* U.S. stocks extend losses after brief leap at open
* Surfeit of weak data depress markets
* Euro rebounds slightly on Irish vote expectations
* U.S. Treasury yields set fresh 60-year lows (Recasts with start of U.S. trading; changes dateline; previous LONDON)
By Barani Krishnan
NEW YORK, May 31 (Reuters) - U.S. stocks fell after opening higher o n T hursday while the euro rose slightly as disappointing U.S. economic data and worries over Spain fueled demand for safe-havens, pushing Treasury debt yields to 60-year lows.
Commodity prices also gave up early gains, with most energy, metals and agricultural markets poised to mark May as one of their weakest months in years.
Shares on Wall Street opened a touch higher and quickly fell, extending Wednesday's losses, which were the sharpest in two weeks. The reversal in U.S. stocks also pulled European and global equity markets down.
Investors were dismayed by a slew of bearish U.S. data, including readings on the labor market, a report on overall economic growth and manufacturing in the U.S. Midwest that pointed to a slowdown in the recovery.
"The markets have become less optimistic and much more accustomed to seeing numbers that are just not impressive," said Peter Kenny, managing director at Knight Capital in Jersey City, New Jersey.
"It is clear the markets are pricing in a substantial slowdown moving forward in terms of GDP growth, employment gains, productivity gains - it's not encouraging for bulls."
A jobs report from private U.S. payrolls processor ADP showed that private employers created 133,000 jobs in May, fewer than the expected 148,000, while new claims for unemployment benefits rose by 10,000 for the fourth straight weekly increase. The data came ahead of Friday's monthly employment data from the government.
The Chicago Purchasing Managers Index for May -- a reading on economic activity in the U.S. Midwest -- was well below expectations, sinking from 56.2 to 52.7 versus a consensus estimate of 56.5.
An hour after the open, the Dow Jones industrial average was down 68.42 points, or 0.55 percent, at 12,351.44. The Standard & Poor's 500 Index was down 10.65 points, or 0.81 percent, at 1,302.67. The Nasdaq Composite Index was down 28.21 points, or 0.99 percent, at 2,809.15.
European stocks, tracked by the FTSEurofirst 300 index , were down 0.8 percent. Global equities, measured by the MSCI index, also fell 0.8 percent.
The benchmark 10-year U.S. Treasury note was up 16/32, with the yield at 1.5645 percent -- lower than Wednesday's 1.6 percent level, which already marked a 60-year bottom.
The euro was last up 0.2 percent at $1.2388 to the dollar, helped partly by expectations of an Irish vote in favor of Europe's fiscal pact.
On the commodities front, oil benchmark Brent crude in London traded at around $103 per barrel, heading for a 13 percent loss on the month.
Gold was down 0.3 percent at below $1,558 an ounce, on target for a 6 percent monthly drop that would mark its worst May in 30 years. Copper futures in London hit 5-month lows at below $7,438 a tonne.
Financial Finesse Releases Second Annual Research Report on Employee Financial Stress - msnbc.com
EL SEGUNDO, Calif., May 31, 2012 (GLOBE NEWSWIRE) -- Financial Finesse, the nation's leading provider of workplace financial wellness programs, has released its second annual special research report on employees' financial stress. The report identified a continuing downward trend in employee stress levels, but may have uncovered the beginning of a backslide into old financial habits due to a state of complacency about their financial situations.
The firm regularly tracks employees' self-reported responses to an online financial wellness assessment and compiles the data to spot trends in employees' current financial stressors and overall financial wellness. Key findings were:
- Employees' financial stress levels continue to decline with only 16% of employees reporting "high" or "overwhelming" financial stress levels in Q1 2012—a decrease from Q1 2011 when 21% of employees reported "high" or "overwhelming" stress, and a significant decrease from Q1 2010 when these levels were at 30%.
- Despite a sluggish real estate market, homeowners reported significantly lower financial stress than non-homeowners. Employees who do not own their home were three times more likely to report overwhelming financial stress than those who do, despite the fact that the market has had a slow recovery, and that many home values remain lower than their purchase price.
