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Jobless claims fall, slow recovery seen

admin — Wed, 28 Apr 2010 23:57:36 +0000

WASHINGTON (Reuters) – The number of U.S. workers submitting new claims for unemployment benefits fell slightly last week, implying only a gradual labor market improvement even as the economic recovery broadens out.

While the data on Thursday did not change views employers probably added to payrolls this month, analysts were disappointed with how slowly claims were declining and said it showed companies were reluctant to embark on a hiring spree.

Initial claims for state unemployment benefits fell 11,000 to a seasonally adjusted 448,000, the Labor Department said. That was slightly below market expectations claims would drop to 445,000.

“Some companies are still struggling and believe they can meet any increase in demand with a smaller workforce. The recovery in the labor market is probably going to be more modest than a lot of people are expecting,” said Paul Dales, a U.S. economist at Capital Economics in Toronto.

The Federal Reserve on Wednesday acknowledged the labor market was improving, but noted that employers remained reluctant to add payrolls. The U.S. central bank left overnight benchmark lending rates near zero and renewed its commitment to keep them low for an extended period.

Economists are concerned that claims remain above 400,000, a level they say is historically associated with a steady pace of jobs growth. Analysts anticipate data next week will show the unemployment rate was unchanged at 9.7 percent in April for fourth straight month.

The report had little effect on U.S. stocks, which rallied broadly as debt-ridden Greece looked closer to a bailout deal. Prices for U.S. government debt were flat, while the dollar fell against a resurgent euro.

UNEMPLOYMENT TO REMAIN HIGH

Though the manufacturing-led U.S. economic recovery is spreading out to other sectors, it is probably not vigorous enough to encourage much hiring. Indications are that unemployment will likely remain elevated for a while.

Gross domestic product data on Friday is expected to show the economy grew at a 3.4 percent annual rate in the first quarter, with consumer spending accounting for much of the advance, according to a Reuters survey.

While slower than the 5.6 percent pace set in the fourth quarter, it will be the third straight quarter of expansion as the economy climbs out of the worst downturn since the 1930s.

“The economy is doing better, growth will gradually get back up toward its potential and the unemployment rate will continue to come down slowly. We are on the right track,” said Ray Stone, managing director at Stone & McCarthy Research Associates in Princeton, New Jersey.

The four-week moving average of new claims, seen as a more-reliable barometer of labor-market trends, rose 1,500 to 462,500 last week, the department said. It was the fourth straight weekly increase.

Private hiring last month handed the economy its largest jobs gain in three years. While analysts believe payrolls grew again in April, they expect much of the boost to come from government hiring for a decennial census.

“We expect nonfarm payroll hiring of 175,000 for April, consisting of underlying hiring of 50,000 and a census contribution of 125,000,” wrote economists at Goldman Sachs.

The number of people still receiving benefits after an initial week of aid fell to 4.65 million in the week ended April 17, a touch above market expectations for 4.62 million.

The so-called continuing claims data covered the household survey week from which the national unemployment rate is derived.

The insured unemployment rate, which measures the percentage of the insured labor force that is jobless, was unchanged at 3.6 percent in the week ended April 17.

Separately, the Chicago Federal Reserve national activity index rose in March, but still indicated below-trend growth.

(Additional reporting by Ann Saphir in Chicago; Editing by Andrew Hay)

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US wholesale inventories fall 0.2% in Jan

