April 20, 2021

Wall Street Now Banks On Rebound in Employment

Less than a week since the Dow Jones industrial average hit its all-time high, the broader Standard Poor’s 500-stock index is on track to surpass its own 2007 high. The reason, in no small part, is because of investor confidence in the growing economic strength of American households.

This is a shift from the last few years, when stocks and corporate profits soared primarily because of cost-cutting and increased productivity from a shrinking or slow-growing work force. The Federal Reserve’s stimulus programs helped corporate America, but they did little to help improve the lives of most American workers, whose wages declined while unemployment remained stuck at high levels.

A surprisingly good employment report on Friday was the strongest of a number of recent indicators that the benefits of the Fed’s program are now starting to trickle down to ordinary Americans, who should, in turn, push up sales at American companies. In addition to brisk job growth in recent months, the February employment report gave some of the first evidence of a sustained upturn in wages, and showed that it was spread across many industries.

The improving job market could falter, particularly if cutbacks in government spending mandated by the so-called sequester take a substantial bite out of economic growth. But even a more modest upturn comes not a moment too soon for American companies.

Growth in corporate profits has slowed in recent quarters as the earlier gains from productivity and cost-cutting reached their limits. Many strategists are now seeing signs that the slowdown in expense reduction — the so-called bottom line — is being made up for by top-line growth in revenues from reviving American consumers.

“You can only cut and cut and cut for so long, eventually you have to have growth,” said Paul Hickey, a founder of the Bespoke Investment Group. “Now we’re starting to see some signs that is happening.”

In the fourth quarter, American companies experienced the biggest increase in sales per share of any quarter since the financial crisis, according to figures from RBS Securities. In announcing their most recent financial results, many executives spoke about the boost they have gotten from American customers, and the money they are putting back into the pockets of their own employees.

Daniel S. Fulton, the chief executive of Weyerhaeuser Company, a timber company, told investors in January, “Most of the hiring that we have done in the company has been production employees that we’ve been putting back to work, in order to be able to ramp up and respond to the increased opportunities for wood products.” The improving prospects for corporate revenues are encouragement to hesitant investors who have been wondering whether to get back into the stock market but worried that the current rally could already be reaching its peak. After six straight days of gains, the S. P. 500 closed Friday just 14 points, or 0.9 percent, from the record high of 1,565.15 it hit in October 2007. Factoring in inflation, however, the index is still far from earlier peaks, as is the Dow.

The sequestration’s automatic spending cuts have not yet appeared in economic data and there are fears it could exert a future drag on the economic recovery. But Friday’s employment report — showing a gain of 236,000 jobs and a dip in the jobless rate to 7.7 percent — suggested that American businesses have largely shrugged off the 2 percentage point increase in the payroll tax that was expected to inflict more pain.

Even if corporate revenues climb further, it won’t necessarily lead to rising share prices. Investors have already factored the optimistic economic signs while making their investments.

Article source: http://www.nytimes.com/2013/03/11/business/economy/after-corporate-upswing-hopes-grow-for-a-consumer-revival.html?partner=rss&emc=rss

Central Bank Nominee Pledges ‘Whatever Is Needed’ for Japan

TOKYO — The nominee to become the next Bank of Japan governor said Monday that he would do “whatever is needed” to finally end deflation in the world’s third-largest economy.

Haruhiko Kuroda, who announced his resignation as president of the Asian Development Bank last week, also called on the government to put its finances on a sounder footing to maintain investor confidence in the country’s long-term solvency.

“If I am confirmed as governor, I will clearly communicate to markets that I am prepared to do whatever it takes to beat deflation,” Mr. Kuroda told a confirmation hearing in parliament.

“The Japanese economy has suffered from deflation for over ten, almost 15 years, which is a global anomaly of the most extreme. As prices have fallen, corporate profits and wages have shrunk, depressing consumption and investment and triggering even lower prices in a vicious cycle,” he said.

“But to avoid a rise in interest rates and a loss of confidence in Japan’s public finances, it is also critical to restore fiscal health in the mid- to long-term,” Mr. Kuroda said.

If confirmed, Mr. Kuroda is set to spearhead a crucial part of Prime Minister Shinzo Abe’s three-pronged plan to spur economic growth. Mr. Abe has pledged to push the Bank of Japan, or B.O.J., to do more to pump funds into the economy, spend generously on public works to kick-start growth and draw on private sector expertise to devise a fresh economic strategy that would make that growth sustainable. The Japanese economy ranks only behind the United States and China in size.

