Dow's 200-point rebound

The Dow Jones industrial average (INDU) rose 202 points, or 2%. The S&P 500 (SPX) index jumped 24 points, or 2.3%. The Nasdaq (COMP) composite gained 58 points, or 2.7%.

Stocks slumped Wednesday after Federal Reserve Chairman Ben Bernanke told Congress the outlook for the economy was "unusually uncertain," adding to worries about the pace of the recovery.

But the tone was positive Thursday, on the back of improved earnings, better-than-expected housing market news and a surge in European markets.

After the close, Dow component Microsoft (MSFT, Fortune 500) reported higher quarterly sales and earnings that topped estimates, thanks to strong sales of its Windows 7 and a better personal computer market than in recent months. Shares were barely changed after the close.

Also after the close, Dow component American Express (AXP, Fortune 500) reported higher quarterly sales and earnings that topped expectations. But AmEx's CEO said the company remains cautious about the economic outlook and shares dipped 1% in after-hours trading.

Quarterly results: Dow component Caterpillar (CAT, Fortune 500) reported higher quarterly sales and earnings that topped estimates due to better sales of gear for the mining, infrastructure and energy industries. Caterpillar also boosted its 2010 profit forecast. Shares gained 1.7%.

Fellow Dow component 3M (MMM, Fortune 500) reported higher quarterly sales and earnings and said that full-year 2010 profit will exceed its earlier targets, thanks to strong demand in both the United States and abroad. The company is seen as a good proxy for the economy due to the breadth of its business, which includes everything from Scotch tape to films for flat-screen TVs. Shares gained 3%.

UPS (UPS, Fortune 500) reported higher quarterly sales and earnings that topped estimates and said that 2010 earnings will surpass its earlier forecasts. The delivery company cited an increase in package revenue in both the United States and abroad. Shares gained 6%. UPS is often seen as an economic bellwether due to the nature of its business.

Dow component AT&T (T, Fortune 500) reported higher quarterly earnings that topped estimates and higher revenue that was shy of estimates. The company also lifted its 2010 forecast, citing cost cutting and a surge in wireless business, thanks to its exclusive iPhone deal with Apple. Shares gained 2.4%.

Late Wednesday, eBay (EBAY, Fortune 500) reported higher quarterly sales and earnings that topped estimates, thanks to strength at its PayPal only payments unit. The online auctioneer also lowered the high end of its full-year 2010 profit forecast, citing the impact of the weaker euro. Shares gained 3.8% Thursday.

Housing: Sales of existing home sales fell 5.1% in June from May levels, according to a report from the National Association of Realtors released Thursday. But the drop was smaller than expected. Sales rose nearly 10% from a year earlier.

Jobs: The House voted to extend jobless claims benefits until November, ending a seven-week old debate between lawmakers that saw federal benefits for the long-term unemployed run out. President Obama is expected to sign the extension shortly.

Earlier, the Department of Labor reported that the number of Americans filing new claims for unemployment rose to 464,000 last week from a two-year low of 427,000 in the prior week. Economists surveyed by Briefing.com thought claims would rise to 445,000.

Continuing claims, a measure of Americans who have been receiving benefits for a week or more, fell to 4,487,000 from 4,710,000 in the previous week. Economists surveyed by Briefing.com expected 4,600,000.

Deals: General Motors said it will buy auto financing firm AmeriCredit (ACP) in a $3.5 billion all-cash deal. The deal gives GM a lending unit after selling its majority stake in GMAC in 2006. The deal was also seen as a key step as GM prepares its initial public offering for later this year, after the government restructured it in bankruptcy. AmeriCredit shares jumped 23%.

Dell: Computer maker Dell (DELL, Fortune 500) agreed to pay $100 million to settle fraud charges with the Securities and Exchange Commission. Chairman Michael Dell and former CEO Kevin Rollins will pay $4 million each. Dell shares finished 2.5% higher.