admin — Wed, 10 Mar 2010 12:18:33 +0000

US wholesale inventories fall 0.2% in Jan
Thu, Mar 11 2010, 06:00 GMT
Equities are modestly fi rmer,
currencies little changed, and commodities are lower. US wholesale inventories fell, but the equity market focused more on the detail which said companies’ sales rose. The S&P500 is up 0.4%, just shy of its one year high (set in Jan) and banks are 2.1% higher. The CRB commodities index is down 0.4% (oil a notable exception at +0.1%), copper -1.4%, and gold -1.3%. US treasuries are 2-3bp higher in yield, but were even weaker prior to the 10yr auction which was well bid by all measures.
The US dollar is little changed since the previous NY close at around 80.50, but did spike to 80.85 early Europe, and dip to 80.30 in NY. The spike was likely a
feature, it falling from 1.3600 to 1.3545 on a weaker German current account, but gaining after that to 1.3680. UK IP was also weak, and
fell from 1.4980 to 1.4873 before recovering to 1.4990.
climbed throughout the evening sessions, from 90.00 to 90.80.
ground slightly higher from 0.9140 to 0.9193 (last seen on 20 Jan), falling in NY to 0.9127.
outperformed the majors and rose to 0.7098, pulling back to 0.7050 in NY. AUD/NZD moved lower to 1.2930, as cross-holders bailed ahead of the RBNZ.
US wholesale inventories fall 0.2% in Jan
. This followed a revised 1.0% fall in Dec, and suggests recent inventory rebuilding momentum (it was a big driver of Q4 GDP growth) may be waning, despite low inventory to sale ratios.
Japanese machinery orders fell 3.7% in Jan.
That is a respectable follow up to the 20.1% gain in Dec. Equipment spending is fi nding a base globally, as the investment share of activity recovers from historically low levels. Orders from manufacturers rose 3.3% while orders non-manufacturing fi rms fell 12.9%, consistent with the gulf between the PMI readings recording by the two sectors globally.
UK industrial production fell 0.4% in Jan
, much weaker than expected though consistent with yesterday’s news that exports fell sharply in January. Weather may have had a negative impact. This continues the run of weak Jan offi cial data stretching across the labour market, retailing, factories and the external sector, which adds to risk that Q1 GDP fails to grow.
: Key event risks today are Australian employment, and the RBNZ’s MPS. AUD’s uptrend since Feb remains intact, but today’s pair of event risks will set AUD direction for the day given the market’s focus on the AUD/NZD cross at present. Minor resistance is at 0.9190, but should that break, there’s nothing until 0.9330; minor support is at 0.9120. NZD needs to sustain a break above 0.7080 to escape its sideways range since Feb.

fxstreet.com

Jobless rate hits 5-month low but payrolls fall

admin — Fri, 05 Feb 2010 02:44:13 +0000

The U.S. unemployment rate surprisingly fell to a five-month low in January and factory payrolls grew for the first time since 2007, hinting at a labor market recovery even though the economy lost 20,000 jobs.
President Barack Obama cautiously welcomed the figures but said more needed to be done to put people back to work. Obama and his fellow Democrats fear voters could punish them in November congressional elections if headway is not made in tackling unemployment.
The decline in payrolls reported by the Labor Department on Friday was far smaller than the 150,000 drop posted in December. November’s data from the survey of employers was revised sharply higher to a gain of 64,000, up from 4,000.
The jobless rate, based on a separate household survey, fell to 9.7 percent from 10 percent in December. That survey found employment rising, with the size of the labor force roughly flat. Analysts had expected payrolls to rise by 5,000 and the unemployment rate to edge up to 10.1 percent.
“The wheels of the economy are turning. The improvement in the employment data does match the increase in GDP the last two quarters so it’s not a fluke. The economic recovery looks much more sustainable today,” said Chris Rupkey, senior financial economist at Bank of Tokyo/Mitsubishi UFJ in New York, referring to economic growth data for the fourth quarter 2009.
Details of the report were relatively upbeat. The length of the average workweek hit its highest in a year and overtime paid in manufacturing was the most since September 2008, suggesting growing pressure to add to payrolls.
Some analysts, however, were skeptical of the drop in the jobless rate and believed it would head higher again. The pickup in factory employment helped to lift U.S. stocks, despite lingering worries about European fiscal problems.
U.S. government debt prices rose and the U.S. dollar hit an 8-1/2 month high versus the euro, tapping flight-to-quality trades from the troubles in Europe.
Annual revisions to the payrolls data showed job losses since the recession began were much deeper than originally thought. The economy has lost 8.4 million jobs since the start of the recession in December 2007, compared to 7.2 million before the revisions.
In January, the number of ‘discouraged job seekers’ stood at 1.1 million, up from 734,000 a year ago. Last month, 6.3 million people had been out of work of more than 27 weeks.
With Americans increasingly anxious about persistent high unemployment, Obama has declared that job creation will be his top priority in 2010. Announcing plans on Friday to expand credit for small businesses, Obama said the employment report was cause for hope but not celebration.
“Understanding that these numbers will continue to fluctuate for months to come, these are welcome, if modest signs of progress along the road to recovery,” Obama said.
Financial markets have grown nervous about the prospect of unemployment in the United States remaining high for a long time. The economy resumed growth in the second half of 2009, but a labor market recovery has yet to materialize.
Labor market weakness is causing households to remain wary of taking on new debt, with total consumer credit declining by $1.73 billion in December, a Federal Reserve report showed.
While the U.S. economy is growing, recovery hopes in Germany were dealt a set back by a sharp drop in industrial output in December.
A survey of banks that do business with the Fed predicted the U.S. central bank will start raising interest rates in the fourth quarter of this year as the labor market mends.
Analysts expect U.S. payrolls to start growing in February as the government steps up temporary hiring for the 2010 census.
“This hiring will continue to push the unemployment rate lower and then once the need for these workers is finished they will be fired and the unemployment rate will drift back up to the 10 percent area,” said Brian Fabbri, chief North America economist at BNP Paribas in New York.
Last month, the services sector added 40,000 jobs after shedding 96,000 positions in December. The figure included a rise in federal government employment, partly a result of early hiring for the census.
In another positive trend, temporary help employment rose again last month, while manufacturing payrolls increased 11,000, the first gain since January 2007. Manufacturing employment had dropped 23,000 in December.
But the construction sector continued to struggle, losing 75,000 jobs, likely because of unusually cold weather. Construction payrolls fell 32,000 in December.
In another sign of labor market improvement, the average workweek unexpectedly edged up to 33.3 hours, the highest in a year, from 33.2 in December, while manufacturing overtime rose to 3.5 hours, the highest since September 2008.
“This suggests that firms are straining to keep up with rising demand without hiring. We believe that as long as orders keep streaming in, at some point soon firms are going to have to give in and add workers,” said Stephen Stanley, chief economist at RBS in Stamford, Connecticut.

