Stocks open higher on Wall Street; Facebook falls - Yahoo Finance Stocks open higher on Wall Street; Facebook falls - Yahoo Finance

Friday, May 25, 2012

Stocks open higher on Wall Street; Facebook falls - Yahoo Finance

Stocks open higher on Wall Street; Facebook falls - Yahoo Finance

NEW YORK (AP) -- Stocks rose Monday morning as investors latched onto a survey suggesting that economists are more optimistic about housing and unemployment.

It's the first gain for the Dow Jones industrial average after six straight days of losses. However a tense undercurrent created by continued tension in Europe, and a steep slide in Facebook's stock, reminded investors that the market is far from healed.

The Dow rose 80 points to 12,449 at midmorning Monday. The Standard & Poor's 500 index rose 11 to 1,306. The Nasdaq composite rose 28 to 2,807.

The most recent report from the National Association for Business Economists showed that its forecasters expect modest growth for the remainder of the year, with the pace picking up in 2013.

That mildly cheerful news seemed to be just a small oasis in a grim desert. The 54 economists who took part in the survey also said they expect consumer spending, business investment and gross domestic product will remain below historic norms. Oil prices rose after Iraq's central government told its Kurdish residents that they must get approval for their oil deals with Turkey.

Lowe's Cos., the world's second largest home improvement chain, posted a 14 percent jump profit for its first quarter, but the stock slumped 9 percent because the company lowered its full-year earnings forecast. That raised concerns that some of the hiring and retail sales of the first quarter weren't signs of the economy actually recovering, but an anomaly caused by an unusually mild winter that encouraged people to do home renovations a few months earlier than they otherwise would.

The Group of Eight summit over the weekend at Camp David produced a joint statement from German Chancellor Angela Merkel, new French President Francois Hollande and U.S. President Barack Obama calling for growth-promoting solutions to the European debt crisis, not just cost cutting.

But tension and uncertainty lingered. Germany's deputy finance minister told a radio station that "eurobonds," debt that Germany and other strong countries would back to prop up weaker countries like Greece and Portugal, were "a prescription at the wrong time with the wrong side effects." Bankia, a bank nationalized by the Spanish government, was ordered to come up with more money to set aside for bad loans in order to meet the government's requirements.

Facebook slid 11 percent to $33.92, below its initial public offering price of $38. Its market debut on Friday was marred by technical problems.

Stocks Slip, but Still Score Weekly Gain -

[BRIEFING.COM] Action this week started on a strong note. Stocks then managed to muster gains that ranged from only incremental to modest during the course of the next few sessions. Still, it was enough to give the S&P 500 a weekly gain of 1.7%, which snapped a streak of three straight weekly slides.

Perhaps most impressive about the stock market’s weekly advance is that it came in the face of continued concerns about persistently precarious conditions in the eurozone.

Most of this week’s gain was earned on Monday, when a blend of bargain hunting and short covering drove the S&P 500 to its strongest performance in two months to snap a six-session losing streak. However, stocks had a hard time building on that bounce with the euro communicating serious concerns about the eurozone by dropping to a near two-year low of about $1.25.

The euro acted as a trading catalyst for most of the week. Its gyrations came amid concerns about the possibility and implications of a eurozone breakup. Those concerns were aroused by a former Greece prime minister, who indicated that the country may be considering an exit from the euro. Subsequent calls by eurozone officials for contingency plans and the need for the creation of eurozone bonds were aimed at addressing the issue. There was also some chatter about coordinated central bank actions regarding swap line fees.

As was the case at the start of the week, stocks were helped later on by some short covering, which helped the broad market reverse out of the red as many market participants were prompted to exit their positions so as to take profits or protect against additional upside action once stocks had stabilized.

In the final session of the week trade was mostly subdued, or at least until the final hour. For the first several hours the broad market was restricted to a low-volume chop with so few traders at their desks ahead of the long Memorial Day weekend. A lack of headlines also made the market less appealing to play. However, a modest slip by the euro seemed to evoke a final flurry of selling. While both the Nasdaq and the S&P 500 managed to limit losses, the Dow fell a little harder due to the weighting of a few Industrial and Financial constituents.

