Stocks Open Higher, Dow Back in the Black for 2012 - CNBC Stocks Open Higher, Dow Back in the Black for 2012 - CNBC

Wednesday, June 6, 2012

Stocks Open Higher, Dow Back in the Black for 2012 - CNBC

Stocks Open Higher, Dow Back in the Black for 2012 - CNBC

Stocks surged more than 2 percent across the board Wednesday, with the Dow and S&P 500 logging their best one-day gains in 2012, amid growing hopes that central banks around the world will implement further measures to support the global economy.

Stocks saw an extra boost in the final minutes of trading after San Francisco Fed President John Williams said the central bank must stand ready to take even more policy action to boost the ailing job market.

The Dow Jones Industrial Average surged 286.84 points, or 2.37 percent, to close at 12,414.79, led by BofA [BAC  Loading...      ()   ], logging its first two-day win streak since late April.

The S&P 500 jumped 29.63 points, or 2.30 percent, to end at 1,315.13. The Nasdaq spiked 66.61 points, or 2.40 percent, to finish at 2,844.72. Both indexes are now out of correction territory. The CBOE Volatility Index, widely considered the best gauge of fear in the market, plunged almost 10 percent to end near 22.

All 10 S&P sectors closed firmly in positive territory, led by financials and energy.

“The market’s rallying on anticipation there’s going to be some kind of QE3 or operation twist,” said Alan Valdes, director of floor operations at DME Securities, noting that volume is still on the lighter side. “Traders continue to be very leery right now and will continue to be until we see jobs growth and a housing turnaround…People think the Fed has unlimited fire power—they don’t!”

Growth in the U.S. economy picked up in April and May and hiring showed signs of a "modest increase,'' according to the Federal Reserve, in its latest Beige Book summary of national activity.

Meanwhile, Atlanta Fed President Dennis Lockhart said the central bank may need to consider further monetary easing if the economy falters. Comments from both Lockhart and Williams come ahead of Fed Chairman Ben Bernanke's testimony on Thursday on the heels of some dismal economic reports.

Earlier, the ECB held its key interest rate unchanged at 1 percent, which was largely expected, but stopped short of announcing any big measures to help the financial markets. The central bank's President Mario Draghi pledged the ECB will act in a timely manner on inflation. Draghi added he expects inflation to stay above 2 percent this year and to ease to between 1 percent and 2 percent next year.

"Bottom line, Draghi didn't bring the meat the market dogs were hoping for as he seems to be standing pat for now, likely waiting for more stress to envelope before announcing something new of substance," wrote Peter Boockvar, managing director at Miller Tabak & Co.

But European shares closed higher amid hopes for further stimulus to boost the euro zone.

Facebook [FB  Loading...      ()   ] ended higher in choppy trading after JMP Securities started coverage of the social-networking giant with a "market outperform" rating and a $37 price target. The company closed below $26 a share in the previous session.

Meanwhile, Nasdaq OMX [NDAQ  Loading...      ()   ] said it plans to set up a $40 million fund to compensate some financial firms that lost money after Facebook's botched market debut on the exchange last month. The plan applies to sell orders at $42 or less that did not execute and buy orders at $42 executed but not confirmed.

Financials led the market rally with BofA posting its biggest one-day rally this year. Morgan Stanley [MS  Loading...      ()   ] also jumped after news the firm was considering a partial sale of its commodities trading division. Citigroup [C  Loading...      ()   ] and JPMorgan [JPM  Loading...      ()   ] were also higher.

Groupon [GRPN  Loading...      ()   ] rallied after the daily-deal website's rating was raised to "hold" from "sell" at Stifel.

Oil prices rallied, while gold touched a one-month high to settle above $1,630 an ounce. Halliburton [HAL  Loading...      ()   ] turned lower after the oilfield-services company said its decline in margins from last quarter will twice what the firm had initially expected, due to fracking costs related to guar gum. Shares were temporarily halted earlier.

Chesapeake [CHK  Loading...      ()   ] jumped following a report that the energy company will be selling nearly all of its pipeline assets to  in a deal worth more than $4 billion.