feeds.reuters.com

Asia shares fall to three-month lows (Reuters)

admin — Mon, 01 Feb 2010 03:48:08 +0000

SINGAPORE (Reuters) –
Asian stocks fell to three-month lows on Monday with investors cautious after new data strengthened the case for tighter Chinese monetary policy and as attention focused on key U.S. economic reports due this week.
European shares (.FTEU3) were also expected to retreat by as much as 1.2 percent amid lingering worries about Greece and other weak euro zone members.
U.S. stock futures
ended lower on Friday despite data showing the U.S. economy grew at its fastest pace in six years in the fourth quarter. (.N)
Markets are bracing for a big week with a number of major central bank meetings across the world and a raft of economic reports out of the United States, culminating in the non-farm payrolls data on Friday.
lost ground on Monday, rattled by U.S. losses last week, while Japan's Nikkei stock average (.N225) ended flat.
is healthy, definitely. Prices have moved ahead quite well,” said Alex Boggis,
, which oversees about $240 billion in investments.
“Obviously over the last year markets have moved ahead quite strongly based on … a dramatically improving environment. But has it really dramatically improved?”
Asia Pacific stocks outside Japan as measured by MSCI (.MIAPJ0000PUS) were off 0.84 percent, a 3-month low. The index lost 6.4 percent in January, its worst month in a year, after a 68 percent surge in 2009, as a host of unsettling factors prompted investors to take profits.
, foreigners sold nearly $4.1 billion in stocks in six
ex-Japan in the week ended January 31 — led by $1.7 billion in Taiwan, $1.2 billion in India and $811 million in South Korea.
The U.S. dollar held at its highest levels in six months on Monday, while the euro huddled near seven-month lows on euro zone fiscal concerns, and higher yielding currencies remained pressured by the closing of leveraged trades.
of Greece, Portugal and other smaller euro zone countries have also weighed on global stocks. Fears that Athens will not be able to service its heavy debt have prompted investors to shun riskier investments.
Also high on investor radar screens has been China, where a pair of business surveys on Monday underlined the mounting challenge policymakers face to curb inflation in the world's third-largest economy.
An index based on an official survey of purchasing managers last month eased from a 20-month high in December but remained firmly in expansionary territory, while an index derived from a companion poll by
scaled an all-time high.
“Industrial activity continues to accelerate, implying stronger GDP growth in the first quarter. But rising input and output prices also point to greater inflationary pressure, which will likely prompt more tightening measures in the coming months,” said Qu Hongbin, chief economist for China at HSBC.
The Shanghai Composite Index (.SSEC) fell 1.6 percent but
(.HSI) managed to recoup early losses.
South Korean shares (.KS11) bucked the overall trend, ending up 0.25 percent, with automakers posting strong gains on firm January sales data and troubles at rival
(7203.T), which has been hit by a massive recall of vehicles.
(005380.KS) ended up 2.65 percent, while
(000270.KS) closed 5.63 percent higher. Toyota, the world's top automaker, fell 1.15 percent after losing almost 14 percent last week.
Toyota will announce on Monday details of its plan to fix accelerator pedals that have led to the recall of 2.4 million cars in the United States as it scrambles to put its worst public relations crisis behind it.
The Australian dollar hovered at its weakest since mid-December as investors unwound yen-funded carry trades on a report that a UK regulator would like to restrain carry trading generally.
The euro teetered at its lowest since last July, holding just above $1.3850 where one trader reported talk of a barrier yet to be triggered. It tested that level several times.
U.S. Treasury bonds
and events this week.
Before the jobs data on Friday, investors will get a snapshot of U.S. manufacturing sentiment on Monday and President Barack Obama will also make remarks on the U.S. budget at 1545 GMT (10:45 a.m. EST).
The benchmark 10-year notes edged down 5/32 in price to yield 3.609 percent, up about 2
from late New York trade on Friday. T-note futures were unchanged at 118-05/32.
Oil prices steadied below $73 a barrel on Monday, pausing from the previous session's 1 percent decline which came as concerns about sluggish energy demand outweighed stronger-than-expected U.S. economic data.
NYMEX crude for March delivery edged lower to $72.75 a barrel by 0645 GMT (1:45 a.m. EST).

