Four years ago, Barack Obama became the first Democratic presidential nominee in at least two decades to outspend the Republican challenger. The incumbent president shouldn’t expect the same advantage this time.
Super-political action committees backing the presumptive Republican nominee Mitt Romney are raising money at a faster clip than Democrats, threatening to erase an Obama financial advantage that allowed him to expand the battleground map in 2008 to include such states as Indiana and North Carolina.
The incumbent’s 12-to-1 financial advantage at the end of April over Romney, a former Massachusetts governor, shrunk to less than 2-to-1 when the bank accounts of the national party committees and friendly super-PACs were added.
“Those people who can and are willing to write seven- and eight-figure checks are few and far between on the Democratic side and far too numerous on the Republican side,” said Democratic consultant Peter Fenn, who participates in weekly phone calls with Obama campaign operatives. “There was some thought that Obama was going to outspend whoever was nominated. That’s long gone.”
Republicans are determined to keep pace this year. Obama and the Democratic Party had about $1 billion to spend in 2008; Republican nominee John McCain, a U.S. senator from Arizona, and the Republicans had more than $200 million less. This time, both campaigns and their allies are expected to reach $1 billion.
No Money Advantage
“My guess is we will have true parity this time,” said Alex Vogel, a Republican consultant. “Whoever wins or loses is not going to win or lose because they were dramatically outspent.”
Some Democrats express concern that Obama will be trailing in cash when the pro-Romney super-PACs, which can take in unlimited donations from corporations and individuals, are combined with pro-Republican nonprofits that keep their donors secret such as Crossroads GPS, which is spending $25 million on anti-Obama ads.
“Everyone is aware of the dangers that super-PACs represent,” said Democratic National Committeeman Robert Zimmerman, an Obama fundraiser. “It comes up in discussions among donors and the Democratic political leadership.”
Ever since the Federal Election Commission began tracking unlimited contributions to the political parties -- known as “soft money” in 1991-92 -- every Republican presidential nominee has had more money to spend than the Democrat.
Obama’s 2008 Edge
Obama changed that in 2008. As the first major-party nominee to shun taxpayer funding since the system was enacted in time for the 1976 elections, Obama raised $745 million, more than twice as much as McCain’s $350 million, which included $84 million in public money. That was more than enough to offset the Republican National Committee’s fundraising edge, $428 million to $260 million, over its Democratic counterpart.
Through April 30 of this year, Obama raised $222 million to $100 million for Romney, and the Democratic National Committee brought in $169 million to $135 million for the Republicans. Obama had 12 times more money in the bank than Romney, $115.2 million compared with $9.2 million.
Even while being outraised, the Republican National Committee had more money in the bank entering May, $34.8 million, compared with $24.3 million for the Democrats.
Both national party committees have transferred money to state parties in advance of the election, and the Democrats have also spent almost $500,000 in coordinated expenses with the Obama campaign.
Super-PAC House Victories
What has Republicans cheering and Democrats worrying is the new role of super-PACs in a presidential election. Those groups helped Republicans win a U.S. House majority and increase its Senate minority in 2010.
“I don’t think anybody has duly grasped the impact that Citizens United can have on a national race,” said Democratic consultant Glenn Totten, in a reference to the 2010 U.S. Supreme Court decision removing restrictions on corporate and union political spending. “We haven’t seen it before and nobody knows how it’s going to turn out. This could be a tsunami of cash.”
Restore Our Future, formed by former Romney aides, raised $56.5 million through April 30. The group raised $4.6 million last month, including $1 million from John Kleinheinz, president of Fort Worth, Texas-based Kleinheinz Capital Partners Inc., and $985,000 from Harold Hamm, chief executive officer of Continental Resources Inc. based in Oklahoma City. It had $8.2 million in the bank entering May.