- In some cases, stress levels are not high enough. There are signs of complacency among employees which may be causing a false sense of security that they are on track to meet important financial goals when, in reality, they are not. More than two thirds of employees who reported no stress also indicated they were not sure they were on track to meet their retirement goals. Sixty-three percent of employees who reported no financial stress do not have an estate plan in place, and 52% are not confident in the way their investments are allocated.
Liz Davidson, CEO and Founder of Financial Finesse, says this report could be identifying an important trend very early on around employees' state of complacency which could be detrimental to employees' future financial improvement.
"When employees grow complacent about their financial situations, they tend to ignore or forget about their long-term goals and needs," she says. "Research has shown that there is an optimal level of stress between no stress and high stress commonly referred to as 'eustress,' meaning stress that is good for your mental and physical health, as well as your ability to accomplish key life goals. It is a delicate balance: too little stress and we have no motivation to overcome bad habits; too much stress and the brain and body shut down."
Davidson is concerned that complacency could cause employees to backslide into bad habits they have made significant progress overcoming since the recession. She notes that, for the first time since 2009, the company saw a slight backslide in employees' day-to-day financial management based on their responses to the company's online financial wellness assessment.
"Our Think Tank is not making any conclusions about this yet—whether this is a temporary blip or signs of a larger problem," says Davidson. "If this continues, however, employees could jeopardize the improvements they've made since the recession to their financial wellness."
This has strong implications for employers, Davidson points out, due to high costs associated with having a large number of employees who have low financial wellness and high levels of financial stress. Trisha Brambley, President of Retirement Playbook, Inc., a retirement plan consulting and education firm, agrees. She adds that employers are increasingly discovering that workplace financial wellness programs are the missing piece in two key areas: First, managing health care expenses since financial stress is a leading cause of stress-related illness, and second, preparing employees for retirement by helping employees better manage their expenses they can afford to save more for retirement. "Both are major issues and both come down to an employees' ability to effectively manage their money," says Brambley.
Both Brambley and Davidson agree that employees' current state of complacency could pose a risk to their ability to achieve future goals, and both firms are working on a way to increase employees' awareness about the importance of taking care of their finances so that they are motivated to develop and sustain good habits.
"It's great we're seeing employees' stress decreasing," Davidson says, "but until we see employees' financial wellness really reflecting that, we need to keep a close eye on their actual ability to achieve financial goals."
Dperry@financialfinesse.com
(424) 218-7954
Financial Finesse is an unbiased financial education company providing personalized and innovative financial education and counseling programs to over 500,000 employees at over 400 organizations. Financial Finesse partners with organizations to reach goals such as reducing fiduciary liability, increasing plan participation, decreasing stress, and increasing productivity through its unique approach to financial education. Financial Finesse does not sell products nor manage assets. For more information, visit www.financialfinesse.com .
This information was brought to you by Cision http://www.cisionwire.com
http://www.cisionwire.com/financial-finesse/r/financial-finesse-releases-second-annual-research-report-on-employee-financial-stress,c9267413
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Stocks flounder after weak GDP, jobs data - Click2Houston.com
U.S. stocks were lower early Thursday, the last day of a wretched month that saw Treasury yields in the U.S. fall to record lows, while Spain and Greece kept contagion worries front and center.
Thursday's declines were driven by a batch of weak U.S. economic data, including reports on U.S. initial jobless claims and regional manufacturing, which cast a cloud over hopes that the domestic economy is improving.
Meanwhile, gross domestic product for the first quarter was revised lower to 1.9%.
The Dow Jones industrial average dropped 54 points, or 0.4%, the S&P 500 lost 10 points, or 0.8%, and the Nasdaq shed 29 points, 1%.
Investors also continued to keep tabs on Europe's debt crisis.
