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| Weekly Wrap Up |
For the first time in about a month and a half, all of the major stock indices ended in positive territory last week. The Dow Jones Index gained just shy of 400 points, while the NYSE gained over 100, and the Nasdaq gained over 40. Last week's trading session got off to a slow start, with the indices closing down both Monday and Tuesday, but picked up on Wednesday and was able to hold the momentum through the rest of the week. The beginning of the week was overshadowed by continued problems in the financial sector, especially as IndyMac Bancorp (IMB: Charts, News, Offers) was seized by the FDIC on Monday, and customers of all banks began to panic. National City (NCC : Charts, News, Offers), U.S. Bancorp (USB: Charts, News, Offers), and Citigroup (C: Charts, News, Offers) all struggled as well. On Tuesday the Dow Jones closed under 11,000 for the first time in 2 years. On Wednesday, however, the markets began to rebound as companys reported some strong earnings data. Wells Fargo (WFC: Charts, News, Offers) and Charles Schwab (SCHW: Charts, News, Offers) helped convince investors that there isn't reason to fear the entire financial sector. Intel (INTC: Charts, News, Offers) and Nokia (NOK: Charts, News, Offers) both posted strong earnings increases, while Google (GOOG: Charts, News, Offers) and Microsoft (MSFT: Charts, News, Offers) posted earnings that failed to meet expectations, causing their shares to fall. Oil fell throughout most of the week, dropping about $10 per barrel before rising again on Friday. The dollar was mixed against other major currencies throughout the week, and gold prices trended slightly up. More Market News
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| Economic News |
Oil prices plummeted by the second-largest margin on record Tuesday as investors feared a further decline in U.S. demand after hearing comments from Federal Reserve Chairman Ben Bernanke. Light, sweet crude fell $6.44 to settle at $138.74 a barrel in trading on the New York Mercantile Exchange. The drop in oil was the largest single-day slide in dollar terms since Jan. 17, 1991, when oil fell by $10.56. On that day, President George H.W. Bush withdrew oil from the Strategic Petroleum Reserve ahead of the first Gulf War. But in 1991, oil was trading at just $32 a barrel, so the more than $10 slide in dollar terms represented a record 33% drop. Oil fell 4.4% Tuesday, which does not even crack the top 100 price declines in percentage terms. (Source: CNN Money) Full Story
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Consumer prices shot up in June at the second fastest pace in 26 years with two-thirds of the surge blamed on soaring energy prices. The Labor Department reported that consumer prices jumped 1.1 percent last month, much worse than had been expected. Energy prices rocketed upward by 6.6 percent, reflecting big gains for gasoline, home heating oil and natural gas. The big rise in prices cut deeply into consumers’ earning power with average weekly wages, after adjusting for inflation, falling by 0.9 percent. It was the biggest monthly decline since a 1.1 percent drop in weekly wages in September 2005. The 1.1 percent June price increase was the second largest monthly advance in the past 26 years, surpassed only by a 1.3 percent gain in September 2005 from a jolt to energy costs after Hurricane Katrina. (Source: MSNBC) Full Story
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The number of newly laid-off people signing up for jobless benefits rose last week as companies keep work forces lean given the economy's slowdown.
The Labor Department reported Thursday that new applications filed for unemployment insurance increased by a seasonally adjusted 18,000 to 366,000 for the week ending July 12. That left new claims at their highest level since late June, when they spiked to 404,000.