Simmons Donation
American Crossroads, founded with help from Karl Rove, a former political adviser to President George W. Bush and Ed Gillespie, a senior adviser to Romney’s presidential campaign, brought in $1.8 million last month and has now raised $30 million. The super-PAC had $25.5 million in the bank. Harold Simmons, chairman of Dallas-based Contran Corp., gave $1 million. He is a donor to both Restore Our Future and American Crossroads.
Obama supporters have their own super-PAC, Priorities USA Action, which has trailed the Republicans in fundraising despite requests from the president’s campaign team for donations. The PAC, which raised $10.6 million through April 30 and had $4.7 million cash on hand, and hired Mary Beth Cahill, who helped run 2004 Democratic presidential nominee John Kerry’s campaign.
Priorities USA Action raised $1.6 million last month, with $1 million coming from the air traffic controllers union and another $250,000 from the plumbers and pipefitters union.
Another pro-Democratic PAC, American Bridge 21st Century, raised $5.7 million and had $1.3 million in the bank through March 31. The research group, which focuses on Romney and other Republican candidates, learned earlier this month that it would receive $1 million from investor George Soros, founder of Soros Fund Management LLC.
Republican Confidence
The success of the pro-Romney PACs has Republicans confident that they will be able to match Obama’s fundraising.
“The most important thing is not to be disproportionately outspent,” said former Republican Representative Bill Paxon of New York, who is raising money for American Crossroads and Crossroads GPS. “It is clear the Republican campaign is going to have enough resources to be competitive.”
The proliferation of super-PACs carry a disadvantage because Romney won’t have the same control over their messages as he does with his campaign committee.
A case in point: Ending Spending Action Fund, whose patron, TD Ameritrade (AMTD) (AMTD) founder Joe Ricketts, considered spending $10 million on ads attacking Obama’s connections with his former pastor who’d delivered racially-charged sermons. Romney repudiated the proposal and Ricketts rejected it.
“The difference is Obama controls his message,” said Republican fundraiser Al Hoffman Jr., a real estate developer based in North Palm Beach, Florida, and a former Republican National Committee finance chairman. “You don’t want the super- PACs throwing stuff out there that’s not central to the core issues, the deficit and the economy.”
To contact the reporters on this story: Jonathan D. Salant in Washington at jsalant@bloomberg.net; Greg Giroux in Washington at ggiroux@bloomberg.net.
To contact the editor responsible for this story: Jeanne Cummings at jcummings21@bloomberg.net.
Stocks fall on Europe, worrisome economic reports - Yahoo Finance
NEW YORK (AP) -- Stocks slipped Thursday after a couple of downbeat economic reports from the U.S. and unease over Europe overshadowed positive earnings from the largest American retailer and an encouraging jobs report.
The Dow Jones industrial average was down 64 points at 12,534 shortly after noon. The Dow is on its way to its 11th loss in the past 12 trading days. It's down 6 percent for the month so far and could be headed for its first down month since September.
The Standard & Poor's 500 index fell 10 points to 1,314. The Nasdaq composite fell 30 points to 2,844.
Caterpillar fell 4 percent, the most of the 30 stocks in the Dow Jones index, after reporting that global sales growth of construction and mining machinery slowed in the three months through April. Wal-Mart stock rose 5 percent, the most in the Dow, after reporting a 10 percent jump in first-quarter income, beating Wall Street expectations.
Indexes opened lower on Wall Street following declines in European markets. The declines accelerated at mid-morning after the Federal Reserve Bank of Philadelphia said manufacturing slowed in the mid-Atlantic region for the first time in eight months. New orders decreased and firms cut jobs.
Also, the Conference Board said its measure of future U.S. economic growth fell in April after six months of increases. The drop reflected fewer requests for building permits and a spike in applications for unemployment benefits.
These gloomy reports were a surprise and came as investors continued to fret about whether Greece might be forced to exit the euro bloc, something that investors fear would cause turmoil on global markets.