Germany's unemployment figures, along with a decline in eurozone inflation, helped lift sentiment in overseas markets. Germany reported an adjusted unemployment rate at a two-decade low of 6.7%.
Later in the day, voters in Ireland are expected to approve more stringent budget rules in a referendum. The struggling country could lose access to additional bailout funds if voters reject the fiscal treaty, so a positive vote could reassure investors. Markets have also been nervous that Greek voters could reject austerity measures and force that country out of the eurozone.
Meanwhile, investors are still worried about Spain not being able to fund bank bailouts that could reach as much as €100 billion. Yields on 10-year Spanish debt soared to 6.6% Wednesday, but retreated slightly on Thursday.
Worries about a slowing U.S. economy and an escalating debt crisis in Europe have triggered deep losses in stocks around the world in May. The S&P 500 and Dow are down almost 6% in May, and headed for their worst monthly losses since November 2011. In fact, the Dow has only been up four days so far this month. The only other time the Dow had a month with just four advancing days was September 1903.
Meanwhile, the Nasdaq has tumbled almost 7% and is on track for its worst monthly performance in two years.
CNNMoney's Fear & Greed Index, which measures investor sentiment, remained firmly in "extreme fear" territory where it has been for more than two weeks.
U.S. stocks also fell sharply Wednesday on heightened concerns about Europe's debt crisis.
World Markets: European stocks were mixed in afternoon trading. Britain's FTSE 100 rose 0.4%, the DAX in Germany edged down 0.1%, while and France's CAC 40 added 0.1%.
In Asia, major indexes closed slightly in the red after recovering from earlier steep losses. The Shanghai Composite shed 0.5%, the Hang Seng in Hong Kong lost 0.3% and Japan's Nikkei closed 1.1% lower.
Economy: A report on private sector hiring from payroll services firm ADP showed a gain of 133,000 jobs, less than the 157,000 gain forecast by economists.
Additionally, the number of people filing for first-time unemployment benefits in the U.S. rose 10,000 to 383,000 in the latest week, which was higher than the expected 368,000 forecast by analysts.
The latest batch of jobs reports comes before the government's closely-watched monthly jobs report, which is due Friday. Analysts surveyed by CNNMoney expect that the U.S. economy added 150,000 jobs in May, including 12,000 government cuts. The unemployment rate is expected to stay at 8.1%.
The Chicago Purchasing Manager Index, which tracks manufacturing activity in much of the Midwest, fell for a third straight month to 52.7, the lowest level since May 2009. The index was expected to come in at 57 for May, up from 56.2 in the month prior. The report is seen an indicator of what will happen with the national reading on manufacturing from the Institute of Supply Management, due on Friday.
Foreclosures accounted for for 26% of home sales during the first three months of the year, according to a report released Thursday by RealtyTrac.
Companies: Shares of Joy Global fell after the mining equipment maker easily beat forecasts but lowered its guidance.
Networking equipment maker Ciena Corp. reported earnings that blew past analysts' estimates and issued a forecast in line with expectations, lifting shares.
Shares of TiVo fell after the DVR maker reported a larger-than-expected quarterly loss after the bell Wednesday.
Lions Gate Entertainment slipped after the film studio reported a net loss for the quarter late Wednesday, citing acquisition costs.
Shares of Facebook edged higher after briefly slipping below $28 Wednesday.
Currencies and commodities: The dollar lost ground against the euro, the British pound and the Japanese yen.
Swiss financial sector plans big cost cuts-study - Reuters UK
* Half of firms want to cut costs 5-10 pct
* 40 percent aiming for cuts of 10-20 pct
* Private banking particularly hard hit by asset loss
ZURICH, May 31 (Reuters) - The Swiss financial industry - particularly private banking - is planning radical restructuring to improve cost efficiency, a survey showed on Thursday.
Audit and advisory firm Ernst & Young said half of the financial institutions it surveyed wanted to cut costs by 5-10 percent, while 40 percent of firms were aiming for cuts of 10-20 percent and 4 percent were hoping to slash more than 20 percent.