Tempur-Pedic [TPX  Loading...      ()   ] plunged nearly 50 percent after the mattress maker slashed its full-year earnings and revenue outlook due to increasing competition in North America. This comes after Mattress Firm [MFRM  Loading...      ()   ] missed revenue expectations on Tuesday and handed in weak quarterly revenue estimates. Smaller rivals Sealy [ZZ  Loading...      ()   ] and Select Comfort [SCSS  Loading...      ()   ] also fell sharply.

Iron Mountain [IRM  Loading...      ()   ] surged to lead the S&P 500 gainers after the document storage company announced it will convert to a real estate investment trust. In addition, at least two brokerages boosted their price targets on the firm.

On the economic front, U.S. productivity fell more than expected at a 0.9 percent annual rate in the first quarter, according to the Labor Department. Mortgage applications gained last week, according to the Mortgage Bankers Association.

—By CNBC’s JeeYeon Park (Follow JeeYeon on Twitter: @JeeYeonParkCNBC)

Coming Up This Week:

THURSDAY: Bank of England announcement, jobless claims, Bernanke speaks, quarterly services survey, Fed's Lockhart speaks, Fed's Kocherlakota speaks, consumer credit; Earnings from Lululemon Athletica, JM Smucker
FRIDAY: International trade, wholesale trade, Fed's Kocherlakota speaks, Chesapeake annual meeting

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Financial Planning Coalition Says Investment Adviser SRO Legislation Offers Wrong Solution to Increase Investor Protections - YAHOO!


Legislation would harm small businesses; better options available

WASHINGTON, June 6, 2012 /PRNewswire-USNewswire/ -- The Financial Planning Coalition today said in a prepared statement that the Investment Adviser Oversight Act of 2012 (H.R. 4624) would create a new regulatory structure that would lead to fewer investor choices for financial advice and impose a significant regulatory burden and higher costs on small advisory firms.

While the Coalition agrees that more frequent examinations of investment advisers by the Securities and Exchange Commission (SEC) are needed, it said that the proposed legislation "is the wrong solution for this problem," noting that should it become law the broker-dealer governed Financial Industry Regulatory Authority (FINRA) - which has no experience overseeing investment advisers - would most likely become the SRO.

The Coalition -- comprised of the Certified Financial Planner Board of Standards, Inc., the Financial Planning Association and the National Association of Personal Financial Advisors and representing more than 75,000 stakeholders - urged Members of Congress to reject the SRO approach in the legislation and put in place a solution that will work to "truly protect investors."

"H.R. 4624 is not the right solution for the narrow problem of increasing investment adviser examinations, and it would create many more problems than it purports to resolve," the Coalition wrote. "It would single out small business owners by imposing fees and regulatory burdens on mid- and small-sized advisory firms that are not imposed on large firms. It would impose increased layers of regulation and cost on state registered investment advisers. Finally, it would discourage investment advisers from serving retail clients. In sum, H.R. 4624 would create significant investor protection issues in its efforts to resolve a simple resource gap at the SEC."

Citing a study by The Boston Consulting Group, the Coalition noted that a FINRA SRO would cost an estimated $550 to $610 million a year. This amount includes an estimated $90 to 100 million annually for SEC oversight, which is required by current law. The cost to the SEC of overseeing the SRO alone is comparable to providing the SEC with the incremental resources it needs to increase its examinations of all investment advisers an average of every four years.

Saying it "supports the obvious, simple and much less expensive alternative, which is to enhance the SEC's existing oversight program so that it can examine all SEC-registered investment advisers at least once every four years," the Coalition would support Congress granting the SEC the "authority to assess user fees on all SEC-registered investment advisers."

The Coalition also encouraged Members of Congress to consider solutions that:

    --  would address the SEC's lack of resources with no impact on         taxpayers or the federal deficit,     --  would increase examinations for all investment advisers to an         acceptable level to protect investors,     --  would be the most cost-effective and efficient solution,     --  would not require establishing a whole new regulatory         bureaucracy,     --  would treat large, mid-sized and small investment advisers         consistently,     --  would be supported by investment advisers who have stated a         strong preference for paying user fees to the SEC as an         alternative to a FINRA-IA SRO, and     --  would allow Congress to retain direct oversight and         accountability over the SEC. 

