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Wall Street Shares Slip

February 14, 2013 by Leave a Comment

Stocks dipped on Wall Street at the opening of trading Thursday but then turned flat in the wake of weaker-than-expected growth data from Europe and Japan, though news on mergers and acquisitions may lead some traders to see further value in the market even after its recent gains.

The Standard Poor’s 500-stock index, the Dow Jones industrial average and the Nasdaq composite index were all nearly unchanged in morning trading.

A contraction of 0.6 percent in gross domestic product in the euro zone was the steepest for the bloc since the first quarter of 2009, while Japan’s G.D.P. shrank 0.1 percent in the fourth quarter, crushing expectations of a modest return to growth.

Though weakness in Europe has persisted over recent quarters, its implications for global growth and American corporate profits spurred some profit-taking on Wall Street.

The S.P. 500 had gained 6.6 percent so far this year, though a dearth of fresh incentives kept trading thin over the past few sessions.

A government report showed the number of Americans filing new claims for unemployment benefits fell more than expected in the latest week. That suggests the job market is improving, said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.

“But it won’t be much of a catalyst for the market this morning,” he said, because of the news out of Europe.”

Mr. Cardillo said a weaker euro, down 0.8 percent versus the dollar, was also a downward pressure on markets.

Merger and acquisition activity indicated investors saw some value in the market.

H.J. Heinz shares jumped 20 percent after it said that Warren Buffett’s Berkshire Hathaway and 3G Capital will buy the company for $72.50 a share, or $28 billion including debt.

American Airlines and US Airways Group said they plan to merge in a deal that will form the world’s biggest air carrier, with an equity valuation of about $11 billion. US Airways shares rose 3.5 percent.

Wall Street stocks closed little changed in light trading Wednesday.

Article source: http://www.nytimes.com/2013/02/15/business/daily-stock-market-activity.html?partner=rss&emc=rss

Filed Under: Economy News Tagged With: , ,

Fiscal Talks Move Shares Higher

December 17, 2012 by Leave a Comment

Shares on Wall Street rose in light trading on Monday as investors seemed encouraged by signs of movement on negotiations in Washington to avoid a fiscal crisis.

Speaker John A. Boehner edged slightly closer to President Obama’s primary demands as they try to avert the tax increases and spending cuts that are set to take effect in the new year.

Mr. Boehner’s latest offer would extend low tax rates for everyone who has earned less than $1 million, and rates would rise for wages above that. But Mr. Boehner’s new positions were still far from those held by Mr. Obama.

“It does solidify that a deal is very close and it could be announced by the end of this week,” said Peter Cardillo, chief market economist at Rockwell Global Capital in New York. “We could be surprised. We could actually have a Santa gift that a deal has been reached.”

Uncertainty over when and if a federal budget deal would be reached has kept investors cautious in what is normally a quiet trading period heading into year-end.

Investors are worried that the economy could slide back into recession if the full brunt of the tax and spending changes are allowed, though most expect a deal will eventually be reached.

“The universal feeling is still that this will probably be solved,” but it might take until the last minute, said Ryan Detrick, senior technical strategist at Schaeffer’s Investment Research in Cincinnati.

The market shrugged off Monday’s less cheery economic data that showed manufacturing activity in the New York region declined for a fifth month in a row in December.

In afternoon trading, the Standard Poor’s 500-stock index was up about 0.9 percent, and the Dow Jones industrial average was up about 0.6 percent. The Nasdaq composite was 0.9 percent higher.

If the S.P. 500 sustains its gains through the session, the index would snap a two-day losing streak. Despite the uncertainty of “fiscal cliff” talks, the S.P. 500 has performed well in the last month, grinding higher in mostly light volume.

Mr. Detrick said markets were likely to continue that sort of momentum through the end of the year, which is typically a bullish time for stocks.

Apple’s shares were about 0.5 percent lower after Citigroup cut its rating to “neutral” from “buy” and slashed its price target to $575 from $675. Apple shares have tumbled nearly 30 percent in about three months, losing 3.8 percent on Friday alone, helping lead the overall market lower.

The company said it sold more than two million iPhone 5 smartphones in China in the three days after its introduction there on Friday, but the figures did not ease worries about stiffer competition.

Sprint Nextel raised its offer for Clearwire, the wireless service provider, by 7 cents a share to buy the rest of the company that it did not already own for $2.2 billion. Clearwire tumbled more than 12 percent, while Sprint was flat.

The American International Group may raise as much as $6.5 billion from the sale of its remaining stake in the AIA Group, exiting a business it started nearly 100 years ago. A.I.G. was up 2.3 percent.

Article source: http://www.nytimes.com/2012/12/18/business/daily-stock-market-activity.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Spanish and French Bond Sales Draw Strong Demand

January 19, 2012 by Leave a Comment

MADRID — Spain passed its biggest test of market sentiment so far this year on Thursday, selling far more longer-term debt than expected as the government pressed ahead with efforts to tackle its problems with the help of a European Central Bank backstop.

France also drew strong demand at its first bond auction since Standard and Poor’s stripped the country of its AAA credit rating.

Spain’s first 10-year bond offering since mid-December raised €3 billion, or $3.9 billion, at a yield of 5.403 percent, broadly in line with analysts’ expectations.

The yield was down more than 150 basis points from a previous sale of the bonds in November, offering some measure of the progress Madrid and euro zone policymakers have made in easing the pressure on its finances.

