAC lost in all of 2007. Results were hurt by the U.S. housing slump, tight credit markets, mounting customer defaults, falling vehicle sales, and the sale of mortgage assets at a loss. "This is the perfect storm for our business, and we see no meaningful signs of it blowing over," Chief Financial Officer Robert Hull said on a conference call. "The headwinds we face will persist for the balance of 2008, at least." (Source: Reuters) Full Story
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MasterCard (MA: Charts, News, Offers) plummeted as much as 12% Thursday after the company posted a huge quarterly loss, despite strong gains from its international business, following its settlement of antitrust litigation with American Express (AXP: Charts, News, Offers). Shares recouped slightly, though, and were recently down $21.64, or 8%, to $249.09. In the three months ended June 30, the Purchase, N.Y.-based electronic-payments company posted a loss of $747 million, or $5.74 a share, which includes a $1 billion after-tax charge related to its settlement. MasterCard announced that it had reached an agreement with American Express last month. Excluding the special item, MasterCard made $276 million, or $2.11 a share. In the year earlier period, MasterCard made $252 million, or $1.86 a share. Net revenue rose 25% to $1.2 billion, fueled the company said. (Source: TheStreet) Full Story
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| Technology Focus |
Verizon Communications Inc.'s (VZ: Charts, News, Offers) second-quarter earnings rose 12%, the company said Monday, while revenue was slightly shy of expectations and customers disconnected their landlines faster than before. The nation's second-largest telecommunications company earned $1.88 billion, or 66 cents per share, in the quarter ended June 30, up from $1.68 billion, or 58 cents per share, a year ago. Verizon said that excluding a merger-related item, it earned 67 cents a share, beating the average estimate of analysts polled by Thomson Financial by 2 cents. Revenue rose 3.7% to $24.1 billion from $23.27 billion a year ago. Thomson says analysts expected $24.2 billion. (Source: CNN Money) Full Story
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On July 29, shareholders in telecommunications equipment giant Alcatel-Lucent (ALU: Charts, News, Offers) finally got what many have been demanding for months: the resignations of Chief Executive Patricia Russo and Chairman Serge Tchuruk. Russo, the former boss of Lucent Technologies before its 2006 merger with Alcatel, said she'll step down before the end of the year, while former Alcatel chief Tchuruk will leave Oct. 1. "The company will benefit from new leadership aligned with a newly composed board to bring a fresh and independent perspective," Russo said, in announcing the changes, which will include a downsizing of its 14-member board. The telecom gear maker's latest quarterly results, also issued July 29, underscore just how tough a job the new leadership team will face. Alcatel-Lucent posted a $1.7 billion quarterly loss, including a $1.3 billion writedown on the North American wireless business inherited from Lucent. Quarterly revenues were down 5.2% year-on-year, to $6.5 billion, and the company warned that spreading economic malaise in Europe could further dampen sales. (Source: BusinessWeek) Full Story
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Sun Microsystems Inc. (JAVA: Charts, News, Offers), the world's fourth-largest maker of server computers, fell 12 percent in Nasdaq trading after forecasting results for the first quarter that fell short of analysts' estimates. Sun won't be profitable in the period ending Sept. 30, Chief Financial Officer Michael Lehman said on a conference call today. Analysts on average projected net income of 11 cents a share, according to a Bloomberg survey. Sales will post "slight decline'' from a year earlier, when they were $3.22 billion. Customers have curbed technology budgets to cope with an economic slump. Last quarter, U.S. clients in financial services, government and telecommunications all slowed spending, Lehman said. U.S. sales, which accounted for more than a third of revenue, fell 9.4 percent. (source: Bloomberg) Full Story
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| Your Money |
Ah, life with a newborn baby -- admiring those cute little hands and feet, picking out those cute little outfits -- and changing as many as 10 diapers a day? If you’re a new parent, you may be far less concerned about saving for college right this minute than you are about finding ways to pay for all those diapers. Who knew this one category could be this expensive? Don’t panic, though. The following tips can help. Full Story
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| Trivia Question |
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Charles Plank and Edward Rosinski together hold 159 US patents and have been inducted into the US National Inventors Hall of Fame. One of their key discoveries was that a synthetic catalyst could make this product yield far more of the end product than ever before. Which product, which end product?
(answer below) |
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| Market Overview |
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| DJIA |
11,348.06 |
-20.84 |
| S&P |
1,263.68 |
+6.5 |
| NYSE |
8,379.15 |
-16.43 |
| NASDAQ |
2,311.56 |
+12.08 |
| 10Yr |
3.96%% |
-0.00119 |
| Dollar |
73.40 |
+0.325 |
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| September 19, 2008 |
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| Trivia Answer |
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| Product - Crude oil, end-product - petrol |
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