While the legislation is supported in part to protect the public from future Bernard Madoff Ponzi schemes, the Coalition notes in its testimony that Mr. Madoff's firm would likely not have been affected by the legislation because his firm would likely have been exempted from the SRO.

"H.R. 4624 leaves the SEC with examination responsibility for the largest advisory firms without additional resources to examine these firms every four years and with the additional unfunded responsibility to oversee a new SRO," wrote the Coalition. "Such a result would be perverse from a public policy perspective. Under H.R. 4624, smaller investment advisers subject to the new SRO would be examined once every four years. But the larger SEC-only investment advisers, who manage far more assets and affect the lives of far more investors, would be examined at a far lower frequency."

SOURCE Financial Planning Coalition


YOUR MONEY-How couples sabotage their finances - Reuters UK

Wed Jun 6, 2012 3:30pm BST

(The author is a Reuters contributor. The opinions expressed are his own. This is part of a five-story package on marriage and money moving June 4-7)

By Chris Taylor

NEW YORK, June 6 (Reuters) - With a wedding coming up, you'd think Jay Buerck would be obsessing about the usual details: Writing vows, choosing appetizers, or figuring out seating charts to accommodate challenging relatives.

But what worries the 29-year-old St. Louis marketing professional isn't any of those things: It's money.

Not that he and his bride-to-be Liz Downey won't have enough; they earn comfortable salaries. What really freaks him out is the inherent challenge of joining two people's finances.

"Money is the reason why many people get divorced," says Buerck. "I have a buddy who got married and didn't tell his wife about the extent of his debt, and they had a rough go of it when he came clean. That's something I want to try and avoid."

The couple has already taken steps to prepare their finances. That's a smart strategy, according to financial experts, especially now that U.S. couples are waiting longer to marry, and many people have thousands of dollars in student loans and credit card debt by the time they take their vows.

Money causes more arguments than other typical flashpoints, according to a recent survey by the American Institute of Certified Public Accountants and Harris Interactive.

A full 27 percent of respondents said their spats started over money, more than problems with kids (16 percent) or chores (13 percent).

Couples who lock horns over finances at least once a week are 30 percent more likely to get divorced, according to a 2009 study by researchers at Utah State University,

"I probably spend 15 percent of my time with couples actually talking about money, and the other 85 percent talking about personal issues," says Chris Kimball, a certified financial planner in Lakewood, Washington, who also has a Masters of Divinity degree.

"It all ties into money. It's a very powerful thing that can do great things in people's lives, or can really mess them up."

Shockingly, nearly one-half of all people have lied to their significant other about money, according to an April poll by Self Magazine and (For a graphic representation of our financial State of the Union, click (

And a survey conducted this spring by revealed that 6 million Americans have hidden financial accounts from their spouses or live-in partners.

The deception isn't usually malicious. Often it's prompted by guilt and embarrassment about spending. Compounding the problem is that financial behavior is very deeply set, and can't be altered easily.

So where do couples go wrong, when it comes to money -- and how can they make it right?


Only 43 percent of couples talked about money before marriage, according to a May 2010 survey conducted for American Express.

But lack of disclosure about your financial issues -- maybe you're struggling with $100,000 in student debt, or maybe you filed for bankruptcy at some point -- isn't really any different from lying. Be up front about your financial situation, have the "money talk" long before the big day, and tackle any challenges as a couple.

"My significant other didn't tell me about the money problems we were having, and then one day we had no credit left and had lost pretty much everything," says Holli Rovenger, an author and speaker in Greenville, South Carolina. "If we'd worked together, maybe our finances wouldn't have spiraled out of control."

Minor money differences can be overcome as long as you have the basics covered: You have your daily needs met, you're bringing in more than you're paying out, and you're able to build a nest egg for the future. But once overspending and debt enter the picture, all bets are off.

