Consumer confidence fell more than estimate, stock market rise on commodities producers
U.S. consumer confidence fell more than forecast in March as US outlook for the economy dropped. The Conference Board's confidence index fell to 64.5. A report from S&P/Case-Shiller showed home prices in January fell by the most on record.
Declining stock and property values have unnerved US, heightening concern spending will falter. A drop in spending would deepen what economists say is almost certainly the second recession of the decade. The Conference Board's gauge of expectations slumped to 47.9, the lowest since December 1973, when the Watergate scandal and an embargo by oil exporters was in effect. Retail sales fell 0.6 percent, the second decline in three months. Consumer spending may grow at an annual rate of 0.5 percent this quarter.
Most U.S. stocks rose led by a rally among commodity producers. The S&P 500 index increased 0.2 percent to close at 1,353.
Home prices fell in January give a sign that the housing recession is deepening. The S&P/Case-Shiller home-price index dropped 10.7 percent from January 2007, after a 9 percent decrease in December. The gauge has fallen for 13 consecutive months.
The proportion of people who expect their incomes to rise fell to 14.9 percent. The share expecting more jobs dropped to 7.7 percent.
Federal Reserve have lowered the benchmark interest rates and pumped money into the banking system to make it cheaper and easier for US to borrow and spend.
The central bank earlier this month carried out its first emergency weekend action in three decades and became the lender to the biggest dealers in government bonds. Two days later, it reduced the target interest rate by three- quarters of a point and acknowledged risks had increased.
The number of US collecting jobless benefits swelled to the highest as automakers, construction companies and financial firms fired workers. The economy lost 63,000 jobs, the most in five years.
More homes are also being foreclosed as the drop in values leaves owners owing more than a property is worth. For those still in their homes, falling prices lead to a loss of wealth that makes US less inclined or able to borrow to finance spending.
What's more, regular gasoline rose to a record $3.28 a gallon on average last week and crude oil reached a record above $111 a barrel.
More and more economists are forecasting a recession and some believe that this month a contraction had already begun.
Stock Market
U.S. stocks rose as a rally in commodity producers helped the market overcome weakening consumer confidence and a record drop in home prices.
Freeport-McMoRan Copper & Gold Inc., Newmont Mining Corp. and Alcoa Inc. carried the Standard & Poor's 500 Index to advance after metal prices increased. The Dow Jones Industrial Average ended lower as Bank of America Corp. and Home Depot Inc. retreated. Monsanto Co. rallied the most in seven years after boosting its earnings forecast.
The S&P 500 added 3.11 points to 1,352.99. The Dow lost 16.04 to 12,532.6. The Nasdaq Composite Index rose 14.3 to 2,341.05.
The S&P 500 has rebounded as the Federal Reserve pumped cash into the banking system and slashed interest rates to restore confidence in financial markets.
Monsanto is adding $10.28 to $114.54. The company raised its earnings forecast to $3.15 to $3.25 a share, from an earlier prediction of as much as $2.80.
Mining companies gained as a drop in the dollar pushed gold higher and silver, copper and aluminum also rose. Freeport- McMoRan climbed $3.65 to $92.41. Newmont Mining added $1.36 to $46.82. Alcoa Inc. increased 70 cents to $35.74.
BJ Services Co. led energy shares to gain. They adding $1.70 to $26.43. Chesapeake Energy Corp. said it plans to spend $275 million next year and $675 million in 2009 to develop a Louisiana discovery and other finds. Chesapeake added $1.39 to $46.40.
General Growth Properties Inc. rose $2.74 to $41. They plans to raise $821.9 million by selling stock to pay debt.
Yahoo Inc. climbed $1.21 to $28.73. The stock was upgraded to buy and increased price estimate on the shares to $34 on expectations that Microsoft Corp. will raise its bid.
Qualcomm Inc. added 91 cents to $40.80. Analyst said that demand for third-generation phones should accelerate in 2008 regardless of pressure on consumer spending.
Home Depot slid 50 cents to $28.76. Lowe's lost 61 cents to $23.68.
MGIC Investment Corp. is sliding $1.05 to $12.25. They have to raised $745 million with the sale of stock and convertible debt after a record fourth-quarter loss.
JPMorgan Chase & Co. will pay brokers at Bear Stearns Cos. a maximum bonus of 100 percent of the annual revenue they generated to keep them from leaving as the two companies combine. It may prompt some of Bear Stearns's top performers to join rivals, where they can get signing bonuses twice as high as JPMorgan is offering.
