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| Weekly Wrap Up |
The positive momentum continued in the stock market as major indices put in another solid week of summer gains. The blue chip DJIA rose 2.16% for the week and the broader S&P 500 gained 2.32%. Both these measures reached their highest levels since November when the financial crisis was at its peak. The week started off on the right foot as the positive stream of earnings announcements continued. The overall trend has been for companies to miss on revenue expectations but to beat on bottom line numbers as the cost cutting they have engaged in bears results. Increased car sales also drove enthusiasm for most of the week as the cash for clunkers program delivered a major boost to Detroit. The stock market traded sideways for the next 3 days alternating between modest gains and losses as investors took a step back from the rally to reevaluate. Also, the market was anxiously awaiting the jobs report on Friday, which showed fewer jobs were lost in July than expected and the unemployment rate actually dropped from 9.5% to 9.4%. This set the stock market on fire as the Dow rose 113.81 points on Friday. The popular opinion on the street now is that the recession has ended or will end soon and the debate has turned to how fast the recovery will be. The answer to the latter will determine the course of the stock market for the rest of the year. Major tech sites such as Twitter, Facebook were victims of a denial of service attack towards the end of the week resulting in service outages. The financial sector performed especially well last week with even AIG (AIG: Charts, News, Offers) joining in the party. The bailed out insurer reported better than expected results for the second quarter.
Looking ahead, this week will see a Fed meeting (the decision on interest rates will, as always, be announced Wednesday afternoon), trade deficit numbers will be released Wednesday and data on retail sales will be out Thursday. Friday will see the release of consumer sentiment data and retailers JC Penney (JCP: Charts, News, Offers) and Abercrombie & Fitch (ANF: Charts, News, Offers) will report earnings. More Market News
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| Economic News |
Why Job Creation Will Be 'Iffy' In The Coming Recovery
This is not your father's recession.
If domestic spending has been the engine of US economic growth in the past few decades, then the coming recovery -- and the job creation that comes with it -- won't be a smooth ride. Much like the American auto industry, the broader economy is undergoing a sea change.
Consumer spending, which typically accounts for 70 percent of economic activity, has been so shaken that it will take years to recover. And even then, the growth will be slow and painful, with subpar job creation. (Source: CNBC) Click here to read the full article
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In Jobless Rate Dip, a Partial Picture
Unemployment dipped in July for the first time in 15 months, but the jobs data released Friday also brought into focus the limits of the budding economic recovery. The new numbers raised hopes that the recession could be nearing an end. The unemployment rate fell to 9.4 percent, from 9.5 percent in June, and employers slashed 247,000 jobs, the slowest rate of decline in nearly a year.
For all the optimism in Washington and on Wall Street -- President Obama said the economy is "pointed in the right direction," and the stock market rose 1.3 percent -- some details in the report show that the labor market remains weak. (Source: Washington Post) Click here to read the full article
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Why desperation is a terrible motivating force for investors
Jack Ablin figured the phone calls would be coming.
Like many money managers, he was faced last winter with clients who wanted out of the stock market, period, as share prices collapsed to 12-year lows and the end of civilization seemed like a reasonable possibility. Now, with stocks up 50% or more since March -- and the sun still rising each morning -- "guys who pulled the plug want in again," says Ablin, who oversees $60 billion as chief investment officer at Harris Private Bank in Chicago.
"Sell low, buy higher" isn't the ideal investing strategy, but it's the one plenty of people have had to follow this year to keep their sanity.
Mentally, it was just too difficult for many investors to stay in the market as it crumbled. (Source: Los Angeles Times) Click here to read the full article
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| Business News |
U.S. auto sales bolstered by rush to dump "clunkers"
U.S. auto sales jumped to the highest level of 2009 in July as Americans rushed to take advantage of the government's "Cash for Clunkers" program, raising hopes that the battered sector is poised for recovery.
Ford Motor Co's sales rose 2 percent, its first month's gain over the previous year since late 2007 and the first for any of the major automakers in the U.S. market since the financial crisis exploded last fall.
Shares of the No. 2 automaker rose almost 7 percent and stoked gains for shares in auto suppliers.
Automakers credited the runaway success of the U.S. government's $1 billion "Cash for Clunkers" incentive program, allowing people to trade in old cars and trucks, with lifting industry-wide sales back above 11 million units on an annualized basis tracked by analysts. (Source: Reuters) Click here to read the full article
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Pepsi to Buy Bottlers With Sweetened $7.8 Billion Bid
PepsiCo Inc. (PEP: Charts, News, Offers) agreed to take control of its two biggest bottlers for about $7.8 billion, ending a three-month standoff and allowing the world's second-largest soda maker to save money by bundling snacks and drinks.
PepsiCo will pay $36.50 a share for Pepsi Bottling Group Inc. (PBG: Charts, News, Offers) and $28.50 a share for PepsiAmericas Inc., half in cash and half in stock, based on the July 31 closing price of PepsiCo, the companies said today in a statement. PepsiCo offered about $6 billion in April, a bid the bottlers rejected. PepsiCo shares rose 5.1 percent. (Source: Bloomberg) Click here to read the full article
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Derivatives Fuel Berkshire Hathaway's 14% Q2 Earnings Rise
Even Berkshire Hathaway Chairman and Chief Executive Warren Buffett has taken his lumps this recession, but Friday he announced his company's best quarterly results for nearly two years.