"I was always a black-belt shopper, and hated to miss a sale," says Jenny Triplett, an entrepreneur in Powder Springs, Georgia, who's been married to husband Rufus Triplett for 22 years. "I'd have bags full of new clothes in the closet, and only bring them out one piece at a time. But eventually we came to a compromise, and I got my spending under control."

That's exactly the right template for resolving money disputes, planners advise. Even with differing money styles, if both partners take strides toward the middle and agree on broad outlines of a budget, it could prevent countless disputes.


Money is such an emotional issue that it could be difficult for couples to untangle all the knots on their own. A trained third party can help you figure out the core issues, and mutually agree on a financial plan.

"I've had clients yelling at each other in the parking lot, who came into the conference room and then wouldn't say a word to each other for the first hour," says Kimball. "But eventually we were able to work through it. Talking to someone can help air these financial issues in a safe environment."

Check out the website of the Association for Financial Counseling and Planning Education (, which has a searchable database of trained financial counselors.


It's helpful to have basic guidelines in place that will keep you on the same page. For instance, purchases under a certain dollar amount can be left to each spouse's discretion, while larger ones should to be cleared with your partner.

Some couples might be comfortable pooling all of their money, and others may not; neither is the "right" choice, but that should be decided explicitly.

"Understanding your partner's values on money is so very important," says Andi Wrenn, a financial counselor in Boston with a master's in marriage and family therapy. "Talk about how they learned money management, and what they plan to do in the future with the money they have and earn. Not often do people marry that are from exactly the same background."

That certainly applies to Jay Buerck and his bride-to-be. She's traditionally been more of a budgeter, and he's more laissez faire when it comes to counting pennies. But since they set up a joint account and moved in together, finances have "actually become less stressful," he says. "It's all about being open and honest." (Follow us @ReutersMoney or here; editing by Jilian Mincer, Linda Stern and Jeffrey Benkoe)

Financial Planners Are Wooing the Unwed - Smart Money

For most couples, marriage provides emotional and financial support -- to say nothing of a guaranteed date on Saturday night. But for retired executive Eric Nathan, it's little more than a musty tradition. The divorced 64-year-old North Carolina resident says he prefers his current arrangement: He has a steady girlfriend with whom he can see himself spending his remaining days, but he maintains his financial independence. The only problem is that the couple may still have a few financial matters they need to think through as, well, a couple. "What if my girlfriend needs to move in with me?" asks Nathan.

That sort of question has given rise to an entire niche industry: Call it financial planning for the kind-of-married. In recent years, financial advisers and estate attorneys have started offering services for unmarried couples -- same-sex or not -- who must deal with the same financial issues as their wedded compatriots but lack the piece of paper that makes the process much simpler. There are big numbers behind the push: Unmarried couples constitute some 6 percent of American households, according to the U.S. Census -- a figure that has risen by a quarter during the past decade. In raw numbers, that translates to nearly 7 million households.

Professionals catering to this group say they can barely keep up with demand. J.T. Hatfield Smith, a vice president of SPC Financial in Rockville, Md., says the number of unwed couples he works with has quadrupled to more than 100 households in the past five years. Others say they're looking for ways to tap into the unmarried pipeline. Attorney and CPA James Lange, owner of Lange Financial Group in Pittsburgh, recently signed up for a one-day legal workshop dedicated to working with this niche. And Gregg Parish, a professor at the College for Financial Planning in Greenwood Village, Colo., says his school recently added an accredited program for advising domestic partners. "It got to the point where financial planners were saying, 'Hey, I don't know what to tell these people,'" he says.

And there's a lot to tell: Married couples can take much for granted, like the ability to transfer assets between spouses without tax implications or the right to assume end-of-life caregiving decisions. But for unmarried couples, there's a range of paperwork -- from trusts (which can cost $1,500 to $5,000 in legal fees to establish) to prenup-style domestic-partnership agreements -- that's required to guarantee the proper protections and cost-saving measures. Otherwise, they could run into problems with issues like, say, whether the surviving partner will be able to remain in the couple's home after the other passes.

