US Economy indicator move closer to recession
Global Market
Federal Reserve said capital markets are still substantially impaired and policy makers and financial industry leaders must act forcefully to stem the crisis. They also said that emergency actions to rescue Bear Stearns Cos. were aimed at halting a financial crisis that would have caused damage to the U.S. economy. Fed defend against critics who say the Fed has encouraged excessive risk-taking on Wall Street.
Consumers fell behind loans at the highest level in 15 years, another sign the U.S. economy is slowing. Payments 30 days past due increased. Late loans climbed 21 basis points to 2.65 percent.
Lenders including American Express Co. and Capital One Financial Corp. doubled reserves for soured debt amid the worst housing slump. Overdue bank-card accounts reached 4.38 percent, as the slowing economy made it harder for consumers to repay debt. Federal Reserve acknowledged that a U.S. recession is possible because consumer spending, employment and homebuilding will deteriorate this year.
Rising late payments will continue, as food and gas prices remain stubbornly high and income growth is anemic.
Home prices declined in most U.S. cities in January as banks sold foreclosed homes at bargain prices.
Rising foreclosures and tighter lending standards are deepening the U.S. housing slump.
U.S. mortgage foreclosures rose to 0.83 percent of all home loans. Late payments also rose. The national vacancy rate increased to 2.8 percent. Sales of new homes in the U.S. fell to an annual pace of 590,000.
Stock Market
U.S. stocks rose as a rally in commodity producers and Merrill Lynch & Co.'s assurance has enough capital to weather credit losses overshadowed growing jobless claims and loan delinquencies.
Merrill helped financial shares rebound after they told Japan's Nikkei newspaper that they won't need to raise capital. Monsanto Co. advanced as corn climbed to a record.
The S&P 500 added 1.78 to 1,369.31. The Dow Jones Industrial Average gained 20.2 to 12,626.03. The Nasdaq Composite Index increased 1.9 to 2,363.3.
The S&P 500 recovered and has gained 4.1 percent. Financial shares contributed gain after Merrill statement bolstered speculation that the industry will recover from $232 billion in worldwide credit losses and asset writedowns. Merrill rallied 55 cents to $45.89. Citigroup Inc. climbed 34 cents to $24.36.
Monsanto rallied $5.79 to $117.79 as the price of corn exceeded $6 a bushel and analysts boosted their profit estimates for this year and next because of strong demand in its corn seed and weed-killer businesses.
Freeport-McMoRan Copper & Gold Inc. rallied $3.96 to $103.69 as copper prices increased.
Research In Motion Ltd. jumped $6.79 to $122.58. Their forecasts exceeded analysts' estimates, signaling that sales may withstand an economic slump and competition. First-quarter sales will double to $2.3 billion that exceed analyst estimates.
Schering-Plough Corp. gained $1.52 to $15.38 after statement that it will cut 10 percent of its jobs and shut plants to save $1.5 billion annually.
Amazon.com Inc. slumped $2.43 to $74.94. Best Buy Co. slid $1.41 to $42.53.
Report on first-time claims for unemployment benefits unexpectedly increased by 38,000 to 407,000. Other report tomorrow estimate that payrolls decreased by 50,000 in March.
Cisco Systems Inc. lost 73 cents to $24.23 after the shares were downgraded to neutral.
MEMC Electronic Materials Inc. retreated $2.63 to $73.76. Their revenue was under analyst prediction because of unexpected maintenance delayed production.
Semiconductor companies rallied as analyst upgraded Micron Technology Inc. because it may improve by the end of the year. Micron shares added 40 cents to $6.79.
SanDisk Corp. gained $1.85 to $26.47. Analysts reiterated their recommendation and predicted increasing demand and sales.
Currencies
The dollar fell against the yen as reports showed U.S. initial jobless claims unexpectedly increased and services industries contracted.
The U.S. currency pared versus the euro after European retail sales unexpectedly dropped and Bayerische Landesbank reported $6.7 billion writedowns on subprime-mortgage market.
The dollar fell to 102.12 yen. USD traded at $1.5672 per euro. The euro dropped to 160.07 yen.
The dollar weakened after initial jobless claims in the U.S. increased 38,000 to 407,000. Analyst forecast new jobless claims to hold steady. Fed acknowledged for the first time that the economy may contract in the first half of this year.
George Soros said the dollar may continue to fall against the euro and yen during the worst financial crisis since the Great Depression.
Gains in the Singapore dollar will slow as Singapore central bank shifts focus to bolstering exports from curbing inflation. The currency will rise against the U.S. dollar to S$1.34 by the end of the year.
Commodities
Oil
Crude oil was little changed amid signs that the dollar's rally against the euro will stall on the slowing economy.
The dollar pared gain against the euro as a U.S. report showed initial jobless claims rose. A weaker dollar boosts commodities as an inflation hedge. Gasoline climbed and crude oil gained after a report showed that supplies of the fuel plunged. Crude oil for May delivery rose to $104.95 a barrel. Brent crude for May settlement fell 59 cents to $103.16 a barrel.
Gold
Gold rose on speculation the dollar's rally against the euro will halt. Silver also advanced.
Gold futures for June delivery rose $10.70 to $910.90 an ounce. Silver futures for May delivery climbed 31 cents to $17.49 an ounce.
Crude-oil futures rally also boosted the precious metals as a hedge against inflation. Oil rose to $106.44 a barrel.
Still, gold may fall should a slowdown in the U.S. spread to Europe, forcing the European Central Bank to cut interest rates, weakening the currency. European retail sales unexpectedly fell and traders raised bets the ECB will reduce rates this year.
Five of the past six bear markets for the U.S. currency have rallied gold.
