03.08.10
Posted in business, economic, news, shortly, world of money tagged finance, life, markets, news, reviews at 7:06 pm by carydalton
LISBON, Portugal – Portugal announced new austerity measures Monday to avoid a debt crisis like the one engulfing Greece, cutting welfare benefits and government hiring as well as selling assets and raising taxes on the well-off.
The announcement comes two days ahead of a bond issue in which Portugal will try to raise euro750 million ($1.02 billion). Greece was able to tap bond markets last week after also announcing more deep cutbacks to shore up its finances.
The two countries’ troubles have fueled a Europe-wide debt crisis that has undermined the euro and led the European Union to consider setting up a new European monetary fund to help support the euro.
Portugal aims to raise euro6 billion ($8.2 billion) from privatizations, trim welfare benefits and slash other state expenditure in an effort to reduce the country’s heavy debt load, Finance Minister Fernando Teixeira dos Santos said.
The measures are part of a four-year austerity plan devised to convince financial markets and other eurozone countries that Portugal has its finances in order.
The plan “rests, essentially, on a reduction in public spending,” Teixeira dos Santos told a news conference.
Portugal’s budget deficit is projected to have hit a record 9.3 percent of gross domestic product last year, prompting fears it could face similar problems to Greece where a budget crisis has brought violent demonstrations, rattled the European Union and undermined the 16-country euro currency, of which Portugal is a member.
Portugal’s public debt is expected to climb to 85.4 percent of GDP this year, up from 76.6 per cent in 2009, and Teixeira dos Santos said he predicts it will peak at 90.1 percent of GDP in 2012 before falling back.
Teixeira dos Santos said he expected the privatizations over the next four years to bring revenue equivalent to 3.6 percent of Portugal’s gross domestic product.
The center-left Socialist government also wants to keep annual pay hikes for state employees below the rate of inflation up to 2013, cut welfare benefits and scrap some tax breaks personal business card.
Teixeira dos Santos said he would create a new tax rate of 45 percent for people earning more than euro150,000 ($205,000) a year and raise the ceiling on entitlements for tax breaks, but otherwise he ruled out tax increases.
“We are focussing on reducing spending and avoiding tax hikes,” Teixeira dos Santos said.
Planned spending on new military equipment projected for the next four years will be cut by 40 percent, and a plan to build a high-speed rail link to Spain will be postponed for at least two years.
The minority government was consulting Monday with opposition parties over the plan, though it has not said whether the measures will be put to a vote in Parliament.
The government has included some of the the planned austerity measures, including a contested pay freeze for civil servants, in its 2010 state budget, which parliament is expected to approve on Friday. The budget was delayed by a general election last year.
State spending cuts will be across the board, Teixeira dos Santos said. About 75 percent of current expenditure goes on salaries and welfare policies.
He said that increasing pay by less than the inflation rate would cut the state’s wage bill to 10 percent of GDP from just over 11 percent.
Staffing levels will be cut by allowing one new employee to be hired for every two that leave the civil service.
The government also wants to reduce outlays on welfare by 0.5 percent by 2013 by trimming benefits. Temporary measures introduced in recent years to ease the effects of the economic downturn, including financial help for companies hiring new workers, will be phased out.
The government is also expecting some relief from an improving economic growth rate which Teixeira dos Santos said is forecast to reach 1.7 percent in 2013.
The government estimates the economy contracted 2.7 percent last year. It predicts growth of 0.7 percent this year.
Portugal adds austerity measures
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03.05.10
Posted in .com, business, economic, news, online tagged events, finance, newsreports, personal, politics at 7:12 am by carydalton
NEW YORK – Shoppers returned to the nation’s malls last month, buying a surprising amount of spring clothing and other items and helping stores post the strongest retail sales since November 2007, a month before the recession began.
The better-than-expected 3.7 percent gain reported Thursday showed that Americans are still thrifty, but they are letting go of some of the frugality brought on by the economic downturn. And many are willing to spend for certain higher-end goods.
Consumers “are now starting to go back to where they had typically shopped” before the recession, said Michael Niemira, chief economist at the International Council of Shopping Centers, who expected a 2 percent gain. “I’m surprised by the broad strength.”
But, he added, there’s still uncertainty about whether such a robust pace can be sustained, particularly later this year when the sales figures are being compared with more stabilized spending patterns.