In all, the Treasury sold €6.6 billion of bonds maturing in 2016, 2019, and 2022, far more than the €4.5 billion targeted. Bid to cover rates on the issues ranged from 2.0 to 3.2.

“The solid demand is a clear sign that market interest” for some of the euro zone’s weaker members “has clearly picked up,” said Annalisa Piazza, market economist at Newedge Strategy in London.

Other euro zone sovereign debtors have leapfrogged Spain to become more prominent targets for investors, but Madrid remains in the market’s sights.

Spanish sovereign yields rose after the auction, with 10-year paper 9 basis points higher at 5.28 percent. The spread between 10-year Spanish and the benchmark German Bunds also widened 9 basis points to 347 basis points.

Peter Chatwell, a rate strategist at Crédit Agricole, said he expected that trend to reverse during the day “as the fact is this is another auction which exceeds the target amount.”

Spain has easily sold shorter-dated debt in recent weeks, aided by the European Central Bank flooding banks with cheap three-year loans and buying Spanish and Italian debt regularly on the market.

But while banks were willing to reinvest the three-year loans over a similar or shorter time scale, finding buyers for 10-year paper was considered a sterner test.

In Paris, the national debt management agency sold €7.965 billion of medium-term bonds at the top of a target range of €6.5 billion to €8 billion. It received bids for €18.9 billion.

S.P.’s downgrade on Friday was largely anticipated by the market and has had little impact on French yields in the secondary market and in a short-term bill auction on Monday.

Article source: http://www.nytimes.com/2012/01/20/business/global/spanish-and-french-bond-sales-draw-strong-demand.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Economix Blog: For Graduates, a Shrinking Payoff

September 1, 2011 by Leave a Comment

Attention recent college graduates — as well as parents who covered those big tuition bills. You may not want to hear this, but a study released on Wednesday found that entry-level wages for students who graduated from college in 2010 was lower than a decade earlier, after adjusting for inflation.

The study was done by Heidi Shierholz, a labor market economist at the Economic Policy Institute, a liberal research and policy center. She found that after gains in the 1980s and 1990s, entry-level hourly wages for college-educated men (without advanced degrees) were $21.77 in 2010, down 4.5 percent from $22.75 in 2000. For college-educated women, entry-level wages were $18.43 in 2010, the study found, down 5.2 percent from $19.38 10 years earlier. (The figures are in 2010 dollars.)

Source: Economic Policy Institute, based on analysis of Current Population Survey, Outgoing Rotations Group

Ms. Shierholz said in an interview, “We’re seeing increased demand for college grads, but the fact that we see these declining wages suggests that demand is being more than met by the increased supply of college grads.”

She said that in the decade after 2000, the business cycle was tough on workers and wages across the board, except for those at the very top. “These young people coming out of college get swooped up in the bottom part of the wage distribution that really suffered during the whole decade after 2000,” she said.

Her study concluded on a pessimistic note: “With unemployment expected to remain above 8 percent well into 2014, it will likely be many years before young college graduates — or any workers — see substantial wage growth.”

Article source: http://feeds.nytimes.com/click.phdo?i=f0c9b9d7ee6751b3eae77d9bf0bfa0d9

Filed Under: Economy News Tagged With: , ,

Stocks Move Higher, but Concerns Remain

June 7, 2011 by Leave a Comment

By late morning, the Dow Jones industrial average was up 61.38 points, or 0.51 percent, at 12,151.34. The S. P. 500 added 7.83 points, or 0.61 percent, at 1,294.00, and the Nasdaq composite index put on 14.88 points, or 0.55 percent, at 2,717.44.

Helping to put a floor on commodity prices, the dollar fell to a one-month low against a basket of currencies after a Chinese official predicted that it would continue to weaken versus other major currencies.

The S. P. 500 has fallen 5.5 percent since a recent high at the start of May, and on Monday closed at its lowest level since March 18, having fallen through its April low in the last session. Some investors look for further volatility and a possible move lower before equities stabilize.

“We came a long way yesterday,” said John Brady, senior vice president at MF Global in Chicago. “I think that there is going to be a growing nervousness in the market.”

“Certainly yesterday’s close indicated that from a technical standpoint this market is going to work its way lower before we stabilize,” said Peter Cardillo, chief market economist at Avalon Partners in New York.

Mr. Cardillo expects the S. P. 500 to hold at 1,275 but cautioned that a move below that could trigger more selling. Analysts at Brown Brothers Harriman in New York look for a decline to 1,230.

“I think the market is trying to focus on whether or not this is a temporary decline in economic activity, or is this going to mushroom into something worse,” said Mr. Cardillo, referring to the recent batch of weak economic data.

European stocks edged higher, rebounding from an 11-week closing low and after a four-session losing run.

Helping the rebound, the European Central Bank chief, Jean-Claude Trichet, said a restructuring of Greece’s public debt, which many in the market see as inevitable, is inappropriate as long as the government follows through on reforms.

Brent crude fell 0.3 percent but traded above $114.19 a barrel, while gold and copper futures in the United States climbed. Gold was benefitting from the soft dollar and safe-haven investors.

The Federal Reserve chairman, Ben Bernanke, was due to speak on the economic outlook Tuesday afternoon at a bankers conference in Atlanta.

Article source: http://feeds.nytimes.com/click.phdo?i=26c550697353001c1425221e5b48ab93

Filed Under: Business News Tagged With: , ,