Last week, Morgan Stanley said it hired 12 Bear Stearns brokers with a total of $26.5 million in revenue.
JPMorgan's private bank had revenue of $2.61 billion in 2007. Their clients typically have a net worth of more than $25 million.
JPMorgan told a group of Bear Stearns's non- broker employees that those who stay until the deal is complete will receive cash payouts ranging from 25 percent to 35 percent of their 2006 compensation. Even those who don't get a job at JPMorgan will be eligible for the payments as long as they stay until the closing.
Wall Street banks, brokerages and hedge funds may report $460 billion in credit losses from the collapse of the subprime mortgage market and profits will continue to wane.
Earnings and share prices at U.S. financial institutions tumbled as fallout from the mortgage crisis spread to other markets. Demand for mortgage-backed securities evaporated.
Merrill Lynch & Co. 2008 profit estimates cut by 45 percent on concern they may disclose further writedowns on subprime mortgages. Merrill may report a total of $5 billion additional losses on collateralized debt obligations.
Bank of America Corp. was downgraded to sell. They also had its earnings-per-share estimate lowered to $3.30.
Lehman Brothers Holdings Inc. had its share-price forecast cut to $70. Their profit estimates were also reduced.
Credit-card loans, auto loans, commercial and industrial lending and non-financial corporate bonds make up the rest of the $460 billion in credit losses.
Currencies
The dollar may decline a second straight day against the euro and yen as traders bet the Federal Reserve will cut its rate by a half- percentage point next month to revive economic growth.
The U.S. currency dropped against the euro yesterday after a report showed consumer confidence fell more than forecast, raising concern that the Fed won't be able to avert a recession. A government report today is forecast to show sales of new homes in the U.S. also declined.
Against the euro, the dollar traded at $1.5649. The dollar traded at 99.99 yen. The euro traded at 156.49 yen.
The U.S. currency last week posted its first weekly gain against the euro in a month on speculation the Fed's efforts would restore confidence in the economy.
Purchases of new homes in the U.S. probably dropped 1.7 percent to 578,000 in February. The report from the Commerce Department is set for release today.
The Icelandic krona surged against all currencies after the central bank raised its benchmark rate 1.25 percentage points to 15 percent at an unscheduled meeting. The krona rose as much as 5.9 percent against the dollar and 4.9 percent against the euro.
Concern that global credit losses will widen triggered a sell-off in the Icelandic currency last week, causing it to slump 9.3 percent against the euro.
The U.S. currency slipped more than 1 percent against the Australian dollar and New Zealand dollar on speculation gains in stocks encouraged investors to increase carry trades.
The Standard & Poor's 500 Index gained 0.2 percent as a rally in commodity producers helped offset the decline in consumer confidence.
Analysts believe that the dollar's decline against the euro appears to be the start of a run to a range of $1.60 to $1.625 over the next two weeks. Now the U.S. currency touched $1.5903 against the euro. The dollar will rebound to $1.45 against the euro and 104 yen by year-end as the economy recovers.
The Conference Board's confidence index fell to 64.5 compare to analysts estimate the measure would fall to 73.5.
Commodities
Oil
Crude oil rose for a second day after gasoline jumped on speculation that inventories of the motor fuel declined.
Gasoline supplies probably dropped 1.15 million barrels last week. U.S. refineries only operated at 83.8 percent of capacity, down 1.2 percentage points from last week.
Crude oil for May delivery rose 60 cents to $101.82 a barrel. Yesterday, futures rose 36 cents to settle at $101.22 a barrel. Gasoline for April delivery rose 3.9 cents to close at $2.6802 a gallon.
The profit margin for making a barrel of crude oil into one of gasoline was negative for the first time since February 2005.
Brent crude for May settlement rose 74 cents to close at $100.60 a barrel.
The Energy Department is scheduled to release its weekly report on inventories today.
Gold
Gold in New York rose as the euro rebounded against the dollar. Silver surged 4 percent.
The euro climbed 1.3 percent against the dollar after dropping 1.6 percent last week.
Gold futures for April delivery rose $16.30 to $935 an ounce.
Silver futures for May delivery climbed 69 cents to $17.80 an ounce.
The euro traded $1.5619 after a report on consumer confidence in the U.S. fell more than estimate, fueling speculation that the Fed will have to cut its rate 50 basis points next month to revive economic growth. Last week, silver plunged and gold fell after the Fed reduced the target rate by 75 basis points, less than gold investors had expected.