Leading indicators: The index of leading economic indicators fell 0.2% in June, the Conference Board reported, after rising 0.5% in May. Economists expected the index to have fallen 0.4%.

World markets: European markets rose, with Britain's FTSE 100 up 1.9%, Germany's DAX up 2.5% and France's CAC 40 up 3%.

Asian markets ended mixed. Japan's Nikkei fell 0.6%, while Hong Kong's Hang Seng gained 1.1% and the Shanghai Composite gained 0.3%.

Currencies: The euro gained versus the dollar. The dollar rose versus the Japanese yen.

Commodities: U.S. light crude oil for September delivery rose $2.46 to $79.02 a barrel on the New York Mercantile Exchange.

COMEX gold for August delivery rose $2.80 to $1,194.60 an ounce.

Bonds: Treasury prices fell, raising the yield on the 10-year note to 2.93% from 2.89% late Wednesday. Debt prices and yields move in opposite directions.

Market breadth: Breadth was positive. On the New York Stock Exchange, winners beat losers by over six to one on volume of 1.18 billion shares. On the Nasdaq, advancers beat decliners by five to one on volume of 2.28 billion shares. 

Obama claims US finance bill ‘strongest’ in history

WASHINGTON —

The law aims to usher in a new era of consumer protections and banking restrictions, a signature achievement that comes after Wall Street’s failures knocked the economy into the worst recession since the 1930s. It also represents a major legislative victory for Mr Obama just before election-year politics overtakes the rest of his ambitious agenda.

In excerpts of Mr Obama’s remarks released by the White House ahead of the signing, the President praised the law’s creation of a Consumer Financial Protection Bureau to write and enforce rules for banks on credit card and mortgage lending. “These protections will be enforced by a new consumer watchdog with just one job: Looking out for people — not big banks, not lenders, not investment houses,” he said.

“That’s not just good for consumers; that’s good for the economy.”

The overhaul will also make way for a new councilof regulators to monitor systemic risks in the banking system and gives the government new powers to unwind failing financial firms whose collapse would undermine the markets.  United States President Barack Obama yesterday signed into law the biggest overhaul of the US financial-regulatory system since the Great Depression, calling it “the strongest consumer financial protections in history”.AGENCIES

Stocks slump on Bernanke comments

The Dow Jones industrial average (INDU) lost 109 points, or 1.1%, the S&P 500 (SPX) index dropped 14 points, or 1.3%, and the Nasdaq (COMP) composite tumbled 35 points, or 1.6%.

Stocks were slightly lower through the early afternoon as better-than-expected quarterly profit reports from Apple, Morgan Stanley and Wells Fargo were countered by disappointment about results from Yahoo and others.

But the selling picked up steam in the afternoon following the 2 p.m. ET release of Bernanke's prepared testimony for a Senate committee. The Fed chief told lawmakers that, despite ongoing signs of weakness in the economy, central bankers expect gradual recovery over the next few years, although the labor market healing will be slower than previously thought.

"He's basically saying the economy is getting worse, and that while it's still going to grow, it's not recovering at the pace they had hoped," said Dave Rovelli, managing director of U.S. equity trading at Canaccord Adams.

Bernanke also provided more details on how the Fed plans to withdraw the trillions in stimulus it has pumped into the economy since the start of the financial crisis in 2008. But he also said that the Federal Reserve will be ready to provide additional help if the economy deteriorates.

Stocks found a little momentum Tuesday amid speculation that the Federal Reserve may take more steps to encourage bank lending. But that failed to transfer to Wednesday's trading despite a number of improved earnings.

"Right now the macro-economic environment is trumping the good earnings," Rovelli said. "The earnings have been good but people are worrying about what the next few quarters are going to look like if the recovery is losing steam."

After the close, eBay (EBAY, Fortune 500) reported higher quarterly sales and earnings that topped estimates, thanks to strength at its PayPal only payments unit. The online auctioneer also lowered the high end of its full-year 2010 profit forecast, citing the impact of the weaker euro. Shares gained 3% in after-hours trading.

