NEW YORK - U.S. stocks are closing higher, snapping a days-long losing streak.
The Dow Jones industrial average closed up 135 points at 12,504 Monday. That's a marked change from its recent performance, which has been crippled by worries about debt-riddled Greece. The Dow fell for each of the past six days, and last week was its worst since November.
The Standard & Poor's 500 is up 21 to 1,316. The Nasdaq composite index rose 68 to 2,847.
The gains were broad and covered nine of the 10 industry groups in the S&P; telecommunications was the only sector that fell. For every stock that declined on the New York Stock Exchange, roughly five rose.
Facebook was an exception, slipping 11 percent on its second day of trading. JPMorgan Chase fell 3 percent.
As business suffers, David Cameron retreats - Daily Telegraph
Taken together, these two factors deter employers from recruiting new staff and hinder businesses from developing the higher productivity on which sustainable growth depends. And far from making things better, the past decade has seen a steady increase in the level and complexity of employment law. Beecroft’s report would have reduced the amount of regulation in a comprehensive and principled way – and, by doing so, would have introduced new certainty and confidence.
That confidence matters, because businesses are far too short of it at present. British businesses collectively hold about £750 billion in cash. To reach its fiscal targets, the Government needs a steep rise in investment – the rate at which they spend that money. Speaking last week, David Cameron said that he leads “a Government resolutely committed to being on the side of enterprise, entrepreneurs, businesses large and small, wealth creation of all types and descriptions”. To many, that is clearly not the case. A full-blooded Beecroft Review would reassure such people, just as a pale imitation would reinforce their concerns.
Taking a step back, today’s news adds to a sense of unease about what the Coalition is actually trying to achieve. This is a Government that claims to have deregulation at its heart, fired by a Tory belief in free markets and a Lib Dem distrust of central direction. It has a policy to stop the growth in regulation (so-called “One In, One Out”) and to reduce the stock of it (the “Red Tape Challenge”). In general, it is supposed to have rejected an old approach based on more debt and higher state spending, and to be looking for real growth via higher productivity.
Recently, however, we have seen a weakening in the Government’s position. Last autumn, the Chancellor pushed his deficit reduction target from the end of this Parliament into the middle of the next. Last week, the Prime Minister hinted at new borrowing to finance infrastructure – exactly the way that Gordon Brown justified his record spending increases. At the same time, the retreat over the NHS has cast a long shadow over the Coalition’s commitment to public-service reform, and its changes to the planning system are taking much longer than expected.
In recent days, the Prime Minister has urged his European counterparts to take action by saying that the eurozone is “at a crossroads”. He should hold his own Government to account in the same terms. Given the challenges facing the country, it is surprising that he needed an independent report to propose changes to employment law at all. Now that he has it, it will be remarkable if he does not implement it – and then keep up the pressure.
Mr Cameron is right that the country’s basic economic problems are due to poor productivity rather than lack of government action. He will know, however, that the contrary view is growing in popularity (and, indeed, capable of winning elections in other countries). The more his policies focus rigorously and consistently on improving the efficiency of the economy, the more successful they will be.
Andrew Haldenby is director of the independent think tank Reform
Bank of England facing new scrutiny over handling of financial crisis after Mervyn King admitted it was 'late to the game' - mailonsunday.co.uk
- Handing of emergency cash to RBS and HBoS in 2008/09 to be reassessed
- Two further reviews will examine economic forecasting and ongoing plans to support banks
- Probes to be conducted by experts who are not employees of the central bank
By Damien Gayle
|
The Bank of England has bowed to pressure to reassess its actions during the financial crisis after governor Sir Mervyn King admitted it was 'late to the game' in tackling the banking collapse.
The Court of the Bank of England, which manages the affairs of the bank but does not set monetary policy, has ordered a probe of its handing of emergency funds to failing banks.
A further two reviews will consider the bank's track record in economic forecasting and ongoing plans for providing support to the banking sector in the event of a fresh crisis.
Scrutiny: The Bank of England has bowed to pressure to re-examine its actions during the financial crisis
All three reviews will be led by experts who are not current employees of the central bank.
The court's decision represents a climbdown by bank chiefs, who until recently had insisted that all necessary internal assessments had already taken place.
Ian Plenderleith, chairman of investment company BH Macro and a former Bank of England official, will look at the supply of emergency cash to the Royal Bank of Scotland and HBoS in 2008/09.
