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Stocks Fail to Rally a Fifth Day After Profit Taking Brings Indices Down

US Session Key Developments

  • Bernanke: No More Bank Failures Under My Watch
  • American Express Reports Rising Credit-Card Defaults
  • Citigroup Surges 30.9% to $2.33

Stocks Fail to Rally a Fifth Day After Profit Taking Pushes Indices Down

Wall Street traded most of the day in positive territory with the Dow and S&P 500 rising as much as 2.34% before finally slipping into the red the session’s final hour. The early advance came after Federal Reserve Chairman Ben Bernanke said that he would not allow any banks from hereon to fail, in a 60 Minutes interview yesterday. Mid-day trading revealed bad financial news that seemed to have forced some of the selling. American Express erased an 8.1% advance after reporting rising credit-card defaults. Despite this, Citigroup surged 30.90% to $2.33 after having traded at $0.96 two weeks ago. Bank of America also rose, by 7.29% to $6.18. The session’s day was filled with mixed performance. In fact, only 210 stocks in the S&P 500 finished up while 286 ended down.

Dow 30                    7216.97                  -7.01                      -0.10%
The Dow opened the day and traded most of the day in positive territory, rising as much as 2.34% before profit-takers forced the index down into the red in the final hour of trading. Basic Materials outperformed, rising 3.60% while Health Care plummeted 1.26%. Citigroup was the most active stock after seeing 287.02 million shares of its stock traded through the New York Stock Exchange.

NASDAQ                 1404.02                  -27.48                   -1.92%
The NASDAQ performed the worst of three indices, spending most of the day in the red and rising by as much as only 0.96% but closing near the day’s lows. SanDisk may have led the slide in tech-stocks after a Bank of America analyst report downgraded the stock’s performance to ‘underperform.’

S&P 500                  753.89                     -29.38                   -0.35%
The S&P 500 had a mixed day, with only 210 stocks rising and 286 ending the day below par. The fear gauge, which shows the implied volatility of call options on the S&P 500, rose for a second straight day, by 3.25% to 43.74.

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Fed Chief Sees Lack of ‘Political Will’ as Threat to Economy, 60 Minutes Interview

Chairman Ben Bernanke gave his first interview since taking the helm of the Federal Reserve, with CBS’ 60 Minutes today. In it he stated that the biggest issue that may continue to threat the U.S. economy is a lack of action on the part of the political process to stem a potentially prolonged recession. “The biggest risk that, you know, we don’t have the political will,” Bernanke said.

But he further added that stabilization of the banking sector is crucial to ensure an economy recovery. “Recovery is not going to happen until the financial markets and the banks are stabilized.” Fortunately, the chairman added that the banks regulated by the Fed are solvent. He also noted that the government’s is “going to take time and patience.” He reemphasized his position on the role of the political process, saying that “it’s going to take some support.”

During the questioning Bernanke stated that the era of “high living” ended with the collapse of the financial companies. It is also “hard to forecast exactly” the future trend in unemployment, he said. Bernanke also emphasized that the U.S. recovery will probably start in 2010, but that the bulk of the crisis will end by the end of this year.

– LG

Related Article: Ben Bernanke’s Childhood Home is Foreclosed

bernanke

PART ONE VIDEO

PART TWO VIDEO

Filed under: Economics, Obama, , , , , , , , , , , ,

Bernanke Warns of ‘Considerable Uncertainty’ As Stocks Slip a Fourth Straight Day

US Session Key Developments

  • Bernanke Warns of ‘Considerable Uncertainty’ Over Budget
  • Pending Home Sales Fall More Than Expected
  • Small-Caps Substantially Under-Perform Large-Caps

Stocks finished lower for a fourth straight day leaving the index closing sequentially in the red seven of the last eight trading sessions. Price action actually stayed in positive territory for about half of the session with the NASDAQ rising as much as 1.74% before quickly reversing course in the final hour of trading. All eyes were on Chairman Bernanke’s testimony to U.S. lawmakers today. In his remarks, Bernanke stated his case for the $30 billion bailout of AIG, saying “we really had no choice…bankruptcy is just not a good option.” When pressed about the economy, he stated that there was “considerable uncertainty” in many of the assumptions made by President Obama’s budget. Macroeconomic news continued to paint a bleak picture with Pending Home Sales slipping -7.7% with economists expecting less than half of that. December’s estimate was revised substantially lower, from 6.3% to 4.8%. While overall stocks finished the day relatively flat compared to previous days, small-cap stocks actually took a much larger toll when compared to their large-cap counterparts. The top 10 stocks by market capitalization actually rose today by an average of 0.53% while the bottom 10 stocks by market capitalization plummeted by an average of -9.37%.