us.rd.yahoo.com

Asia stocks fall on China jitters, yen gains

admin — Tue, 26 Jan 2010 04:41:59 +0000

Asia stocks fall on China jitters, yen gains
SINGAPORE (Reuters) – Asian stocks fell for the ninth straight day on Wednesday on fears that China’s heightened efforts to rein in soaring credit growth could hamper the global economic recovery.
European stocks were set to follow Asia lower, with financial spreadbetters expecting key indexes in Britain, Germany and France to open as much as 0.6 percent lower, while U.S. stock futures were little changed.
Investors were cautious ahead of the conclusion of a two-day policy meeting by the U.S. Federal Reserve later in the day.
The meeting is expected to yield little in terms of a near-term policy shift. But traders will scour a Fed statement afterwards for clues on how much longer it may leave its ultra-low interest rates and easy money policy in place, and for updates on the health of the U.S. economy.
The meeting is taking place amid a fierce Senate debate over whether Chairman Ben Bernanke should be appointed for a second term, which has also weighed on investor confidence this week.
The euro fell to a nine-month low of 125.31 yen as investors continued to cut risky trades amid a host of unsettling factors.
Besides worries that Chinese imports may slow as policymakers try to keep the economy from overheating, investors have been plagued by worries about Greece’s high debt levels and a proposal from the White House that could break up some huge investment banks, which could slash their profits.
Data on Tuesday showed U.S. consumer confidence in January hit its highest level in nearly a year and a half, but a closely watched housing index showed an unexpected decline in November prices, giving a mixed view of its economic recovery.
The MSCI index of Asia Pacific stocks outside Japan fell 1 percent on Wednesday, surrendering brief early gains. The index has lost around 9 percent in the past two weeks, nearing the 10 percent level that is typically used to define a stock market correction.
The index slid 2 percent on Tuesday to its lowest in two months after China implemented a rise in bank reserve requirements to curb loan growth.
China’s largest bank, ICBC, said on Wednesday it has stopped rolling over some loans after a surge in credit at the start of the year, in the latest evidence that banks may finally be heeding a government-directed clampdown.
Japan’s Nikkei average fell 0.7 percent to its lowest in five weeks, while South Korean stocks shed 0.7 percent to a seven-week low with sentiment weighed by reports North and South Korean forces exchanged artillery fire.
Many investors had been pricing in a smoother and stronger economic rebound this year, which would justify higher share valuations.
Now that questions are growing about the pace and depth of a recovery, share prices are highly vulnerable to a correction, especially after many global indexes have rallied more than 60 percent from lows seen in March last year.
Tech shares, which helped lead the strong global equities rally over the last year, have been among the hardest hit by profit taking in recent sessions as investors fear demand for flat screen TVs and other gadgets may weaken if the global recovery stumbles.
In Seoul, LG Electronics Inc fell almost 1.9 percent to an eight-week low after posting a weaker-than-expected quarterly net profit. Taiwan’s tech-heavy index dropped 0.5 percent to a two-month closing low, after slumping 3.5 percent on Tuesday, on fears that China’s tightening measures will curb the island’s exports to the mainland.
Analysts believe much of the fears over China’s tightening are overdone, saying Beijing will largely stick to a pro-growth stance even as it tries to head off inflation risks and boom-bust swings in the economy.
“It is highly unlikely, in my opinion, that Beijing will drive the economy into a growth recession just to contain inflation,” Stephen Jen, managing director of macroeconomics and currencies at Bluegold Capital Management, said in a note.
Nevertheless, shares in Shanghai and Hong Kong remained under heavy pressure.
The Shanghai Composite Index fell 1.1 percent, closing below the key psychological support level of 3,000 points for the first time since October, despite upbeat earnings estimates from two major banks. Hong Kong’s Hang Seng index lost 0.8 percent.
The yen, seen as a safer haven in times of market turmoil, firmed broadly currencies as investors dumped high-risk assets. The U.S. dollar fell 0.4 percent to 89.25 yen, but rose 0.2 percent against a basket of major currencies.
However, the high-yielding Australian dollar rose to $0.9045 after fourth-quarter inflation rose faster than expected as the cost of housing, recreation and food all climbed.
The data set the stage for a fourth straight increase in interest rates by the central bank at a meeting next week.
Gold prices steadied near $1,100 an ounce, supported by consistent retail demand from Asia, while oil futures prices fell 10 cents to $74.62 a barrel.

