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| Weekly Wrap Up |
Last week, the markets changed directions once again. After two weeks of gains, and some early gains on Monday and Tuesday, the major indices fell to a loss by the end of the week. Despite the weekly loss, analysts have still continued to point to various economic reports as indicators that the economy is turning around. Leading economic indicators rose for the fifth month in a row, unemployment benefits claims fell, home prices rose 0.3%, and new home sales rose as well (although not as much as had been anticipated). A few economics reports, however, were not as promising, including a drop in existing home sales. Corporate news was mixed, ranging from positive earnings reports from CarMax (KMX: Charts, News, Offers), Carnival (CCL: Charts, News, Offers), and General Mills (GIS: Charts, News, Offers), disappointing earnings reports from Lennar Corp. (LEN: Charts, News, Offers), Research in Motion Ltd. (RIMM: Charts, News, Offers), and Rite Aid Corp. (RAD: Charts, News, Offers), and news of executives stepping down at Wells Fargo & Co. (WFC: Charts, News, Offers) and Aeropostale (ARO: Charts, News, Offers). In M&A news, the biggest acquisition news was from Dell (DELL: Charts, News, Offers), who is spending $3.9 billion to acquire Perot Systems (PER: Charts, News, Offers). Meanwhile, the G-20 Summit took place Thursday and Friday, to make decisions that should benefit the global economy. Crude oil futures continued to fall throughout the week, dropping about $7 a barrel to close Friday at $65.70 a barrel. More Market News
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| Economic News |
Whole lot of clucking going on
Existing-home sales are falling! Existing-home sales are falling! Oh my, our housing recovery is doomed! Take shelter everyone, please!
After four straight months of increases, sales of existing homes in the United States dropped 2.7% in August. That caught the Henny Penny economists, who had been predicting another gain, off guard and sent the Foxy Loxy Realtors, who are demanding an extension of the tax credit for first-time home buyers, into a tizzy.
It will surely bring out the Chicken Little pundits who assume any signs of recovery are illusory, and that the fragile housing market is ready to resume its free fall at any moment. But that's pretty much Cocky Locky talk. (Source: MarketWatch) Click here to read the full article
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Applications for Jobless Benefits Dip
The job loss situation is slowly easing. Initial claims for unemployment benefits dropped to 530,000 for the week ending September 19, the U.S. Department of Labor announced Thursday morning. The drop was unexpected by all but a few of the 44 experts surveyed by Bloomberg News. The median estimate for new claims by those experts was 550,000.
The four-week moving average - which smoothes out the volatility of the weekly figures - was 553,500, a decrease of 11,000 from the previous week.. Continuing claims for the week and the four-week average for continuing claims also dropped, with the latter now at 6.187 million. About 40% of American workers are eligible for unemployment compensation. (Source: Daily Kos) Click here to read the full article
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Federal Reserve leaves interest rates near zero
The Federal Reserve said Wednesday that it would keep short-term interest rates near zero for the foreseeable future, even though the central bank acknowledged that the economy was recovering from its long downturn.
The announcement after a two-day Fed meeting makes clear that the agency is in no hurry to raise interest rates despite concerns that the federal government's soaring deficits and the Fed's extraordinary stimulus measures will eventually drive up inflation.
The Fed's policy-setting committee said evidence suggested "economic activity has picked up," compared with its Aug. 13 assessment that the economy was merely "leveling out." (Source: Los Angeles Times) Click here to read the full article
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| Business News |
GM restores 3,000 jobs, prepares to raise output
General Motors Co (GM: Charts, News, Offers) said on Tuesday it planned to restore about 3,000 jobs at U.S. assembly plants and related facilities and is getting set to raise North American production by up to 45 percent next year.
GM said it would add shifts at three assembly plants as the automaker consolidates production from plants that are closing or retooling, a process that would not add immediately to its production schedule for 2009.
But GM expects to increase North American production to about 2.8 million vehicles in 2010, up about 40 percent to 45 percent from 2009. GM had sharply curtailed North American production around its government-guided reorganization. (Source: Reuters) Click here to read the full article
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Airlines Set New 'Premium' Charge For Holiday Travel
A new $10 surcharge for three popular travel dates this winter could make visiting family more expensive. American Airlines (AMR: Charts, News, Offers) imposed a $10 charge on domestic flights for Nov. 29 (the Sunday after Thanksgiving) and on Jan. 2-3, the weekend that many people will be returning home from Christmas and/or New Year’s holiday celebrations. United (UAUA: Charts, News, Offers) matched the new charge late Thursday, and on Friday Delta (DAL: Charts, News, Offers) and US Airways (LCC: Charts, News, Offers) said they would follow.
Continental (CAL: Charts, News, Offers), Southwest (LUV: Charts, News, Offers), JetBlue (JBLU: Charts, News, Offers), Alaska Airlines (ALK: Charts, News, Offers), and AirTran (AAI: Charts, News, Offers) have not matched the surcharge; Frontier is studying it. "We are focused on providing our passengers the best value in the sky, not taking advantage of them on some of the busiest travel days of the year," AirTran spokesman Christopher White said. (Source: BusinessWeek) Click here to read the full article
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Ford unveils Indian-built Figo, foresees return to profitability
Ford Motor Co. (F: Charts, News, Offers) is on a roll. The lone U.S. car company not to have taken a government bailout, Ford said Wednesday it foresees a return to profitability within two years, as it unveiled an inexpensive compact car to be made in India.