Under pressure from Mr. Abe, the central bank has already promised to expand its asset-purchase program to achieve a 2 percent inflation target, compared to a negative rate of inflation that has dogged Japan for most of the past 15 years. Japan has also kept its policy interest rate close to zero for years, to no avail.

Mr. Kuroda said, however, that that “scale and scope” of the Bank of Japan’s asset purchases had so far not been enough to achieve inflation, and that it would be natural for the central bank to buy longer-term bonds.

He also acknowledged that as Japan tackled deflation, the yen would weaken but he stressed that devaluation was a side-effect of an economic policy imperative to trigger growth in Japan, and not a goal in itself. His comments came after concerns that policies that weaken the yen would trigger a global round of devaluations as countries seek to weaken their currencies to boost their exports.

“There is evidence that currencies tend to fall for countries that ease monetary policy on a large scale,” Mr. Kuroda said, “but the B.O.J.’s policy is not targeting currencies.”

“The important thing is to ensure price stability and achieve the 2 percent price stability goal, although it could affect currencies in that process,” he said.

The opposition Democratic Party, which still leads Mr. Abe’s Liberal Democratic Party in parliament’s upper house, has signaled that it will not block Mr. Kuroda’s nomination. The current Bank of Japan governor, Masaaki Shirakawa, is scheduled to leave his post on March 19.

Article source: http://www.nytimes.com/2013/03/05/business/global/05iht-yen05.html?partner=rss&emc=rss

You’re the Boss Blog: This Week In Small Business: 1,000 New Bankers

Dashboard

A weekly roundup of small-business developments.

What’s affecting me, my clients and other small-business owners this week.

The Big Story: Four More Years

At his inauguration, President Obama delivers a rallying cry for active government. Rick Newman says the president has given a gift to the stock market. This blogger believes that the speech made things a lot more certain for small businesses. Here’s the whole speech in just three minutes. These are 22 of the most fabulous Beyoncé moments from the inauguration (and one that’s not-so-fabulous). The president’s daughters seemed to enjoy the day, too.

Finance: Bank of America Hires 1,000 Bankers

Investment professionals are anticipating an influx of income and growth-hungry mom-and-pop “retail” investors. Bank of America reached its goal of hiring 1,000 small-business bankers and extended nearly $8.7 billion in new credit to small businesses in 2012. Companies are keeping stockpiles of foreign cash in the United States. Erik Sherman says you should be wary of any Web site that claims to enable crowdfunded public offerings.

The Economy: $1 Trillion In Profits

General Electric’s earnings rise and overall corporate profits are now projected to be $1 trillion this year. But how good can things be if Google’s co-founder is still taking the subway? Weekly jobless claims dropped to a five-year low. The architecture billings index went up for the fifth straight month, and truck tonnage jumped 2.8 percent in December. Existing home sales shrank, but Bill McBride says it’s a solid report. Manufacturing activity contracts again in Richmond and in Kansas City (pdf). Blockbuster plans to close 300 stores. A quarterly survey finds that small-business confidence continues to hold steady but a Chamber of Commerce survey finds 53 percent of small businesses have not hired in the past year and 64 percent plan to keep the same number of employees in 2013. The International Monetary Fund thinks the United States economy is slowing down.

Tweet of the Week

@michaelianblack: Blockbuster still has 300 stores?

The Budget: Cats!

The House votes to extend the debt ceiling to May 19. Larry Summers says the government should worry less about deficits and more about unemployment. Jeff Miller tells us how to spot pop economists. A New Zealand economist wants to eradicate the country’s cats.

On The Road: Dreamliner Nightmares

Boeing’s unions blame the 787 Dreamliner woes on outsourcing. Southwest Airlines introduces a $40 fee. Capital One introduces a LinkedIn group for business travelers. Chicago’s hotel occupancy rate is back to pre-recession levels. A former road warrior delivers tips on cutting business travel expenses (and this road warrior almost becomes a former road warrior).