feeds.reuters.com

EURUSD fall sharply. No real reason except stocks being hit.

admin — Fri, 22 Jan 2010 01:04:05 +0000

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Goldman trims pay, posts profit as shares fall

admin — Fri, 22 Jan 2010 00:53:29 +0000

Goldman trims pay, posts profit as shares fall
GS.N
), under fire for gold-plated pay packages, cut average pay per employee by about a quarter from record 2007 levels, helping boost its profit to a record.
But the forecast-beating results were quickly overshadowed by anxiety about the impact of the Obama administration’s proposed crackdown on financial risktaking, and shares in Wall Street’s biggest proprietary trading institution slumped 5 percent.
“Goldman Sachs is not a banking or financial story now, it’s a political story,” said Matt McCormick, portfolio manager at Bahl & Gaynor Investment Counsel in Cincinnati.
Goldman had been on track to shatter its compensation record from 2007, but instead decided to set aside nothing for compensation in the fourth quarter and give $500 million to charity.
The move, which cut average compensation per employee to $498,000, helped the Wall Street bank report a record profit for 2009 and a better-than-expected fourth-quarter net income of $4.95 billion.
Average pay was still up from $317,000 last year, but down from $661,490 in 2007.
The move helped Goldman answer critics who have lambasted the bank for setting aside so much for bonuses months after U.S. taxpayers rescued the banking industry during the financial crisis.
“Goldman Sachs is not deaf to the calls for restraint,” the bank’s chief financial officer, David Viniar, told reporters on a conference call. The bank consulted U.S. pay czar Kenneth Feinberg regarding its bonus policies.
Political scrutiny of Wall Street firms is intensifying. President Barack Obama on Thursday proposed stricter limits on financial risk-taking. This could wallop Goldman, which often trades its own funds to help bolster the bottom line.
Goldman shares rose in early trading but later fell after Obama proposed steps including preventing major banks from owning, sponsoring or investing in hedge funds for their own profit.
Goldman became a bank holding company in 2008 during the financial crisis as a signal of safety to investors, but also opening itself up to more regulation.
“It looks like Goldman Sachs has been given a reason to give back their bank charter,” said Tom Sowanick, chief investment officer of the Omnivest Group in Princeton, New Jersey. “Moreover, it also looks as though banks may be going down the path of being regulated like utilities.”
Goldman denied it had any intention of giving back its bank charter, but its shares fell as much as 6.6 percent and were down 3.5 percent at $161.90 in late afternoon trade. Goldman shares are down 18 percent from their highs in October.
Goldman’s debt protection costs also jumped after Obama’s proposals.
Responding to outrage over high pay, the bank set aside 36 percent of net revenue for compensation for 2009, Goldman’s lowest percentage as a public company. Compensation for the year totaled $16.19 billion.
A protest demonstration over Wall Street excess was planned for Thursday in front of Goldman’s headquarters in New York. The investment bank, famously referred to as “a great vampire squid wrapped around the face of humanity” in a scathing piece in Rolling Stone last summer, is seen as a poster child for the excesses of Wall Street.
“It will alleviate some political pressure,” said Keith Davis, a bank analyst at money manager Farr, Miller & Washington in Washington, D.C. “They’ve been in everyone’s cross-hairs for how much money they make. I think they’ll still be there, but the fact that they took down the bonuses will help incrementally.”
The bank recorded negative compensation expense in the fourth quarter because of the contribution to Goldman Sachs Gives, the firm’s charitable arm. The contribution was part of total commitments to charitable and small business initiatives during 2009 in excess of $1 billion, the firm said.
The compensation total was far below the record $20.2 billion the firm paid in 2007, and well below what the firm was expected to pay this year as it reported blockbuster profits.
Goldman’s British staff is likely to bear the brunt of the bonus cut as the firm curbed payouts in light of Britain’s supertax on bonuses, an industry source said.
The firm last month moved to deflect criticism on pay by announcing its top 30 managers would receive their bonuses entirely in long-term stock. The banking industry has moved to pay in equity in an effort to tie compensation to long-term performance and curb risk-taking.
MS.N
), which has also changed its pay structures, on Wednesday reported an annual loss for 2009 but still paid out more than $14 billion as it ratcheted up its compensation ratio to 62 percent from 51 percent in 2008.
The House of Representatives Financial Services Committee, led by Rep. Barney Frank, will hold a hearing on Friday to discuss compensation for top executives in the finance sector.
Last week, a commission investigating the financial crisis called Goldman CEO Lloyd Blankfein to testify on Capitol Hill, quizzing him on the firm’s role in the financial crisis.
Even after Goldman curbed its pay, it faced a fresh lawsuit from the Southeastern Pennsylvania Transportation Authority alleging excessive compensation.
Goldman’s fourth-quarter profit amounted to $8.20 a share, topping analysts’ average forecast by $3. In the year-earlier fourth quarter it posted a loss of $2.12 billion, or $4.97 a share.
The fourth-quarter compensation actions boosted profit dramatically. If the company had set aside $3.3 billion in the quarter for pay, which would have brought total compensation expense to about $20 billion for the year, Goldman would have earned less than $4.00 a share.
But low compensation expense may be difficult to repeat in the future, raising questions about how strong Goldman’s performance really was in the fourth quarter, analysts said.
The bank’s trading momentum fell off in the quarter. Goldman reported trading and principal investments revenue of $5.1 billion, down 43 percent from the third quarter. Rivals reported similar declines.
Investment banking was strong as Goldman reported revenue of $1.6 billion, up 58 percent from a year earlier.
Goldman reported revenues of $9.62 billion, which were in line with analyst expectations.
Goldman also drew down risk in the fourth quarter as its average Daily Value at Risk (VaR) declined to $181 million from $197 million a year earlier and $208 million in the third quarter. VaR, one measure of risk, stands for the maximum that could potentially be lost trading on a single day.
The firm paid $6.44 billion in corporate taxes, resulting in a tax rate of 32.5 percent for 2009. That is up from less than 1 percent in 2008.
After Obama’s announcement, credit default swaps insuring Goldman’s debt jumped by around 25 basis points to 120 basis points, or $120,000 per year for five years to insure $10 million in debt, according to broker Phoenix Partners Group.
Yield spreads on Goldman’s 7.5 percent notes due in 2019 widened by 12 basis points to 150 basis points over Treasuries, according to MarketAxess.
(Reporting by Steve Eder,
,
,
,
, Dena Aubin; Editing by John Wallace,