The February sales report was the third consecutive monthly increase, according to the ICSC. The monthly index excludes Wal-Mart Stores Inc., which stopped reporting monthly sales last year.
Shoppers shrugged off snowstorms and worries about the economy to visit a broad array of merchants, from luxury retailer Nordstrom to middlebrow Macy’s Inc. to discounter Target Corp., which all reported solid sales increases that beat Wall Street analysts’ estimates.
The figures are based on sales at stores open at least a year and are considered a key indicator of a retailer’s health.
Stores in malls, which had seen sales plunge as their customers traded down to cheaper options, are starting to bring shoppers back by offering lower-priced or exclusive items.
Saks Fifth Avenue, for example, is expanding its exclusive merchandise offerings, putting more emphasis on lower prices and expanding its discount Off Fifth chain.
Selia Black, 26, was at the Manhattan Mall in New York on Thursday to find a birthday gift for her sister. She splurged on a $178 jacket at full price at Bebe. A year ago, she would have been scouring for a present that was deeply discounted, she said.
“I’m easing up a little bit, but not totally,” said the Brooklyn woman. She does not work, but her husband is a security guard.
Black says the recession has made her switch from Macy’s to discounters such as Marshall’s, and she planned to keep shopping at discount stores even when the economy recovers.
“You always get the deals,” she said. “But this is something special.”
Dennis Jacobe, chief economist at Gallup, believes shoppers’ thriftiness may have thawed a bit, as shoppers who have jobs are buying a little more. But, he said, frugality has not gone away, based on Gallup’s polls.
“We are in a new normal of spending,” he said low fee payday advance. He cited Gallup surveys taken Feb. 1 to Feb. 3 in which 57 percent of consumers polled said they are spending less. One-third of those surveyed said curtailed spending will be their normal pattern.
Another factor that helped the monthly sales figures look so strong was that February 2009 figures were so awful. Jacobe says spending levels are still well below 2008.
February, sandwiched between post-holiday clearance and spring, is the second-least important month of the year for retailers after January. Analysts see combined data for March and April as a more accurate measure of consumer behavior.
Still, the fact that shoppers were buying full-priced spring clothing was a pleasant surprise in the face of a sharp drop in the monthly Consumer Confidence Index.
Economists pointed to factors that depressed shoppers’ mood last month but did not seem to affect spending: gridlock in Congress over the jobs bill and a dive in the stock market related to worries about Greece’s national debt — not to mention repeated winter storms that buried much of the country in heavy snow.
Most economists say companies need to start hiring significantly in order for spending to keep improving. Unemployment stood at 9.7 percent in January and was expected to increase to 9.8 percent in February. The Labor Department was to report new job figures Friday.
In other encouraging signs for the economy, the Labor Department reported Thursday that new claims for jobless benefits fell last week, reflecting that layoffs may be easing as the economy slowly recovers. Factory orders also rose in January, according to the Commerce Department.
Shoppers are buying food at Wal-Mart and picking up discounted designer clothing at TJ Maxx, but trading up to stores such as Macy’s and Kohl’s for exclusive merchandise, said Craig Johnson, president of retail consultancy Customer Growth Partners.
Target, the nation’s second-largest discounter behind Wal-Mart Stores Inc., said February sales in stores open at least a year rose 2.4 percent as it attracted more customers and more spending per customer. But food and household essentials remained the biggest sellers, with furniture and clothing sales about flat with last year.
Gap, where sales had been led by low-price Old Navy, is starting to see a recovery across all its brands, including upscale Banana Republic, where sales were hurt when the financial meltdown escalated. Sales at namesake Gap stores were flat, but Banana Republic posted a 6 percent gain and Old Navy’s business improved by 5 percent.
Retail sales post strongest gains since late 2007
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03.02.10
Posted in .com, Free blog Tips, hot news, online, world of money tagged business, finance, life, marketing, world at 6:05 pm by carydalton
LONDON – Inflation in the 16 countries that use the euro fell in February, official figures showed Tuesday, in a further sign that price pressures remain subdued in the wake of the recession.
Eurostat, the EU’s statistics office, said that eurozone prices are estimated to have risen by 0.9 percent in February from the year before. That rate is down from the 11-month high of 1 percent recorded in January.
The decline was unexpected — the consensus in the markets was for inflation to hold steady at 1 percent.
No further details were provided, but more information will come when Eurostat publishes its full release on March 16.
