Stocks rise from year's lows, euro flat - Stocks rise from year's lows, euro flat -

Monday, May 21, 2012

Stocks rise from year's lows, euro flat -

Stocks rise from year's lows, euro flat -

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The absence of negative news from Europe revived some appetite for U.S. equities despite a sell-off of Facebook shares following its lacklustre debut on Friday.

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 whose shares rose 4 percent to $552.80.

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.


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)

US Stocks Bounce From Losing Streak On Europe, China - NASDAQ

-Stocks rise on the back of gains in Europe

-Europe up after G-8 affirms interest in keeping Greece in euro zone

-Weekend polls show Greece's conservative party gains ground

By Matt Jarzemsky


NEW YORK -(Dow Jones)- Stocks headed for their best session so far this month Monday, shrugging off a steep decline in Facebook's newly public stock and focusing instead on comments from international leaders that they want Greece to remain in the euro zone.

The Dow Jones Industrial Average climbed 128 points, or 1%, to 12497 in less than an hour before the closing bell. The average had suffered its sixth consecutive loss, and 12th in 13 sessions, on Friday. The last 13-session stretch with 12 losses occurred in October 1974.

Standard & Poor's 500-stock index added 20 points, or 1.6%, to 1316. The materials and tech sectors led advances while utilities and telecommunications--typically seen as defensive-retreated. The Nasdaq Composite advanced 67 points, or 2.4%, to 2845, on pace for its biggest percent increase since Dec. 20.

Facebook skidded 10% on its second day of trading, pushing it well below its $38 offer price. The stock had opened up 11% in its Friday debut but pared gains to close at $38.23.

"Portfolio managers have a sell trigger that says if the deal breaks the price of the original offering, then they sell it," said Christopher Baggini, senior portfolio manager at Turner Investments in Berwyn, Pa.

In Europe, the Stoxx Europe 600 ended up 0.5%, after the Group of Eight leading industrialized nations affirmed over the weekend that they wanted Greece to remain in the euro zone. Weekend polls showed support was growing for the Greek conservatives, which helped ease worries about the political turmoil in the country.

"The markets were both technically and psychologically oversold and were due for a bounce," said Prudential Financial market strategist Quincy Krosby. "We're getting that bounce, but it's against a backdrop of promise and hope that you're going to hear an announcement from the Europeans and perhaps from the Chinese on more stimulus."

Asian markets were also mostly higher after weekend comments from Chinese Premier Wen Jiabao highlighted the importance of adjusting policies to avoid an economic slowdown. Japan's Nikkei Stock Average gained 0.3% and China's Shanghai Composite added 0.2%.

Crude-oil futures advanced 1.5% to $92.81 a barrel, while gold futures ticked down 0.1% to $1,590.00 an ounce. The U.S. dollar edged lower against the euro but rose versus the yen.

Cooper Industries jumped 25% after agreeing to be acquired by industrial manufacturer Eaton for $11.8 billion in cash and stock.

Lowe's slumped 9.8% after the home-improvement retailer reported fiscal first-quarter results that topped analyst estimates, according to FactSet Research, but lowered its full-year earnings outlook, citing a cautious view of the economic environment for housing.

J.P. Morgan fell 2.5% after suspending its share-repurchase program, the latest fallout from the bank's $2-billion- plus losses on derivatives trades.

Campbell Soup retreated 2% after saying sales for the year will be near the low end of its forecast.

Apple gained 5.4% after analysts at Goldman Sachs and Piper Jaffray reiterated recommendations that clients buy the shares.

-By Matt Jarzemsky, Dow Jones Newswires; 212-416-2240;

    (END) Dow Jones Newswires   05-21-121554ET   Copyright (c) 2012 Dow Jones & Company, Inc. 

US Stocks enjoy relief after falls - Shropshire Star

Forget Facebook. This is still Apple’s stock market.

Apple – the world’s most valuable company, the innovator that revolutionised the mobile phone – climbed nearly 6% on Monday, helping propel major US stock indexes to gains after a solid week of losses.

The Standard&Poor’s 500, where Apple accounts for 4% of the index, enjoyed its best day in nearly five weeks. The Nasdaq composite index, where Apple accounts for an even heftier 12 percent, notched its biggest gain of the year.

And it was no thanks to Facebook. The social networking giant, on its second day as a public company, plunged 11% even as the rest of the market rallied.

It was tough to pin down any accurate reason for Facebook’s stock decline. It did go public during the market’s worst week of the year so far, and finished Friday just 23 cents above its opening price of 38 dollars. But that did not explain Monday’s plunge.

Investors may also have been concerned by technical glitches that marred trading right after it opened. But again, those issues appeared to be cleared up by Monday.

Apple is also no stranger to fickle investors. Its stock soared 57% from the end of last year until April 9, climbing to more than 636 dollars from 405 dollars as iPhone sales seemed unstoppable. Then it fell for most of April and May, declining to about 530 dollars on Friday, partly because investors are worried that phone companies will grow tired of subsidising the expensive phones to sell to customers.

But Monday’s gain of 30.90 dollars to 561.28 dollars – its second-biggest climb of the year so far – came after several analysts said they expect the iPhone business to continue to do well.

The benchmark Dow Jones industrial average rose 135.10 points, or 1.1%, to 12,504.48. The S&P 500 rose 20.77 points to 1,315.99, and the Nasdaq jumped 68.42 to 2,847.21.