feeds.reuters.com

Asia stocks fall amid fears of China lending curbs (AP)

admin — Tue, 19 Jan 2010 15:50:12 +0000

BANGKOK – Asian stock markets were mostly lower Wednesday amid renewed fears of Chinese lending curbs and jitters about U.S. corporate earnings that have provided mixed signals about the strength of economic recovery.
as a sign the flow of easy credit will be further stanched.
earlier this month made a tentative move to slow its lavish bank lending. But they unsettled investors who were already on edge because lackluster earnings from U.S. companies have suggested economic recovery in the world’s largest economy is slow and uneven at best.
Asia’s losses came despite Wall Street’s gains on Tuesday, where the
rose 1.1 percent to a 15-month high. Oil slipped below $79 a barrel and the dollar was stronger against the yen and the euro.
In Tokyo, the
stock average surrendered early gains to fall 27.38 points, or 0.3 percent, at 10,737.52.
slumped 60 percent to 2 yen after filing for one of the country’s largest bankruptcies on Tuesday. JAL shares will be removed from the stock exchange on Feb. 20.
The Shanghai index slid 2.8 percent to 3,156.16 which also knocked
lower. The Hang Seng fell 283.75, or 1.3 percent, to 21,394.23.
Elsewhere, Singapore’s market was off 0.5 percent,
retreated 0.3 percent and
’s stock measure lost 1.2 percent. South Korea’s Kospi bucked the trend, advancing 0.2 percent to 1,714.38 and India’s Sensex was up 0.1 percent at 17,516.84.
In the U.S. on Tuesday, the Dow rose 115.78, or 1.1 percent, to 10,725.43. The broader Standard & Poor’s 500 index rose 14.20, or 1.3 percent, to 1,150.23. The
rose 32.41, or 1.4 percent, to 2,320.40.
Stocks been climbing for 10 months on hopes that an easing recession would boost corporate profits. But lingering problems like high unemployment and a weak housing market in the U.S. have raised questions about whether the rally has been overdone.
.,
.,
.,
.,
.,
and Wells Fargo & Co.
Results already released from corporate bellwethers have been a mixed bag.
fell in Asia amid expectations of a dismal U.S. crude inventory report.
Benchmark crude for February delivery fell 68 cents to $78.64 in
. The contract rose $1.02 to settle at $79.02 on Tuesday.
In currencies, the dollar rose to 91.17 yen from 91.11 yen. The euro fell to $1.4195 from $1.4291.

