| Market Summary |
Equities bounced back today after yesterday’s big sell-off as the blue chip Dow Jones Industrial Average rose 1.90% and the tech heavy NASDAQ posted an impressive 2.50% jump. The major factors that drove today’s rally included a big drop in the low-yielding yen (which indicates that investors are confident enough to be moving towards riskier and higher yielding investments), strength in the tech sector (which is generally perceived to be fairly immune to the recent problems in the credit markets) and the release of Ben Bernanke’s letter to a Congressman indicating that the Fed is keeping a close eye on the markets and will jump in again to help, if necessary. Some traders took the letter as a sign that a cut in the federal funds rate is imminent. Traders also realized that they probably oversold yesterday and therefore, that contributed to today’s rally as they sought to get back into the market. The recent gyrations in the market are likely to continue especially as some significant economic reports are scheduled for release later this week. The dollar was stronger against the yen but weaker against the euro.
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| Market News |
Federal Reserve Chairman Ben Bernanke suggested that policymakers look for ways to encourage a wider range of mortgages geared for low income and other borrowers who have been hard hit by the housing slump and credit crunch.
Bernanke, in a letter to Sen. Charles Schumer, D-N.Y., released Wednesday, said the Fed is keeping close tabs on financial markets and is "prepared to act as needed" to make sure spreading credit problems that have rocked Wall Street in recent weeks don't hurt the economy. It's a message the central bank has been sending in recent weeks as the markets have grown more turbulent. (Source: MSNBC) Full Story
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Apple (AAPL: Charts, News, Offers) shares rose more than 5% Wednesday on growing expectations that the company will announce a revamped line of iPod media players next week.
Technology websites speculate that Apple could launch a video iPod with a large touch screen similar to the iPhone, and a redesigned iPod nano in time for the end-of-year holiday shopping season.
Apple distributed invitations to a Sept. 5 event in San Francisco without revealing what it would be about. (Source: USA Today) Full Story
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Altria Group (MO: Charts, News, Offers) said on Wednesday it plans to spin off its international tobacco unit but will not give details on the timing on the much anticipated move until January.
The company also raised its quarterly dividend by 8.7 percent to 75 cents per share, less than the 10 percent increase some analysts had been expecting.
Altria shares gave up their early gains and were down 11 cents at $68.96 in mid-morning trade on the New York Stock Exchange. The stock traded as high as $70.98 earlier in the day. (Source: Reuters) Full Story
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| Market Analysis |
While the wireless industry was going wild this summer over Apple's (AAPL: Charts, News, Offers) iPhone and the mere prospect of Google's (GOOG: Charts, News, Offers) foray into the business, Korean electronics maker Samsung quietly hit a milestone: It surpassed Motorola (MOT: Charts, News, Offers) to become the No. 2 seller of mobile phones. In the second quarter Samsung shipped 37.4 million devices, compared with 35.5 million for Motorola.
The low-key nature of Samsung's achievement -- the company didn't even issue a press release -- reflects its steady approach to the cellphone business, which it entered a dozen years ago. (Source: Fortune) Full Story
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The Blackstone Group does everything big. It's done $109 billion in deals in the last year. Earlier this month it raised $21.7 billion for its private equity fund. Its June 21 IPO reaped $667 million for Chief Executive Stephen Schwarzman. And when it comes to mollifying Washington's politicos, Blackstone's leading the pack as well.
According to midyear filings made with the U.S. Senate, Blackstone has spent more than $3.7 million lobbying lawmakers in 2007; $4 million if you count lobbying efforts by Blackstone subsidiaries Travelport and Ce***se, says the Center for Responsive Politics, a watchdog group that tracks campaign finance issues. (Source: Forbes) Full Story
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The credit crunch may well have been hyped. The global economy looks to be in decent shape, and the markets have already recovered some of their nerve.
That doesn't mean there won't be pockets of real pain.
Right now, the London economy is dangerously exposed. In the last five years, it has boomed because of its turbo-charged financial-services industry.
The City, as the financial district is known, has drawn in talent from around the world. On some measures, it has overtaken New York as the No. 1 financial center. The trouble is, its lead has been built on credit derivatives, hedge funds and buyout firms, precisely the areas that have been threatened by the credit crunch. (Source: Bloomberg) Full Story
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