"The U.S. economy is growing slowly and not going gangbusters," said Brian Gendreau, market strategist at broker-dealer Cetera Financial Group. "But Europe is very much on investors' minds. It's been two years with multiple bailouts involving Ireland, Portugal and Greece and things don't seem to be getting better."
Greece's caretaker Cabinet was sworn in Thursday and will hold power at least until next month's election. In the recently-held elections Greeks didn't given any party a majority, but they did give strong support to politicians who rejected the tough austerity measures that came with the country's financial bailout.
Without that rescue package, Greece will likely default and be forced to leave the 17-country euro zone, which would destabilize other countries that use the euro. German, French and Spanish stock markets all fell more than 1 percent.
Collateral economic damage is already being felt by other members of the euro bloc.
Spain was forced to pay sharply higher interest rates to raise $3.18 billion in a debt auction Thursday. And shares of Bankia, which Spain nationalized last week, plunged 20 percent on a report from the newspaper El Mundo stating that depositors have withdrawn over $1 billion since last Wednesday.
Oil prices continued to trade lower, falling below $93 a barrel on Thursday, extending a sharp two-week sell-off, as traders worried about the potential impact on global growth from the European crisis. Crude oil has plummeted about 12 percent from $106 two weeks ago.
Energy companies fell. Chesapeake Energy fell 4 percent, while WPX Energy declined 6 percent.
Among stocks making big moves:
— Media General soared 38 percent after billionaire Warren Buffett's company Berkshire Hathaway agreed to buy 63 newspapers from the company for $142 million.
— GameStop fell 9 percent after the world's largest video game retailer reported its first-quarter profit fell 9.8 percent, as fewer customers visited its stores and bought new games and systems.
— Sears Holdings rose 8 percent after the beleaguered retailer turned a profit in the first quarter, benefiting from a gain on the sale of some stores.
US STOCKS-Wall St edges up but Facebook's decline weighs - Reuters UK
* Facebook shares down 13 pct, trades near $33/share
* World leaders back Greece, vow to combat crisis
* Stocks: Dow up 0.2 pct, S&P up 0.2 pct, Nasdaq flat (Updates to market open)
By Angela Moon
NEW YORK, May 21 (Reuters) - U.S. stocks edged up on Monday from their worst weekly decline for the year as world leaders expressed support for Greece to stay in the euro zone, but gains were limited as shares of Facebook dropped more than 13 percent shortly after the open.
Facebook Inc's shares fell below their $38 issue price as support from underwriters of the initial public offering dissipated after its Friday debut. The stock dropped over $5 to hit a session low of $33.00 in early trading.
"It was just a poorly done deal and it just so happens to be the biggest deal ever for Nasdaq and they pooched it, that's the bottom line here," said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.
Facebook shares were expected to face tough trading this week if lead underwriter Morgan Stanley stops supporting the stock and managers lower down in the IPO book who were hoping for an early surge decide to get out before going underwater.
On Saturday, G8 leaders stressed that their "imperative is to promote growth and jobs" and gave verbal backing for Greece to stay in the euro. But gains were limited as the pledge was unlikely to herald quick new action from the region, meaning more uncertainly for nervous financial markets.
The Dow Jones industrial average was up 19.53 points, or 0.16 percent, at 12,388.91. The Standard & Poor's 500 Index was up 2.34 points, or 0.18 percent, at 1,297.56. The Nasdaq Composite Index was down 1.42 points, or 0.05 percent, at 2,777.37.
Yahoo shares fell 1 percent to $15.28 after rising in premarket trade, on news that Chinese Internet entrepreneur Jack Ma is buying back up to half of a 40 percent stake in his Alibaba Group from Yahoo for $7.1 billion, in a deal that moves the Chinese e-commerce leader closer to a public listing.