us.rd.yahoo.com

Stocks fall on JPMorgan results, sentiment survey (AP)

admin — Fri, 15 Jan 2010 15:46:47 +0000

. and a disappointing consumer sentiment reading sent investors rushing from stocks.
Financial stocks led the market lower Friday, pulling major stock indexes down about 1 percent from 15-month highs. The Dow lost almost 101 points, its steepest drop since Dec. 31. Interest rates fell in the
in search of safety.
JPMorgan, regarded as one of the strongest U.S. banks, warned investors it was too soon to say that losses on mortgages and other loans have peaked. The weakness in JPMorgan’s consumer business hurt other financial stocks, which led the rest of the market lower.
., the biggest maker of computer chips.
Commodity prices slumped as the dollar turned higher, and a disappointing report on consumer sentiment also weighed on the market. The preliminary Reuters/
for January rose to 72.8 from 72.5 in late December but came in weaker than economists had forecast.
The news from JPMorgan brought concerns about profits at other big banks, many of which post results next week. Banks have been saying since the
exploded in the fall of 2008 that mortgages resetting at higher rates and job losses would push more loans into default. The latest comments gave investors a fresh reminder that the economy still needs more time to heal.
After a 10-month run in the market that has been all but unbroken, some investors think stocks are running low on gas. Light trading volume since November indicates there is little conviction behind the market’s recent ascent. The Dow on Thursday closed above 10,700 for the first time since October 2008 and has climbed 62.1 percent since March, though it’s still down 25.1 percent from its peak in October 2007.
The market will get additional signals about the economy next week as many more companies report earnings. U.S. markets are closed on Monday for
. Day.
Adam Gould, senior
, said the reaction to JPMorgan’s report signaled that investors had gotten too far ahead of themselves in predicting stellar earnings from companies.
“The market has been pricing in the best-case scenario for earnings for all of these companies,” he said. “I think with an earnings report like this six months ago, we would’ve seen stocks rally.”
The Dow fell 100.90, or 0.9 percent, to 10,609.65, the biggest drop since it lost 120 points on the final day of 2009. The broader Standard & Poor’s 500 index fell 12.43, or 1.1 percent, to 1,136.03, and the
fell 28.75, or 1.2 percent, to 2,287.99.
Bond prices rose, pushing their yields lower. The yield on the benchmark 10-year Treasury note fell to 3.68 percent from 3.74 percent late Thursday.
The dollar rose against most major currencies. That hurt commodities, which are priced in dollars. A stronger greenback makes commodities like oil more expensive to foreign buyers.
Crude oil fell $1.39 to settle at $78 per barrel on the
. Gold fell.
.,
.,
.,
and Wells Fargo & Co.
Jim Herrick, director of
at Baird & Co. in Milwaukee, said JPMorgan’s report prompted selling because the bank is seen as stronger than other banks and because financial stocks have been the biggest drivers of the market’s climb since March.
“The concern is that this is a harbinger of things to come as far as earnings,” he said. “It’s only smart to take chips off the table after the run we’ve had and sit on the sides and wait for earnings to come out.”
After a strong start to the year, the market’s advance slowed during week and the modest gains were eaten by Friday’s slide. Caution about earnings from the final three months of 2009 grew after aluminum producer
. posted disappointing results.
For the week, the Dow slipped 0.1 percent, the
fell 0.8 percent and the
lost 1.3 percent.
Among banks,
fell $1.01, or 2.3 percent, to $43.68. Morgan Stanley fell 82 cents, or 2.6 percent, to $30.38, while
fell 9 cents, or 2.6 percent, to $3.42.
, where consolidated volume came to 4.8 billion shares as
expired on some stocks. Volume Thursday came to 3.9 billion shares.
of smaller companies fell 8.47, or 1.3 percent, to 637.96.
fell 0.8 percent,
fell 1.9 percent, and
’s CAC-40 lost 1.5 percent. Earlier, Japan’s Nikkei stock average rose 0.7 percent.
closed the week down 8.54, or 0.1 percent, at 10,609.65.
& Poor’s 500 index fell 8.95, or 0.8 percent, to 1,136.03. The
fell 29.18, or 1.3 percent, to 2,287.99.
The Russell 2000 index, which tracks the performance of small company stocks, fell 6.60, or 1 percent, for the week to 637.96.
U.S. Total
— which measures nearly all U.S.-based companies — ended at 11,604.82, down 101.96, or 0.9 percent.