But the problem, say experts, is that the issues involved are so complex that even specialists devoted to this type of planning can make mistakes. Estate planning is one potential trouble spot. It's a crucial piece of planning for unmarried couples, because there's no assuming the "spouse" will get what he or she deserves or expects, and yet there are few cookie-cutter solutions for drawing up legal documents for unwed partners, says Lange. And even small planning matters can cause problems, says Hatfield Smith. Take homeowner's insurance: If the property is under only one partner's name, the policy won't necessarily cover the other's personal items.

If there's any takeaway for the kind-of-married, say the pros, it's that even a little planning can go a long way, be it in the form of thousands of dollars saved in taxes or the comfort of knowing you can make medical decisions on a partner's behalf. Of course, for some couples, a marriage blessed by the federal government remains an option -- and there are couples who tie the knot for financial reasons, say advisers and attorneys. But Nathan, the retired executive, doubts he and his girlfriend will ever be one of them: "We're both very protective of our freedom."

Stocks for a small-cap bounce - MSN Money

Since the stock market began to turn lower two months ago amid renewed fears about the European debt crisis, small-cap stocks have fared worse than their larger peers. It shouldn't be a surprise -- often when fears hit and the market falls investors lean toward stocks of larger companies, assuming they will be more stable and steady during tough times.


Many quality small-caps can thus get unfairly punished during such periods, creating bargains among the market's little guys. That's what's happening with many smaller stocks right now according my Guru Strategies ideas (each of which is based on the approach of a different investing great).

Very often, investors who take advantage of such bargains get a big boost when the market turns back up again, as smaller stocks outperform larger stocks when fears subside and investors begin to take on more risk.

In 2010, for example, the market really began to turn upward after its summer doldrums on Aug. 30. Over the next three months, the Standard & Poor's 500 Index ($COMPX) gained about 12.6%; the Vanguard Small Cap ETF (VB) jumped more than 20%. Last year, after stocks bottomed on Oct. 3, the S&P rose about 16.2% over the next three months; the Vanguard Small Cap ETF gained more than 21%.


I'm not saying the market has bottomed, or that you should try to time the market. What's more important here is that many high-quality small-caps are trading on the cheap. So even if they don't snap back today or next week, they're still the sort of longer-term bargains you should consider for your portfolio. (And if they do happen to turn around sooner rather than later, all the better.) Here are several my models are high on right now:


L.B. Foster Company (FSTR): Pittsburgh-based Foster ($275 million market cap) makes construction and other products that range from rail joints to bridge decking to water well piping. My Benjamin Graham-inspired model is high on the stock.

Graham, known as the father of value investing, was a very conservative investor, and this approach looks for companies with good liquidity (current ratio of at least 2.0) and a strong balance sheet (long-term debt should not exceed net current assets).

Foster has a 3.2 current ratio, no long-term debt, and about $160 million in net current assets. It also trades for a reasonable 14 times three-year average earnings, and just 0.88 times book value.


Darling International (DAR): Darling ($1.7 billion market cap) is in the business of rendering -- turning animal by-products from butcher shops, grocery stores, food service companies, and meat and poultry processors into oils and proteins used by agricultural, leather and chemical firms. It also recycles cooking oils used by restaurants into useable products like animal feed and industrial oils, and it recycles bakery waste into by-products like cookie meal (an animal feed ingredient).


Darling has been an explosive grower, upping earnings per share at a 47% pace over the long haul (I use an average of the three-, four-, and five-year earnings per share figures to determine a long-term rate.) That makes it a fast-grower according to my Peter Lynch-based model -- Lynch's favorite type of investment.

Lynch famously used the price to earnings to growth ratio to find bargain-priced growth stocks, and when we divide Darling's 10.9 price-to-earnings ratio by that long-term growth rate, we get a PEG of just 0.23. That easily comes in under this model's upper limit of 1.0. While it will be tough to maintain such a high growth rate, the stock is cheap enough that it would be a bargain at even half its current growth.


