Post Reply
761-780 of 2099
Stocks: Best day in 14 months
By Alexandra Twin, senior writerMay 10, 2010: 6:33 PM ET
NEW YORK (CNNMoney.com) -- Stocks rallied Monday after European officials approved a nearly $1 trillion rescue plan to contain the debt crisis in troubled nations and stabilize the euro.
The Dow Jones industrial average (INDU) gained 405 points, or 3.9%, the average's biggest one-day point and percentage gain since March 23, 2009.
The S&P 500 index (SPX) surged 49 points, or 4.4%. It was also the best day on a point and percentage basis since March 23, 2009.
The Nasdaq composite (COMP) rallied 109 points, or 4.8%. It was the Nasdaq's best day on a point basis since Oct. 28, 2008, and on a percentage basis since March 23, 2009.
Markets around the globe advanced on the plan as investors breathed a sigh of relief that aggressive action was being taken after months of mounting concern. The euro gained versus the dollar, and the dollar gained against the yen.
Treasury prices slipped, boosting the corresponding yields, as investors pulled money out of the safe-haven investment and put it into riskier assets, such as stocks.
U.S. investors were reacting to the size and scope of the rescue, said Ron Kiddoo, chief investment officer at Cozad Asset Management.
"It shows Europe is willing to do something fairly dramatic to address these problems," he said. "It doesn't solve everything, but it's a good step."
A big selloff last week left all three major indexes in negative territory for the year and the Nasdaq in a correction -- defined as a decline of at least 10% off the recent highs. The Nasdaq's decline was 10.5%. The Dow had fallen 7.4% and the S&P 500 8.5% from the late April highs.
Stocks had been down on worries about debt-plagued Greece weakening other troubled European nations, including Spain and Portugal, and ultimately destabilizing the euro.
But the selling was exacerbated last Thursday after computer trading on more than 300 stocks sparked a massive selloff. The Dow tumbled 998.50 points, the index's biggest loss ever on an intraday basis, before it recovered about two-thirds of the drop. On Friday, trades of 296 stocks were cancelled.
In the aftermath of that selloff, the Securities and Exchange Commission and the major stock exchanges all agreed Monday on the basic framework to strengthen "circuit breakers" and methods for handling erroneous trades.
The selling that plagued the market for a week or two prior to the Thursday battering started to wear out, setting markets up for a bounce, said Gary Webb, CEO at Webb Financial Group.
But with Thursday's so-called "flash crash" and continued concern about European debt, the major indexes finished the week down for the year to date. Having gotten past that, stocks could be set up for a decent bounce for a few weeks, Webb said.
"I think investors around the world are reacting well to this bailout because they see that our bailout worked," he said, referring to the $787 billion U.S. stimulus plan approved last year. "There's a price to be paid down the line, but the fact that it did stabilize our markets is reassuring them that the EU bailout will stabilize the euro."
Volatility: Last week the CBOE Volatility index, or the VIX (VIX), Wall Street's fear gauge, rallied to 13-month highs as investors priced in a bigger retreat. But on Monday, the VIX slumped 12 points, or almost 30%, to end at 28.96 as investor anxiety dissipated.
"The news out of Europe is positive, but I'm not sure how healthy today's move is," said Paul Brigandi, vice president of trading at Direxion Funds. "It shows we're back in a volatile period. We had a violent selloff last week and this huge rebound today."
He said that the moves in the market and in the VIX show investors are uncertain about how to factor in all the so-called headline risk, including Greece, the Gulf oil spill and the latest for Goldman Sachs, which is fighting off fraud charges.
Additionally, "It shows we're getting away from fundamentals like the economy and corporate profits and just focusing on the day-to-day news," he said.
Rescue plan: The European rescue package, valued at close to $1 trillion over three years, includes government-backed loans, the expansion of a stabilization program and funding from the International Monetary Fund (IMF)
Under the deal, the 16 European Union (EU) countries will provide a collective $570 billion in the form of government-backed loans. The European Commission, the EU's governing body, will provide another $76 billion under an already existing stabilization fund. The IMF will provide at least $284 billion.
Additionally, the European Central Bank said it would start buying government and corporate debt. The ECB was said to have started buying euro zone government bonds Monday, although details were not available.
Finally, the Federal Reserve joined central banks in Canada and Europe in re-establishing a program that makes more U.S. dollars available for interbank lending.
On the move: Gains were broad based, with 30 Dow components rallying.