Results: After the close Tuesday, Apple (AAPL, Fortune 500) posted its best quarter ever, thanks to sales of its Mac computers, iPads and iPhones. Shares gained 1% Wednesday.

But search engine operator Yahoo (YHOO, Fortune 500) reported results that disappointed investors. The Internet company reported higher earnings that beat estimates on revenue that was barely higher from a year earlier and was shy of analysts' expectations.

Citigroup downgraded the stock Wednesday, while a variety of other firms downgraded it or cut earnings estimates on the company. Shares fell 8.5%.

Dow component Coca-Cola (KO, Fortune 500) reported higher quarterly sales and earnings that topped estimates, helped by increased sales in most of its markets, with particularly strong demand overseas. Shares gained 1.6%.

Morgan Stanley (MS, Fortune 500), Wells Fargo (WFC, Fortune 500) and US Bancorp (USB, Fortune 500) all reported strong profits, but bank shares were mixed. The KBW Bank (BKX) index lost 2.4%.

Morgan Stanley reported a profit of $1.4 billion, better than expected and reversing a loss from the same quarter a year ago. The company also reported higher earnings that topped estimates.

Wells Fargo reported a higher second-quarter profit that topped expectations, thanks to smaller loan losses. Shares gained 4.7%.

US Bancorp reported higher quarterly sales and earnings that topped expectations, thanks partly to lower credit costs.

Wall Street reform: President Obama signed the Wall Street reform bill into law Wednesday, enacting the most far-reaching financial overhaul since the Great Depression.

World markets: European markets rose, with Britain's FTSE 100 up 1.5%, Germany's DAX up 0.4% and France's CAC 40 up 0.8%.

Asian markets ended mixed. Japan's Nikkei fell 0.2%, while Hong Kong's Hang Seng gained 1.1% and the Shanghai Composite gained 0.3%.

Currencies: The euro fell versus the dollar. The dollar fell versus the Japanese yen.

Commodities: U.S. light crude oil for September delivery fell $1.16 to $76.56 a barrel on the New York Mercantile Exchange.

COMEX gold for August delivery fell $5.90 to $1,191.80 an ounce.

Bonds: Treasury prices rose, lowering the yield on the 10-year note to 2.89% from 2.93% late Wednesday. The two-year note hit a record low. Debt prices and yields move in opposite directions.

Market breadth: Breadth was negative. On the New York Stock Exchange, losers beat winners by two to one on volume of 1.2 billion shares. On the Nasdaq, decliners beat advancers by almost three to one on volume of 2.25 billion shares.

STI lower at midday

The writer is chairman of the Singapore Institute of International Affairs and author of Asia Alone: The Dangerous Post Crisis Divide From America. He was a keynote speaker at the Asia-Europe meeting public conference in Brussels.

 

TRUST

T RUST

Tempered  RUST

pharoah88      ( Date: 21-Jul-2010 08:51) Posted:   by Wilson Rothman msnbc.com updated 30 minutes ago commentary It's been a long season of embarrassment for BP, but leaking oil isn't what the blogosphere is ripping the company for today. A site called Americablog spotted a photo of BP's Houston command center, ostensibly taken on July 16. The image had quite visibly been Photoshopped — badly — to include more on-screen camera action. Once word got out — the story was picked up by the Washington Post, where it was then spotted by the tech blog Gizmodo and others — BP 'fessed up. A spokesman admitted that the image was altered, said that a photographer had inserted shots where the TV screens were blank, and provided the original image. "We've instructed our post-production team to refrain from doing this in the future," said the spokesman in an e-mail to the Washington Post. Though the command center alteration doesn't seem to be an attempt to hide facts or confuse the public, it heightens skepticism for the company at a time when it should be trying to build trust. As the Americablog reporter John Aravosis wrote, "I guess if you're doing fake crisis response, you might as well fake a photo of the crisis response center." As it happens, the command center shot isn't the end of the issue. Today, Aravosis published evidence of another altered photo, this one depicting a meeting from the failed "top kill" maneuver. "How many other crisis response photos from BP have been faked?" wrote Aravosis. "Did they fake any videos?" Please don't tell us that the people in those sucking-it-up-and-taking-responsibilty ads are actually paid models! http://www.msnbc.msn.com/id/38333456/ns/technology_and_science-tech_and_gadgets/