Gold rallied 31 percent last year, when the U.S. consumer price index gained 4.1 percent.
Investment bank UBS AG forecast gold to reach $950 in a month and $1,075 in three months.
Declining stock and property values have unnerved US, heightening concern spending will falter. A drop in spending would deepen what economists say is almost certainly the second recession of the decade. The Conference Board's gauge of expectations slumped to 47.9, the lowest since December 1973, when the Watergate scandal and an embargo by oil exporters was in effect. Retail sales fell 0.6 percent, the second decline in three months. Consumer spending may grow at an annual rate of 0.5 percent this quarter.
Most U.S. stocks rose led by a rally among commodity producers. The S&P 500 index increased 0.2 percent to close at 1,353.
Home prices fell in January give a sign that the housing recession is deepening. The S&P/Case-Shiller home-price index dropped 10.7 percent from January 2007, after a 9 percent decrease in December. The gauge has fallen for 13 consecutive months.
The proportion of people who expect their incomes to rise fell to 14.9 percent. The share expecting more jobs dropped to 7.7 percent.
Federal Reserve have lowered the benchmark interest rates and pumped money into the banking system to make it cheaper and easier for US to borrow and spend.
The central bank earlier this month carried out its first emergency weekend action in three decades and became the lender to the biggest dealers in government bonds. Two days later, it reduced the target interest rate by three- quarters of a point and acknowledged risks had increased.
The number of US collecting jobless benefits swelled to the highest as automakers, construction companies and financial firms fired workers. The economy lost 63,000 jobs, the most in five years.
More homes are also being foreclosed as the drop in values leaves owners owing more than a property is worth. For those still in their homes, falling prices lead to a loss of wealth that makes US less inclined or able to borrow to finance spending.
What's more, regular gasoline rose to a record $3.28 a gallon on average last week and crude oil reached a record above $111 a barrel.
More and more economists are forecasting a recession and some believe that this month a contraction had already begun.
Stock Market
U.S. stocks rose as a rally in commodity producers helped the market overcome weakening consumer confidence and a record drop in home prices.
Freeport-McMoRan Copper & Gold Inc., Newmont Mining Corp. and Alcoa Inc. carried the Standard & Poor's 500 Index to advance after metal prices increased. The Dow Jones Industrial Average ended lower as Bank of America Corp. and Home Depot Inc. retreated. Monsanto Co. rallied the most in seven years after boosting its earnings forecast.
The S&P 500 added 3.11 points to 1,352.99. The Dow lost 16.04 to 12,532.6. The Nasdaq Composite Index rose 14.3 to 2,341.05.
The S&P 500 has rebounded as the Federal Reserve pumped cash into the banking system and slashed interest rates to restore confidence in financial markets.
Monsanto is adding $10.28 to $114.54. The company raised its earnings forecast to $3.15 to $3.25 a share, from an earlier prediction of as much as $2.80.
Mining companies gained as a drop in the dollar pushed gold higher and silver, copper and aluminum also rose. Freeport- McMoRan climbed $3.65 to $92.41. Newmont Mining added $1.36 to $46.82. Alcoa Inc. increased 70 cents to $35.74.
BJ Services Co. led energy shares to gain. They adding $1.70 to $26.43. Chesapeake Energy Corp. said it plans to spend $275 million next year and $675 million in 2009 to develop a Louisiana discovery and other finds. Chesapeake added $1.39 to $46.40.
General Growth Properties Inc. rose $2.74 to $41. They plans to raise $821.9 million by selling stock to pay debt.
Yahoo Inc. climbed $1.21 to $28.73. The stock was upgraded to buy and increased price estimate on the shares to $34 on expectations that Microsoft Corp. will raise its bid.
Qualcomm Inc. added 91 cents to $40.80. Analyst said that demand for third-generation phones should accelerate in 2008 regardless of pressure on consumer spending.
Home Depot slid 50 cents to $28.76. Lowe's lost 61 cents to $23.68.
MGIC Investment Corp. is sliding $1.05 to $12.25. They have to raised $745 million with the sale of stock and convertible debt after a record fourth-quarter loss.
JPMorgan Chase & Co. will pay brokers at Bear Stearns Cos. a maximum bonus of 100 percent of the annual revenue they generated to keep them from leaving as the two companies combine. It may prompt some of Bear Stearns's top performers to join rivals, where they can get signing bonuses twice as high as JPMorgan is offering.
Last week, Morgan Stanley said it hired 12 Bear Stearns brokers with a total of $26.5 million in revenue.