Your Employees: As Happy As Google

Yahoo is trying to lure back some former employees (suggestion: hire these awesome people instead). A marketing and advertising firm embraces quirkiness and manages to increase its growth. This is how to let employees know they’re appreciated and how to make your office as happy as Google’s. Emmanuel Banks explains how to make your Mac work space more productive. Here are a few tips for your employees to be more productive when working from home. Cash appears to be leaking out of 401(k) plans at an alarming rate. An 11-year-old girl shatters climbing records.

Managing: Losing Your Passion?

Brian Lee explains why you should never give up on becoming an entrepreneur, and Brad Farris has some thoughts on what business owners should do when they lose their passion. Ken Gaebler believes that investing in public relations boosts a company’s chances of getting acquired: “P.R. works because you’re not saying, ‘I’m great’; instead, it’s a respected outsider saying, ‘They are great,’ which is much more convincing.” Here’s how to achieve business success based on the Martha Rules. A bunch of high-profile entrepreneurs reveal what’s in the refrigerator.

Start-Ups: Why M.B.A.’s Fail

When looking for people to join your start-up’s board of directors, Mahendra Ramsinghani says not to let laziness and bias trump diversity. These three start-ups are trying to help you sleep. A new venture will mine asteroids. John Greathouse says there are five reasons M.B.A.’s fail at start-up. Steve Woodruff recommends five books for business starters. This is how one start-up spends its money.

Social Media: Bait and Switch

The clients of this social media consultant can’t even log on to Facebook, and here are 26 tips for getting started with social media marketing. Deb Donston-Miller suggests five ways social media makes business-to-business sense. This is how Threadless, Home Depot, and Amex managed to get groups of fans talking. Twitter experiences technical problems and releases a video sharing app. Here’s how to track the most popular Twitter hashtags. Google plans improvements to its image searching, and Facebook’s first intern is leading a small-business revolution. Nothing makes Derek Johnson angrier than seeing a text-message marketing campaign pull the old bait-and-switch on consumers. These are the five biggest misconceptions about using Instagram for business (but be careful: restaurants are cracking down on Instagrammers). And for some reason, the Library of Congress is archiving America’s tweets. Owen gets on SportsCenter.

Marketing: After the Sale

Here’s why you need to make content marketing a priority, and Heidi Cohen suggests nine content-marketing tactics. A webinar will discuss the seven marketing habits of today’s highly successful small and midsize businesses. J. David Green explains how technology on the trade show floor can help your sales team work smarter and sell more. Ken Sundheim explains how search engine optimization almost killed his business. Charlotte Varela asks if you are helping your customers after they buy from you.

Retail: ‘Show-Rooming’

Target can teach you the benefits of introducing brands online instead of in stores. “Show-rooming” shoppers have been a good thing for eBay. Yelp is adding health inspection grades to its site. A bear uses a washing machine. A new marketplace helps retailers find spaces offering short-term leases. This week retailers can start charging their customers for credit card fees. The Panera Bread Foundation opens a new community cafe with no cash registers or prices.

Around The Country: Sparking Entrepreneurs

A flexible work company plans to add more than 20 locations in the Los Angeles area in 2013. The owner of the Jacksonville Jaguars offers $1 million to “spark” entrepreneurs. A new tech rap video promotes entrepreneurship. Small businesses are big in Montana. Startup Weekend is coming to Evansville, Ind.

Around The World: 3D Clothes

Spanish banks are facing big challenges. Coca-Cola pledges $100,000 for projects by young people. In the United Kingdom, the prime minister wants a global crackdown on corporate tax cheats, a record-breaking number of Britons are now at work, and Prince Harry abandons an interview for ice cream. A Dell executive says small businesses should consider exporting to Brazil. In Paris, 3D printed clothing hits Fashion Week, and a Dutch architecture firm plans to print a house. This is the world’s poorest president.

Red Tape: Five Legal Myths

A new e-guide from Microsoft demystifies the process of pursuing contracts with the government and other large enterprises. Pete Wise lists five legal myths small-business owners should avoid, including: “I don’t need a lawyer.” Entrepreneurs plan a road trip to talk up immigration reform. Women entrepreneurs will have greater access to federal contracts. Bill Murphy Jr. lists four ways women in combat will change business. Michael Keating discusses the opportunities in the government market.