Meanwhile, Bill Winters, who sat on the Independent Commission on Banking, will review current plans for supporting the banking system, while the former statistics chief at the U.S. Federal Reserve, David Stockton, will probe the Monetary Policy Committee’s forecasting methods.
The announcement comes after a former City minister labelled Sir Mervyn the 'least distinguished' Bank of England governor in nearly 100 years.
'Least distinguished': Bank governor Sir Mervyn King has been the target of fierce criticism from former Labour City minister Lord Myners
Labour’s Lord Myners said Sir Mervyn’s time at the bank had been 'one of considerable lack of distinction' and added the governor had 'politicised the Bank of England'.
The governor admitted earlier this month that more should have been done to avert the banking crisis and conceded the Bank of England should have 'shouted from the rooftops' that banks had been allowed to borrow and lend too much.
'We were certainly late to the game in understanding the scale of the fragility in the banking system and the potential consequence when those risks materialised,' he said.
Mr Plenderleith will look at the bank’s actions at the height of the financial crisis, around the collapse of Lehman Brothers, to provide emergency cash to RBS and HBoS, the Bank Court said.
He will examine how the bank discharged its responsibilities as lender of last resort in a crisis and make recommendations for the conduct of any such operations in the future.
Mr Winters, a former investment banker, will make recommendations to inform the future development of the bank’s operations, consistent with its objectives to implement the MPC’s decisions and to provide back-up support to the UK banking system.
Mr Stockton will examine whether the MPC’s forecasting procedures allow it to take full account of the relevant risks and uncertainties the economic outlook faces.
The findings are due to be published in October, ahead of a major overhaul of financial regulation which will see more power transferred to the central bank.
Earlier this year, Sir Mervyn defended the bank’s record despite it missing its inflation target for more than two years.
The governor said the UK would have suffered a much deeper recession had the bank raised interest rates to hit the 2 per cent target.
The last time inflation was less than 1 per cent away from the target was in December 2009, when it was 2.9 per cent, and it has been 3 per cent or above ever since.
Today he welcomed the reviews, telling the Financial Times: 'Major changes to the operations of the Bank have already been made in the light of the financial crisis.
'These detailed, independent reviews will help to ensure that all the important lessons for the future have been learnt.'
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 bounces but investors dump Facebook - Reuters
* Facebook shares down 12 pct, trades near $33/share
* World leaders back Greece, vow to combat crisis
* Apple stock boosts Nasdaq
* Stocks: Dow up 0.7 pct, S&P up 1 pct, Nasdaq up 1.3 pct
By Edward Krudy
NEW YORK, May 21 (Reuters) - U.S. stocks rose on Monday after their worst weekly decline for the year with signs investors were quickly exiting newly floated shares of Facebook following its broken IPO and redeploying capital elsewhere in the market.
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, last trading down 11.8 percent at $33.71.
That contrasted with a sizeable rally in shares of Apple, which rose 2.8 percent to $545.14. Apple's shares are off almost 15 percent from a peak in April.
"People were coming out of Apple to participate in Facebook," said Frank Lesh, a futures analyst and broker at FuturePath Trading LLC in Chicago. "Facebook is not doing what they thought it would so maybe they'll take that capital back where they had it."
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. That helped lift the sentiment after failed elections in Greece lifted speculation that the country was headed toward exiting the euro zone.
"We sold off on some fear and not all of that fear was realized," said Lesh. "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 hostage to European news and will be for the foreseeable future."
The Dow Jones industrial average gained 82.27 points, or 0.67 percent, to 12,451.65. The Standard & Poor's 500 Index rose 12.40 points, or 0.96 percent, to 1,307.62. The Nasdaq Composite Index added 36.92 points, or 1.33 percent, to 2,815.71.
Investors are watching 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 index fell 7.8 percent since April. The bottom of the range coincides with the index's 10 month moving average.
"The ability to find support near 1,290-1,300 can trigger buyers to return, igniting the next sustainable rally towards our 2012 target in the mid-1,400s and possibly overshoot to low-1,500s," said technical analysts at UBS.
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.
"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.
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. The shares fell 9.8 percent to $25.69.
Yahoo shares rose 0.5 percent to $15.50 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.
The Nasdaq 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 2.6 percent after falling more than 4 percent on Friday.
Typical! Bankers investigating bankers. The bloke down the pub knows more about liquidity ratios than all the bankers combined. Perhaps some of the people with savings accounts at the Bank of England should be allowed to look at the books.
- UKIP Supporter, Millions of votes short of a minority, 21/5/2012 22:03
Report abuse