Wall Street stages a comeback

The Dow Jones industrial average (INDU) rose 75 points, or 0.7%. The S&P 500 (SPX) index rose 12 points, or 1%, and the Nasdaq (COMP) composite gained 24 points, or 1%.

Stocks plunged at the open and struggled for most of the morning as investors digested a big drop in quarterly earnings from Goldman Sachs and a lower profit outlook from Johnson & Johnson. Weaker-than-expected revenues from IBM also weighed on the market.

But the tone improved in the afternoon on chatter that the Fed is considering additional steps to encourage bank lending. Ben Bernanke, chairman of the U.S. central bank, is scheduled to testify before Congress on Wednesday.

"That's all speculation," said Dave Rovelli, managing director of U.S. equity trading at Canaccord Adams. "I think it's more Apple and Goldman rallying and taking the market up with it."

Shortly after the market closed, Apple (APPL) reported its best quarterly results on record due to strong Macintosh sales and overwhelming demand for its iPad device.

Apple said sales rose to a record $15.7 billion in the most recent quarter, up 61% from the same period last year. Net income rose to $3.25 billion, up 78% from a year ago.

Shares of Apple continued to rally, gaining 4% in extended trading.

Also after the close, Yahoo (YHOO, Fortune 500) said its second-quarter net income rose 51% versus the same period last year. The Internet company said sales rose 2% to $1.6 billion, which beat analysts' forecast of $1.16 billion. But shares fell nearly 5% in extended trading.

Investors have been focused on quarterly results, with over 120 companies due to report this week.

While earnings have been relatively strong so far, investors are looking for sales and revenue growth to confirm that profits are due to improved economic conditions and not cost-cutting measures.

Concerns that the U.S. economy could dip back into recession later this year have kept the market range-bound since April. A dour report released Tuesday on initial construction of new homes in June added to the economic jitters.

"People are very concerned about growth in the second half," said Ryan Larson, head of U.S. equity trading at RBC Capital Markets. "That's going to be key to sustaining any rally coming out of earnings season."

Stocks ended Monday's session with gains, although economic worries tempered positive earnings results.

Companies: After the market closed, BP (BP) announced plans to sell $7 billion worth of assets to Apache Corp. The sale of assets in the United States, Canada and Egypt is part of a plan to raise money to cover costs related to the oil spill in the Gulf of Mexico.

Goldman Sachs (GS, Fortune 500) said profit fell 82% in the second quarter to $613 million, due to a slowdown in the bank's trading business. Results were also hurt by a bonus tax in the United Kingdom and the $550 million settlement Goldman reached with the Securities and Exchange Commission. Shares gained about 2%.

Drugmaker Johnson & Johnson (JNJ, Fortune 500) fell more than 2% after the company lowered its full-year earnings estimate to a range between $4.65 to $4.75 a share, compared with earlier guidance of $4.80 to $4.90 a share.

For the second quarter, J&J said it earnings rose 7% to $1.23 a share from $1.15 a share in the same period last year.

J&J also said it has received a grand jury subpoena and is cooperating with a federal investigation stemming from multiple recalls of its popular non-prescription drugs.

Harley-Davidson (HOG, Fortune 500) soared over 13% after the motorcycle maker said it earned 59 cents a share, versus expectations for 41 cents a share.

Shares of Toyota (TM) fell 1.4% after the automaker said it was cooperating with a subpoena from a U.S. federal grand jury for documents related to steering problems in its vehicles.

IBM (IBM, Fortune 500) fell 2.5% after the company reported late Monday second-quarter earnings that beat expectations, while sales growth was weaker than expected.