The number of new layoff filings was lower than the 380,000 that economists were forecasting. Yet, the filings are higher than a year ago, when they stood at 309,000, underscoring weakness in employment conditions. (Source: Yahoo Finance) Full Story
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| Business News |
The maker of the King of Beers has agreed to go to work for the Belgian brewer InBev SA. Anheuser-Busch Cos. (BUD: Charts, News, Offers) said early Monday it had agreed to a sweetened $52 billion takeover bid from InBev, creating the world's largest brewer and heading off what was shaping up as an acrimonious fight for the maker of Budweiser and Bud Light beers. Inbev brands include Stella Artois, Beck's and Bass. The combined company will be called Anheuser-Busch InBev. As of the end of last week, InBev said it would be the world's third largest consumer products company by market capitalization after Procter & Gamble of the United States and Nestle SA of Switzerland. The Anheuser-Busch board accepted the higher takeover offer Sunday night from Belgian-based InBev, according to a joint press release. The deal is expected to close by year-end. "What consumers care is that their Bud will always be their Bud, and that's what we're committed to, not only the product, the quality, the beer … but also the heritage, the breweries, who brews the beers, and everything that's connected to the breweries," InBev CEO Carlos Brito said in a media conference call. (Source: Yahoo! Finance) Full Story
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Citigroup Inc (C: Charts, News, Offers) shares Tuesday fell to their lowest level since the October 1998 creation of the largest U.S. bank from the merger of Travelers Group and Citicorp. Shares fell as much as 8 percent to $14.01 before rallying as bank shares rebounded. In afternoon trading, the shares were down 14 cents at $15.08 on the New York Stock Exchange. The bank is in the Dow Jones industrial average. Citigroup shares have fallen by more than two-thirds in the last year, wiping out more than $180 billion of market value, as losses have mounted from subprime mortgages, complex debt and deteriorating consumer credit. The bank lost close to $15 billion in the six months ended March 31, and analysts on average expect it on Friday to post a second-quarter loss exceeding $3 billion. (Source: Forbes) Full Story
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California, Florida and Texas, the U.S. states with the most Starbucks Corp (SBUX: Charts, News, Offers) stores, will see the most shuttered as the coffee chain axes more than 600 underperforming outlets in the coming year. Starbucks is closing 88 locations in California, a loss of 5 percent based on store counts as of the end of March. According to a list of store closures released on Thursday, Florida will lose 59 stores, or nearly 14 percent of overall outlets, while the coffee seller's move to shutter 57 Texas locations will lower store counts there by 11 percent. (Source: Reuters) Full Story
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| Technology Focus |
Google (GOOG: Charts, News, Offers) and Microsoft (MSFT: Charts, News, Offers) just can't seem to stop butting heads. Tuesday, the software giant lobbed antitrust allegations at the Internet king for its recent tie-up with Yahoo! (YHOO: Charts, News, Offers). Thursday, Google and Microsoft are both slated to report last quarter's earnings within an hour of each other, and both companies are expected to post strong results. What tends to get lost in the enthusiasm over growth rates: Microsoft, with 2007 revenues of $51 billion, is still three times Google's size. Analysts say Google's search advertising money machine could push earnings up 33%, while brisk PC and laptop sales could provide a 21% lift to Microsoft's earnings. (Source: Forbes) Full Story
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Intel Corp (INTC: Charts, News, Offers) reported a 25 percent rise in quarterly profit, helped by strong sales of microprocessors used in notebook computers, and gave a revenue forecast that topped expectations.
But its second-quarter gross margin disappointed some analysts as the world's biggest chipmaker said higher demand for cheaper laptops led to a lower-than-expected average microprocessor selling price.
"The concern on the Street was that demand may be falling off the cliff. We've seen that in the handset market. So at least as Intel's results and outlook goes, we're not seeing similar weakness in the PC market," said CRT Capital Group analyst Ashok Kumar. (Source: Reuters) Full Story
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Time finally ran out for Advanced Micro Devices (AMD: Charts, News, Offers) CEO Hector Ruiz.
With AMD's latest financial report bringing its seven-quarter losing streak to a cumulative $5.5 billion loss with no meaningful progress to show in sales of its chips, and with the gross margin continuing to erode, there was simply no way the company could face the Street without doing something.
The board's decision to sack Ruiz, the 62-year old former Motorola(MOT: Charts, News, Offers) executive who has run AMD since 2002, was in the end, the only thing it could do.
AMD spun Thursday's move as the natural culmination of a previously-arranged two-year succession plan that called for President Dirk Meyer to take over. But while it was no secret that Meyer was Ruiz's designated successor, the company's disastrous performance assured that the leadership change could no longer be put off. (Source: The Street) Full Story
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| Your Money |
Work often stops unexpectedly. You'd better be prepared with a financial plan.
Paulette Geller thought she had her retirement all figured out. Geller, 64, planned to work until 66 or 67 to boost her Social Security check. Then, after successful foot surgery last year, she was in the hospital being wheeled to her car to go home when she had a stroke.
The stroke caused Geller to lose some technical skills and vision, keeping her from continuing to work as program director for older adults at the Winter Park (Fla.) Health Foundation. "I honestly thought I wasn't going to ever stop working. I was going to cut back to half time or quarter time because I loved my job," Geller says. Suddenly, "I couldn't do my job anymore, but it wasn't on my timeline and I wasn't in control." Now Geller gets disability payments that amount to 60 percent of her former salary and pays for COBRA health insurance coverage. (Source: Yahoo Finance) Full Story
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