Technology: Ashton Kutcher as Steve Jobs

Microsoft considers taking a big stake in a Dell buyout. Chris Luo says big data and software as a service will become relevant for small businesses in 2013. Ashton Kutcher will appear at MacWorld as Steve Jobs (which may help him get an invite to one of these dinners). Apple takes a beating on Wall Street. Paul Greenberg announces the best customer relations management applications for 2013. Liquids bounce off this clothing material. Robert LeCount gives advice for picking the right technology for your business. A yearlong competition challenges the best technology minds to develop solutions that address issues in health care, education and sustainability. Brother introduces a contest aimed at small businesses.

The Week’s Bests

Freshdesk’s marketing and communications manager, Sairam Krishnan, explains how his company finds and keeps customer service representatives: “Test their culture fit. Every company has a slightly different way of doing business. At Freshdesk, we frown upon bureaucracy and hierarchy. We put our customer service candidates in situations where they have to interact with a few senior employees of the company. These interactions, usually spontaneous and casual, help the team evaluate the candidate’s personality and fit with our customer service-centered culture.”

Megan Totka shares tips for building a socially conscious business: “Set an example. While it is great to encourage employees to volunteer, and even provide incentives, the best way to get everyone in your company fired up for service is by getting out there and participating yourself. Do more than simply embrace the idea of service; make the service happen.”

This Week’s Question: Do you consider your business socially conscious?

Gene Marks owns the Marks Group, a Bala Cynwyd, Pa., consulting firm that helps clients with customer relationship management. You can follow him on Twitter.

Article source: http://boss.blogs.nytimes.com/2013/01/28/this-week-in-small-business-1000-new-bankers/?partner=rss&emc=rss

U.S. Economy Grew Slower in Spring Than Reported

Fewer exports and weaker growth in business stockpiles led the government to lower its growth estimate for the April-June quarter from the initial 1.3 percent rate.

The economy expanded only 0.7 percent in the first six months of the year, the agency said.

Nine of the last 11 recessions since World War II have been preceded by a period of growth of 1 percent or less, economists note.

“The economy is teetering on the edge of a renewed recession,” said James Marple, an economist at TD Securities. “Any renewed shock could push the economy over the edge.”

Economists said the revision had not changed their growth forecasts. Most expect slightly better growth — roughly 1.5 to 2 percent — in the second half of the year.

That level of growth would likely cool recession jitters. But it is not enough to make a noticeable dent in the unemployment rate, which was 9.1 percent in July.

Some economists worry that this summer’s sell-off on Wall Street could hamper growth further if consumers and businesses pull back on spending and investment. The stock market has lost 12 percent of its value since July 21.

There were some good signs in the report. Corporate profits rose faster than in the previous quarter. The decline in business stockpiles suggests factories may step up production to fill future orders.

The revision also showed consumers and businesses spent a bit more in the spring than in the government’s first estimate. Consumers spent more on health care, insurance and financial services. Businesses bought more equipment and software and invested in more buildings.

Consumer spending was revised up to a 0.4 percent gain, slightly better than the first estimate of 0.1 percent. Still, that is the weakest growth since the final three months of 2009.

People bought fewer long-lasting manufactured goods, such as autos and appliances. Those purchases fell 5.1 percent this spring, the biggest drop since the fall of 2008. That partly reflects a shortage of autos on many dealer lots after the March 11 earthquake in Japan. Consumer spending accounts for 70 percent of growth.

Government spending contracted for the third straight quarter. And spending by state and local governments declined for the seventh time in eight quarters.

Corporate profits remained healthy, as they have throughout the recovery. They rose 3 percent, up from a 1 percent gain in the first quarter.

Several dismal economic reports have suggested the economy worsened in the July-September quarter, sending the stock market lower. Manufacturing in the mid-Atlantic region contracted in August by the most in more than two years, a survey by the Federal Reserve Bank of Philadelphia found. A Richmond Fed survey released Tuesday and a New York Fed survey last week also pointed to slowdowns in those areas, although not as severe.

Still, other reports offer a more optimistic picture. The economy added 117,000 net jobs in July, twice the number added in each of the previous two months. Consumers spent more on retail goods last month than in any month since March. Automakers rebounded last month to increase factory production by the most since the Japan crisis.

Thursday’s report is the second of three estimates the government issues for each quarter’s economic growth. The estimates are updated with more recent data that was not available for the first report.