The Figo, which apparently is Italian slang for "cool," will go on sale in India beginning early next year, Ford officials said during a press conference in Delhi. There are also plans to export the four-door hatchback to other nations in Asia. Though Ford didn't disclose retail prices, it is expected the Figo will sell for about $6,000 to $8,000. (Source: Daily Finance) Click here to read the full article
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Rite Aid posts smaller 2Q loss, cuts forecast
Rite Aid Corp. (RAD: Charts, News, Offers) on Thursday reported a smaller second-quarter loss than a year ago as it cut expenses, but the nation's third-largest drugstore operator lowered its expectations for the fiscal year due to the weak economy and high unemployment.
Rite Aid said economic conditions have hurt its sales of nonpharmacy items like food and cosmetics because customers looked harder for bargains and bought more items that were on sale. It said rivals spent more money on promotions — a move Rite Aid is countering with a new rewards program — and profit margins at pharmacies fell due to lower reimbursement rates.
The company said those trends are likely to continue through the holiday season. In heavy afternoon trading, Rite Aid shares fell 23 cents, or 11.8 percent, to $1.72. Click here to read the full article
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| Technology Focus |
Dell to buy Perot Systems for $3.9 billion
Computer maker Dell (DELL: Charts, News, Offers) will acquire information-technology company Perot Systems (PER: Charts, News, Offers) for $3.9 billion in cash, as the PC giant looks to expand beyond its core hardware business, the companies said Monday.
The move marks a strategic shift for Dell, which has stuck with its personal computer and server sales even as its rivals like Hewlett-Packard (HPQ: Charts, News, Offers) and IBM (IBM: Charts, News, Offers) continue to diversify amid slumping hardware sales.
"We've seen this coming, but I'm surprised it took as long as it did," said Gartner analyst John Enck. "This path is a necessary ingredient to future success, which being a hardware-only provider would have limited." (Source: CNN Money) Click here to read the full article
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Can Amazon Be the Wal-Mart of the Web?
THE hum of 102 rooftop air conditioners and a chorus of beeping electric carts provide the acoustic backdrop in Amazon.com's (AMZN: Charts, News, Offers) 605,000-square-foot distribution facility on this city's west side. But the center's employees can almost always hear Terry Jones.
On a recent summer afternoon, Mr. Jones, an "inbound support associate" making $12 an hour, steered a hand-pushed cart through the packed aisles and shouted his location to everyone in earshot: "Cart coming through. Yup! Watch yourself, please!" Mr. Jones explained that he was just making his time at Amazon "joyful and fun" while complying with the company's rigorous safety rules.
But his cries might double as a warning to the retail world: Amazon, the Web’s largest retailer, wants you to step aside. (Source: The New York Times) Click here to read the full article
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Twitter to Raise $100 Million From Insight, T. Rowe Price, Other Investors
Twitter, the messaging web site that has become an Internet sensation, is nearing a deal to close as much as $100 million of new funding from as many as seven investors, according to people familiar with the deal.
The investor group includes mutual fund giant T. Rowe Price and private-equity firm Insight Venture Partners, which are new investors to Twitter. The $100 million investment is about twice as much as Twitter was reportedly expected to haul in this latest round of fund-raising.
Other investors in this round include venture-capital firms Spark Capital and Institutional Venture Partners, which have previously invested in Twitter. (Source: The Wall Street Journal) Click here to read the full article
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| Your Money |
A Clip-and-Save Renaissance
Heather Hernandez walked into a supermarket with a stack of coupons last month and walked out with $160 worth of groceries, for which she paid $30.
"With the economy right now everyone wants to make their dollars go further," said Ms. Hernandez, a stay-at-home mother in Houston who clips and files coupons with the meticulousness of an accountant. "I see all kinds of people using coupons. I see teenagers using coupons. I see grandfathers using coupons."
It may be the digital age, but when it comes to pinching pennies, most consumers are opting for a method that is well over a 100 years old: the paper coupon. (Source: The New York Times) Click here to read the full article
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Payback time for homebuyer tax credit
Question: I bought a home and qualified for the $8,000 first-time homebuyer tax credit. I'm still a bit confused, though, about the payback rules. Can you explain them? --Jessica G., Houston, Texas
Answer: Sure. But first I'd like to remind anyone who's considering taking advantage of the first-time homebuyer tax credit of up to $8,000 that was part of this year's stimulus package that time is running out. (Source: CNN Money) Click here to read the full article
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| Trivia Question |
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To deter counterfeiting on newfangled, high-tech copiers, which security measure was added to $50 and $100 bills in 1990?
(answer below) |
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| Market Overview |
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| DJIA |
9,665.19 |
-154.48 |
| S&P |
1,044.38 |
-23.92 |
| NYSE |
6,823.51 |
-193.41 |
| NASDAQ |
2,090.92 |
-41.94 |
| 10Yr |
3.329% |
-0.15 |
| Dollar |
77.01 |
+0.34 |
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