The survey was carried out by an online questionnaire in February at 23 large banks and 10 insurance companies.
"These figures are a clear signal that we are on the brink of further transformation in the financial sector," Bernhard Boettinger of Ernst & Young said in a statement.
"A temporary economic recovery would not be enough to stop this process. The industry is undergoing radical change."
Ernst & Young said insurance companies cited fiercer competition for new customers and growing price pressure as the main drivers for restructuring, while banks pointed to the cost of new regulations and more rapid client turnover.
It said private banks were particularly hard hit as clients withdraw their assets or turn to products with lower returns.
The Swiss banking industry is seeing a big outflow of European assets after the country came under international pressure to clamp down on foreign tax evaders who have stashed their wealth in secret Swiss accounts.
The Swiss parliament gave the green light on Wednesday for pacts with Germany, Britain and Austria aimed at taxing their citizens' undeclared assets. (Reporting by Emma Thomasson; editing by Keiron Henderson)
STOCKS NEWS EUROPE-Bounce back hopes boost Kingfisher post Q1 - Reuters UK
Shares in Kingfisher rise 2.4 percent, second-top gainers on a rallying FTSE 100, with investors backing the company to bounce back despite the gloomy economic environment, as Europe's biggest home improvements retailer posts a steep fall in first-quarter profits.
Against tough comparatives, the firm, which runs the market-leading B&Q chain in Britain as well as Castorama and Brico Depot in France and elsewhere, saw its retail profit fall 8.6 percent to 160 million pounds ($248.5 million) in the three months to April 30, at the bottom end of analyst forecasts.
Seymour Pierce says in a note it has confidence in the management despite uncertainty over the outlook in Kingfisher's two core markets, question marks over its Chinese operation and the lacklustre objective of improving operating profitability by only 300 million pounds over the next five years.
"Earnings will also benefit from significant growth in direct sourcing over the next three years ... and the development of common ranges to all stores and the further expansion of own label," the broker says, adding the stock is fairly rated at 11.2 times 2013 earnings estimates.
Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers, says: "The company's track record of delivering superior returns in tougher times should see it through as the year progresses."
That view is reflected in the performance of Kingfisher's shares, which are up 10.2 percent over the last 12 months and among the top 20 performers on London's blue chip index in the period, comparing with a 5 percent drop on the FTSE 100.
To see a statement, please click
Reuters messaging rm://david.brett.thomsonreuters.com@reuters.net
Stocks cap worst month in two years - The Age
It was a month many investors would rather forget as heightened worries about Greece and other debt-laden European economies sent stock markets and the dollar plunging.
The benchmark ASX200 share index trimmed its losses during the day but still ended about 7.3 per cent lower for May - the worst monthly return since Europe's debt crisis erupted in May 2010.
The index closed down 17.9 points, or 0.44 per cent, at 4,076.3 points after being about 1.5 per cent lower at one point.
The broader All Ordinaries index gave up 14.9 points, or 0.36 per cent, to 4,133.8. The index's loss was about 7.5 per cent in May, or the equivalent of about $100 billion in market value.
For the month, the biggest losers among the major stocks included Aquarius Platinum losing 45 per cent, Whitehaven shed 25 per cent, Toll Holdings slumped 21 per cent, OneSteel fell 19 per cent and Fortescue Metals sank 18 per cent.
Top gainers for May included Ramsey Health, up 7.7 per cent, News Corp 6.8 per cent, AGL Energy 4.7 per cent, Coca-Cola Amatil 3.2 per cent and CSL 2.7 per cent.
European shares, meanwhile, opened slightly higher after Wednesday's steep losses, with the FTSEurofirst 300 up 0.4 perc ent at 979.65 points, on track for its biggest monthly loss since August when markets were similarly beset by fears over Europe's debt crisis.
Dollar, bonds
The Australian dollar edged back above the 97 US-cent level after earlier touching six-month lows on a global retreat to the greenback.