Nevertheless, the figures give further evidence that inflationary pressures remain constrained by a near 10 percent unemployment rate and subdued money growth.
This view was further underlined by another release from Eurostat showing that prices at the factory gate fell by 1 percent in January from the year before.
The figures are also likely to reinforce market expectations that the European Central Bank will not be raising its benchmark interest rate from the current record low of 1 percent anytime soon business card. The bank is tasked with keeping inflation at or just below 2 percent.
“In all, then, we still expect headline inflation to ease back towards zero over the remainder of the year, suggesting that it will be a long while yet before the ECB begins thinking about raising interest rates,” said Ben May, European economist at Capital Economics.
Though an interest rate increase is not thought to be imminent, the central bank’s president Jean-Claude Trichet is expected to announce on Thursday, at the conclusion of the latest monetary policy meeting, that special liquidity measures introduced to prop up the banking system during the financial crisis and the recession will continue to be wound down.
Eurozone inflation drops to 0.9 percent in Feb
Hot News: Titanium Metals reports sharp drop in 4Q profit
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Posted in .com, All, Free blog Tips, business, top tagged campaign, finance, markets, personal, reviews at 6:00 am by carydalton
FORT WORTH, Texas – Natural gas and oil producer Quicksilver Resources Inc. posted a fourth-quarter profit of $32.5 million, or 19 cents per share, Monday as revenue grew, compared with a loss a year earlier, when it recorded several charges.
A year earlier, the company lost $467 million, or $2.79 per share.
The results, which beat Wall Street’s expectations, sent Quicksilver’s shares up 50 cents, or 3.4 percent, to $15.42. The stock has traded the past 52 weeks at $3.98 to $16.59.
Excluding one-time items, the company earned $47.3 million, or 27 cents per share, up from an adjusted profit of $39.3 million, or 23 cents per share, a year earlier home kerosene heaters.
Revenue rose 12 percent to $234.1 million from $208.9 million.
Analysts, on average, were expecting a profit of 25 cents per share on sales of $217.4 million, according to a poll by Thomson Reuters.
For the full year, Quicksilver posted a loss of $557.5 million, or $3.30 per share, compared with a loss of $378.3 million, or $2.33 per share, a year earlier.
Adjusted earnings were 86 cents per share for 2009.
Revenue rose to $832.7 million from $800.6 million.
Quicksilver reports profitable 4Q, shares climb
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02.12.10
Posted in Free blog Tips, economic, money, news, top tagged economics, economy, finance, marketing, newsreports at 11:12 am by carydalton
RIGA, Latvia — The tiny Baltic states have pursued closer integration with Europe with enormous zeal. But the price of monetary union may be giving them pause.
Economists and ordinary citizens alike are watching the protests rumbling through the streets of Athens and the slow response to Greece’s problems coming out of Brussels.
“Countries like Estonia and Latvia were once desperate to get in,” said Alf Vanags, director of the Baltic International Center for Economic Policy Studies in Riga. “The euro is not looking so attractive now.”
Latvia has been on track to adopt the euro in 2014, as has Lithuania, with Estonia eyeing its inclusion by 2011.
These governments have reason to fear that, like Athens, they will be caught in a vise: unable to pay for expensive social programs demanded by citizens while staying within the euro zone’s debt limits.
Enthusiastic for years about adopting the euro, Latvia had undertaken painful austerity measures. Even as the global economy contracted, the government slashed spending. The program included cuts of 50 percent or more in the salaries of public-sector employees and a 40 percent reduction in hospital budgets.
The result, many economists say, has been deepening unemployment and the worst recession of any country in the 27-nation European Union.
Latvia’s gross domestic product has declined by an estimated 24 percent since the recession began — a steeper drop than America’s during the Great Depression.
To keep a faltering country’s economy in line with the euro “is a tall and very unpleasant order,” Mr. Vanags said.
One of the constraints of joining the euro zone would be that Latvia would be unable to devalue its currency by printing more money. The current members of the euro zone that are weaker, like Spain and Portugal, are feeling such constraints now.
Despite some negative effects, devaluations have helped many countries over the years, giving a lift to their economies by making foreign goods more expensive and domestic goods more attractive.
Latvia has already taken some steps that limit its ability to bolster its economy. Since 2004, the Latvian central bank has pegged its currency, the lat, to the euro, to prepare for adhering to the common currency.