The Nasdaq said it plans to implement procedure through which the Financial Industry Regulatory Authority (FINRA) will accommodate orders not executed in Facebook during the social media company's market debut on Friday. (Reporting By Angela Moon, editing by Dave Zimmerman)
Stocks, oil rise as G8 leaders pledge growth - Reuters India
NEW YORK |
NEW YORK (Reuters) - Global stocks on Monday rebounded from lows for the year and oil prices rose for the first time in four sessions as world leaders emphasized support for growth in the euro zone, and China said priority should be given to maintaining its economic expansion.
Still, most investors and analysts see the pause in selling of stocks, oil and other commodities as temporary, given the uncertainties ahead for Greece, which holds national elections on June 17.
Risk that Greece might leave the euro zone curbed a recovery for the euro, which stabilized above its lowest level in about four months.
On Saturday, leaders of the Group of Eight nations stressed that their "imperative is to promote growth and jobs" for the euro zone, and expressed support for Greece to stay in the euro.
Despite calls from the United States for immediate moves to boost growth, no sign emerged that Germany would soften its stance on austerity as the cure for Europe's debt problems.
"We're in a bit of an oversold bounce in here at the moment and whether we're going to build on all of this we'll find out this week. We'll still be hostage to European news and will be for the foreseeable future," said Frank Lesh, a futures analyst and broker at FuturePath Trading LLC in Chicago.
The absence of negative news from Europe revived some appetite for U.S. equities despite a selloff of Facebook shares following its lackluster debut on Friday.
The Dow Jones industrial average gained 135.10 points, or 1.09 percent, to close at 12,504.48. The Standard & Poor's 500 Index rose 20.77 points, or 1.60 percent, to finish at 1,315.99. The Nasdaq Composite Index advanced 68.42 points, or 2.46 percent, to close at 2,847.21.
U.S. stocks came off their worst weekly loss in a year as Facebook's sloppy debut on Friday disappointed investors. The social networking company's stock lost 11 percent on Monday to close at $34.03 on Monday. It fell as low as $33 - $5 below its initial offering price, wiping out $10 billion of its market value.
While Facebook shares faded after much fanfare, established technology companies did better, led by Apple Inc whose shares rose 5.8 percent to $561.28.
The FTSE Eurofirst index of top European shares closed up 0.5 percent at 975.04 after losing 5.1 percent last week to reach its lowest level of the year.
The MSCI world equity index rose 1.1 percent to 301.33. It clawed above where it started the year after erasing all the gains made due to a concerted round of easing by central banks in the first quarter.
Spain's prime minister said on Monday that urgent solutions were needed to guarantee financial stability in Europe. On Friday, Spain revised upward its estimated 2011 budget deficit.
Spanish benchmark 10-year bond yields held at 6.29 percent, while the 10-year Italian debt yield was flat at 5.94 percent. These long-term borrowing costs are seen as unsustainable for the euro zone's fourth- and third-largest economies, respectively.
The euro rose 0.25 percent in choppy trading to $1.2814, well above Friday's four-month low of $1.2642, which was not far from its lowest point for 2012.
The dollar index slipped 0.43 percent to 80.941 after touching its highest level since mid-January on Friday on heavy bids for the U.S. currency and other perceived safe-haven assets.
Nagging jitters over the financial contagion from the festering debt problem in Europe offset earlier profit-taking on U.S. and German government debt.
Benchmark U.S. Treasury yields touched historic lows and Bund futures hit contract highs last week on bids from nervous investors.
The 10-year U.S. Treasury note slipped 6/32 in price for a yield of 1.74 percent, just 7 basis points above its lowest intraday level in at least 60 years, while German Bund futures edged down 15 basis points to 143.49 after touching a contract high of 144.06 last week.
OIL RISES ON CHINA'S GROWTH STANCE
Signs that China, the world's second-largest economy, was willing to support measures to boost growth offset some of the euro-zone worries in global stocks and commodity markets.
"We should continue to implement a proactive fiscal policy and a prudent monetary policy while giving more priority to maintaining growth," Premier Wen Jiabao said in comments reported by state news agency Xinhua on Sunday.
