Stocks higher on housing but Europe worries linger - Yahoo Finance Stocks higher on housing but Europe worries linger - Yahoo Finance

Sunday, June 3, 2012

Stocks higher on housing but Europe worries linger - Yahoo Finance

Stocks higher on housing but Europe worries linger - Yahoo Finance

NEW YORK (AP) -- Hopes that the U.S. housing market is starting to recover and the economy is on the mend sent stocks higher on Wall Street.

But the gains are being constricted from continuing worries that Greece's political deadlock could fracture the European Union and roil global markets.

The Dow Jones industrial average rose 75 points Wednesday to 12,707. The Standard & Poor's 500 added nine points to 1,340. The Nasdaq composite rose 15 points to 2,908.

Home builder stocks rose after the Commerce Department said builders started work on new homes at an annual pace of 717,000 last month, 2.6 percent more than in March. It was a heartening sign for the beleaguered housing market, which seems to be forming a bottom and starting to recover. Construction rose for both single-family homes and apartments.

Target Corp. rose after a strong earnings report. Target said revenue at stores opened at least a year rose 5.3 percent, the strongest performance in six years for that period. Target's results illustrate that Americans are beginning to spend cautiously as economic uncertainty persists. Though the job market is still shaky, falling gas prices have given shoppers hope.

As signs of a global economic slowdown persist, prices of commodities have come off highs. Oil prices continued their march downwards from $105 in the beginning of the month to $93. Crude oil prices were down $1 on Wednesday. Gold prices fell $18 to $1539, the lowest level since December.

In Europe, a potentially chaotic situation was developing in Greece, where power-sharing talks collapsed Tuesday and new elections were called for next month. There is already concern in other European countries about how a possible Greek exit from the euro would affect the rest of the continent.

On Wednesday, Spain's prime minister warned that the country, which is trembling under a 24.4 percent unemployment rate, could be locked out of international markets due to problems in the EU.

"Right now there is a serious risk that (investors) will not lend us money or they will do so at an astronomical rate," Mariano Rajoy told Spanish lawmakers.

Financial pressures extend well beyond Europe too. The Indian rupee hit a new all-time low against the dollar with investors increasingly seeking a safe place to put their money. The rupee sank to 54.44 against the dollar Wednesday, surpassing the prior low of 54.39 on December 15.

Among other stocks making big moves:

— JC Penney plunged 14 percent, the most in the S&P 500 index, after the retailer reported a bigger-than-expected first-quarter loss. Sales plummeted as shoppers are rejecting their new pricing plan.

— Abercrombie & Fitch fell 11 percent after reporting that its first-quarter net income shrank 88 percent because of higher costs and declining sales in established stores and in Europe.

— General Electric rose 3.6 percent, the most of the 30 stocks in the Dow, after the company said its finance unit will pay a special dividend of $4.5 billion to the parent company this year. It had suspended the payments in 2009 during a freeze in credit markets.

Israel Stocks: Elad Europe, Hot, Israel Chemicals, Partner - Bloomberg

Israel’s TA-25 index closed at the lowest since Nov. 20, sliding 2.3 percent to 1,040.61 at the 4:30 p.m. close in Tel Aviv. Investors traded about 832.3 million shekels ($213 million) of shares and convertible securities, according to bourse data.

The following stocks rose or fell today. Symbols are in parentheses.

Elad Europe Ltd. (ELER) surged 31 percent, the most since February 2011, to 1.227 shekels. T.G.I. Real Estate Investments Ltd. offered to acquire the shares it doesn’t already own in the real-estate development and management company.

Cellcom Israel Ltd. (CEL) dropped 4 percent to 26.40 shekels, the lowest level on record. The country’s largest mobile-phone provider was lowered to ilAA- from ilAA at Standard & Poor’s Maalot, citing the risk of a continued decline in profitability amid increased competition.

Hot Telecommunication System Ltd. (HOT) closed at its highest level since May 14, gaining 2.4 percent to 35.60 shekels. The board of Israel’s second-largest fixed-line operator approved a plan last week to buy back as much as 184 million shekels of stock.

Israel Chemicals Ltd. (ICL) , the company that extracts minerals from the Dead Sea to make potash and other fertilizers products, retreated 4 percent, the most since Feb. 26, to 38.82 shekels. Corn futures fell to an 18-month low on June 1 as economic data from Europe, Asia and the U.S. indicated demand for commodities will ebb. Farmers use potash on their crops to help strengthen plant root systems and make them more resistant to drought.

Israel Opportunity Energy Resources LP (ISOPL) dropped 13 percent, the most since September 2010, to 0.23 shekel. The oil and gas exploration company said most of the 6.7 trillion cubic feet of natural gas that may be found in the Pelagic prospect remained undiscovered.

Maxima Air Separation Center Ltd. (MAXM) surged 14 percent, the most since January 2010, to 8.97 shekels. The company said on June 1 that Discount Investment Corp. (DISI) entered an agreement to sell its holdings in the industrial gases producer. Discount Investment fell 1.3 percent to 7.85 shekels, the lowest level on record.