The model I base on the writings of hedge fund guru Joel Greenblatt is also high on Darling. Greenblatt's approach is a remarkably simple one that looks at just two variables: earnings yield and return on capital. Darling's 15% earnings yield and 49.7% ROC make it one of the top stocks in the market right now according to this approach.


Fred's (FRED): Fred's ($500 million market cap) operates more than 700 discount general merchandise stores in the southeastern United States. Like many discount retailers, it's done quite well in recent years, and my Lynch-based model likes its 22.2% long-term growth rate and 14.6 price-to-earnings ratio. Those figures make for a bargain-priced 0.66 PEG ratio.


Another reason my Lynch model likes Fred: The firm's debt/equity ratio is a mere 1.7%.


MWI Veterinary Supply (MWIV): This Idaho medical equipment small-cap ($1.2 billion) keys on a very specialized group of end users: animals. It sells its products, which include pharmaceuticals, vaccines, parasiticides and pet food and nutritional products, to veterinarians in the U.S. and U.K. In the past year, it has taken in more than $1.8 billion in sales.


MWI has actually outperformed the market since the downturn, but my models still think there's value in the stock. It gets strong interest from my Martin Zweig-inspired model, which likes the firm's long-term earnings per share growth (24.9%) and long-term sales growth (22%). It also likes that earnings per share have increased in each year of the past half-decade, and that MWI's debt is less than 20% of its equity.


My Lynch-based model, meanwhile, likes MWI's 24.9% long-term earnings per share growth rate. Its price-to-earnings is on the high side (24.1), but the firm's growth is high enough that its PEG ratio still comes in at 0.97, just under the model's 1.0 upper limit. And my James MWIVO'Shaughnessy-based growth model likes that it has upped earnings per share in each year of the past half-decade, and that it has an 81 relative strength and 0.65 price-to-sales ratio.


LSB Industries (LXU): LSB ($600 million market cap) manufactures a range of hydronic fan coils, heat pumps, large custom air handlers and other products used in commercial and residential air-conditioning systems, as well as chemical products for mining, quarry and construction, agricultural and industrial acid markets.


LSB gets strong interest from the approach top money manager Kenneth Fisher laid out in his 1984 classic "Super Stocks." Fisher pioneered the use of the price-to-sales ratio (PSR) as a valuation metric, finding it to be a better indicator than the more popular price-to-earnings ratio. This model looks for cyclical and industrial-type firms to have PSRs below 0.8. LSB's is 0.74, a good sign. The model also likes LSB's reasonable 26% debt-to-equity ratio, 26.2% long-term inflation-adjusted earnings per share growth rate, and three-year average net profit margins of 6.4%.


My Lynch-based model also likes LSB, thanks to its 28.6% long-term earnings per share growth rate and 8.2 price-to-earnings ratio, which make for a stellar 0.29 PEG ratio. It also likes the company's reasonable debt load.


I'm long FSTR and MWIV. 

John Reese is founder and CEO of Validea Capital Management and, a premium investment research site, and the author of "The Guru Investor: How to Beat the Market Using History's Best Investment Strategies".

Stocks Close Sharply Higher Amid Optimism About Stimulus - RTT News

6/6/2012 4:26 PM ET
(RTTNews) - With traders expressing optimism about further stimulus from the world's central banks, stocks moved sharply higher during trading on Wednesday. The markets extended the upward move seen in the previous session, recovering further from the sell-off seen in recent weeks.

The major averages saw further upside going into the close, ending the session at their best levels of the day. The Dow jumped 286.84 points or 2.4 percent to 12,414.79, the Nasdaq surged up 66.61 points or 2.4 percent to 2,844.72 and the S&P 500 soared 29.63 points or 2.3 percent to 1,315.13.

Much of the rally on Wall Street stemmed from the optimism about further stimulus following the Reserve Bank of Australia's interest rate cut on Tuesday.

The optimism came even as the European Central Bank announced its widely expected decision to leave interest rates unchanged following its monetary policy meeting.