Article source: http://feeds.nytimes.com/click.phdo?i=ea32b2aba827e90120f7c32e7698abaf

Stocks Open Higher in U.S.; Europe Up

At noon, all three of the main indexes were up more than 1 percent. Tthe Standard Poor’s 500-stock index was up 14.65 points, after dipping briefly into negative territory. The Dow Jones industrial average was up about 187 points, and the Nasdaq rose 27.26.

If Friday’s gains are sustained, it could turn around the week’s overall trend, which had the broader market as measured by the S.P. 500 down by just over 2 percent at the end of trading Thursday.

American stock markets have been wildly volatile in the past four trading sessions, with alternating days of collapsing and then sharply rising prices. The mood has swung between speculation about worries over the economy and a renewed financial crisis, and confidence that banks are healthy and corporate profits strong.

As the week drew to a close, investors sifted through new data on the economy, including insights into consumer behavior, a crucial element in trying to gauge the pace of the recovery.

The Commerce Department said retail sales for July rose 0.5 percent. Without the volatile automobile and gas components, sales firmed 0.3 percent. The figures included several revisions, but they suggested there was some spending momentum in the second quarter and the beginning of the current quarter, at least.

But another piece of data that is indicative of where the market could swing was a survey by the University of Michigan that showed consumer sentiment dipped in August, registering 54.9 on its index, which was a reading lower than during the crisis of November 2008.

“Clearly, recent financial market turmoil has weighed heavily on sentiment, which was already under pressure from a dysfunctional political arena and the longer-term issue of an ailing labor market,” said Joshua Shapiro, the chief United States economist for MFR, in a research note.

Industrial stocks led the way on the S.P. 500, with General Electric up 2.55 percent. Financial stocks showed slight gains of less than half a percent.

The “fear” index, or VIX, which is a measure of volatility in the market, declined to 34.23, its lowest point so far this week.

United States benchmark 10-year Treasury yields were lower, to 2.25 percent from 2.34 percent on Thursday.The gain in stocks came well after investors had digested the latest economic data. Timothy A. Hoyle, director of research for Haverford Investments, said that the markets took a step down in early trading when the index report was released, but that the figure was not unexpected considering recent bad economic data and some of the developments in financial markets.

Speaking about the market on Friday, he said: “Everyone is suffering from volatility fatigue.”

“We are stuck in a trading range until we have a credible backstop in Europe,” he said. “The market is extremely cheap but there is a lack of confidence in forward earnings estimates.”American stocks picked up the pace from Europe, where markets got a lift from the imposition of temporary bans on negative bets against financial stocks in four countries. The Euro Stoxx 50 index of euro zone blue chips was up more than 4 percent, and the FTSE 100 index in London was up 3.04 percent. The CAC 40 index in Paris was also up 4.02 percent, and the DAX in Frankfurt was up 3.45 percent. Asian stocks had a lackluster trading day.

Bans on so-called short-selling of bank shares took effect in France, Italy, Spain and Belgium Friday, giving some relief to pressured bank shares. France, Italy and Spain said the bans would be in effect for 15 days, while Belgium did not set an expiration date. The Stoxx Europe 600 Banks index was up 2.8 percent in afternoon trading.

Germany said it supported the move by its neighbors and would push for other countries to adopt its own ban on so-called naked short-selling, which involves selling securities without having the underlying assets, in the hope of buying them back at a lower price.

“We are advocating a wide-reaching ban on naked short-selling of stocks, sovereign bonds, and credit default swaps,” a German Finance Ministry spokesman, Martin Kotthaus, told Reuters in Berlin. “Only this way can destructive speculation be countered convincingly.”

Article source: http://www.nytimes.com/2011/08/13/business/daily-stock-market-activity.html?partner=rss&emc=rss

Off The Charts: As Corporate Profits Rise, Workers’ Income Declines

The Commerce Department last week reduced its estimates of economic growth in 2010 and early 2011. At the same time, it said corporate income was much better than it had thought. Using newly available data from 2009 corporate tax returns, the department raised its estimates of corporate profits by 8.3 percent for 2009 and 10.8 percent for 2010.

The new figures indicate that corporate profits accounted for 14 percent of the total national income in 2010, the highest proportion ever recorded. The previous peak, of 13.6 percent, was set in 1942 when the need for war materials filled the order books of companies at the same time as the government imposed wage and price controls, holding down the costs companies had to pay.

In the first quarter of 2011, the latest figures available, the new estimates indicate corporate profits accounted for 14.2 percent of national income, well above the 13.1 percent that had previously been estimated.

