| Market Summary |
Wall Street started off the third quarter slightly higher after zigzagging throughout the session on better-than-expected results from General Motors and more disappointing data. The Dow Jones Industrial Average edged up 32 points to close at 11,382.26. Broader indicators also rose. The Nasdaq rose 11.99 points to 2,304.97 and The Standard & Poor's 500 index rose 4.91 points to 1,284.91. News from General Motors (GM: Charts, News, Offers) that U.S. sales fell 18% in June, but beat analysts’ projections, gave the market a boost during afternoon trading. A bounce in some of the recently-battered financial shares also helped the market recover. Lehman Brothers (LEH: Charts, News, Offers) shares rose as investors speculated that the company may need to put itself up for sale as a discounted rate. American Express (AXP: Charts, News, Offers) shares gained after UBS upgraded it to "neutral" from "sell" as part of a broader upgrade of the credit card sector. Although the market ended in positive territory, investors were handed some more discouraging news during the session. U.S. light crude for August delivery rose 63 cents to settle at $140.97 a barrel on the New York Mercantile Exchange. The Institute for Supply Management also issued an overall disappointing report on manufacturing in June. Treasury prices fell, raising the yield on the benchmark 10-year note to 3.98% from 3.97% late Monday.
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| Market News |
General Motors Corp. (GM: Charts, News, Offers) soundly beat Toyota Motor Corp. in June to retain its traditional U.S. sales lead, but GM sales still dropped 18.2 percent during a dismal month for most large automakers. Toyota's (TM: Charts, News, Offers) U.S. sales fell 21.4 percent, while Ford Motor Co. said it sales tumbled nearly 28 percent. GM's shares bounced nearly 6 percent higher in afternoon trading Tuesday after sinking to their lowest level in more than a half century during Monday's session. The nation's biggest automaker on Tuesday reported selling 262,329 vehicles for the month, compared with Toyota's 193,234. Some industry analysts had expected Toyota to beat GM in the U.S. for the first time, but both companies were hurt by a sluggish economy and poor sales of trucks and sport utility vehicles. Toyota car sales fell 9.4 percent in June while its truck sales were off 38.8 percent. (Source: Yahoo! Finance) Full Story
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Clear Channel Communications Inc.'s (CCU: Charts, News, Offers) banks, seeking investors to help finance the U.S. radio company's $17.9 billion leveraged buyout, cut the offering price on some loans, according to people with knowledge of the offering. Citigroup Inc. and Deutsche Bank AG are leading banks offering $3 billion of the debt to investors in the mid-80-cents range, down from 90 to 91 cents on the dollar last week, said the people, who declined to be identified before the loans are sold. The price cut reflects a decline in average actively traded high-yield, high-risk loans. Prices fell to 89.9 cents on the dollar from 92.1 on June 19, the first time it dipped below 90 cents since April, according to data compiled by Standard & Poor's LCD. The discounting indicates that a rally in loan prices in April and May has ended. "It's a tough time to get a deal done,'' said Matthew Wilcox, an analyst at KDP Investment Advisors Inc. in Montpelier, Vermont. "Banks may have to increase the discount or change the terms of the debt.'' (Source: Bloomberg) Full Story
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The Federal Reserve has auctioned another $75 billion in loans to squeezed banks to help them overcome credit problems and announced it will provide a fresh batch of the loans this month. The central bank on Tuesday released the results of its most recent auction - the 15th since the program began in December. It's part of an ongoing effort to ease financial turmoil and credit stresses. In the latest auction, commercial banks paid an interest rate of 2.340 percent for the 28-day loans. There were 77 bidders. The Fed received bids for $90.88 billion worth of the loans. The auction was conducted on Monday with the results made public on Tuesday. The Fed also said it will conduct two auctions in July. Banks will have an opportunity to bid on a slice of $75 billion in short-term loans in each auction. (Source: Forbes.com) Full Story
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| Featured Article from the InvestorGuide University |
International Stocks
What information should you consider before investing in international stocks? Learn about the different kinds of international stocks, how to buy them, and how to weigh the pros and cons of risk and diversification.
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| Market Analysis |
With equity markets reeling lately—and the Dow Jones industrial average delivering its biggest first-half percentage decline in 38 years—investors have fled stocks for the perceived safety of U.S. Treasury bonds. There's little incentive these days to own government bonds. The yield on benchmark 10-year notes is down to around 4.0%, and five-year notes are at 3.3%, yields near current inflation levels. Amid concern about rising unemployment, tanking consumer confidence, and growing fear that a U.S. recession has been postponed until the end of 2008, the Federal Reserve may not be able to raise interest rates any time soon, even if inflationary expectations start to spin out of control. In his July investment outlook, published June 30, bond specialist Bill Gross, a managing director at Pimco (AZ), warned that the federal deficit is likely to top $1 trillion on the next President's watch as the government spends big on a housing-market rescue plan and more comprehensive health-care coverage. (Source: BusinessWeek) Full Story
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Big U.S. multinationals riding high on revenue from overseas operations may find that wave is about to break. For the past year, the stock market has rewarded those companies that have been able to offset subpar U.S. performance with stellar overseas profits. But recently, that has not been enough to keep investors happy. Nike's (NKE: Charts, News, Offers) shares tumbled last week after reporting its quarterly earnings when investors focused on its U.S. weakness rather than strong international results by the world's largest shoe and apparel maker. So why the shift in focus? The multinational play was based on a combination of strong global growth and a weak U.S. dollar. But now with Europe slowing sharply, a cyclical economic slowdown in emerging markets and inflation rearing its head across the world economy, continued strong global demand is anything but certain. (Source: Reuters) Full Story
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When Lynda and Don Perdew retired, they sold their home in Southern California and used the money to buy a 37-foot recreational vehicle. Then they set out to see the country. That was 10 years ago, and the Perdews are still on the road. But now they're taking shorter trips and staying longer in each place. Now parked at a campground near Mount Rushmore, they'd like to visit Bryce Canyon National Park in Utah this summer. But with gas prices topping $4 a gallon, they aren't sure it's affordable anymore. "We're sitting with a calculator in one hand and a map in the other, trying to figure out how far we're going to get when we get 7 miles a gallon," says Lynda Perdew, 61. Like the Perdews, many older Americans had long envisioned retirement as a period of adventure — a time to indulge in leisurely lifestyles, with frequent trips out of town to see relatives and explore places they'd never seen. (Source: USA Today) Full Story
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