| Market Summary |
The shortened trading week ended with some uncertainty as the Federal Government reported stagnation in unemployment figures and a contraction of the country's service sector. The Dow was up 73.03 points to close at 11,288.54 and the Nasdaq fell 6.08 to close at 2,245.38. The S&P also rose slightly up 1.38 to end the week at 1,262.90. Oil prices hit a high of over $145 a barrel in anticipation for an increased demand this holiday weekend. The Labor Department reported job cuts for the sixth straight month and payrolls fell by 62,000 after a very similar drop in May. Unemployment, however, held steady at 5.5%. General Motors (GM: Charts, News, Offers) gained 1.4% after suffering tumultuous losses on Wednesday. Nvidia (NVDA: Charts, News, Offers) suffered some of the worst losses of the day falling nearly 31% in early trade after warning that quarter sales won't meet forecasts due to slower demand. Financial stocks were mixed with JP Morgan (JPM: Charts, News, Offers) and Lehman Brothers (LEH: Charts, News, Offers) both up over 2% while Comamerica (CMA: Charts, News, Offers) lost 3.56% to end at $24.68. Treasury bonds saw modest drops raising the yield on the benchmark 10-year note to 3.97% from 3.96%.
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| Market News |
The U.S. economy lost more than 60,000 jobs last month, as Treasury Secretary Henry M. Paulson Jr. warned in London that record-high oil prices will likely mean a longer economic slowdown with no "quick fixes" in sight. New data from the Department of Labor showed that a steady erosion of jobs that began in January continued for a sixth month. In addition to the 62,000 jobs lost in June, the department said the employment decline in April and May was larger than first estimated. Overall, the economy has lost about 438,000 jobs since the first of the year. The unemployment rate, which is affected by the number of people seeking work and other factors, remained steady at 5.5 percent. (Source: Washingtonpost.com) Full Story
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Oil prices raced above $145 a barrel for the first time Thursday as traders added to their bets on the commodity ahead of the long holiday weekend. There was little good news for Americans hitting the road for the July Fourth holiday, as gas prices set their own record near $4.10 a gallon. Light, sweet crude for August delivery surged $1.72 to settle at a record $145.29 on the New York Mercantile Exchange. Earlier in the trading session, the last of the week, the contract rose to $145.85 a barrel, also a new high. The gains built on a record-shattering rally the previous day, and left prices 3.6 percent higher for the week. Crude has shot up by more than half just since the start of the year. (Source: Associated Press) Full Story
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An even gloomier scenario may be in store for an already ailing U.S. housing market if the overall economy slips into a recession, according to UBS Securities analysts. Falling home prices, soaring foreclosures at a time of tighter lending and rising unemployment are all weighing heavily on an already troubled housing sector, the analysts said during a conference call late on Wednesday."The housing market has been in a recession for the past year and once the overall economy slips into a recession, which it probably will, the housing market will probably be in a depression," said Tom Zimmerman, head of ABS, mortgage research at UBS Securities. (Source: Reuters) Full Story
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Annuities
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| Market Analysis |
British Airways has failed twice in its attempts to form a grand transatlantic alliance with American Airlines. Yet thanks to the new Open Skies agreement to liberalize the transatlantic airline market, it could be third time lucky. Transatlantic anti-trust immunity is a holy grail for European and American airlines, allowing carriers to effectively operate as one without all the cost and rigmarole of a full merger. The airlines can charge the same prices, share profits and costs, and even split routes between them. (Source: Bloomberg) Full Story
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So let's say you're a big shot at Lehman Brothers Holdings Inc., (LEH: Charts, News, Offers)trying to keep your firm from becoming the next Bear Stearns Cos. The stock has tanked. The market has doubts about your balance sheet. What do you do? One step to avoid would be any action that might create needless public uncertainty about your company's finances, because investors' greatest fear is of the unknown. So what does Lehman do? It sells billions of dollars of assets to a newly formed hedge fund that: (Source Forbes.com) Full Story
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Eddie Lampert used to be the smartest investor in retailing, if not the best investor of his generation. That was the case last summer when shares of Sears (SHLD: Charts, News, Offers) hovered above $170. In his recent letter to shareholders, Lampert presented a chart showing that even as Sears stock collapsed in the latter half of last year, his five-year return on investment in Sears Holdings, the combination of Kmart and Sears, exceeded 900%. His return, in fact, beat that of every other major retailer. No more. Since May, as Sears stock has tumbled to $74, another retailer, Urban Outfitters (URBN: Charts, News, Offers), has risen to trump Lampert’s investment. (Source CNN Money) Full Story
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