A rising stock market boosted the value of Berkshire's (BRK.B: Charts, News, Offers) equity investments and derivatives bets, more than offsetting the continuing recession-induced softness in many of the group's underlying businesses, notably the Geico auto insurance unit and some industrial units.
The company reported Friday a net income of $3.3 billion, or $2,123 a Class A share, for the three months to June 30, compared with $2.88 billion, or $1,859 a share, for the same period a year earlier. Earnings had previously fallen for six consecutive quarters. Earnings release. (Source: Forbes) Click here to read the full article
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Obama signs $2 billion ‘Cash for Clunkers’ extension
President Barack Obama has signed the $2 billion extension for the popular "Cash for Clunkers" program Friday morning after the U.S. Senate approved it on a 60-37 vote Thursday night.
The House overwhelmingly approved the measure on July 31 after the program ran through its $1 billion kitty in about a week. The measure would transfer money from other parts of the stimulus package.
The Car Allowance Rebate System, better known as Cash for Clunkers, offers a rebate of $3,500 to $4,500 for new car purchases when buyers turn in older, less fuel-efficient models.
Wisconsin's two senators -- Democrats Herb Kohl and Russ Feingold -- both voted to approve the extension. (Source: BizJournals) Click here to read the full article
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| Technology Focus |
Why Murdoch, the old media reactionary, is wrong to charge for content
I have never received so many calls from so many places across the world to talk about the momentous decision by Rupert Murdoch to charge people for access to his newspaper websites.
As so often with statements by the world's most famous media mogul, the announcement is being treated as the word of god. Where Rupert goes, said several TV and radio presenters, others are sure to follow.
Excuse me if I disagree with those slavish reactions, and with Murdoch and, incidentally, with Lionel Barber, the editor of the Financial Times, who also believes that paid-for content is inevitable. (Source: Guardian) Click here to read the full article
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Idiot's guide to why Twitter went down
Twitter has struggled for almost a week with DDoS also known as a Distributed Denial of Service Attack. This is not a technical document but a very basic description so you can understand what happened; why it's difficult to defend against and how a company might defend itself.
When you type a URL on your browser window, send a tweet, do a Google search, pretty much anything you do on the Internet - you send a request to a web site running on a computer server (think of it as a bigger computer than your home computer or laptop), the server processes your request and returns a result and sends it back to your browser --- So your Pandora music streams, your iTunes track downloads, tweet your followers, you find a date from Match.com or you get to listen to President Obama on CNN. (Source: SF Gate) Click here to read the full article
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Secrets of the Amazon best-seller list
It's almost a philosophical riddle: Do sales drive the best-seller list, or do best-sellers get all the sales because buyers see them on the list? As much as we'd like to believe that the crowd picks the best books, a strong presence in retail locations -- front-of-store positioning and tempting discounts -- still counts a great deal in determining how well a title sells.
Nonetheless, authors are in it for the glory, and the visibility and bragging rights of being a "best-seller" retains the glamour of years past.
In the old days, the New York Times best-seller list meant everything. But it doesn't come out until weeks after the sales take place, and it only updates on Sunday. Today's author needs a better, faster sounding board. And she's found it in Amazon's (AMZN: Charts, News, Offers) unblinking sales rank, the 24-hour barometer of book sales. (Source: MSNBC) Click here to read the full article
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| Your Money |
Gimme a Job-Or I'll Sue!
This week, we have a slew of readings on the employment situation: ADP. Challenger. The Labor Department. And Trina Thompson. Trina Thompson, who received her bachelor's degree in IT from Monroe College in New York City in April, is suing the school because she hasn’t found a job yet.
Claiming the university's "Office of Career Advancement" wasn't helping find her a job, she’s suing for her $70,000 tuition back -- plus $2,000 for emotional damages -- because of the stress I have been going through. (Source: CNBC) Click here to read the full article
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No More Perks: Coffee Shops Pull the Plug on Laptop Users
A sign at Naidre's, a small neighborhood coffee shop in Brooklyn, N.Y., begins warmly: "Dear customers, we are absolutely thrilled that you like us so much that you want to spend the day.."
But, it continues, "..people gotta eat, and to eat they gotta sit." At Naidre's in Park Slope and its second location in nearby Carroll Gardens, Wi-Fi is free. But since the spring of 2008, no laptops have been allowed between 11 a.m. and 2 p.m. weekdays and 10 a.m. and 3 p.m. weekends, unless the customer is eating and typing at the same time.
Amid the economic downturn, there are fewer places in New York to plug in computers. As idle workers fill coffee-shop tables -- nursing a single cup, if that, and surfing the Web for hours -- and as shop owners struggle to stay in business, a decade-old love affair between coffee shops and laptop-wielding customers is fading. In some places, customers just get cold looks, but in a growing number of small coffee shops, firm restrictions on laptop use have been imposed and electric outlets have been locked. The laptop backlash may predate the recession, but the recession clearly has accelerated it. (Source: Wall Street Journal) Click here to read the full article
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| Trivia Question |
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All paper money has imprinted on its face an initial and a letter that indicates its ''birthplace.'' Which historic city can claim rights to number ''1,'' letter ''A''?
(answer below) |
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| Market Overview |
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| DJIA |
9,370.07 |
+198.46 |
| S&P |
1,010.48 |
+23.00 |
| NYSE |
6,586.71 |
+162.43 |
| NASDAQ |
2,000.25 |
+21.75 |
| 10Yr |
3.854% |
+0.184 |
| Dollar |
79.11 |
-0.77 |
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| Boston |
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