Big contributors to the Dow's gains were aerospace firms Boeing (BA, Fortune 500) and United Technologies (UTX, Fortune 500), heavy-equipment maker Caterpillar (CAT, Fortune 500), tech firms IBM (IBM, Fortune 500) and Hewlett-Packard (HPQ, Fortune 500), as well as 3M (MMM, Fortune 500), McDonald's (MCD, Fortune 500) and Procter & Gamble (PG, Fortune 500).
Market breadth was negative. On the New York Stock Exchange, winners topped losers by almost 19 to 1 on volume of 1.86 billion shares. On the Nasdaq, advancers beat decliners by seven to one on volume of 2.87 billion shares.
Fannie Mae: Mortgage backer Fannie Mae (FNM, Fortune 500) asked for another $8.4 billion from the federal government Monday after reporting a massive first-quarter loss. The losses were due to accounting changes and the continued weakness in the U.S. housing market.
Fannie Mae, along with fellow mortgage company Freddie Mac (FRE, Fortune 500), was put under government conservatorship during the height of the financial crisis in fall 2008. It already owed the government $76.2 billion.
Last week, Freddie Mac asked for another $10.6 billion after posting an $8 billion quarterly loss.
World markets: Stocks around the globe finished higher. In Europe, France's CAC 40 gained 9.7%, Germany's DAX added 5.3% and Britain's FTSE rose 5.2%. On Monday, the Bank of England said it will keep its key interest rate unchanged at a low 0.5%.
Asian markets rallied as well, with Japan's Nikkei adding 1.6% and Hong Kong's Hang Seng gaining 2.5%. On Friday, the Bank of Japan pumped $22 billion into financial markets to ease fears about the impact of the Greek debt crisis.
Dollar and commodities: The euro gained 1% against the dollar, continuing to recover after having fallen to a 14-month low versus the U.S. currency last Thursday. The dollar rose 1.7% versus the yen.
U.S. light crude oil for June delivery gained $1.69 to settle at $76.80 a barrel on the New York Mercantile Exchange.
COMEX gold for June delivery slid $9.60 to settle at $1,200.80 per ounce.
Bonds: Treasury prices tumbled, pushing the yield on the 10-year note to 3.57% from 3.43% Friday. Treasury prices and yields move in opposite directions.
GOVERNMENT TALK:
POOR is HAPPY
HAPPINESS in POORNESS
GOVERNMENT WALK:
HIGHEST GOVERNMENT COMPENSATIONS
HAPPINESS in SELF ENRICHNESS
Bernanke to grads: Money can’t buy happiness
Your parents were right.
Money can't buy you Happiness.
That was the message
from the Federal Reserve chairman to
graduates of the University of South Carolina.
bE pOOr tO bE HAPPY
2010-05-09
欧盟拟1250亿元 遏阻市场投机者
欧元区领袖计划设立一笔700亿欧元（约1250亿新元）的危机储备金，
援助任何受到投机者攻击的成员国，并同意加速推行削减赤字措施，
收紧预算规则。
Looks like the Dow is
pengsan again tonight (so far
-28 pts) ...
Seven '
pengsans' in a row is not impossible...
hehehe...
| |
7 ways to profit
from a euro collapse
Matthew Lynn
When the euro celebrated its 10th anniversary last year, it seemed to be a solid currency. Only a few eccentrics speculated about whether it may break up one day. In the last few weeks, Greece has changed all that. New York-based investment bank Morgan Stanley is among those saying the possibility of a euro collapse has to be considered.
Next to the demise of the euro, the implosion of Lehman Brothers would look like a fairly trivial event. Of course, we shouldn’t overestimate the likelihood. The deal cobbled together by the European Union and the International Monetary Fund may be enough to keep the Greek trade unions, the German taxpayer, and the hedge funds speculating in the bonds, all happy. Miracles happen — just not that often.
The Greeks don’t appear to be in any mood for the years of grinding austerity that their economy will need. Nor do the Germans seem willing to help out what they see as a bunch of Mediterranean layabouts.
When a relationship is that fundamentally incompatible, even the most skilful marriage counsellor might think it was about time to start talking about how to divide up the assets and calling it a day.
So, if the euro might not be around in 2020, here are seven trades to start thinking about.