Federal Reserve said capital markets are still substantially impaired and policy makers and financial industry leaders must act forcefully to stem the crisis. They also said that emergency actions to rescue Bear Stearns Cos. were aimed at halting a financial crisis that would have caused damage to the U.S. economy. Fed defend against critics who say the Fed has encouraged excessive risk-taking on Wall Street.
Consumers fell behind loans at the highest level in 15 years, another sign the U.S. economy is slowing. Payments 30 days past due increased. Late loans climbed 21 basis points to 2.65 percent.
Lenders including American Express Co. and Capital One Financial Corp. doubled reserves for soured debt amid the worst housing slump. Overdue bank-card accounts reached 4.38 percent, as the slowing economy made it harder for consumers to repay debt. Federal Reserve acknowledged that a U.S. recession is possible because consumer spending, employment and homebuilding will deteriorate this year.
Rising late payments will continue, as food and gas prices remain stubbornly high and income growth is anemic.
Home prices declined in most U.S. cities in January as banks sold foreclosed homes at bargain prices.
Rising foreclosures and tighter lending standards are deepening the U.S. housing slump.
U.S. mortgage foreclosures rose to 0.83 percent of all home loans. Late payments also rose. The national vacancy rate increased to 2.8 percent. Sales of new homes in the U.S. fell to an annual pace of 590,000.
Stock Market
U.S. stocks rose as a rally in commodity producers and Merrill Lynch & Co.'s assurance has enough capital to weather credit losses overshadowed growing jobless claims and loan delinquencies.
Merrill helped financial shares rebound after they told Japan's Nikkei newspaper that they won't need to raise capital. Monsanto Co. advanced as corn climbed to a record.
The S&P 500 added 1.78 to 1,369.31. The Dow Jones Industrial Average gained 20.2 to 12,626.03. The Nasdaq Composite Index increased 1.9 to 2,363.3.
The S&P 500 recovered and has gained 4.1 percent. Financial shares contributed gain after Merrill statement bolstered speculation that the industry will recover from $232 billion in worldwide credit losses and asset writedowns. Merrill rallied 55 cents to $45.89. Citigroup Inc. climbed 34 cents to $24.36.
Monsanto rallied $5.79 to $117.79 as the price of corn exceeded $6 a bushel and analysts boosted their profit estimates for this year and next because of strong demand in its corn seed and weed-killer businesses.
Freeport-McMoRan Copper & Gold Inc. rallied $3.96 to $103.69 as copper prices increased.
Research In Motion Ltd. jumped $6.79 to $122.58. Their forecasts exceeded analysts' estimates, signaling that sales may withstand an economic slump and competition. First-quarter sales will double to $2.3 billion that exceed analyst estimates.
Schering-Plough Corp. gained $1.52 to $15.38 after statement that it will cut 10 percent of its jobs and shut plants to save $1.5 billion annually.
Amazon.com Inc. slumped $2.43 to $74.94. Best Buy Co. slid $1.41 to $42.53.
Report on first-time claims for unemployment benefits unexpectedly increased by 38,000 to 407,000. Other report tomorrow estimate that payrolls decreased by 50,000 in March.
Cisco Systems Inc. lost 73 cents to $24.23 after the shares were downgraded to neutral.
MEMC Electronic Materials Inc. retreated $2.63 to $73.76. Their revenue was under analyst prediction because of unexpected maintenance delayed production.
Semiconductor companies rallied as analyst upgraded Micron Technology Inc. because it may improve by the end of the year. Micron shares added 40 cents to $6.79.
SanDisk Corp. gained $1.85 to $26.47. Analysts reiterated their recommendation and predicted increasing demand and sales.
Currencies
The dollar fell against the yen as reports showed U.S. initial jobless claims unexpectedly increased and services industries contracted.
The U.S. currency pared versus the euro after European retail sales unexpectedly dropped and Bayerische Landesbank reported $6.7 billion writedowns on subprime-mortgage market.
The dollar fell to 102.12 yen. USD traded at $1.5672 per euro. The euro dropped to 160.07 yen.
The dollar weakened after initial jobless claims in the U.S. increased 38,000 to 407,000. Analyst forecast new jobless claims to hold steady. Fed acknowledged for the first time that the economy may contract in the first half of this year.
George Soros said the dollar may continue to fall against the euro and yen during the worst financial crisis since the Great Depression.
Gains in the Singapore dollar will slow as Singapore central bank shifts focus to bolstering exports from curbing inflation. The currency will rise against the U.S. dollar to S$1.34 by the end of the year.
Commodities
Oil
Crude oil was little changed amid signs that the dollar's rally against the euro will stall on the slowing economy.
The dollar pared gain against the euro as a U.S. report showed initial jobless claims rose. A weaker dollar boosts commodities as an inflation hedge. Gasoline climbed and crude oil gained after a report showed that supplies of the fuel plunged. Crude oil for May delivery rose to $104.95 a barrel. Brent crude for May settlement fell 59 cents to $103.16 a barrel.
Gold
Gold rose on speculation the dollar's rally against the euro will halt. Silver also advanced.
Gold futures for June delivery rose $10.70 to $910.90 an ounce. Silver futures for May delivery climbed 31 cents to $17.49 an ounce.
Crude-oil futures rally also boosted the precious metals as a hedge against inflation. Oil rose to $106.44 a barrel.
Still, gold may fall should a slowdown in the U.S. spread to Europe, forcing the European Central Bank to cut interest rates, weakening the currency. European retail sales unexpectedly fell and traders raised bets the ECB will reduce rates this year.
Five of the past six bear markets for the U.S. currency have rallied gold.
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