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| Weekly Wrap Up |
The markets ended the week with significant gains, despite the fluctuating ups and downs they expeirenced throughout the week. All of the major indices posted solid gains that came close to rivaling the impressive gains of two weeks ago, and more than negated the previous week's losses. Throughout the week, however, the markets couldn't seem to make up their mind, posting strong gains Monday, Wednesday, and Thursday, and losses on Tuesday and Friday. In economic news, February home sales unexpectedly rose, as did mortgage applications. The economy, however, is still shrinking, and unemployment continues to rise. Shares of KB Home (KBH: Charts, News, Offers) rose, as the company cut its losses, and posted an increase of new home orders. The financial sector experienced some growth, thanks to news of the government's plans to help banks. AIG (AIG: Charts, News, Offers) executive Jake DeSantis resigned on Wednesday after fallout from the employee bonuses. The technical sector saw some growth as well, with share prices rising at mulitiple companies, including Hewlett-Packard (HPQ: Charts, News, Offers), Intel (INTC: Charts, News, Offers), and Best Buy (BBY: Charts, News, Offers). General Electric (GE: Charts, News, Offers) lost its AAA rating from Moody's, which it has held for over 40 years. Crude oil futures jumped as well throughout the week, ending relatively unchanged, and oil companies including Exxon Mobil (XOM: Charts, News, Offers) fell in response. More Market News
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| Economic News |
Sales of previously occupied homes jumped unexpectedly in February by the largest amount in nearly six years as first-time buyers took advantage of deep discounts on foreclosures and other distressed properties. Economists said sales, while still at levels not seen since 1997, may finally be coming back to life after declining sharply following the stock market plunge last autumn. Prices, however, are expected to keep falling well into the year. Tens of thousands of homes reman tied up in the foreclosure process and are not yet for sale. Plus, as the recession deepens and job losses mount, many buyers are likely to stay on the sidelines. (Source: Yahoo! Finance) Full Story
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The economy shrank at a 6.3 percent pace at the end of 2008, the worst showing in a quarter-century, and probably isn’t doing much better now. The Commerce Department on Thursday reported that the economy was sinking a bit faster than the 6.2 percent annualized drop for the October-December quarter estimated a month ago. And the pain has persisted in the current quarter. New claims for unemployment benefits last week rose to a seasonally adjusted 652,000 from the previous week’s revised figure of 644,000, the Labor Department said Thursday. The total number of people claiming benefits jumped to 5.56 million, higher than economists’ projections of 5.48 million, and a ninth straight record-high. (Source: MSNBC) Full Story
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U.S. mortgage applications jumped last week as record low interest rates spurred a surge in demand for home refinancing loans, data from an industry group showed on Wednesday. The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, increased 32.2% to 1,159.4 for the week ended March 20. Refinancing accounted for 78.5% of all applications. Interest rates on mortgages fell after the Federal Reserve last week said it would buy Treasury securities for the first time in more than four decades as well as more than double its planned purchases of mortgage-related securities, according to Orawin Velz, associate vice president of economic forecasting at the MBA in Washington. (Source: CNN Money) Full Story
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| Business News |
Ford Motor Co. (F: Charts, News, Offers) said Monday it had raised the amount of secured debt it is buying back under a broad plan to slash its automotive debt by more than 40% and reduce annual interest costs. Ford, which has not sought emergency U.S. government aid, is powering ahead of domestic rivals General Motors Corp. (GM: Charts, News, Offers) and Chrysler in bolstering its finances amid the global automotive downturn. The automaker could retire up to $11.3 billion of automotive debt under buybacks launched earlier in March, or nearly 44% of that $25.8 billion of outstanding debt. Ford said an offer through its finance arm to buy back senior secured term loan debt was oversubscribed and it had doubled the cash available for the offer to $1 billion to buy back $2.2 billion of debt at 47 cents on the dollar. (Source: CNN Money) Full Story