Traders were also initially disappointed by ECB President Mario Draghi's remarks at a subsequent press conference, as they did not seem to indicate that the ECB was planning on providing further stimulus.

However, Draghi later told reporters that the central bank stands "ready to act" if the economic situation continues to worsen.

Positive sentiment was also generated by comments from Atlanta Federal Reserve President Dennis Lockhart, who said that the option of extending "Operation Twist" is still on the table.

Operation Twist involves replacing short-term securities in the Fed's bond portfolio with longer-term securities in an effort to push already low long-term interest rates even lower.

San Francisco Fed President John Williams also spoke late in the trading day, calling it crucial that the central bank maintains in highly stimulatory monetary policy stance.

"As part of this, we've stated our intention to keep our benchmark short-term interest rate at exceptionally low levels at least through late 2014," Williams said. "We must also stand ready to do even more if needed to best achieve our statutory goals of maximum employment and price stability."

Stocks saw continued strength following the release of the Fed's Beige Book report, which said overall economic activity expanded at a moderate pace during the reporting period from early April to late May.

While the Beige Book also said the economic outlooks remain positive, the Fed noted that contacts were slightly more guarded in their optimism.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Wednesday, adding to the gains posted in the previous session. Japan's Nikkei 225 Index surged up by 1.8 percent, while Hong Kong's Hang Seng Index jumped 1.4 percent.

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Financial Markets Buoyant Ahead of ECB Meeting - NASDAQ

Financial markets were in a buoyant mood early Wednesday with the euro rising strongly against the dollar, stocks strongly up in positive territory and euro-zone "peripheral" yields steady ahead of the European Central Bank's rate setting meeting later in the day.

Investors are hoping for some action from the central bank after the crisis in the euro zone has worsened in recent weeks.

Spain's borrowing costs have risen sharply with its banking sector looking increasingly vulnerable and there is still a big question mark over the political situation in Greece as the June 17 general election looms.

In addition, traders say the U.S. Federal Reserve may also introduce a round of fresh stimulus measures. A report in The Wall Street Journal said that disappointing economic data, weak financial markets and the ongoing European crisis have made policy action at the central bank a possibility once again. However the Fed's next meeting on June 19 and 20 could be too soon for decisive action.

But most economists have maintained their forecasts that the ECB will not change its policy response or key rate.

"The ECB is unlikely to see a rate cut as an effective response to the problems of the periphery, with any rate cut in future likely to be triggered by weakness in Germany and the rest of the "core" countries," said Lloyds Bank. Nor does it see another long-term refinancing operation as likely at this stage.

But investors are thinking otherwise and at 0815 GMT, the benchmark Stoxx 600 index was up 1.4% at 237.81. Germany's DAX increased 1.4% to 6053.48 and France's CAC-40 gained 1.4% to 3028.85. The U.K.'sFTSE 100, which re-opened after the Jubilee public holiday, was 1.2% higher at 5321.98.

In foreign exchanges, the euro gained against the dollar as investors hoped the ECB would take fresh easing action later to calm recent market jitters. At 0815 GMT the euro was $1.2518 compared with $1.2452 late Tuesday in New York.

Bank stocks were up in Europe with the Stoxx 600 index 2.4% higher at 124.62. Even German banks made some solid gains despite Moody's Investors Service lowering its investment-grade ratings on six German banks by one notch. The ratings firm pointed to increased risk of further shocks from the euro-zone sovereign crisis for the change. Moody's also lowered its investment grade ratings on Austria's three largest banks. However, Commerzbank--one of the banks that was downgraded--was up 2.0%.

The move by Moody's is part of its ongoing review of over 100 European banks so it was anticipated by the markets.

Amongst individual stocks, Lloyds Banking Group gained 4.4% after selling an GBP809 million package of Australian corporate real-estate loans. The package was sold to AET SPV Management Pty Limited, a joint venture comprised of funds sponsored by a Morgan Stanley real-estate investment fund and Blackstone Group.