JPMorgan's private bank had revenue of $2.61 billion in 2007. Their clients typically have a net worth of more than $25 million.
JPMorgan told a group of Bear Stearns's non- broker employees that those who stay until the deal is complete will receive cash payouts ranging from 25 percent to 35 percent of their 2006 compensation. Even those who don't get a job at JPMorgan will be eligible for the payments as long as they stay until the closing.
Wall Street banks, brokerages and hedge funds may report $460 billion in credit losses from the collapse of the subprime mortgage market and profits will continue to wane.
Earnings and share prices at U.S. financial institutions tumbled as fallout from the mortgage crisis spread to other markets. Demand for mortgage-backed securities evaporated.
Merrill Lynch & Co. 2008 profit estimates cut by 45 percent on concern they may disclose further writedowns on subprime mortgages. Merrill may report a total of $5 billion additional losses on collateralized debt obligations.
Bank of America Corp. was downgraded to sell. They also had its earnings-per-share estimate lowered to $3.30.
Lehman Brothers Holdings Inc. had its share-price forecast cut to $70. Their profit estimates were also reduced.
Credit-card loans, auto loans, commercial and industrial lending and non-financial corporate bonds make up the rest of the $460 billion in credit losses.
Currencies
The dollar may decline a second straight day against the euro and yen as traders bet the Federal Reserve will cut its rate by a half- percentage point next month to revive economic growth.
The U.S. currency dropped against the euro yesterday after a report showed consumer confidence fell more than forecast, raising concern that the Fed won't be able to avert a recession. A government report today is forecast to show sales of new homes in the U.S. also declined.
Against the euro, the dollar traded at $1.5649. The dollar traded at 99.99 yen. The euro traded at 156.49 yen.
The U.S. currency last week posted its first weekly gain against the euro in a month on speculation the Fed's efforts would restore confidence in the economy.
Purchases of new homes in the U.S. probably dropped 1.7 percent to 578,000 in February. The report from the Commerce Department is set for release today.
The Icelandic krona surged against all currencies after the central bank raised its benchmark rate 1.25 percentage points to 15 percent at an unscheduled meeting. The krona rose as much as 5.9 percent against the dollar and 4.9 percent against the euro.
Concern that global credit losses will widen triggered a sell-off in the Icelandic currency last week, causing it to slump 9.3 percent against the euro.
The U.S. currency slipped more than 1 percent against the Australian dollar and New Zealand dollar on speculation gains in stocks encouraged investors to increase carry trades.
The Standard & Poor's 500 Index gained 0.2 percent as a rally in commodity producers helped offset the decline in consumer confidence.
Analysts believe that the dollar's decline against the euro appears to be the start of a run to a range of $1.60 to $1.625 over the next two weeks. Now the U.S. currency touched $1.5903 against the euro. The dollar will rebound to $1.45 against the euro and 104 yen by year-end as the economy recovers.
The Conference Board's confidence index fell to 64.5 compare to analysts estimate the measure would fall to 73.5.
Commodities
Oil
Crude oil rose for a second day after gasoline jumped on speculation that inventories of the motor fuel declined.
Gasoline supplies probably dropped 1.15 million barrels last week. U.S. refineries only operated at 83.8 percent of capacity, down 1.2 percentage points from last week.
Crude oil for May delivery rose 60 cents to $101.82 a barrel. Yesterday, futures rose 36 cents to settle at $101.22 a barrel. Gasoline for April delivery rose 3.9 cents to close at $2.6802 a gallon.
The profit margin for making a barrel of crude oil into one of gasoline was negative for the first time since February 2005.
Brent crude for May settlement rose 74 cents to close at $100.60 a barrel.
The Energy Department is scheduled to release its weekly report on inventories today.
Gold
Gold in New York rose as the euro rebounded against the dollar. Silver surged 4 percent.
The euro climbed 1.3 percent against the dollar after dropping 1.6 percent last week.
Gold futures for April delivery rose $16.30 to $935 an ounce.
Silver futures for May delivery climbed 69 cents to $17.80 an ounce.
The euro traded $1.5619 after a report on consumer confidence in the U.S. fell more than estimate, fueling speculation that the Fed will have to cut its rate 50 basis points next month to revive economic growth. Last week, silver plunged and gold fell after the Fed reduced the target rate by 75 basis points, less than gold investors had expected.
Gold rallied 31 percent last year, when the U.S. consumer price index gained 4.1 percent.
Investment bank UBS AG forecast gold to reach $950 in a month and $1,075 in three months.
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