Dow 30                6726.02                -37.27                  -0.55%
The Dow began the day in the green before a rollercoaster day sent the index in a negative direction. Despite most sectors performing poorly, the Financials actually rose by 1.75% with American Express leading the way after spiking 6.87%.

NASDAQ                1321.01                -1.84                     -0.14%
The NASDAQ grew was much as 1.74% before being weighted down in the final hour of trading. Individual sector performance was diverse in that two-thirds actually finished higher. Information Technology and Health Care finished a hair above water.

S&P 500               696.33                  -4.49                  -0.64%
Utilities in the S&P performed the worst, plummeting -3.58% while Information Technology and Telecommunications rose. Energy also finished the day up after oil jumped $1.50 or 3.74% per barrel. The VIX ultimately fell because the equity indices traded above water for a substantially period. The volatility index fell 3.26% to 40.93.

Filed under: Economics, Stocks, , , , , , , , , , , , ,

Stocks Rally Most in a Month On Bernanke’s Optimism, No Nationalization

Stocks Rally Most in a Month On Bernanke’s Optimism, No Nationalization

US Session Key Developments

  • Bernanke: Recession May End in ’09; No Nationalization
  • Home Prices Fall to 2003 Levels
  • Consumer Confidence Falls to Lowest in At Least 30 Years

Stocks rallied today after Federal Reserve Chairman Ben Bernanke offered positive light to a market weighed down by fears of bank nationalization. In a testimonial to the U.S. Senate, Bernanke stated that the economy could shed its recession by the end of 2009. He further added that he does not see “any reason to destroy the franchise value or to create the huge legal uncertainties of trying to formally nationalize a bank when it just isn’t necessary.” The breath of fresh air comes after traders feared that the Obama administration would cease certain banks over the coming days. Bernanke’s comments overshadowed negative macroeconomic news. Home Prices fell to their lowest levels since the end of 2003. In fact, they tumbled by 18.23% in the final quarter of 2008. Consumer Confidence fell to the lowest in at least 30 years, when records began. -LG

DJIA                 7350.94                 +236.16                 +3.32%
Every sector in the Dow Jones Industrial Average finished the day in the green. In fact, each category rose at least 1.96%. Financials saw the larges gains, rallying 11.30%.

NASDAQ                1441.83                 +54.11                   +3.90%
Financials and Telecommunications led the NASDAQ’S rally, seeing each sector rise 6.46% and 5.20% today.

S&P500                773.14                   +29.81                   +4.01%
Volatility tumbled today, seeing the VIX index plummet 13.54% to finish the day at 45.49. The S&P 500 also saw every sector in the index finish the day above water.

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Recession May End in ’09; Banks Need Not Be Nationalized, Bernanke Says

Bernanke: ‘There is a reasonable prospect’ that the economy will recover by year’s end

“I don’t see any reason to destroy the franchise value or to create the huge legal uncertainties of trying to formally nationalize a bank when it just isn’t necessary.”

Markets Rally After Bernanke's Speech

Markets Rally After Bernanke's Speech

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U.S. Consumer Prices Rise Above Expectations…EXCLUDING ENERGY

When excluding food and energy, whose primary component (gasoline) rose in price by 6.0% on the month, the Consumer Price Index rose 0.2% in the month of January alone. Expectations called for a rise of only 0.1%. December’s figure stayed flat from the month prior. Overall inflation in the 12 months through the first month has come out to be 1.7%, a tick down from the previous month’s data, but still 0.2% points above expectations.

In a speech given on Wednesday, Fed Governor Ben Bernanke stated that such developments would “help to better stabilize the public’s inflation expectations, thus contributing to keeping actual inflation from rising too high or falling too low.” Indeed, the central bank’s projected 2.0% longer-run inflation target seems to be on track to be met.

On the news, the U.S. Dollar continued it’s overnight rebound against the Euro. -LG

Filed under: Economics, Obama, , , , , , , , , , , , , , ,

Fed Chairman Bernanke’s Childhood Home Foreclosed and Sold

Invisibleman.com

Bernanke the Boatswain; Source: Invisibleman.com

Fed Chief’s Boyhood Home Is Sold After Foreclosure – WSJ

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