The news is not so good for smaller enterprises. The government category for many such businesses, known as proprietors and partnerships, is based on the type of tax returns filed, and is not completely accurate because some large enterprises file partnership tax returns while some smaller ones file as corporations. But it is generally used as a proxy for small business.

The latest figures indicate the smaller businesses’ share of national income fell to a 17-year low of 7.7 percent in 2009, but recovered to 8.3 percent in 2010 and in the first quarter of this year.

Employees have always received more than half the total national income, until now. In 2010, the percentage of national income devoted to wages and salaries fell to 49.9 percent, and it slipped a little more to 49.6 percent in the first quarter of this year. That continued decline may help explain the economic worries of many Americans who have jobs but still fear they are falling behind.

The figure for wages and salaries reflects only what employees are directly paid, and does not include the cost paid by employers for benefits, which has been steadily rising over the years. It is thus not an accurate gauge from the point of view of employers, for whom a dollar spent on health insurance premiums is no less real than one spent on wages.

Adding the two categories together may provide a better view of the share of national income going to workers or being spent for their benefit.

The 2010 total, of 62.1 percent, is not close to the record low share of 54.5 percent, set in 1929, the first year for which numbers are available. But it is the lowest for any full year since 1965. In the first quarter of 2011, it slipped further, to 61.7 percent.

National income, as calculated by the Commerce Department, is similar to gross domestic product but excludes some items, most notably an estimate of depreciation. Besides the ones shown in the charts, there are other categories included in national income, including rental income and net interest income, so the figures shown do not add up to 100 percent.

One way to look at recent trends is to compare the total income figures for 2010 with those of 2006, before the economy began to slide into recession. In nominal dollars, not adjusted for inflation, national income was 6.7 percent higher in 2010 — a gain that did not come close to matching the 8.2 percent rise in the consumer price index.

Total employee compensation, including benefits, rose 6.6 percent, although wages and salaries gained only 5.6 percent. Corporate profits were 11.9 percent higher, while proprietors’ income was down 8.5 percent. Corporate profits more than kept up with inflation. Other categories of income did not.

It can be misleading to look at shares of income without examining their magnitude. A small share of a big pie may be larger than a big share of a small pie. The record high share for wages and salaries, of 59.7 percent, came in 1932. Worker pay was plunging in those days, but not as fast as corporate profits. Companies as a group lost money that year.

Nonetheless, President John F. Kennedy’s observation that a rising tide lifts all boats is no longer as true as it once was.

There have been 10 years when corporate profits as a share of national income exceeded 13 percent — 1941, ’42, ’43, ’50, ’51, ’55, ’65, ’66, 2006 and 2010. In eight of those years, the economy, as measured by real gross national product, grew at a rate of greater than 6 percent.

The exceptions were 2006, when real growth was just 2.7 percent, and 2010, when it was 3 percent.

Similarly, in the past, unemployment was generally low when corporate profits were high. In 2006, the unemployment rate ended the year at 4.4 percent — and that was higher than it had been in other postwar years when the corporate share of national income was high. At the end of 2010, the jobless rate was 9.4 percent. On Friday, the government reported that the rate was 9.1 percent in July.

Floyd Norris comments on finance and economics in his blog at norris.blogs.nytimes.com

Article source: http://feeds.nytimes.com/click.phdo?i=7b9ebf50509aa3d3232973a32bc2b7c7

Stocks & Bonds: World Leaders’ Optimism On Economy Lifts Shares

Freeport-McMoRan Copper and Gold advanced 2.7 percent as copper rallied after Standard Chartered Bank predicted price gains. Wells Fargo and Bank of America increased at least 1.5 percent, pacing a rally in financial shares, as Nout Wellink, a member of the governing council of the European Central Bank, said he expected Greece to receive aid from the International Monetary Fund next month. The Marvell Technology Group surged 11 percent after projecting higher sales than analysts had estimated.

The Standard Poor’s 500-stock index rose 5.41 points, or 0.4 percent, to 1,331.10. The Dow Jones industrial average added 38.82 points, or 0.3 percent, to 12,441.58. The Nasdaq composite index rose 13.94 points, or 0.5 percent, to 2,796.86.

The Dow Jones and S. P. indexes fell for a fourth consecutive week, while the Nasdaq fell for a third consecutive week.