In 2008, Latvia accepted austerity as a condition of a bailout led by the International Monetary Fund that allowed it to remain on track to adopt the euro. After sharply cutting salaries in the public sector, the government encouraged the private sector to do the same. The policy, in fact, worked to balance the trade deficit. But the country is now being severely hurt by the very policies needed to get into the euro zone.
Andris Liepins, deputy minister of economy in Latvia, said in an interview that Latvia remained committed to a currency peg and to adopting the euro short term personal loan. “Greece’s problems are temporary,” he said. “Greece needs the same reforms as Latvia.”
The austerity programs imposed by the I.M.F., Mr. Liepins said, would help Latvia’s economy restructure over the long term, by cutting health care outlays and encouraging companies to become more efficient. Devaluing the currency would help only in the short term, he said. It would also push more homeowners to default on their mortgages, which are often denominated in foreign currencies. “We would lose competitiveness as an economy,” he said.
The policies should be judged three or four years from now, he said, when policies like encouraging outsourcing has made companies more competitive while creating opportunity for new small business.
Latvia’s economy contracted an extraordinary 18 percent in 2009, according to preliminary figures. If the number holds, it would mark the sharpest contraction in the world, though it followed what was widely regarded as an unsustainable burst of growth just before the global crisis.
Casting about for ways to raise cash during the crisis, the Latvian government grasped at times at unconventional methods.
In January, it auctioned off a ghost town along with an abandoned Soviet radar base called Skrunda-1 for 1.5 million lats ($2.89 million).
A Russian company bought it.
The economy began growing slowly in the fourth quarter of last year. Rating agencies also noted an improved outlook on the country’s creditworthiness.
Still, the government’s reliance on layoffs and deep wage cuts has not been popular.
But the response has been more measured in the Baltic countries so far than in Greece, struggling with public employee strikes and protests.
Slava Ushakov, who had a small business, sympathizes with the employees of the Greek government. When his business failed in the recession, Mr. Ushakov took a job chipping ice from city sidewalks under a government work program.
When he slipped and broke a rib, his already meager pay was docked for the days that he had missed. So now he comes to work injured. “I just wrapped it,” Mr. Ushakov said, lifting his sweater and gingerly touching bandages.
The work program, designed by the World Bank and partly financed by the European Union, pays Mr. Ushakov 100 lats ($192) a month. Still, the jobs are coveted, in a sign of the depth of troubles in Europe’s most recession-plagued economy.
“I am still working every day,” Mr. Ushakov said. He added that these days in Latvia, “if you want to buy a chicken, you have to think pretty highly of yourself.”
With Greece’s Woes, Nations Rethink Push Into Euro Zone
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02.11.10
Posted in .com, All, money, online, top tagged economics, finance, marketing, newsreports, writing at 5:48 am by carydalton
BRUSSELS — The crisis in Greece brought Europe’s leaders together on one issue Wednesday: The need for emergency action to keep the problem from infecting Europe’s other weak economies. But an accord on who will take the lead — and how — appeared uncertain.
European officials face greater urgency to devise a bailout for Greece after fears its government might default caused a recent slump in financial markets worldwide.
A phalanx of European leaders put on a unified show of support ahead of a Thursday summit meeting in Brussels, where the heads of all European Union governments and the finance ministers of the 16 countries that use the euro are scheduled to appear. Together with the president of the European Central Bank, Jean-Claude Trichet, the officials agreed Wednesday that they could no longer allow uncertainty about the future of Greece — and the euro zone — to disturb global investors.
“The point of no return has been passed,” said one diplomat involved in negotiations over a possible European bailout of Greece. “We have to do something or announce something.”
But some officials said the meeting might achieve little more than a political statement, leaving details to be worked out later by finance ministers.
German officials also insisted that no formal decision had been made.
Stocks on Wall Street fell Wednesday, partly on worries that European politicians may not find a quick resolution to the crisis.
A crucial point in the discussions is whether the government in Athens should be offered loan guarantees or given additional loans to help meet a looming debt payment, or whether there should be a pledge to buy Greek government bonds should the need arise. Investors like the concept of having one or several creditworthy nations, like Germany, guaranteeing the debts of a poorer nation, although such a move would be largely without precedent.
Germany and France are expected to have to take the lead on any emergency solution, especially after European officials rejected allowing Greece to go the International Monetary Fund — which often provides financial aid to emerging markets — for help. Going to the fund is considered a highly undesirable option for any of the 16 countries that use the euro currency. President Nicolas Sarkozy of France and Chancellor Angela Merkel of Germany intend to hold a joint news conference after the summit meeting.