Elsewhere, Dutch retailer Royal Ahold NV fell 3.1% after it posted a slight fall in its first-quarter net profit as intense price competition weighed on margins. Royal Ahold gets most of its revenue from the U.S. where it operates the Stop & Shop and Giant chains.

Asian equity markets rose Wednesday. Japan's Nikkei gained 1.8%, helped by a weakening yen, Hong Kong's Hang Seng Index increased 1.3% while Australia's S&P ASX 200 ticked up 0.3%.

Earlier, data showed that Australia's average measure of gross domestic product in the first quarter rose 1.3% on the quarter and 4.3% on the year. Economists on average had expected GDP to rise 0.7% on the quarter and 3.4% on the year.

The China Shanghai Composite slipped 0.1%. South Korea is closed for a holiday.

In other asset classes, the July Nymex crude futures contract was up $1.00 at $85.29 and the July Brent futures contract was up $0.90 at $99.74. Spot gold was $7.30 higher at $1,635.10. The September bund was down 0.57 points at 144.29.

The Spanish 10-year Spanish government bond yield was down two basis points at 6.324% and the Italian 10-year bond yield was down one point at 5.61%, reflecting the more positive mood in the financial markets.

The second release of euro-zone first-quarter GDP is at 0900 GMT and German industrial production at 1000 GMT. The ECB's rate announcement is at 1145 GMT and a press conference hosted by the ECB's president Mario Draghi follows at 1230 GMT.

Write to Andrea Tryphonides at

    (END) Dow Jones Newswires   06-06-120305ET   Copyright (c) 2012 Dow Jones & Company, Inc. 

Money Management International Receives Financial Literacy Grant From Chase - Yahoo Finance

HOUSTON, June 6, 2012 (GLOBE NEWSWIRE) -- Money Management International (MMI) has been awarded a $187,000 grant from Chase Card Services, a division of JPMorgan Chase & Co., to help American consumers gain access to important financial literacy programs designed to help them become financially stable.

Grant funds made possible through Chase's Financial Literacy Grant initiative support MMI's Journey to Financial Security program and community-based workshops, both of which focuses on providing financial education that not only helps to build a solid financial foundation, but also assists consumers in developing the skills needed to reach long-term financial success.

Over the next three to five years, this funding will enable consumers across the nation to participate in education and case management programs intended to improve competency levels centered on core financial literacy topics such as setting and reaching financial goals, building savings and wealth, managing income and expenses, and using credit wisely. In addition, participants will learn strategies for managing decisions surrounding financial life-stages such as paying for college, planning for marriage and family, and saving for retirement.

"We commend Chase for taking steps to assist individuals in gaining access to financial education programs," said Jo Kerstetter, vice president of education and community relations for MMI. "We are excited to partner with Chase on this important effort to build stronger communities and provide residents with the financial tools and resources needed to reach long-term financial success."

Chase's Financial Literacy Grant program awards funds to community organizations focused on financial education and empowerment throughout the United States.

"Now more than ever, Chase is committed to increasing access to information and assistance that can help individuals improve their financial situations and secure their financial futures," said Gina Luna, chairman of Chase in Houston. "We are pleased to provide MMI with the funding they need to help ensure their program's success.

To learn more about Chase's philanthropic initiatives, contact Greg Hassell at

About Money Management International

Money Management International (MMI) is a nonprofit, full-service credit-counseling agency, providing confidential financial guidance, financial education, counseling and debt management assistance to consumers since 1958. MMI helps consumers trim their expenses, develop a spending plan and repay debts. Counseling is available by appointment in branch offices and 24/7 by telephone and Internet. To learn more, visit or call 800.432.7310.

About Chase

Chase is the U.S. consumer and commercial banking business of JPMorgan Chase & Co. (NYSE:JPM - News), a leading global financial services firm with assets of $2.3 trillion and operations in more than 60 countries. Chase serves more than 50 million consumers and small businesses through more than 5,500 bank branches, 17,500 ATMs, credit cards, mortgage offices, and online and mobile banking as well as through relationships with auto dealerships. More information about Chase is available at


Tanisha Warner

Media Relations


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