Brent crude recovered from a 2012 low, on hopes the Chinese premier's announcement could mean strong fuel demand by the world's second-largest oil user, although concerns about the euro-zone crisis capped gains.
Brent gained for the first time in four sessions, rising $1.67, or 1.56 percent, to settle at $108.81 a barrel. In New York, U.S. June oil futures gained $1.09, or 1.19 percent, to end at $92.57 a barrel.
Three-month copper futures on the London Metal Exchange gained 1 percent to settle at $7,731 a tonne.
Spot gold prices last traded flat at $1,592.69 an ounce, erasing an earlier loss with a late bounce in the euro.
(Reporting by Ed Krudy and Richard Leong in New York, Richard Hubbard, Anirban Nag, Jessica Donati in London, Umesh Desai in Hong Kong; Editing by Jan Paschal)
US STOCKS-Wall St rebounds, but investors dump Facebook - Reuters
* Facebook stock falls nearly 14 pct to session low at $33
* Nasdaq's best 1-day percentage gain since December 2011
* World leaders back Greece, vow to combat crisis
* Dow up 1.1 pct, S&P 500 up 1.6 pct, Nasdaq up 2.5 pct
NEW YORK, May 21 (Reuters) - U.S. stocks rose more than 1 percent on Monday, with the S&P 500 snapping a six-day losing streak in a rebound from equities' biggest weekly drop in almost six months, but Facebook slumped in its second session after a disappointing debut.
Tech shares were among the day's biggest gainers, with an S&P sector index surging 2.8 percent on the strength of Apple Inc. Shares of Apple climbed 5.8 percent to $561.28, leading the Nasdaq to its biggest one-day percentage gain since December 2011.
Facebook Inc, the social networking giant that fell short of lofty expectations last week, fared no better on Monday. Facebook's stock sank 11 percent in its second day of trading, dropping to $34.03, well below its $38 issue price.
"Institutional buyers weren't as enamored with Facebook as retail investors were, so it isn't a surprise to see them taking their liquidity out for other areas," said John Norris, managing director of wealth management with Oakworth Capital Bank in Birmingham, Alabama.
Investors are watching the 1,300 to 1,290 range on the S&P 500 as a major support level, the lower end of which was tested last week after the benchmark index had fallen 7.8 percent since the end of April. The bottom of the range coincides with the S&P 500's 10-month moving average.
Sentiment improved after G8 leaders gave verbal backing for Greece to stay in the euro and stressed over the weekend that their "imperative is to promote growth and jobs." Greece is expected to hold elections after the country was unable to form a government following its most recent elections.
The Dow Jones industrial average jumped 135.10 points, or 1.09 percent, to 12,504.48 at the close. The Standard & Poor's 500 Index climbed 20.77 points, or 1.60 percent, to 1,315.99. The Nasdaq Composite Index rose 68.42 points, or 2.46 percent, to close at 2,847.21.
In another factor helping sentiment, China's premier called for additional efforts to support growth on Sunday, signaling Beijing's willingness to take action after a recent series of economic indicators suggested that the world's second-biggest economy will slow further in the second quarter.
"We've been in something of a near panic lately, and after so many down days, it was inevitable that we would bounce back, especially with news indicating that things aren't falling apart," Norris said.
Facebook shares were expected to face tough trading this week if lead underwriter Morgan Stanley stops supporting the stock and managers listed lower down in the IPO book, who were hoping for an early surge, decide to get out before going underwater.
Nasdaq OMX Group said it plans to implement procedures through which the Financial Industry Regulatory Authority (FINRA) will accommodate orders not executed in Facebook during the social media company's market debut on Friday. Nasdaq shares gained 3.6 percent to $22.78 after falling more than 4 percent on Friday.
In earnings news, Lowe's Cos Inc, the world's second-largest home improvement chain, cut its fiscal-year earnings outlook and said demand slowed toward the end of the traditionally strong first quarter. Lowe's stock slumped 10.1 percent to $25.60.