Mellanox Technologies Ltd. (MLNX) dropped 2.8 percent, the most since May 20, to 225.90 shekels, or the equivalent of $57.78. The New York-traded shares of the Israeli developer of technology used to transfer and store data quickly dropped 4.6 percent to close at $57.70 on June 1.

Partner Communications Co. (PTNR) advanced as much as 3.6 percent to 18.20 shekels before closing at 17.79 shekels. Suny Electronics Ltd. (SUNY) , a marketer of mobile phones, said it’s in advanced talks with Hutchison Whampoa Ltd. for the sale of a controlling stake in Scailex Corp. (SCIX)(SCIX IT). Scailex holds a 44.5 percent stake in Partner, according to data compiled by Bloomberg. Trading in Suny and Scailex was suspended today.

To contact the reporter on this story: Shoshanna Solomon in Tel Aviv at

To contact the editor responsible for this story: Claudia Maedler at

RPT-Wall St Week Ahead: Time for some more stimulus? - Reuters UK

Sun Jun 3, 2012 4:02pm BST

(Repeating item that initially moved late on Friday)

By Edward Krudy

NEW YORK, June 3 (Reuters) - Things are shaping up for another hot summer on Wall Street, and there is a long, long way to go yet.

Federal Reserve Chairman Ben Bernanke will be back on Capitol Hill on Thursday to testify before a congressional committee about the state of the U.S. economy. He's not going to get an easy ride.

The blue-chip Dow average of stocks is now negative for the year. Employment appears to be slowing to a snail's pace and Europe remains mired in crisis.

"This puts the Fed firmly in play and they will likely feel compelled to respond," said Tom Porcelli, chief U.S. economist at RBC Capital Markets in New York, after data on Friday showed U.S. job growth in May was the weakest in a year.

"The missing ingredient preventing the Fed from action had been the equity market, but now we are seeing it softening," he said. "Equities are falling and that was the last hurdle for Fed policy action because all the other criteria have been met."

For last week, the Dow Jones industrial average fell 2.7 percent, the Standard & Poor's 500 index was down 3 percent and the Nasdaq composite index fell 3.2 percent.

The Fed's next policy meeting occurs on June 19-20. A Reuters poll of 15 dealers gives a 35 percent chance of the Fed extending its stimulative operating twist at that meeting. The poll showed that dealers expecting further quantitative easing, or QE3, rose to 50 percent from 33 percent in May.

Stock market rallies in each of the past three years were fueled by combinations of massive central bank and government stimulus spending. That maybe the only hope for equities this year, too.

The world's economic outlook darkened on Friday as reports showed as well as slowing U.S. employment growth, Chinese factory output barely grew and European manufacturing fell deeper into malaise.

"It certainly suggests that perhaps the softness in Europe is either influencing the U.S. or that the U.S. recovery may not be strong enough to overcome the softness in Europe," said Jack Ablin, chief investment officer at Harris Private Bank in Chicago.

"I underestimated the relationship or the alignment of the world markets to the European markets," he said. "I felt that Europe could potentially proceed in their own little corner of the world. For right now anyway it just doesn't seem that way."

Nothing tells the story of the global economy at the moment better than the world's equity markets.

Bear markets are raging in Spain, Italy, Brazil and Russia. Asian stocks have been weak. Most of Europe's other markets are negative for the year, and that is where U.S. stocks are going - and fast.

"I don't see any compelling reason to think that we are going to have any sustained recovery absent new fiscal, monetary stimulus, not only here in the United States but perhaps even more importantly elsewhere around the world," said Clark Yingst, chief market analyst at Joseph Gunnar.

Yingst said that signs of more stimulus may be a compelling reason to get bullish.

We will be "watching very closely for new fiscal and monetary stimulus from a variety of countries. I think the source will be important, I think the magnitude, the scope will be important," he said.

On Friday, the S&P 500 fell 2.5 percent, edging below its 200-day moving average for the first time since December. The level is closely watched by investors, and a significant breach there could open the way for steeper losses.

That looks like a distinct possibility at the moment. Greece will face new elections in two weeks. A victory for parties that oppose the bailout led by the European Union and International Monetary Fund could start the ball rolling on the country's withdrawal from the euro zone.

Such an event would have unforeseen consequences for the global economy and financial markets. Part of the 6.3 percent drop in the S&P 500 in May - its worst month since September - was about pricing that in.

But it is anyone's guess how far stocks will fall if a Greek exit sparks the Lehman-type event that some investors fear.

Fears that the euro-zone debt crisis is spilling over to the United States sparked fresh buying of U.S., German, Japanese, Swiss and Nordic government debt, which are perceived as safe havens in times of market turbulence.

Yields on the benchmark 10-year Treasury note hit 1.442 percent, the lowest level in records going back to the early 1800s.

At the same time, funding options are narrowing for companies across the globe as issuers are shut out of markets due to risk aversion for weaker credits and demand for spread that is sending costs soaring.