us.rd.yahoo.com

Retail sales fall unexpectedly, jobless claims up

admin — Fri, 15 Jan 2010 01:48:10 +0000

Retail sales fall unexpectedly, jobless claims up
WASHINGTON (Reuters) – U.S. consumers unexpectedly curbed their Christmas spending in December and more people filed claims for jobless benefits last week, casting fresh doubts on the durability of the economic recovery once government support fades.
The Commerce Department said on Thursday retail sales fell 0.3 percent last month, the first decline since September, as consumers spent less on vehicles and an array of other goods during the holiday shopping month.
Analysts had expected an increase of 0.5 percent, but disappointment was tempered by upward revisions to prior months’ data. November sales were revised to show a 1.8 percent gain from an initially reported 1.3 percent increase, and October sales were bumped up a touch as well.
A separate report from the Labor Department showed initial claims for state unemployment benefits rose 11,000 to 444,000 last week, higher than the 437,000 claims analysts surveyed by Reuters had forecast.
“Will consumers be able to take over from the government and replace demand that has come so far from government spending? If the consumer is unable to do that, it’s going to pose some significant risks to the recovery story,” said Boris Schlossberg, director of research at GFT Forex in New York.
Bets that business spending would bolster profits in the technology sector helped to shift the attention on Wall Street from the weak economic data, giving U.S. stocks a lift. Prices for U.S. government debt, a safe haven in times of economic uncertainty, surged. The U.S. dollar fell versus the yen.
Discounting appeared to be a factor weighing on the government’s dollar measure of sales. Auto receipts dropped 0.8 percent, even though industry data had shown unit vehicle sales rose in December.
The report also conflicted with data from general merchandise retailers who reported strong December sales volumes. Some analysts blamed the surprise fall in sales on a snow storm that struck a week before Christmas.
“There is an unusual amount of noise in these numbers related to … major discounting by retailers, electronics suppliers and auto companies at the end of the year in order keep inventories lean,” said Brian Bethune, chief U.S. financial economist at IHS Global Insight in Lexington, Massachusetts.
For the Federal Reserve, which has pledged to keep its benchmark interest rate near zero for an extended period, the latest figures suggested that both consumer demand and the job market were still under considerable pressure.
“It probably pushes off the date of any normalization of interest rates,” said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ in New York.
The Congressional Budget Office said the U.S. unemployment rate, which stood at a 26-year high of 10 percent in December, would likely not drop below 8 percent before 2012.
President Barack Obama faces pressure to find new ways to spur job creation and economic growth as government stimulus spending begins to taper off and the Fed winds down its emergency lending and asset-buying programs.
But the labor market is showing some signs of healing. The four-week moving average of jobless claims, which smoothes out weekly variations, dropped for a 19th straight week, to 440,750 — the lowest level in nearly 1-1/2 years.
Stephen Stanley, chief economist at RBS, said weak December retail sales set the stage for a poor performance in January.
“Stores were quite conservative in stocking goods for the holiday season and many were left with little to sell by the end of December. January is typically a clearance month, and this year, there is not much left to clear,” said Stanley.
Excluding motor vehicles and parts, retail sales fell 0.2 percent in December, the biggest decline since July. So-called core sales, which exclude autos, gasoline and building materials, fell 0.3 percent. This category closely reflects the consumer spending component of the government’s GDP reports.
A second report from the Commerce Department showing inventories increased 0.4 percent in November bolstered views the economy picked up steam in the fourth quarter.
While the economy remains on a steady recovery path, the housing market — the main trigger of the economic downturn — continues to show signs of stress.
The nation closed out 2009 with a record number of foreclosure actions and is poised to set a fresh record this year, real estate data company RealtyTrac said.
According to the group, 2.8 million properties with a mortgage received a foreclosure notice last year, up 21 percent from 2008 and 120 percent from 2007.
For a graphic comparing retail sales and personal spending, see:
For a graphic comparing new jobless claims and the four-week average, see:
,

feeds.reuters.com