It is “no longer considered an option not to act,” said a French official involved in the talks.
Officials are worried about the “moral hazard” of any Europe-backed solution for Greece: If one country is bailed out by the others, investors will expect a similar response should other weak economies that use the euro, including Portugal and Spain, fall into serious trouble.
And then there are questions about how to apply any commitments so that the weaker governments would be pressured to deliver painful economic overhauls freecreditreport.
The talks, which included a discussion of what steps Greece might be required or even forced to take to deal with its own financial problems, came as Greek citizens demonstrated in protest against austerity measures so far announced by the government, which many market participants think are far from adequate.
“At this junction they will have to support Greece,” Simon Tilford, chief economist at the Center for European Reform, said of Europe’s politicians. “If you have encouraged the markets to believe that support is forthcoming and then it is not, we will see a backlash” in financial markets.
Though Mr. Tilford said the markets would ideally like to see some form of guarantee extended to Greek loans, he added that this would probably be too much for the government in Berlin. The most likely outcome was a loan facility extended on condition that changes were undertaken by the government in Athens. It would also need to apply to other countries facing similar ills.
Jean Pisani-Ferry, director of the Bruegel research institute in Brussels said that whatever officials decide Thursday, it was important to lay out markers — including what assistance they would take, what would activate it and who would provide it — so that markets could understand how aid would be given.
The summit meeting Thursday was called by Herman Van Rompuy, president of the European Council, to try to draw up a longer-term economic strategy for the European Union to modernize its economy by 2020, an agenda that has been overshadowed by the euro zone debt crisis.
Stocks rose across most of Europe on Wednesday, with the euro-zone benchmark Dow Jones Euro Stoxx 50 index gaining 1.2 percent. The euro slipped as conflicting comments from European leaders showed the bloc was still moving hesitantly toward concrete measures. The 16-nation currency traded at $1.3733 late Wednesday in Europe.
Greek government debt rallied for a second consecutive day, with the yield on the government’s benchmark 10-year bond — which spiked as high as 7.2 percent on Jan. 28 — dropping at one point below 6 percent for the first time in a month. Italian, Irish, Spanish and Portuguese bonds also gained. The cost of insuring government debts against default through credit default swaps also fell.
Charles Diebel, head of European rate strategy at Nomura International, said a default was not imminent in Greece. But without European Union support Greek bond yields will rise so high that Athens would find it very difficult to sell debt when it needs to refinance in a few months.
“It’s a question of confidence, not fundamentals,” Mr. Diebel said.
Nicholas Kulish contributed reporting from Berlin.
Europe Agrees to Aid Greece, but Is Unsure of How to Help
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02.08.10
Posted in .com, money, shortly, top, world of money tagged finance, newsreports, opinion, politics, world at 5:18 am by carydalton
NEW YORK – Betty White plays football, babies talk about “milkaholics” and a house made of Bud Light cans falls slowly apart. It must be the Super Bowl — or at least the advertising showcase that entertains amid the gridiron action.
The commercials from such advertisers as Anheuser-Busch and Coca-Cola got off to a funny start Sunday night on CBS.
Villanova marketing Professor Charles R. Taylor said the light-hearted tone is working this year because the ads still manage to tell people what the brands stand for. That marks a turn from last year, when some ads took a more somber tone amid the still-deepening recession.
Not every commercial was strictly humorous. Automaker Toyota aired several ads before and after the game to reassure worried owners after its recalls connected with accelerator problems.
A commercial by conservative Christian group Focus on the Family, perhaps the most-discussed ad leading up to the game, hinted at a serious subject, although it, too, had a punchline. Heisman Trophy winner Tim Tebow and his mother talk about her difficult pregnancy with him — implying an antiabortion message, because she had been advised to have an abortion for medical reasons — but ended with Tebow tackling his mom and saying the family must be “tough.”
Taylor said he had been disappointed in at least the past five Super Bowls in terms of the effectiveness of ads in connecting with products, but this year he’s pleased. Advertisers pay dearly for the airtime — from $2.5 million to more than $3 million per 30 seconds — and marketers say ads work best when they focus on the product, as well as entertaining.
