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| Weekly Wrap Up |
Stocks ended the week mixed from the week before upon data indicating that the US economic slump was not as bad as initially feared. Monday started with the Dow Jones Industrial Average lowered by about 200 points, due notably to financials like American International Group (AIG: Charts, News, Offers) and JPMorgan (JPM: Charts, News, Offers). In the following trading session, light trading created both negative and positive environments on Tuesday but when combined with mixed but better-than-expected economic data on Wednesday, the markets rallied on Wednesday and Thursday before closing downwards again on Friday. Dell (DELL: Charts, News, Offers) also missed analysts' expectations and dealt the markets a blow in Friday’s session. Oil also fluctuated but ended the week just slightly higher than what it originally closed at last week. Gold prices did not move with oil however as gold had a general upward trend for the week only to close lower on Friday. As for the dollar, it had moved in both directions for the week but ended up closing slightly higher. Looking forward and anticipating what is to come, commodities will be watched more closely after Hurricane Gustav’s aftermath as well as on views of how the rest of the world’s economies are being affected by the current state of the US economy. More Market News
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| Economic News |
Personal income fell in July by the biggest drop in 3 years after surging the prior two months because of $90 billion in economic stimulus payments. The Commerce Department said Friday that individual income decreased by 0.7% in July after a 0.1% jump in June and a 1.8% increase in May. Economists polled by Briefing.com were expecting income to fall by 0.2% in July. Economists were expecting a decrease in income following the temporary boost provided by the stimulus checks. But the sharp decline was the largest drop off since August of 2005, when personal income plunged by 2.3%, according to the Bureau of Economic Analysis. While personal income fell, disposable personal income sank even further in July. (Source: CNN Money) Full Story
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The number of troubled U.S. banks leaped to the highest level in about five years and bank profits plunged by 86 percent in the second quarter, as slumps in the housing and credit markets continued. Federal Deposit Insurance Corp. data released Tuesday show 117 banks and thrifts were considered to be in trouble in the second quarter, up from 90 in the prior quarter and the biggest tally since mid-2003. The FDIC also said that federally-insured banks and savings institutions earned $5 billion in the April-June period, down from $36.8 billion a year earlier. The roughly 8,500 banks and thrifts also set aside a record $50.2 billion to cover losses from soured mortgages and other loans in the second quarter. "Quite frankly, the results were pretty dismal," FDIC Chairman Sheila Bair said at a news conference, but they were not surprising given the housing slump, a worsening economy, and disruptions in financial and credit markets. (Source: BusinessWeek) Full Story
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Americans' confidence in the economy got a better-than-expected boost in August, thanks to lower prices at the gas pump. The Conference Board, a private research group, said Tuesday that its consumer confidence index rose to 56.9, from a revised 51.9 in July. Analysts had expected a reading of 53. That marked the second month in a row that sentiment improved, after a six-month slide since January. However, the level still remains about half of what it was a year ago. The Conference Board's Present Situation Index, which measures shoppers' current assessment of the economy, declined to 63.2 from 65.8 in July. But the Expectations Index, which measures their outlook over the next six months, increased to 52.8 from 42.7 in July. (Source: USA Today) Full Story
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| Business News |
Sears Holdings Corp. (SHLD: Charts, News, Offers) reported a 62 percent drop in second-quarter profit as the retailer continues to struggle to attract customers to its stores despite a high-stakes restructuring. The company also delivered a downbeat outlook predicting that its sales and gross profit margins will continue to be pressured amid a challenging economic environment. The Hoffman Estates, Ill.-based retailer, which operates Kmart and Sears, Roebuck and Co. stores, said Thursday that it earned $65 million, or 50 cents per share, in the three-month period ended Aug. 2. That compares with $173 million, or $1.15 per share, in the year-ago period. The second-quarter 2008 results included the positive impact of the reversal of a $62 million reserve because of the overturning of a Feb. 2, 2007 adverse jury verdict related to the redemption of certain Sears, Roebuck and Co. bonds in 2004. (Source: Yahoo! Finance) Full Story
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Dillard's Inc. (DDS: Charts, News, Offers), the department store chain operator, said Wednesday its loss widened in the second quarter as its sales fell. Company chief executive William Dillard II said a weakening economy led to the sales drop. Dillard said the company will keep closing underperforming stores and cut back on expenses. The Little Rock-based company lost $38.3 million, or 51 cents a share, in the quarter ended Aug. 2 compared with a loss of $25.2 million, or 31 cents a share, a year ago. Included in the latest results is a gain of $11.2 million, or 15 cents a share, after taxes mostly from the sale of a company airplane, offset in part by asset impairment and store closing charges of $6.1 million, or 8 cents per share. (Source: Forbes.com) Full Story
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BankUnited Financial (BKUN.A: Charts, News, Offers) shares slumped more than 16% Wednesday after at least one analyst downgraded the troubled bank on concerns about liquidity and capital adequacy. David Bishop, an analyst at Stifel Nicolaus, cut his rating to sell from hold on the Coral Gables, Fla.-based company. The downgrade comes just two days after BankUnited disclosed in its quarterly filing with the Securities and Exchange Commission that it is under regulatory agreement with the Office of Thrift Supervision. Regulators are telling the bank, which holds $14 billion in assets, to raise at least $400 million in capital or submit an alternative capital plan. (Source: TheStreet) Full Story
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| Technology Focus |
The volatile stock market and the tepid economy aren't particularly conducive to long-term perspectives. Investors, if anything, put even more of an emphasis on short-term performance -- which makes Amazon.com (AMZN: Charts, News, Offers) more of an odd man out in this market. Amazon has always been, by design, a long-term performer -- an ugly duckling that was certain to grow into a magnificent swan if you just waited long enough. (Source: TheStreet.com) Full Story
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Broadcom Corp. (BRCM: Charts, News, Offers), the chipmaker for flat-panel TVs, agreed to buy a unit of Advanced Micro Devices Inc. (AMD: Charts, News, Offers) for $192.8 million to gain semiconductors used in lower-priced models likely to be in demand for digital broadcasting. Broadcom, of Irvine, California, inherits more than 530 employees and gets access to customers including Sony Corp. (SNE: Charts, News, Offers) and Samsung Electronics Co., the world's biggest TV maker. The deal should close in the fourth quarter, Broadcom said in a statement. (Source: Bloomberg) Full Story
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U.S. computer maker Dell Inc. (DELL: Charts, News, Offers) Friday acknowledged deteriorating economic conditions in Asia after posting an unexpected drop in second-quarter earnings and said it will watch closely for more signs of weakness in the region. For now, Dell said problems stemming from an economic downturn in Asia have not materialized. "I haven't changed my level of optimism (for Asia)," Stephen Felice, Dell's Asia-Pacific Japan president, said during a conference call. (Source: CNN Money) Full Story
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| Your Money |
We all know people who have emerged from serious financial setbacks with smiles on their faces and songs in their hearts. Whether beset by bankruptcy, foreclosure or divorce, these folks insist they're so much better off now than they were pre-disaster. And, emotionally, perhaps they are. The effects on their finances, though, are likely to linger. Serious financial setbacks do more than send your blood pressure soaring. They can destroy wealth and wreak havoc on your credit. (Source: MSN Money) Full Story
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