Yahoo shares rose 1 percent to $15.58 after news that Chinese Internet entrepreneur Jack Ma is buying back up to half of a 40 percent stake in his Alibaba Group from Yahoo for $7.1 billion in a deal that moves the Chinese e-commerce leader closer to a public listing.
About 83 percent of companies traded on the New York Stock Exchange closed in positive territory while on the Nasdaq, almost three-fourths of shares ended higher.
Volume was light, with about 6.77 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, below last year's daily average of 7.84 billion.
Stocks rise from year's lows, euro flat - ibtimes.co.uk
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The absence of negative news from Europe revived some appetite for U.S. equities despite a sell-off of Facebook
In midafternoon trading, the Dow Jones industrial average rose 93.39 points, or 0.76 percent, at 12,462.77. The Standard & Poor's 500 Index was up 15.46 points, or 1.19 percent, at 1,310.68. The Nasdaq Composite Index was up 53.79 points, or 1.94 percent, at 2,832.58.
U.S. stocks came off their worst weekly loss in a year as Friday's sloppy debut by Facebook disappointed investors. The social networking company's stock last traded down 10 percent at $34.21 (21.63 pounds) on Monday. It fell as low as $33, $5 below its initial offering price.
While Facebook shares faded after much fanfare, established technology companies did better, led by Apple Inc
The FTSE Eurofirst index of top European shares closed up 0.5 percent at 975.04 after losing 5.1 percent last week to reach its lowest level of the year.
The MSCI world equity index rose 0.9 percent. It is below where it started the year, having given up all the gains made after a concerted round of easing by central banks in the first quarter.
Spain's prime minister said on Monday that urgent solutions were needed to guarantee financial stability in Europe. [ID:nL5E8GLD9A] On Friday Spain revised up its estimated 2011 budget deficit.
Spanish benchmark 10-year bond yields held at 6.29 percent, while the 10-year Italian debt yield was flat at 5.94 percent. These long-term borrowing costs are seen as unsustainable for the euro zone's fourth- and third-largest economies, respectively.
The euro was barely up in choppy trading at $1.2787, well above Friday's four-month low of $1.2642, which was not far from its lowest point for 2012.
The dollar index slipped 0.2 percent at 81.154 after touching its highest level since mid-January on Friday on heavy bids for the U.S. currency and other perceived safe-haven assets.
Nagging jitters over the financial contagion from the festering debt problem in Europe offset earlier profit-taking on U.S. and German government debt.
Benchmark U.S. Treasury yields touched historic lows and Bund futures hit contract highs last week on bids from nervous investors.
U.S. 10-year Treasury notes were down 2/32 in price for a yield of 1.73 percent, just 6 basis points above its lowest intraday level in at least 60 years, while German Bund futures edged down 6 basis points to 143.58 after touching a contract high of 144.06 last week.
CHINA PROMOTES GROWTH
Signs that China, the world's second-largest economy, was willing to support measures to boost growth offset some of the euro zone worries in global share and commodity markets.
"We should continue to implement a proactive fiscal policy and a prudent monetary policy while giving more priority to maintaining growth," Premier Wen Jiabao said in comments reported by state news agency Xinhua on Sunday.
Brent crude rose toward $108 per barrel, recovering from a 2012 low, on hopes the Chinese premier's announcement could mean strong fuel demand by the world's second-largest oil user, although concerns about the euro zone crisis capped gains.
Brent gained for the first time in four sessions, rising $1.48 cents to $108.62 a barrel. In New York, U.S. oil futures were up 92 cents at $92.38 a barrel.
Three-month copper futures on the London Metal Exchange settled 1.29 percent higher at $7,746.75 a tonne.
Spot gold prices dipped 0.18 percent to $1,589.01 an ounce after rising the previous two sessions.
(Reporting by Ed Krudy and Richard Leong in New York; Richard Hubbard, Anirban Nag, Jessica Donati in London; Umesh Desai in Hong Kong)
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