Home improvement retailer Lowe's (LOW 27.24, +0.14) reported stronger-than-expected earnings, but issued disappointing guidance this week. Fellow retailers Best Buy (BBY 19.17, +0.35), Urban Outfitters (URBN 28.42, +0.39), and Polo Ralph Lauren (RL 149.84, +1.16) were also in play. Polo Ralph Lauren complemented its quarterly report with news of plans to double its dividend to $0.40 per share.

Dell (DELL 12.46, +0.01) endured its worst one-day drop in more than a decade to set a new 52-week low in response to a disappointing quarterly report. Fellow Tech outfit Hewlett-Packard (HPQ 22.33, +0.56) was greeted with a positive response following its latest earnings announcement, resulting in the stock’s best single-session percentage gain in more than a month. Meanwhile, Yahoo! (YHOO 15.36, +0.01) made headlines with its decision to sell half of its stake in Alibaba.

Diversified financial services giant JPMorgan Chase (JPM 33.50, -0.47) opted to suspend its share repurchase program, but stated that it intends to maintain its dividend.

Only a dearth of domestic data was released this week.

Durable goods orders increased by 0.2% during April, but orders less transportation items declined by 0.6%. It had been generally expected that overall orders would increase by 0.3%, while orders less transportation would increase by 1.0%. Prior month data was revised to reflect a 3.7% decline in overall orders and a 0.8% decline in orders less transportation items.

The latest weekly initial jobless claims count totaled 370,000, which is on par with the 365,000 initial claims that had been widely forecasted, and consistent with the 372,000 initial claims filed in the prior week.

During April existing home sales hit an annualized rate of 4.62 million while new home sales hit an annualized rate of 343,000. Respective rates of 4.65 million and 339,000 had been broadly expected.

The revised monthly Consumer Sentiment Survey from the University of Michigan made a surprise improvement to 79.3, which stands as a four-year high.
Global data of note featured disappointing PMI manufacturing and services numbers from the eurozone. Numbers from France also disappointed, but readings from Germany were more mixed.

Amid the persistently precarious conditions in Europe, the OECD now expects a mild economic contraction in the euro area.

Leaders of China conveyed a willingness to consider accommodative policies with regard to stimulating economic growth. Later in the week it was announced that the World Bank trimmed its growth forecast for China to a rate slightly greater than 8%.

The Japanese yen was also hit with selling pressure. Its weakness followed a decision by analysts at Fitch to downgrade Japan's long-term debt rating to A+ from AA.

Late last week the yield on the benchmark 10-year Note set a new historical low fractionally under 1.70%, but improved sentiment in the stock market prompted some participants to rotate out of the safe haven, resulting in a modest rise in yields.

A series of auctions this week featured offerings for Notes with 2-year, 5-year, and 7-year terms.

The auction of 2-year Notes drew a bid-to-cover of 3.95, dollar demand of $138.3 billion, and an indirect bidder participation rate of 33.3%. For comparison, the prior auction drew a bid-to-cover of 3.76, dollar demand of $131.6 billion, and an indirect bidder rate of 32.1%, while an average of the past six auctions results in a bid-to-cover of 3.71, dollar demand of $129.9 billion, and an indirect bidder rate of 33.1%.

Results from an auction of 5-year Notes drew a bid-to-cover of 2.99, dollar demand of $104.7 billion, and an indirect bidder participation rate of 42.6%. For comparison, the prior offering produced a bid-to-cover of 3.09, dollar demand of $108.2 billion, and an indirect bidder rate of 47.5%, while an average of the past six auctions results in a bid-to-cover of 3.00, dollar demand of $105.1 billion, and an indirect bidder participation rate of 45.1%.

The auction of 7-year Notes drew a bid-to-cover of 2.80, dollar demand of $81.2 billion, and an indirect bidder participation rate of 42.7%. For comparison, the prior auction attracted a bid-to-cover of 2.83, dollar demand of $82.1 billion, and an indirect bidder rate of 38.2%, while an average of the last six auctions results in a bid-to-cover of 2.88, dollar demand of $83.5 billion, and an indirect bidder rate of 39.4%.

European stocks close firmer after nervous session - Economic Times
LONDON: The euro briefly dipped below $1.25 on Friday but European stocks firmed despite dark clouds lingering over the eurozone with concerns that problems at Spanish banks could turn into a full-blown crisis.

