Thursday, May 14, 2009

Quick Notes for the Day - May 14

Treasurys Rise on Jobs, Fed Buyback - Treasury prices crept up Thursday, putting yields at their lowest in more than two weeks, on economic data for jobless claims and inflation. The Federal Reserve's purchase of debt maturing in 2010 and 2011 also helped keep prices up. Bonds gained support from a Labor Department which said initial claims for jobless benefits last week rose to the highest level since mid-April, in part due to layoffs after automaker Chrysler's bankruptcy filing (claims rose to 637,000 - up 32,000). On the inflation front, the producer price index (PPI) was higher for April but it was due to food costs primarily.

Natural Gas Inventories - U.S. natural gas inventories rose 95 billion cubic feet last week which sent prices down 4% to $4.15. This is still quite a bit higher than the recent low of around $3.50.

Chrysler to Close Dealerships - Chrysler will close almost 800 dealerships as part of its bankruptcy restructuring, according to media reports Thursday. President Obama is pushing for Chrysler to reorganize within 60 days but recent reports suggest the process could take up to two years.

Mortgage Rates Rise - Barely - Freddie Mac said Thursday that the 30-year fixed rate mortgage average rose to 4.86% with an average 0.6 point for the week ending May 14, from 4.84% last week. Last year at this time, the average was 6.01%. "Interest rates for fixed-rate mortgages were little changed this week following the release of April's employment figures," said Frank Nothaft, Freddie Mac chief economist, in a statement.

AIG to Divest Taiwan Life Insurance Unit - AIG is planning to divest Nan Shan Life Insurance Co., its Taiwan life-insurance unit, according to an on-line report Thursday in The Wall Street Journal which cited people familiar with the matter. The newspaper said that AIG will offer the business to prospective buyers in an auction as well as plan for an initial public offering of the unit.

Wal-Mart's Profit Slightly Higher - Wal-Mart reported its first-quarter profit from continuing operations rose slightly to $3.03 billion, or 77 cents a share, from $3.029 billion, or 76 cents, in the year-earlier period. Revenue including membership income in the quarter ended April 30 fell to $94.2 billion from $94.9 billion, hurt by a stronger dollar. The company forecast second-quarter profit of 83 cents to 88 cents a share with Wal-Mart U.S. and Sam's Club each expecting their comparable store sales to be between flat and up 3%.

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