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| Weekly Wrap Up |
In a reversal from the week before, the major stock markets ended mostly on a positive note this week. Unlike 2 weeks prior, which saw huge gains, this week saw only moderate improvements. The NYSE saw the largest improvement, rising 142 points, while the NASDAQ rose 31, and the S&P only rose 3. The Dow Jones experienced a minor loss, only falling 5 points over the course of the week. The market seemed to change direction every day; with stocks posting a gain on Monday, Wednesday and Friday, and a loss on Tuesday and Thursday. Market optimism was encouraged by President-elect Obama’s plans for a stimulus package and an increase in jobs, as well as a good reaction to the proposed bailout plan for the auto industry. Problems arose, however, as the Sentate rejected the auto industry bailout package. Other economic problems persisted, as new jobless claims continued to rise, and retail sales continued to fall. 3M (MMM: Charts, News, Offers), UBS (UBS: Charts, News, Offers), Anheuser-Busch InBev, Sony (SNE: Charts, News, Offers), and Bank of America (BAC: Charts, News, Offers) all announced that they would be cutting jobs, as many other companies including FedEx (FDX: Charts, News, Offers), Eli Lilly (LLY: Charts, News, Offers), and Procter & Gamble (PG: Charts, News, Offers) announced warnings that they may not reach projected earnings for this quarter or next year. Crude oil prices fell throughout the week to close Friday at $46.28 per barrel, and the average national price at the pump dropped to $1.6559 per gallon. More Market News
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| Economic News |
The federal government registered a record budget deficit for the month of November, reflecting the impact of a recession on tax receipts and the mounting costs of the $700 billion financial rescue program. The country remains on track to hit a record deficit of $1 trillion or more for the entire year, which would be more than double the previous all-time high set last year. The Treasury Department said Wednesday that the gap between the government's revenue collections and what it paid out last month totaled $164.4 billion, the largest deficit ever recorded for the month of November. In just the first two months of this budget year, the deficit now totals $401.6 billion. A deficit of $1 trillion for the year would set a new record-high in dollar terms, and would be the largest as a percentage of the overall economy since World War II. (Source: Yahoo! Finance) Full Story
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New claims for jobless benefits rose more than expected last week, exceeding even gloomy expectations for an economy stuck in a recession that seems to be deepening. The Labor Department reported Thursday that initial applications for jobless benefits in the week ending Dec. 6 rose to a seasonally adjusted 573,000 from an upwardly revised figure of 515,000 in the previous week. That was far more than the 525,000 claims Wall Street economists expected. Elsewhere, the U.S. trade deficit rose unexpectedly in October as a spreading global recession dampened the once-strong sales of American exports and the volume of oil imports surged by a record amount, the Commerce Department said. (Source: MSNBC) Full Story
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U.S. retail sales fell for a record fifth consecutive month in November and wholesale prices tumbled as the deepening recession pulls inflation down.
The 1.8 percent decline in sales was smaller than forecast because discounts drew in more shoppers at department stores and electronic retailers, Commerce Department figures showed in Washington. Still, a record hit to household wealth means consumers will likely retreat further in December, analysts said.
Car sales fell for the ninth time in 10 months, according to the report, underscoring calls for a government bailout for General Motors Corp. (GM: Charts, News, Offers) and Chrysler LLC. The fall in consumer spending helped spark a fourth straight monthly retreat in wholesale prices in November, a separate report showed, giving the Federal Reserve further room to pump cash into the economy. (Source: Bloomberg) Full Story
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| Business News |
Anheuser-Busch InBev announced Monday it would cut some 1,400 U.S. jobs - or another 6 percent of its U.S. work force - to help save the world’s largest brewer at least $1.5 billion a year. It said three-quarters of the jobs to disappear will go from Anheuser's North American headquarters in St. Louis, both at downtown offices and its Sunset Hills campus. The job cuts go beyond plans Anheuser-Busch announced this summer to streamline costs, before it agreed to be taken over by Belgium-based InBev. The company said the job losses will help it save at least $1.5 billion a year by 2011 and cope with a "challenging economy." Most of the cuts will be made by the end of the year. (Source: MSNBC) Full Story
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American Express Co. (AXP: Charts, News, Offers) is taking advantage of new government liquidity programs by raising billions of dollars in fresh capital, according to a regulatory filing submitted Tuesday. American Express said it issued $5.5 billion in new debt as part of a guarantee program run by the Federal Deposit Insurance Corp., according to a filing with the Securities and Exchange Commission. The financial services firm, which is primarily focused on credit card lending, also had raised about $4.6 billion in capital as of Dec. 5, through the launch of a retail certificate of deposit program through its banking subsidiaries. The financial firm could also borrow money from the Federal Reserve using credit card receivables as collateral, according to the filing. In October, American Express received approval to borrow from the Federal Reserve Bank of San Francisco. (Source: CNN Money) Full Story