He cited a commercial by tiremaker Bridgestone featuring men carrying a whale in the back of their truck, and another by Dove launching its new men’s skin-care line. They were winners, he said, because they manage to entertain while telling people about the brands. The ad for Dove tells the story of boy growing into a man and the signal events in a man’s life.
“So far from what I’ve seen I’m quite positively impressed, more than I thought I would be,” he said.
A first Super Bowl ad by Google — which rarely advertises on television — told an affecting story of a budding relationship through a series of Google searches, beginning with “study abroad” and “how to impress a French woman” and ending with “churches in Paris” and “how to assemble a crib personal business card.”
That was one of the few strong ads this year, said Laura Ries, president of marketing consulting firm Ries & Ries outside Atlanta.
She figured people would most likely end up talking about the game between the New Orleans Saints and the Indianpolis Colts — which was close until the waning minutes — rather than ads. Often, it’s the other way around.
“It’s very, very difficult to be entertaining in a place like the Super Bowl and have a connection to your brand,” she said. “The home runs here are few and far between.”
Other highlights include a series of ads by restaurant chain Denny’s, which showed chickens nervous about all the eggs they’d have to lay when the company gives out free Grand Slam breakfasts again this year.
A top topic on Twitter was “green police” — the name of an ad by carmaker Audi pushing its new diesel-fueled vehicle the TDI. Using word play on Cheap Trick’s “Dream Police” — “Green” police officers deal with people making questionable environmental decisions. A man is arrested for choosing a plastic bag at the grocery store, for example.
But not all ads were winners.
Taylor said an ad by Boost Mobile, Sprint’s prepaid cellular phone service, didn’t work because it depended too heavily on the 1985 Chicago Bears’ “Super Bowl Shuffle,” a reference that could be too old for the brand’s buyers.
An ad by Kia for its Sorento SUV will be remembered for its story of a whimsical joyride taken by children’s toys — but people won’t likely remember the brand behind the ad, Ries said.
Celebrities weren’t as plentiful in this year’s Super Bowl. Notable sightings include Charles Barkley rapping for Taco Bell, Betty White and Abe Vigoda playing football for Mars’ Snickers brand and Beyonce for low-price television brand Vizio.
A promotion for CBS’ “Late Show with David Letterman” was memorable because its punchline was spoken by Jay Leno, whose show will again be squaring off with Letterman in the fall.
Letterman, sitting on a couch with Oprah Winfrey, says “This is the worst Super Bowl party ever.”
Leno replies that Letterman’s “just saying that because I’m here.”
Super Bowl ads: Betty White, Bud Light, big laughs
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01.25.10
Posted in All, Free blog Tips, money, online, top tagged All, blogs, finance, marketing, money at 5:12 pm by carydalton
WASHINGTON – The top Senate Democrat wants to make it more difficult to run up the deficit with new tax cuts or expansions of federal benefit programs.
Majority Leader Harry Reid’s plan would make it difficult to again extend emergency unemployment benefits or health insurance subsides for laid off workers. It would also make it harder to render new assistance for state Medicaid payments.
The Nevada Democrat is pressing the plan to get legislation passed permitting the government to continue to borrow money to finance its operations no fax cash loans. Under the pay-as-you-go concept, program cuts or revenue increases would be needed to cover the cost of any new policies or programs. If not, across-the-board spending cuts would kick in.
Top Senate Democrat lays out deficit curbs
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01.24.10
Posted in .com, All, business, economic, online tagged finance, life, personal, politics, world at 3:36 pm by carydalton
Wall Street tumbled for a third day on Friday as a three-day slide pushed the markets down almost 5 percent. For the Dow, Friday was the lowest close since early November.
For a second day, shares declined on concerns about President Obama’s proposal for tighter restrictions on the activity of banks as the markets finished the week with a three-day losing streak.
The president on Thursday proposed to ban banks with federally insured deposits from casting risky bets in the markets, and to resist further consolidation in the financial industry — moves the caught bankers and traders by surprise.
In response, the Dow Jones industrial average fell more than 200 points on Thursday. Declines in Asian and European markets followed and then carried over a second day Wall Street. Concerns of earnings sent shares lower on Wednesday.
At the close, the Dow Jones industrial average was down 216.90 points, or 2.1 percent, at 10,172.98. The broader Standard & Poor’s 500-stock index fell 24.73 points or 2.2 percent, to 1,091.75, while the technology-heavy Nasdaq composite fell 60.41 points or 2.67 percent, at 2,205.29. For the week, the Dow was down about 4.1 percent.