Trade was choppy throughout the session but took a final turn higher on news Italian Prime Minister Mario Monti had invited French, Spanish and German leaders to a four-way summit after key Greek elections in June.

At close London's benchmark FTSE 100 index inched up 0.03 per cent to 5,351.53 points, while Frankfurt's DAX 30 gained 0.38 per cent to 6,339.94 points and in Paris the CAC 40 rose 0.32 per cent to 3,047.94 points.

Madrid gained 0.13 per cent to 6,543 points even though lender Bankia earlier asked to be suspended from trading on reports saying the bank may seek up to 20 billion euros from the state to stay afloat.

On Wall Street, the major US indices were mixed amid thin pre-weekend trade with the Dow Jones down 0.23 per cent, the Nasdaq dipping 0.15 per cent and the S&P index modestly in the black, rising 0.05 per cent.

"The market globally lacked volume and will be sorely short of catalysts over the next few days," said Renaud Murail of Barclays Bourse in Paris.

In foreign exchange deals, the European single currency, hit $1.2496 during the session touching a low point last seen in July 2010. It later recovered to $1.2514, still lower than $1.2532 late in New York on Thursday.

The dollar firmed to 79.64 Japanese yen from 79.59 yen.

This week, the single currency has tumbled to a series of multi-month low points on the back of concern over the plight of debt-plagued Greece.

"The euro remains firmly in a downtrend, investors continue to pile into German bunds (bonds) that are returning them next to nothing and Spain's economy is continuing to be crippled by rising borrowing costs and more bank bailouts," said Simon Denham, head of Capital Spreads trading group.

"The recipe is a toxic one that shows just how serious the European crisis is becoming and now that we've had the big shake out in equities, it would seem that for now at least the selling has been exhausted."

Across Europe, prices of bonds issued by countries considered to be at less risk from the debt crisis have tended to rise in recent weeks, pushing down their rate of return, as investors seek to put money in safer instruments.

The rate of return earned by holders of French 10-year government bonds touched a record low 2.414 per cent on Friday from 2.531 per cent at the close the previous day.

The yield on French two-year government bonds also fell to a historic low of 0.399 per cent, with five-year bonds at 1.259 per cent.

In Spain, lender Bankia requested the suspension of its shares ahead of a board meeting to decide on a recapitalisation plan, "in view of the lack of precision on the figures," the bank said in a statement

The announcement came as a poll Friday found that consumer confidence in Germany, which has taken a knock from high oil prices in recent months, is currently holding up in face of the eurozone debt crisis.

Market research company GfK said its household confidence index was steady at 5.7 points for June, unchanged from May, a statement said.

On Thursday, the key Ifo business climate index unexpectedly dropped sharply in May, bringing to an end a six-month rally and casting a cloud over the hitherto strong performance of Europe's biggest economy.

French consumer confidence continued its slow improvement in May but remains below the long-term trend, the INSEE national statistics office said on Friday.

The household sentiment index compiled by INSEE edged up one point to 90, it said, putting it back at levels last seen in late 2010.

In December, the index was at 80, its lowest level since December 2008.

Business Bancshares makes partial TARP repayment - St. Louis Post-Dispatch

Business Bancshares made a partial repayment of TARP this week, thanks to steadily improving earnings and assets.

The $6 million payment, made on May 23, is 40 percent of the Treasury's $15 million investment through the Troubled Asset Relief Program. The Treasury's infusion of capital was made in 2009.  

Business Bancshares is the holding company for the Business Bank of St. Louis, which operates a single branch in Clayton.

“The partial repayment of TARP funds reflects the continued improvement in earnings and asset quality for the organization,” the bank's chairman, Charles Thal, said in a statement.

Business Bancshares announced its partial TARP repayment the same day it reported first quarter earnings. The bank holding company reported a $485,000 profit for the first quarter that ended March 31, up from a $469,000 profit in the first quarter of 2011.

The bank's nonperforming assets as a percentage of its total assets declined to 3.38 percent in the first quarter, compared to 3.42 percent in the first quarter of 2011.

“Earnings and asset quality trends continued to improve during the first quarter of 2012,” Larry Kirby, CEO and president of Business Bancshares and the Business Bank of St. Louis, said in the statement.

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