Separately, a monthly report from the Labor Department showed that unemployment eased in more than half of U.S. states in June.

A total of 39 states and the District of Columbia posted unemployment rate decreases in June, while jobless rates rose in five states and remained unchanged in six states.

World markets: European shares ended lower. The FTSE 100 in Britain lost 0.2%, France's CAC 40 slid 0.5% and Germany's DAX fell 0.7%.

Asian markets ended mixed. The Shanghai Composite rallied 2.2% but Japan's Nikkei tumbled 1.2%. The Hang Seng in Hong Kong added 0.9%.

Dollar and commodities: The dollar was up against the euro, the British pound and the Japanese yen.

U.S. light crude oil for August delivery edged up 78 cents to settle at $75.53 a barrel. The September contract, which becomes active Wednesday, rose 85 cents to $77.75 a barrel.

COMEX gold's August contract rose $10 to $1,192.20 per ounce.

Bonds: Treasury prices rose, pushing the yield on the 10-year note down to 2.93% from 2.96% late Monday. Bond prices and yields move in opposite directions.

Stocks tumble as Goldman disappoints

The Dow Jones industrial average (INDU) was down 137 points, or 1.3%, shortly after the opening bell. The S&P 500 (SPX) index sank 13 points, or 1.2%, and the Nasdaq (COMP) composite shed 36 points, or 1.7%.

Stocks ended Monday's session with gains, although economic worries tempered positive earnings results.

"Earnings are a mixed picture right now, and people are still trying to determine whether we are seeing signs of the economy recovering," said Derek Hoffman, founder of The Wall Street Cheat Sheet. "There's a lot of uncertainty, so investors are sitting on the sidelines and buying into companies based on these earnings, and that's really what is moving the market from day to day."

Earnings: Goldman Sachs (GS, Fortune 500) posted a profit of $613 million in the second quarter, down 82% from a year earlier due to its settlement with the Securities and Exchange Commission and other charges. Shares of the company sank 2% in early trading.

Johnson & Johnson (JNJ, Fortune 500) fell more than 2% after the drugmaker lowered its full-year earnings estimate to a range between $4.65 to $4.75 a share, compared with earlier guidance of $4.80 to $4.90 a share.

For the second quarter, J&J said it earnings rose 7% to $1.23 a share from $1.15 a share in the same period last year.

J&J also said it has received a grand jury subpoena and is cooperating with a federal investigation stemming from multiple recalls of its popular non-prescription drugs.

Other companies due to report their results Tuesday, after the close, include tech heavyweights Apple (AAPL, Fortune 500) and Yahoo (YHOO, Fortune 500).

After U.S. markets closed Monday, IBM (IBM, Fortune 500) posted a jump in second-quarter earnings, but the tech bellwether's sales fell short of estimates. Shares of IBM were down about 5% in early trading.

Economy: Housing starts fell to their lowest level of the year in June, down 5% to an annual rate of 549,000. But building permits showed surprise strength, climbing 2.1% to an annual rate of 586,000.

A state unemployment report from the Department of Labor is due out at 10 a.m. ET.

World markets: European shares were lower in midday trading. The FTSE 100 in Britain lost 1%, France's CAC 40 dropped 1.7% and Germany's DAX fell 0.5%.

Asian markets ended mixed. The Shanghai Composite rallied 2.2% but Japan's Nikkei tumbled 1.2%. The Hang Seng in Hong Kong added 0.9%.

Dollar and commodities: The dollar was up against the euro, the British pound and the Japanese yen.

U.S. light crude oil for August delivery edged down 70 cents to $75.84 a barrel.

COMEX gold's August contract fell $1.40 to $1,180.50 per ounce.

Bonds: Treasury prices rose, pushing the yield on the 10-year note down to 2.92% from 2.96% late Monday. Bond prices and yields move in opposite directions.