Volume on United States exchanges was 19 percent lower than a week earlier at 5.47 billion shares before the Memorial Day holiday.

“The resilience of riskier assets is linked to the fact that we’re still going to have easy monetary policy,” said Bruce A. Bittles, chief investment strategist at Robert W. Baird Company of Milwaukee. “The Federal Reserve’s program of quantitative easing has helped bolster stock prices but has not helped the housing market.”

The S. P. 500 has fallen 2.4 percent from an almost three-year high on April 29 on concern about Europe’s debt crisis and weaker-than-forecast economic data. Still, the gauge has risen 5.8 percent from the end of 2010 amid government stimulus measures and higher-than-forecast corporate profits.

Global stocks rose after the Group of 8 leaders said that a strengthening global economy would pave the way to cuts in the debt built up during the recession after the 2008 financial crisis.

Europe vowed to fight its fiscal woes with “determination,” while President Obama promised a “clear and credible” United States deficit-reduction strategy. Japan was allowed to put off savings measures until its economy rebounded from the March earthquake and tsunami.

The Thomson Reuters/University of Michigan final index of consumer sentiment increased to a three-month high of 74.3 from 69.8 in April. Economists had forecast a reading of 72.4, the same as the preliminary figure issued earlier this month, according to the median estimate in a Bloomberg News survey.

Copper rose in New York as increased premiums signaled stronger demand in China and Standard Chartered predicted price gains. Freeport advanced $1.34, to $51.73.

Banks had the biggest gain in the S. P. 500 out of 24 industries, rallying 1.5 percent. Wells Fargo, the home lender, advanced 1.6 percent to $28.14. Bank of America rose the most in the Dow, rallying 2 percent to $11.69.

Marvell Technology surged 11 percent, to $16.17. The company forecast second-quarter profit of 35 to 39 cents a share, excluding some items. Analysts projected 33 cents, according to the average of estimates compiled by Bloomberg.

A report showed that the number of Americans signing contracts to buy previously owned homes plunged more than forecast in April.

Interest rates were steady. The Treasury’s benchmark 10-year note fell 4/32, to 100 14/32, and the yield rose to 3.07 percent, from 3.06 percent late Thursday.

Article source: http://feeds.nytimes.com/click.phdo?i=634bbb0ab16d754e00e42dad817f8270

Stocks and Bonds: Light Trading Ahead of Earnings Season

With oil prices reaching a 30-month high of $108 a barrel, some investors are waiting for Alcoa to report its first-quarter earnings next Monday, the unofficial start of the earnings season, before making any big moves. Traders are hoping to see how rising gasoline prices and other commodity costs are affecting corporate profits.

The Dow Jones industrial average rose 23.31 points, or 0.19 percent, to 12,400.03. The Standard Poor’s 500-stock index gained 0.46 points, or 0.03 percent, to 1,332.87, and the Nasdaq composite index fell 0.41 points, or 0.01 percent, to 2,789.19.

Materials companies gained 0.7 percent, the most of any of the 10 company groups that make up the S. P. 500, as commodity prices increased. Futures contracts for corn, wheat and sugar each rose more than 2 percent.

In company news, Pfizer, the world’s largest drug maker, said it would it sell its Capsugel unit to an affiliate of the private equity firm Kohlberg Kravis Roberts for $2.4 billion in cash. Capsugel makes capsules for oral medicines and dietary supplements. Pfizer rose less than 1 percent.

Southwest Airlines fell nearly 2 percent as the company continued to inspect its planes after the fuselage of one jet ripped open Friday, forcing it to make an emergency landing. Southwest grounded 79 planes after the incident and canceled about 700 flights over the weekend. The company canceled 70 flights on Monday.

Ford Motor rose 2.6 percent. The company’s sales rose 16 percent in March, in part because of the success of its new Explorer crossover vehicle. A Credit Suisse analyst upgraded the automaker, citing an improved balance sheet.

Vivus rose nearly 7 percent after the drug developer said patients taking its diet pill Qnexa over two years saw reductions in blood pressure in addition to significant weight loss.

Interest rates were lower. The Treasury’s benchmark 10-year note rose 7/32, to 101 23/32, and the yield slipped to 3.42 percent from 3.44 percent late Friday.

Article source: http://feeds.nytimes.com/click.phdo?i=a398e4026eb4f3db3a8041d5515fd631