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GMAC Financial Services, the financing arm of General Motors (GM: Charts, News, Offers), said Wednesday that its bid to become a bank holding company and qualify for aid under the government's $700 billion bank rescue plan may be in danger because it hasn't raised the capital needed to meet federal requirements. One analyst said that if GMAC doesn't get the help it needs, it may need to shutter its home mortgage division in order to prevent the entire company from filing for bankruptcy protection. It wasn't clear what impact that would have on its owners, the automaker General Motors Corp. and the private equity firm Cerberus Capital Management LP. GMAC, which provides both mortgage and car loans, is trying to reduce its debt and raise $30 billion in capital that regulators are requiring before it can become a bank holding company and possibly get access to government assistance. (Source: BusinessWeek) Full Story
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| Technology Focus |
Sony Corp. (SNE: Charts, News, Offers) is slashing 4 percent of its worldwide work force, reining in spending and shutting plants as it tries to ride out a looming worldwide recession that is battering Japan's export-reliant manufacturers. Tokyo-based Sony, which is cutting 8,000 of its 185,000 jobs, said Tuesday it will shut five or six plants -- about 10 percent of its 57 factories. Sony also plans to reduce its electronics investments by about one-third by the end of March 2010, although it did not give specific numbers. The job cuts are the most drastic here since the U.S. credit crunch hit over the summer. They are a bad twist for Sony, which has been recovering from internal problems in recent years under cost-cutting reforms led by Chief Executive Howard Stringer. (Source: Yahoo! Finance) Full Story
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Chip maker Texas Instruments Inc (TXN: Charts, News, Offers) and smaller rival National Semiconductor Corp (NSM: Charts, News, Offers) have slashed current-quarter revenue forecasts to far below Wall Street expectations, as demand for cell phone and analog chips came to a virtual standstill.
Chip makers Broadcom Corp (BRCM: Charts, News, Offers) and Altera Corp (ALTR: Charts, News, Offers) also warned on Monday of weaker-than-expected demand.
TI shares fell 5 percent while National Semiconductor stock was down 7 percent after both forecast dramatic, 30 percent sequential declines in sales for what is normally the strongest quarter due to holiday sales of consumer products. (Source: Reuters) Full Story
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Shares of Electronic Arts Inc. (ERTS: Charts, News, Offers) tumbled Wednesday after the video-game publisher said results for its crucial fourth quarter would come in below expectations due to disappointing sales.
Several analysts removed their buy ratings from the stock on the warning, voicing concerns that the slowing economy and the company's ongoing turnaround plan will continue to pressure results into next year.
shares -- already off by more than two-thirds this year -- closed trading down 12% at $17 on Wednesday.
"We believe EA is entering another period of negative earnings revisions with no positive catalysts on the horizon, which will likely keep the stock in the penalty box until it can show sustainable positive earnings leverage," wrote Brent Thill of Citigroup, who cut the stock to a hold rating. (Source: Marketwatch) Full Story
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| Your Money |
Even as consumers wrestle with new concerns after enduring this year's plummeting home prices, failing banks and plunging markets, they're finding opportunities to rebuild the wealth they lost.
It won't be an easy recovery for most of us, but financial planners say that a little flexibility about your saving, spending and retirement plans will go a long way. Here are some strategies for recovery in five key areas of your financial life.
Retirement: The market crash has erased more than $3 trillion in retirement savings in 2008. But working a little past your planned retirement date can go a long way toward repairing the damage. Full Story
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| Trivia Question |
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How many stock exchanges are there in US?
(answer below) |
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| Market Overview |
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| DJIA |
8,629.68 |
-5.74 |
| S&P |
879.73 |
+3.66 |
| NYSE |
5,543.96 |
+142.71 |
| NASDAQ |
1,540.72 |
+31.41 |
| 10Yr |
2.589% |
-0.07 |
| Dollar |
83.63 |
-3.56 |
| More market statistics |
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| December 12, 2008 |
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| Last Week |
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| December 1-5 |
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| Trivia Answer |
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| There are eight stock exchanges in the United States -- New York and American in New York, Boston, Cincinnati, Chicago, Philadelphia, Pacific in San Francisco and Los Angeles and NASDAQ, a computer-based, automated network that provides stock-price information to brokers and dealers |
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