At its local close, the dollar was buying 97.2 US cents, placing it on course for a loss of about 6.8 per cent in May - its worst month since it dived 8.8 per cent last September.
Yields on Australian government debt maturing in two years or longer fell to record lows as a report showed home-building approvals unexpectedly dropped in April, boosting speculation the Reserve Bank will cut its cash rate again when it meets on June 5.
“Spain is becoming a huge problem,” said Derek Mumford, a director in Sydney at Rochford Capital. “A lot of money is going to be needed to bail them out. The Aussie (dollar) will inevitably be dragged down to a very important support area at 94.50 to 95 US cents.”
The 10-year Australian yield slid below 3 per cent for the first time, to as low as 2.856 per cent, the least in data compiled by Bloomberg going back to 1969. The rate on two-year notes fell to 2.108 percent, also an all-time low.
Partial rebound
While there was a partial recovery in the afternoon session, the Australian sharemarket ended well down amid broadbased declines.
‘‘Fear has definitely got the market around its little finger today,’’ CMC Markets sales trader Ben Taylor said in a research note.
Financial stocks closed 1.14 per cent lower and were the worst performers on the market, according to IRESS data.
ANZ was down 7 cents at $20.90, CBA fell 34 cents to $49.40 and Westpac slipped 13 cents to $20.29.
NAB, which was trading without a dividend today, posted the biggest declines among stocks in the S&P/ASX50, dropping 5.63 per cent, or $1.34, to $22.48.
Mr Taylor said the financial sector’s declines came as Moody’s probed the strength of lenders mortgage insurance providers.‘
"Brokers are also moving negative on the banks considering the lower growth environment, potential for margin squeeze and the difficulty to foresee a change in economic conditions,’’ Mr Taylor said.
Standard & Poor’s Ratings Services, meanwhile, gave South Australia a blow, lowering its long-term rating to 'AA+' from 'AAA', on the state government's debt and that of its financing arm, South Australian Government Financing Authority. It affirmed the 'A-1+' short-term rating. "The outlooks on the ratings remain negative," the agency said.
Miners off
Market heavyweight BHP was down 20 cents at $31.97, while Rio Tinto fell 49 cents to $56.86.
On a positive note, traditionally defensive stocks held up well on the day, with the healthcare sector gaining 1.15 per cent, utilities rising 1.01 per cent and consumer staples advancing 0.73 per cent.
In a late development, casino operator Echo Entertainment caved into demands from billionaire James Packer for an extraordinary meeting of shareholders. Echo shares rose 6 cents, or 1.4 per cent, to $4.40.
Also making news on Thursday, news reports said Telstra was considering buying television broadcaster Nine Entertainment Co.
Telstra closed down 1 cent at $3.55.
David Jones said total sales for the three months to April 28 fell 2.9 per cent, with the department store chain gearing up for a big end of financial year clearance.
The stock fell 4 cents at $2.21.
The spot price of gold in Sydney was $US1,562.70 per fine ounce, down $US14.175 from yesterday’s local close of $US1,548.525 per ounce.
Gold, though, was on course for a fourth consecutive monthly loss, trading about 6 per cent lower in US-dollar terms for May.
National turnover was 1.9 billion shares worth $5.8 billion, with 481 stocks up, 499 down and 394 unchanged.
AAP with BusinessDay, Bloomberg, Reuters
Money has changed – that’s the issue - New Statesman
Peter Selby responds to Nelson Jones's article Money and Morality.
When the St Paul’s Institute, working with JustShare, Penguin Books and the LSE, brought nearly 2000 people into St Paul’s for a public debate on the theme of Michael Sandel’s book, What Money Can’t Buy: the Moral Limits to Markets (see Nelson Jones, NS 25 May) it was because we knew the theme touched a nerve, not because we have an answer to peddle. The Institute has been engaged for some years, as an agency of the Cathedral, in seeking to get into debate with the financial institutions which are its ‘parish’; as such we could hardly think Sandel’s book unimportant, and we were delighted so many others thought the same.