1. BUY GERMAN BONDS, SELL THE DAX
Germany is one of the most creditworthy countries in the world: It hates budget deficits, runs a big trade surplus, and believes in sound money. But it is being dragged down by spendthrift neighbours that hitched a ride on the currency-union bandwagon. Outside of the euro, German bonds would soar. But so would the “new deutsche mark”, hurting the exporters that dominate the DAX.
2. BUY THE DOLLAR
Sure, it has its own problems. The United States budget and trade deficits are huge.
Wall Street is under attack from populist, crusading politicians. Its share of the global economy is in long-term decline. But with the euro gone, it would be the only serious reserve currency — at least until China decides to take on that role. Without any competition, the dollar would only strengthen.
3. BUY ITALIAN SHARES
Spain, Ireland and Greece all rode a bubble created by cheap money. The crash might be nasty, but at least there was some fun before the party ended.
Italy has just been stuck with a decade of restrained growth compared with the 1990s. Liberated from the shackles of the euro, the Italian economy could start to motor again if the currency can be devalued and wages can be held in check. Italy has been the big loser from the euro.
4. SELL SPANISH BANKING STOCKS
Led by Banco Santander, the Spanish lenders have risen to global prominence.
Santander is the 11th-largest bank in the world, measured by market value. Banco Bilbao Vizcaya Argentaria is in the top 40.
But Spain is a relatively small country, with unemployment exceeding 20 per cent and an economy still in recession. Without the euro, its banks would find it impossible to maintain those kinds of positions in the global financial system.
5. SELL ANYTH ING TO DO WITH BELGIUM
The collapse of the euro would mark the end of the process of constantly expanding the European Union — or what is sometimes known as the Belgian Empire. As the hub of a global superstate, Belgium has a certain status. Without that distinction, it becomes a small place where you can buy some nice chocolate and change trains.
6. BUY THE POUND
Sure, the United Kingdom might have a terrible budget deficit, shaky banks on every corner, and no stable government after this week’s election. But at least it stayed away from the mess of currency union. It won’t have to bail out Greece, Portugal or Spain.
It just has to save itself. Against its neighbours, it will look rather stable. That should be worth a few points on sterling.
7. Buy airlines
For a few years, the “new drachma” would make the Iraqi dinar look like a haven of stability. It would plunge, and wealthy northern Europeans would be taking three or four holidays a year on Greek islands.
That would be great for the companies that fly tourists there.
Add in the weakness of the new Portuguese escudo, Spanish peseta and Italian lira, and the guys at Airbus will be working nightshifts to keep up with the demand for new planes to get everyone to
the beaches.
A fortune is waiting for investors who get on the right side of history, and everyone else will get cheap holidays.
Maybe these storm clouds will have a silver lining after all. Bloomberg
The writer is a Bloomberg News columnist.
The opinions expressed are his own. |
When both Soros and Buffet are speaking, I only hear Soros...
hehehe...
Quote:
Buffett Worries About High Risks of ‘Significant Inflation’ Around Globe
Monday, 03 May 2010 11:56 AM
Article Font Size
Warren Buffett says he is worried about the prospect for "significant inflation" in the United States and elsewhere, and that the Greek debt crisis has the potential for "high drama."
Buffett also said he is seeing real signs of improvement in the economy, especially in manufacturing, though it will take another year for a sustainable housing recovery to take hold.
Buffett also said his Berkshire Hathaway Inc. has only limited exposure to currency fluctuations, mainly through investments in businesses such as reinsurers and marketable securities.
Speaking at Berkshire's annual shareholders meeting on Saturday in Omaha, Neb., Buffett said the company has a large share of its fortunes tied to the euro, largely from investments in European companies.
Unlike other prominent investors like hedge fund manager George Soros, Buffett has steered clear of large currency bets in recent years, and has said that while he looks worldwide for investments, he would be happy making investment bets mainly in the United States.
However, after many central banks worldwide drove interest rates to record or near-record lows and funneled trillions of dollars of stimuli into economies worldwide as the 2008 financial crisis set in, Buffett said he sees a chance for inflation to rear its head.
"The prospects for significant inflation have increased, not only here but around the world," Buffett told roughly 40,000 shareholders at the meeting. "Weaning ourselves from the medicine" may be more difficult than enacting the stimuli in the first place, he said.
Buffett said the days of very low interest rates in the United States cannot continue indefinitely.
"It won't work forever to run huge budget deficits and easy money," Buffett warned. He said if this causes problems, Congress rather than the Federal Reserve should get the blame.