Quincy M. Krosby, a markets strategist at Prudential Financial, said investors were also weighing news that Ben S. Bernanke’s confirmation for a second term as chairman of the Federal Reserve faced growing opposition.
“What they’re sensing is this has taken on a political visceral momentum,” Ms. Krosby said. “They makes them hesitant about the future of the banking system.”
As they did on Thursday, financial shares led the decline. On Wall Street, shares of Morgan Stanley declined 6.3 percent; Goldman Sachs dropped 5.2 percent; Bank of America, 4.5 percent; and Citigroup, 1 percent. In Europe, Barclays lost 6 percent. UBS of Switzerland was off 5.1 percent, while Santander of Spain gave up 3 percent.
“There’s no doubt that there will be a significant amount of regulation in the banking industry in the next year,“ said Henk Potts, equity strategist at Barclays Wealth in London. “But there’s a long road to travel and lots of discussions and negotiations before we find out exactly what this will entail no fax payday loan.”
Questions about the banks, analysts said, could push the markets into another period of uncertainty.
Other analysts saw President Obama’s announcement of tighter banking rules was taken as a sign that government leaders are looking beyond the financial crisis.
“It’s clear that politicians are starting to have enough confidence that the global economy has been saved and are starting to try to find ways of paying the bills,” analysts at Deutsche Bank said Friday in a research note. “The risk is that they do this too early and the timing of this announcement is unfortunate given it coincides with the escalation of problems in peripheral Europe and in a week where China has effectively tightened policy.”
The comments about peripheral Europe were a reference to the budgetary problems in Greece that have rattled bond markets here.
Earnings from two companies helped to offset some of the declines. General Electric topped expectations despite a 19 percent drop in fourth-quarter income. For the quarter, G.E. posted net income of $2.94 billion, or 28 cents a share. That compared with $3.65 billion, or 35 cents, a year earlier.
And the fast-food restaurant chain, McDonald’s said fourth-quarter profit was $1.22 billion, or $1.11 a share, up from $985.3 million, or 87 cents a share, a year earlier. The company said sales overseas had helped to offset a weakness in American sales. G.E. shares were up 1 percent and McDonald’s rose 0.35 percent.
Markets in Europe were also lower. In London, the FTSE 100 was down 32.11 points or 0.6 percent, and the DAX shed 51.65 points, or 0.9 percent, in Frankfurt.
In Asia, the Nikkei 225 index, Japan’s leading market gauge, led the region’s declines with a drop of 2.56 percent. The Shanghai composite index in mainland China fell nearly 1 percent, while the Hang Seng index in Hong Kong dropped 0.6 percent, with the international banks Standard Chartered and HSBC both down.
Bettina Wassener reported from Hong Kong and Matthew Saltmarsh from Paris.
3-Day Slide Sends Markets Down About 5 Percent
Hot News: Report: Barclays to defer bonuses
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01.20.10
Posted in All, Free blog Tips, business, news, online tagged economics, finance, life, markets, politics at 10:24 am by carydalton
The possibility that the dynamics of the health care debate could changed helped spur the market on Tuesday, overshadowing fresh concerns about banks and the American consumer.
Investors were preparing for the prospect that a Republican might win the Senate seat once held by Edward M. Kennedy in Massachusetts and, with it, deny Democrats the 60th vote needed to surmount Republican filibusters and advance the health legislation.
As voters headed to the polls in Massachusetts, shares of pharmaceutical companies surged. The possibility of disarray over the bill eased concerns that profits would suffer at insurance and drug companies. Merck climbed nearly 3 percent, and Pfizer was up 2 percent. Rising health stocks pulled the broader market higher.
In midday trading, the Dow Jones industrial average climbed 0.73 percent or 76.94 points. The broader Standard & Poor’s 500-stock index rose 0.8 percent, and the technology-dominated Nasdaq was up 0.94 percent.
Amid Tuesday’s zeal, however, there were indications that financial firms face high hurdles as they try to escape the worst recession in decades. The banking giant Citigroup reported a loss for a second consecutive year, held back by losses on mortgages and credit cards.
Citigroup’s figures followed similarly cautious results from JPMorgan Chase last week. Taken together, the reports suggest Americans are still struggling to pay the bills amid high unemployment and depleted savings accounts, leaving banks looking for fertile revenue streams.