Monday was the Dow’s first gain after six straight days of losses, and only its third up day for May. Last week was the worst for the Dow since November. The month has wiped out nearly three-quarters of the Dow’s first-quarter gains.

Heist of the century: university corruption and the financial crisis - The Guardian

Many people who saw my documentary Inside Job found that the most disturbing portion of the film was its revelation of widespread conflicts of interest in universities, at thinktanks, and among academic experts. Viewers who watched my interviews with eminent professors were stunned at what came out of their mouths.

Yet we should not be surprised. Over the past couple of decades medical professionals have amply demonstrated the influence money can have in a supposedly objective, scientific field. In general, medical schools and journals have responded well, adopting disclosure requirements. The economics discipline, business schools, law schools and political science schools have reacted very differently.

Over the past 30 years, significant portions of American academia have deteriorated into "pay to play" activities. These days, if you see a famous economics professor testify in Congress, or write an article, there is a good chance he or she is being paid by someone with a big stake in what's being debated. Most of the time, these professors do not disclose these conflicts of interest, and most of the time their universities look the other way.

Half a dozen consulting firms, several speakers' bureaus and various industry lobbying groups maintain large networks of academics for hire for the purpose of advocating industry interests in policy and regulatory debates. The principal industries involved are energy, telecommunications, healthcare, agribusiness – and, most definitely, financial services.

Some examples. Glenn Hubbard became dean of Columbia Business School in 2004, shortly after leaving the George W Bush administration. Much of his academic work has been focused on tax policy. A fair summary is that he has never seen a tax he would like. In November 2004 Hubbard co-authored an astonishing article, jointly with William C Dudley, then chief economist at Goldman Sachs. The article, How Capital Markets Enhance Economic Performance and Facilitate Job Creation, warrants quotation. Remember, this is November 2004, with the bubble well under way: "The capital markets have helped make the housing market less volatile ... 'Credit crunches' of the sort that periodically shut off the supply of funds to home buyers … are a thing of the past."

Hubbard refused to say whether he was paid to write the article. He also refused to provide me with his most recent government financial disclosure form, which we could not obtain otherwise because the White House had destroyed it. Hubbard was paid $100,000 (£63,000) to testify for the criminal defence of two Bear Stearns hedge fund managers prosecuted in connection with the bubble, who were acquitted. Last year, Hubbard became a senior economic adviser to Mitt Romney's presidential campaign.

Larry Summers has held almost every important government position in economics. Treasury secretary under President Clinton, in 2009 he became director of the National Economic Council in the Obama administration.

Although sensible about many issues, Summers has made a succession of well-documented mistakes and compromises. And his views on the financial sector would be hard to distinguish from those of, say, [Goldman Sachs chief] Lloyd Blankfein or [JP Morgan boss] Jamie Dimon.

Most of our information about Summers comes from his mandatory government disclosure form. Summers' 2009 disclosure form stated his net worth to be $17m-$39m. His total earnings in the year prior to joining the government were almost $8m. Goldman Sachs paid him $135,000 for one speech.

Summers is a compromised man who owes most of his fortune and much of his political success to the financial services industry, and who was involved in some of the most disastrous economic policy decisions of the past half century. In the Obama administration, Summers opposed strong measures to sanction bankers or curtail their income.

Harvard still does not require Summers to disclose his financial-sector involvements. Both Harvard and Summers declined my requests for information.

The problem of academic corruption is now so deeply entrenched that these disciplines, and leading universities, are severely compromised, and anyone considering bucking the trend would rationally be very scared. Consider this situation: you're a PhD student, or a junior faculty member, considering doing some research on, say, compensation structures on risk-taking in financial services, or the potential impact of public disclosure requirements on the market for credit default swaps. The president of your university is … Larry Summers.

The chairman of your department is …Glenn Hubbard. Or you're at MIT, and you want to examine the decline in corporate tax payments. The president of MIT is Susan Hockfield, on the board of GE, a company that has managed to avoid paying hardly any corporate taxes for several years.

How much do these forces actually affect academic research and policymaking? The available evidence suggests that the effect is large.

Academic commentary on the financial crisis by economists has been remarkably muted. There are, to be sure, some notable exceptions. But for the most part, the silence has been deafening. How can an entire industry come to be structured such that employees are encouraged to loot and destroy their own firms? Why did deregulation and economic theory fail so spectacularly?

The release of the film Inside Job clearly touched a nerve with regard to these questions. I was contacted by a large number of students and faculty, and there has been a great deal of debate. Departments including the Columbia Business School have adopted disclosure requirements for the first time. But most universities still have no such requirements, and few if any have any limitations on the existence of conflicts of interest. The same is true of most academic publications. Newspaper reporters are strictly prohibited from accepting money from any industry or organisation they write about.

Not so in academia.

There has been one significant positive development. Earlier this year, the American Economics Association adopted a disclosure requirement for the seven journals it publishes. But most institutions continue to oppose further disclosure and, when I was making my film, refused even to discuss the subject.

This is an edited extract from Inside Job: the Financiers Who Pulled Off the Heist of the Century by Charles Ferguson, published by Oneworld at £12.99. Order a copy for £10.39 with free UK p&p here or call 0330 333 6846. Charles Ferguson will appear at the Edinburgh international book festival on Sunday 12 August.

US STOCKS-Wall St bounces but investors dump Facebook - Reuters

Mon May 21, 2012 12:00pm EDT

* 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.

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