Buffett's said Berkshire's manufacturing businesses, including the conglomerate Marmon Holdings Inc. and toolmaker Iscar Metalworking Cos., are benefiting from "pretty significant improvement.
He said luxury goods units including Borsheim's and the NetJets Inc. plane leasing unit are seeing improved business, albeit from a "very, very low level," while results for housing-sensitive businesses such as Acme Brick Co. and the insulation maker Johns Manville remain "very poor."
Yet Buffett cautioned policymakers not to artificially stimulate housing sales and perhaps derail a recovery.
"What would bother me is if we were to overstimulate them, and create a permanent overhang," he said. "I want to have a sustainable recovery, and I don't think you're going to have to wait more than a year for that."
Buffett maintained enthusiasm for Federal Reserve Chairman Ben Bernanke, saying "there's no one in the United States that I know of whom I would rather have running the Fed than Ben Bernanke."
He also said low rates make it tough for individual investors. Buffett joked that if an investor held investments when Christopher Columbus arrived in America in 1492, "you might have doubled your money by now."
Buffett said Berkshire has substantial exposure to the euro through investments in reinsurance companies in Germany, such as Cologne Re.
"We seldom develop a strong view on one currency versus another," Buffett said. "Events in past years would make me more bearish in terms of currencies holding their value over time."
Buffett and Berkshire Vice Chairman Charlie Munger said Greece's current financial problems pose a unique challenge because the country's government is a sovereign state, but its fiscal problems prevent it from printing its own money to resolve its economic crisis.
"We may be seeing a test case play out here with a country not using its own currency," Buffett said.
Debt problems in Europe have caused the euro's value to fall to $1.33 as of Friday, from about $1.432 at year end.
Berkshire once had a $21 billion bet against the dollar, but unwound most of that bet three years ago.
Known for his simple language and homespun humor, Buffett likened the crisis to a movie with a depressing ending.
"It will be high drama," he said. "I really don't know how this movie ends, and I try not to go to movies like that."
European governments and the International Monetary Fund on Sunday committed to pull Greece back from the brink of default, agreeing on 110 billion euros ($145 billion) in emergency loans on the condition Athens make painful budget cuts and tax increases.
The rescue is aimed at keeping Greece from defaulting on its debts and preventing its financial crisis from infecting other indebted countries just as Europe is struggling out of recession.
Stocks mired in sell-off
By Julianne Pepitone, staff reporterMay 5, 2010: 4:38 PM ET
NEW YORK (CNNMoney.com) -- Stocks extended losses to end sharply lower Wednesday, amid more signs of a deepening crisis in Europe.
Moody's said it was considering a downgrade of Portugal's debt, while three people were reported dead due to riots in Greece.
The Dow Jones industrial average (INDU) lost 60 points, or 0.6%, to end at 10,866.83. The blue-chip index had fallen more than 100 points earlier in the trading day.
The S&P 500 index (SPX) fell 8 points, or 0.7%, to close at 1,165.87. The Nasdaq composite (COMP) was down 22 points, or 0.9%, to settle at 2,402.29.
Moody's rating agency released a statement early Wednesday that it had placed Portugal's investment-grade bonds "on review for possible downgrade ... by one, or at most two, notches."
Also Wednesday morning, Greek authorities said three people had died in central Athens in a fire during street riots protesting severe new government austerity measures that are attached to its $146 billion bailout.
These and other overseas worries have slammed U.S. stocks this week. Global markets also felt the blow Tuesday, amid rumors that Spain was negotiating a bailout from the International Monetary Fund. Although both Spanish officials and the IMF denied the rumors, the S&P fell 2.4% and the blue-chip Dow tumbled 2% Tuesday.
Europe and volatility: On Tuesday, Wall Street's key index of volatility hit its highest level in more than two months. The VIX (VIX), which gauges fear in the market, surged more than 18% to close at 23.84 Tuesday. On Wednesday, the VIX ended 5.4% higher at 25.12.
Volatility will likely continue, as investors will be forced to weigh chaotic foreign events with domestic improvements, said Dave Hinnenkamp, chief executive at KDV Wealth Management.
"This morning's steep drop was probably more of an overreaction to the uncertainty," Hinnenkamp said. "We might be in for more downward pressure, but if you look past all of the noise that's out there now the U.S. is well-positioned."
Upbeat U.S. earnings and improving economic data bode well for the domestic market long term, Hinnenkamp said.
Economy: The latest readings on jobs, though not enough to distract investors from the debt woes in Europe, showed some turnaround in the domestic job market.
Outplacement firm Challenger said planned job cuts in April dropped to the lowest level in nearly four years. A separate report showed private-sector employers added jobs for the third consecutive month.
Earnings: Before the opening bell, Time Warner (TWX, Fortune 500) reported its highest quarterly profit in company history, easily beating Wall Street's forecasts. But Time Warner shares ended 2.4% lower.
The New York-based parent company of CNNMoney.com said its net income rose to $725 million, or 62 cents per share, up 10% from a year earlier. Analysts expected earnings of 48 cents per share.
Companies: Shares of biotech firm InterMune (ITMN) plunged to end 75% lower Wednesday after the Food and Drug Administration rejected the firm's application for a lung drug.
Outlook: Analyst Hinnenkamp said he is bullish on U.S. equities, and he "[doesn't] think European debt concerns will create the next Armageddon."
Greece and Portugal are two of the smaller economies in the euro zone, Hinnenkamp noted, so downgrades to their ratings are not of major concern.
"Independently, these aren't huge issues," Hinnenkamp said. "The worry lies in whether the rest of the European Union has to pick up the tab, and if that draws larger countries into debt problems as well."
World markets: Stocks in Europe ended lower, extending the previous session's sharp losses.
Asian markets also declined. Hong Kong's Hang Seng index shed 2.1% and Taiwan's TSEC 50 index plunged nearly 3%. Markets in Japan were closed.
Other markets: The dollar rose 1.3% versus the euro, with the shared currency near a 12-month low. The U.S. currency also was up versus the British pound, but it fell 0.8% against the yen.
Oil prices plummeted $2.77 to settle at $79.77 a barrel, while COMEX gold for June delivery was rose $5.80 to settle at $1,169.20 an ounce.
Bond prices rallied, pushing the 10-year Treasury yield down to 3.55%. Bond prices and yields move in opposite directions.
Market breadth was negative. On the New York Stock Exchange, losers topped winners four to one on volume of 1.5 billion shares. On the Nasdaq, decliners bear advancers ten to three, on volume of 3 billion shares.
Many will be out eagerly catching falling knives...
Snapping up 'cheap' stocks...
But it is so easy to get cut...
because, once started,
a trend is not easily reversed...
Fund managers' battle cry now is apt to be "
Sell on the rallies! (for good prices)"...
hehehe...
Tuesday: 4 MAY 2010
dOw -225
SPAIN RUMOURS
gOOd CALL
freeme ( Date: 04-May-2010 23:51) Posted:
yes.. i hope morning will have a big gap down.. then be ready to grab some call warrants when time is right
iwonder ( Date: 04-May-2010 23:37) Posted:
Tomorrow will see a sea of red. Dow is -224
If you want to short at the opening......be nimble cos there is a likelihood the market will reverse direction at the end of the day. This is a trading market. |
|
|
|
yes.. i hope morning will have a big gap down.. then be ready to grab some call warrants when time is right
iwonder ( Date: 04-May-2010 23:37) Posted:
Tomorrow will see a sea of red. Dow is -224
If you want to short at the opening......be nimble cos there is a likelihood the market will reverse direction at the end of the day. This is a trading market. |
|
Tomorrow will see a sea of red. Dow is -224
If you want to short at the opening......be nimble cos there is a likelihood the market will reverse direction at the end of the day. This is a trading market.
Wah lau! DOW is down almost 250 points. As u said, tomorrow SGX will be another farting day, not a Fatting one.
From the small world view, it means lucky...
From the same view, "Fatt" means "Huat Arrhhh!!!"
But to the rest of the world, it's called "Fart !" ...
hehehe...
boyikao3 ( Date: 04-May-2010 22:22) Posted:
Ominous? I tot Ang Ang means lucky lucky ?
iPunter ( Date: 04-May-2010 22:07) Posted:
The Dow plumetted -166pts on the opening bell!...
This is ominous!...
|
|
|
|
Yes STI over stretched.. SSE n HSI had corrected nicely and I see they might head for rebound soon. Therefore, S-chip on SG do have a chance to U-turn too..
Ya, quite scary.
Ominous? I tot Ang Ang means lucky lucky ?
iPunter ( Date: 04-May-2010 22:07) Posted:
The Dow plumetted -166pts on the opening bell!...
This is ominous!...
|
|
.png)