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Goldman Sachs Group Inc. (GS: Charts, News, Offers), once the most profitable firm on Wall Street, is talking with U.S. regulators about repaying the $10 billion it received from the government by mid-April, a person familiar with the matter said. Goldman Sachs hasn’t formally applied to give back the money, which the New York-based company received as part of the first round of the Troubled Asset Relief Program, the person said, declining to be identified because the talks are private. Bank executives are chafing under increased scrutiny that accompanied the bailout money, as public outrage over bonuses and executive perks intensifies. The government may be reluctant to let any banks pay back the TARP money now, because it could pressure other companies that still need the cash to return it, according to Peter Sorrentino, who helps manage $13.3 billion at Huntington Asset Advisors in Cincinnati. (Source: Bloomberg) Full Story
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JPMorgan Chase (JPM: Charts, News, Offers) is suing Washington Mutual and the Federal Deposit Insurance Corp. for the right to retain certain assets it acquired in its purchase of the failed thrift in September. New York-based JPMorgan filed a lawsuit on Tuesday in a Delaware bankruptcy court, claiming the right to assets including securities, tax refunds and capital contributions acquired in the deal, but which the holding company for WaMu is now trying to recoup, according to Dow Jones. JPMorgan bought the thrift's assets for $1.9 billion after the FDIC seized the company in late September. (Source: TheStreet.com) Full Story
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| Technology Focus |
Best Buy Co.'s (BBY: Charts, News, Offers) fiscal fourth-quarter net income fell 28% on restructuring charges, but tightening costs and strong sales of notebook computers and flat-panel TVs helped push results above analysts' expectations. The largest U.S. electronics chain also provided fiscal 2010 per-share earnings guidance exceeding Wall Street's expectations, saying it expects a 6% decline despite market-share gains. Best Buy said U.S. market share grew by 1.2 percentage points to about 22%. "We expect consumer spending to remain challenging in fiscal 2010, and the complex mix of external factors that will influence their behavior makes forecasting the future increasingly difficult," Chief Financial Officer Jim Muehlbauer said. (Source: CNN Money) Full Story
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IBM (IBM: Charts, News, Offers) will cut about 5,000 jobs in the United States, adding to similarly large cuts in the past few months, sources with knowledge of the matter told Reuters on Wednesday. The job cuts will account for over 4 percent of IBM's U.S. workforce, which totaled around 115,000 at the end of 2008. The sources, who were not authorized to speak publicly on the issue, said the cuts will mostly be in IBM's global services business, which includes outsourcing and consulting services. An International Business Machines Corp spokesman declined to comment. (Source: Reuters) Full Story
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Verizon (VZ: Charts, News, Offers) is preparing to enter the 3G netbook race.
At least one netbook has passed Verizon's rigid network compatibility test and others are in the works, says a company source who declined to name the computer manufacturers involved.
Analysts see the move as an answer to rival AT&T's (T: Charts, News, Offers) recent netbook efforts. Earlier this month, AT&T announced it would sell netbooks for $99 through retailers like RadioShack (RSH: Charts, News, Offers) in exchange for two-year service contracts.
To date, Verizon has offered $100 and $200 rebates on more expensive laptops with two-year contracts, but the subsidized netbook category is an altogether new strategy for the New Jersey wireless joint venture half owned by Vodafone (VOD: Charts, News, Offers). (Source: TheStreet) Full Story
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| Your Money |
A combination of terrible market conditions and a soft job market has left many Americans with dwindling retirement accounts. But consumers also make plenty of mistakes on their own that cost them tens of thousands of dollars before they reach retirement age. Here are five common pitfalls to avoid:
Lack of information. A recent ING DIRECT survey found that almost half of Americans have "no clue" how much money they need to retire. And according to a recent report by the Transamerica Center for Retirement Studies, only 1 in 10 people does any sort of calculation at all. (Source: Yahoo Finance) Full Story
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