The frustration of his untold story

Obama has achieved more than most US Presidents — except convince voters he’s boosted the economy

F

Within hours of each other on Thursday, BP capped the oil leak in the Gulf of Mexico and the Senate passed the financial regulatory reform Bill. The former brought an end to three months of political agony for the White House as Americans watched those daily video feeds of crude oil gushing into the sea. The latter mercifully concluded an even uglier display — that of the Senate spending a year crafting a Bill.

These events inspired a round of commentary agreeing that between healthcare and “finreg”, Mr Obama was the most consequential Democratic President (in terms of domestic legislation) since Lyndon Johnson in the mid-1960s. And yet most of the buzz in the political press over the week involved more chest-thumping about how terrible things were for Mr Obama.

A

The explanation for this incongruity — a President of accomplishment whose party faces a wipe-out — is not complicated. It rests on the 9.5-per-cent unemployment rate. And in the conviction, shared by up to three-quarters of the public, according to polls, that the steps the administration has taken have not helped and have maybe even hurt.

This is maddening, because those steps have helped avert a depression, a possible run on banks, the probable bankruptcy of two major car-makers and other nightmares.

It’s standard operating procedure in United States political journalism at this point to note grimly that trying to describe to the public how much worse it could have been is a fool’s errand. I disagree with that strenuously, and think the Democrats could have done a far, far better job of it.

For instance, thousands of small businesses have had work because of the stimulus

Bill: Why didn’t someone run a television advertising campaign featuring testimonials to this effect from business owners? Too late now: The storyline is set.inally, the old wheel of fate cut Barack Obama a couple of breaks last week.Washington Post poll showing a majority disapproves of his handling of the economy spurred unusually fervent declarations that the Republicans were poised to regain control of the House of Representatives and, for the first time, speculation that now even the Senate might fall too, like overripe fruit, into Republican hands.

GRUESOME NEWS FOR DEMOCRATS

The Democrats’ failure to mount a stronger case has had massive ramifications, because the storyline is much larger than merely that the stimulus has failed. It is that government is a failure. A poll came out last week that got less attention than the

This survey was conducted by the White House’s own pollster for a non-profit group called Third Way, a centrist think-tank. It found that by 48 per cent to 43 per cent, Americans think the administration’s actions have made things worse, not better.

By a whopping 54 per cent to 32 per cent, they prefer tax cuts for business over more government spending as a spur to growth.

Finally, people were given a choice between two descriptions of corporations. Are they “the backbone of the US economy and we need to help them grow, whether they are large or small”, or do they “have too much power, hurt the middle class, and government needs to keep them in check”.

By 55 per cent to 37 per cent, respondents chose the former.

American liberals need to think about these numbers. The great bottomline hope back in November 2008 was that Mr Obama was going to restore trust in government and prove it could solve problems. That hasn’t happened.

Put aside the Tea Party people. Independent voters who backed Mr Obama over John McCain now give him 38 per cent of their support. And the Third Way poll suggests more large-scale attempts to interject government into the economy won’t fly.

Maddening and ahistorical, insofar as history demonstrates that public investment helps a sick economy. But again, the Democrats have already lost this argument.

That’s not an argument about the midterm elections. It’s about the party of government’s very raison d’etre. And it’s one the Democrats have backed off from.

Mr Obama has tried, albeit without enough conviction or imagination. Certain Democrats in Congress have tried. But many other Democrats in Congress have decided the argument is a loser. It may serve their short-term electoral interests to say so, but it serves their party’s long-term interests quite poorly.

Mr Obama has a small gust of wind at his back now. The well is capped. He will sign finreg on Wednesday. His Supreme Court nominee Elena Kagan will cruise this month towards confirmation. These are important victories. But the larger war is being lost — to a bunch of people whose only agenda is to cut taxes on corporations and millionaires. Americans going back to work is the only thing that can reverse this.Washington Post survey but is more interesting because it gets at these deeper problems, and it heralds gruesome news for Democrats.

THE GUARDIAN

The writer is editor-at-large at Guardian America.

Michael Tomasky

STI higher at midday

STI opens higher