That’s not the same as signing up to his thesis about the moral corrosion brought about by the intrusion of the market into all sorts of spheres to which it is not appropriate. Certainly we are signed up to the desire to get people thinking hard about which are the things that should be for sale and which should not be and, as Rowan Williams says in his review of What Money Can’t Buy, to do so on the basis of rational reflection rather than relying in feelings of revulsion when we see certain things getting a price.
Nelson Jones in his NS piece wonders whether things have deteriorated from some golden age when money didn’t play the part it now does, and points to many areas where things were much more monetised in the past than they are now. Tellingly, if slightly optimistically, he says we no longer sell people, and however bad the euro crisis gets we still won’t be doing that. There are examples he cites in the ancient world that are at least as unpleasant to think about as some of the examples Sandel gives of the intrusion of market thinking.
In my comments in the debate I voiced my own reservations about Sandel’s thinking, so much of which seems to me to address symptoms without digging deeper into causes. When he gives the example of prisoners being able to buy a cell upgrade, and when Nelson Jones points out that that has historical precedent, the deeper issue is not being faced by either of them: the selling off of incarceration as a business is common policy in the USA as it is increasingly in Britain. In the process of creating that market a financial interest is being created in locking people up. That can’t be unconnected with the fact that we in Britain lock up more people than other European countries and that a quarter of the rising number of prisoners in the world – and a third of all incarcerated women in the world, whose number has increased by a sixth in five years – are in the USA.
The figures that became a matter of public scandal during the Jubilee 2000 campaign for the relief of unrepayable third world debt showed all too clearly that the escalating power fo financial debt was depriving children worldwide of education, healthcare and life itself. The situation is infinitely worse than either Sandel or Jones portrays: the issue is not the buying and selling of things that should, or should not, be free, or whether people value things they pay for more than things they receive for nothing; in the end it is not about getting people to think more clearly than they do about whether markets should have moral limits though all these questions are important. What really matters is that in everything from the depletion of the planet’s resources to the requirement on Greek citizens to sell their democratic birthright to have their debts rescheduled money is deciding matters of life and death, and doing so more and more.
That’s why as a Christian and a theologian I am convinced money has acquired all the characteristics of an idol, aggrandising its power and claiming more and more of people’s lives. And that’s why, because of faith’s commitment to raise fundamental questions about anything that has the potential to be an idol, the St Paul’s Institute will go on engaging that debate at an ever more fundamental level. When it recently commissioned a report on the attitudes of those working in the financial sector (see Value and Values) we learned that most did not think the City should listen more to the Church’s guidance. But we now know, since the Sandel debate came to St Paul’s, that many people do want to know whether pressing economic questions have something to say about the meaning of life and whether those who profess faith are prepared to get involved in relating that faith to those questions.
Because, make no mistake, money did not acquire this power by accident. The last four decades, roughly since the massive oil price rises of the early 1970s, have seen vast increases in the amount of money in circulation, and technological advance has multiplied its speed of circulation. In the absence of means of regulating that the dominant policy has been one of deregulation, allowing the power of money to grow with its quantity. The results are not just the life and death issues I have described, but a situation in which all of us, rich or poor, are compelled to worry more and more about money and think more and more about it.
The issues of monetary reform, dismissed even by the independent commission on banking and widely ignored, are ones we need to press: just as ‘home ownership’ is a euphemism for housing debt, so ‘fractional reserve’ is now a synonym for debt multiplication: is one of the questions we need to ask about the post-2008 crisis whether the system on which we have relied for money creation for nearly a century fraught with inherent instability? I ask the question not because the Institute has a recipe or a policy to commend, but because it is our passion as a community of faith to ensure that these questions are honestly faced. The Sandel debate, and the Jones response are just a start.
Peter Selby is one of the interim directors of the St Paul’s Institute, and author of Grace and Mortgage: the Language of Faith and the Debt of the World. He was until retirement Bishop of Worcester, and Bishop to HM Prisons.
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