“What’s going to be critical for banks is their ability to cut their loan losses — that’s going to be the principal source of earnings growth,” said David A payday loans with no fax. Rosenberg, chief economist and strategist for Gluskin Sheff. “Citigroup’s loss certainly raises a bit of a cautionary flag in terms of the entire financial sector.”
Still, investors said Citigroup’s results could have been much worse, and they were pleased its $1.6 billion loss in 2009 was a stark improvement from the $27.7 billion loss in 2008. Shares of Citigroup rose 0.58 percent, while JPMorgan Chase fell 0.23 percent and Bank of America dropped 0.92 percent.
In other markets, the dollar gained and the euro fell amid continuing concern about the ability of several European nations, including Greece, to pay off debt. Oil dropped.
Investors were also encouraged by heavy merger and acquisition activity over the holiday weekend, analysts said. Cadbury agreed to a takeover offer from Kraft on Tuesday, worth about $19 billion, that would create the world’s largest confectioner. Cadbury rose 5.34 percent.
In addition, Berkshire Hathaway said it would acquire part of the Swiss Reinsurance Company for nearly $1.3 billion, sending shares of Berkshire up 1.23 percent.
Overseas, European markets were poised to close higher. The FTSE 100 in London was up 0.52 percent, the CAC 40 in Paris rose 0.9 percent, and the DAX in Frankfurt climbed 0.96 percent.
Drug Companies Lead Markets Higher
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01.17.10
Posted in .com, business, economic, online, shortly tagged economics, finance, money, political, politics at 10:48 pm by carydalton
NEW YORK (Reuters) – Some banking analysts are bullish on U.S. regional banks as they expect fourth-quarter results to bring improved earnings per share and capital-ratio visibility, Barron's reported on Sunday.
Credit Suisse analyst Craig Siegenthalter says that while some regional banks will probably miss earnings estimates when results are announced in coming weeks, he believes the rate of change in non-performing assets and earnings charge-offs will move close to zero, Barron's reported.
Loan-loss provisions should peak in the fourth quarter, Siegenthalter said.
"If problem loans don't grow as much as expected and the deceleration is bigger than expected, that will cause a lot of buying of these stocks," Barron's quoted Siegenthalter as saying quick cash advance.
Stocks he rates as "outperform" include Bank of Hawaii Corp (BOH.N), Fifth Third Bancorp (FITB.O), First Horizon National Corp (FHN.N) and SunTrust Banks Inc (STI.N), the newspaper said.
David Kovacs, a chief investment officer at Turner Investment Partners, told Barron's his favorites include Regions Financial (RF.N), Huntington Bancshares Inc (HBAN.O), Marshall & Ilsley Corp (MI.N) and Susquehanna Bancshares (SUSQ.O).
(Editing by Leslie Adler)
Outlook better for some regional banks
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01.16.10
Posted in .com, All, Free blog Tips, hot news, online tagged economics, finance, markets, people, personal at 3:24 pm by carydalton
A veteran General Motors executive, Nick Reilly, left, will take over as Opel’s chief executive, Opel announced on Friday. The widely expected appointment of Mr. Reilly, who is already president of G.M. Europe, was part of a management shake-up. Mr. Reilly will be responsible both for Adam Opel and its British sister brand Vauxhall. Also on Friday, G.M. said in a regulatory filing that it lent Opel $900 million in November to maintain operations and to repay a loan from the German government payday loans. Also, G.M. on Jan. 4 accelerated $930 million in payments to Opel for engineering work. The accelerated payments will keep Opel going until more permanent financing is arranged, the filing said.
Business Briefing | Automobiles: Opel Names a G.M. Executive as Its New Chief
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01.06.10
Posted in business, hot news, shortly, top, world of money tagged economics, finance, opinion, work, world at 8:48 am by carydalton
NEW YORK, Jan. 5 (Xinhua) — Crude prices rose for the ninth straight day on Tuesday as cold weather boosted demand for heating fuel.
Unusually cold weather has hit the United States, Europe and Asia since last week. Investors expected that the weather would boost heating demand above normal.
Investors are also awaiting weekly U.S. oil inventory data while analysts forecast the data will show a drop in distillate and crude stockpiles online payday loans.
Light, sweet crude for February delivery was up 26 cents to settled at 81.77 U.S. dollars a barrel. In London, Brent crude for February rose 47 cents to 80.59 dollars.
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