Volume in the robust U.S. investment-grade market has dwindled from $284.8 billion in the first quarter to just $118.7 billion in the first two months of the second quarter, according to data from IFR, a unit of Thomson Reuters. That number is expected to fall even more in the summer.

But not everyone is hitting the sell button. Zahid Siddique, an associate portfolio manager of the Gabelli Equity Trust, said his two-to-four year time horizon and focus on value is allowing him to add to positions in sectors that are getting hit the hardest.

"Companies that we liked before are becoming more attractive from a valuation perspective and we have been buying more of those," he said. "We just buy on any dips and exit when valuations reach our assessment of value."

Siddique said he'd been adding to holdings in auto suppliers, aerospace and consumer sectors.

(Wall St Week Ahead runs every Sunday; Reporting By Edward Krudy; Editing by Kenneth Barry)

Money, Dedication Likely Why Bucs Went With Clark Over Winslow - The Ledger

But the move was more than just numbers. Clark's professionalism will go a long way in the locker room of the young Bucs.

Clark was signed as a free agent after being released by the Indianapolis Colts, who purged most of their team. Winslow was traded to the Seattle Seahawks for a conditional seventh-round pick.

If the team goes strictly by the numbers, the deal would never have been made. The two have basically the same numbers over their careers. Winslow is 28, 6-foot-4 and 240 pounds, while Clark is 32, 6-foot-3 and 252 pounds.

Winslow has 10 more catches, while Clark has 51 more receiving yards. Their average per catch is nearly identical (Clark 11.4 to Winslow's 11.1).

The major difference, strictly by the numbers, is in touchdown receptions, where Clark has a 2-to-1 edge over Winslow (46 to 23).

That alone could have made a difference although Winslow's fans could counter with the past three years.

During that span, Winslow did not miss a game and averaged 72 catches during that time.

Clark, who battled injuries, has averaged 11 games and 57 catches over the same time period.

While critics will likely point out Bucs special assistant Butch Davis had something to do with Winslow being traded (the duo were together in Cleveland), that likely did not play much of a role.

What likely played a role was Winslow's salary.

Winslow was scheduled to make $3.3 million, not including a little over $1 million in workout and roster bonuses.

Clark signed a one-year deal worth up to $2.7 million with just $1 million guaranteed.

"Certainly there's a business side of this game at this level," said Tampa Bay coach Greg Schiano, who wouldn't say much else about trading Winslow.

Although Clark has played a full season just once entering his 10th season, he has played 15 games four times.

"He's a proven player," Schiano said of Clark. "I know he's had some health issues of late, some issues that have kept him from playing at the level of football he played earlier in his career. I believe whole-heartedly he's going to return to form and play the way he's capable."

Clark is going to do everything he can to get back to his high standards.

"Once you stop proving yourself, you're out the door," he said. "You have to bring your A game every day. That's what makes guys special who stay in the league a long time. To do it day in and day out (and for years), finding those pros is special.

"I'm just trying to be consistent and just be a player that (Bucs quarterback Josh Freeman) and the offense can depend on," he said. "That's all I tried to be. You are never guaranteed 100 catches. You are never guaranteed 20 catches. You have to earn every one of them."

That determination and dedication is why Clark is now a Buc.

Google Has A Magic Money Making Machine - Yahoo Finance

Here's one thing that's clearer than ever after Facebook's IPO mess: Google has a magic money making machine, and it's possible no other internet company will ever have the same sort of (relatively) easy success.

The number one comparison point for Facebook as it headed towards an IPO was Google. Facebook, like Google, was a giant web company that had hundreds of millions of users. Facebook, like Google, was working on highly-targeted ads that could hit hundreds of millions of consumers.

But a funny thing happened on Facebook's path to becoming Google 2.0 (from a business perspective). Everyone suddenly realized Facebook's ads aren't that good. And everyone realized that Facebook's ads, while very good at targeting, aren't nearly as powerful or effective as Google's.

And then everyone realized Facebook isn't going to have its own magic money making machine. If it's going to make lots of money, it's going to be more of a grind to figure it out.

In our newsroom, someone threw out a good analogy for Facebook's ad business*: It's like you're at a party, standing around, talking to your friends, and someone made the posters on the wall advertisements. Maybe you'll look at them, but they're not really what you're there to do.

Google, on the other hand, is like you're walking through a grocery store looking for whatever you need and the advertiser gets to jump in at the last second and offer you what you're looking for.

As Chris Dixon has written, successful online advertising is all about purchasing intent. How do you capture commercial consumer interest?

Google's entire business is based on people asking commercial questions and giving advertisers an opportunity to provide the top 2-3 answers to the question.

That's an amazing business. And it's one Facebook doesn't have.

That's not say Facebook isn't going to figure out a way to make gobs and gobs of money. It has 900 million users. It has a team of super smart people looking to solve a hard problem. It can figure something out.

It's just not likely to be a magical money making machine like what Google has.

Don't Miss: Here's What Could Happen Next To Facebook's Stock

*We apologize if this analogy was from somewhere else and we didn't realize. Credit to whoever came up with it.

More From Business Insider

No comments: