On Thursday, U.S. stocks fell after American International Group (AIG) reported a larger than expected loss Wednesday after the close. AIG's earnings and forecasts led to fears that the credit crisis was not over for the financial sector.
Thursday morning before the open, Wal-Mart (WMT) released its sales projections that were seen as "cautious". This led some to worry about consumer spending in the coming quarters.
All of the financials were hit after AIG posted its third consecutive quarterly loss of more than $5 billion as it wrote down bad mortgage-related investments. During trading Thursday, AIG's shares had their worst day in more than two decades.
Citigroup (C) did not do any favors for the financials after the bank agreed to buy back more than $7 billion of illiquid auction-rate securities to settle charges it misled investors about the debt's risk. Then Moody's Investors Service said it may downgrade the credit rating of Dow component American Express (AXP). The stock fell more than 4% on the news.
Wal-Mart's report of weaker July sales are believed to be due to the fact that shoppers had run out of tax rebate cash. This seemed to also sour the predictions of a good "back-to-school" shopping season this year.
Oil prices gained about a $1.50 to close right at $120 a barrel on news of an explosion on a Turkey pipeline. The explosion sent oil higher due to possible supply issues for that region.
The good news for the day came from the National Association of Realtors (NAR) which reported that U.S. pending home sales unexpectedly rose in June. Does this mean we have reached a bottom in real estate and have turned the corner? It is much too early to say, but any movement to the positive in residential real estate is welcomed at the moment.
On the Tokyo exchange Friday morning, the market has turned positive by 0.5%. The stronger dollar (of the past few weeks) is helping the foreign stocks of Honda and Toyota among others. The goods produced in Japan have a lower cost with the stronger dollar. This news was thought to raise the earnings power of Toyota and Honda.
On Friday morning, the U.S. Dollar is at a six month high versus the Euro. This is helping to push oil lower by $2.75 to about $117.25 in early morning trading.
Also reported Friday morning was the U.S. productivity report by the Labor Department. The report showed that U.S. firms cut back their employees' working hours in the second quarter which kept productivity growth relatively high. Inflationary pressures were subdued with real hourly compensation falling. This is a good sign for the fight against inflation, but it could be a bit troubling for economic growth. Productivity in the non-farm business sector rose at an annual rate of 2.2% in the second quarter, while unit labor costs rose 1.3%.
Sources: CBSMarketwatch, Reuters
Thursday morning before the open, Wal-Mart (WMT) released its sales projections that were seen as "cautious". This led some to worry about consumer spending in the coming quarters.
All of the financials were hit after AIG posted its third consecutive quarterly loss of more than $5 billion as it wrote down bad mortgage-related investments. During trading Thursday, AIG's shares had their worst day in more than two decades.
Citigroup (C) did not do any favors for the financials after the bank agreed to buy back more than $7 billion of illiquid auction-rate securities to settle charges it misled investors about the debt's risk. Then Moody's Investors Service said it may downgrade the credit rating of Dow component American Express (AXP). The stock fell more than 4% on the news.
Wal-Mart's report of weaker July sales are believed to be due to the fact that shoppers had run out of tax rebate cash. This seemed to also sour the predictions of a good "back-to-school" shopping season this year.
Oil prices gained about a $1.50 to close right at $120 a barrel on news of an explosion on a Turkey pipeline. The explosion sent oil higher due to possible supply issues for that region.
The good news for the day came from the National Association of Realtors (NAR) which reported that U.S. pending home sales unexpectedly rose in June. Does this mean we have reached a bottom in real estate and have turned the corner? It is much too early to say, but any movement to the positive in residential real estate is welcomed at the moment.
On the Tokyo exchange Friday morning, the market has turned positive by 0.5%. The stronger dollar (of the past few weeks) is helping the foreign stocks of Honda and Toyota among others. The goods produced in Japan have a lower cost with the stronger dollar. This news was thought to raise the earnings power of Toyota and Honda.
On Friday morning, the U.S. Dollar is at a six month high versus the Euro. This is helping to push oil lower by $2.75 to about $117.25 in early morning trading.
Also reported Friday morning was the U.S. productivity report by the Labor Department. The report showed that U.S. firms cut back their employees' working hours in the second quarter which kept productivity growth relatively high. Inflationary pressures were subdued with real hourly compensation falling. This is a good sign for the fight against inflation, but it could be a bit troubling for economic growth. Productivity in the non-farm business sector rose at an annual rate of 2.2% in the second quarter, while unit labor costs rose 1.3%.
Sources: CBSMarketwatch, Reuters
No comments:
Post a Comment