Posts Tagged ‘Nasdaq

12
Aug
10

Fed Effort to Aid Recovery Fails to Calm Investors

NEWS
Fed Effort to Aid Recovery Fails to Calm Investors

Thursday, August 12, 2010

More worried about the recovery, the U.S. Federal Reserve has taken a small step to bolster the U.S. economy.

Wrapping up a one-day meeting, the Fed said it will use money from its investments in mortgage securities to buy government debt on a small scale. That could help nudge down long-term rates on mortgages and corporate debt, but wouldn’t have a dramatic impact on stimulating economic growth, economists say.

Perhaps more importantly, the largely symbolic action sends a signal that the Fed sees the recovery weakening and that it stands ready to take more aggressive action, if needed, to keep it on track.

Delivering a more downbeat assessment, the Fed now believes economic growth will be ‘more modest’ than it had anticipated at its late June meeting.

The Fed, citing ‘subdued’ inflation, said it would keep its target for a key interest rate at zero to 0.25 percent for an ‘extended period’.
Investors reacted positively to the statement. Stocks that were down sharply before the announcement made up some lost ground. The Dow Jones industrial average, down about 100 points just before the Fed decision, was down about 40 a short time later. However, the market was likely to fluctuate, as it usually does while investors pore over the Fed’s statement.

Treasury prices rose slightly as investors were pleased by the Fed’s plan to buy government debt, which would reduce the amount of Treasury securities in the market. The yield on the Treasury’s 10-year note, which moves in the opposite direction from its price, fell to 2.77 percent from 2.82 percent just before the announcement.

Economists doubt the Fed can turn around the economy on its own. Some believe additional help from Congress is needed. Others are sceptical that easier credit or even more government aid will persuade Americans to shop more and hire more. Yet others think some jobs – like in construction – will never return to pre-recession levels, as the economy makes a structural shift.
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23
Jul
10

Nokia Q2 profit falls 40 percent to $290 million

NEWS
Nokia Q2 profit falls 40 percent to $290 million

Friday, July 23, 2010

••• The world’s top mobile phone maker Nokia has reported a 40 percent plunge in second-quarter net profit to 227 million euros ($290 million) but maintained its earnings forecast for its key devices and services unit.

The Finnish company had slashed its second-quarter and full-year forecasts for its key devices and services unit last month, citing fierce competition.

From April to June, Nokia posted a net profit of 227 million euros ($290 million), down 40 percent from 380 million euros ($485.46 million) for the same quarter a year earlier.
Analyst expected a profit drop of 30 percent, according to estimates published in the Finnish press.

Nokia said its net sales were up 1.0 percent on a year-to-year basis to 10.0 billion euros ($2.77 billion), and that the sales in its devices and services unit were up 3.0 percent on a year-to-year basis, but down 2.0 year-to-year in constant currency.

Shares in company, which had recently plunged to their lowest level in 12 years, were up 1.43 percent to 7.09 euros on a Helsinki Stock Exchange up 0.9 percent shortly after the announcement.
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19
Jun
10

Stocks end higher for second week

NEWS
Stocks end higher for second week

Saturday, June 19, 2010

U.S. stocks ended the week more than two per cent higher amid optimism over the global economic recovery, but as Wall Street braced for a volatile week with a heavy dose of U.S. economic data.

The blue-chip Dow Jones Industrial Average advanced 2.3 percent over the week to end Friday at 10,450.64 as traders digested a week of mixed economic data. Some stability in debt-stricken Europe buoyed confidence.

The tech-rich Nasdaq index climbed three per cent to 2,309.80 and the broad-market SP 500 index gained 2.4 percent at 1,117.51.

Trade was notably slower than the roller coaster session of previous weeks, analysts said.

‘Whether the slower action is the result of market participants taking a breather following the volatile activity over the last two months or the beginning of a summer lull remains to be seen,’ said analysts at Briefing.com.

One notable exception was New York-listed shares in British oil giant BP, which were hit hard following the company’s massive oil spill in the gulf and as its credit rating was slashed by top rating agencies.

BP’s shares fell 6.5 percent for the week, after trading close to 52-week lows in the middle of the week.

The focus of next week’s trade is sure to be a meeting of the Federal Reserve’s policy-making body on Tuesday and Wednesday.

The Fed board is expected to vote to keep interest rates unchanged at virtually zero per cent as the economy continues to be dogged by unemployment concerns.

While no interest rate changes were expected, ‘the status of the extra measures the Fed has taken to address liquidity and the cost of capital will continue to be monitored,’ analysts at Charles Schwab Co said.

And other data will be scrutinised.

In the coming week, the market will grapple with existing home sales for May that are expected to show a jump as well as new home sales for the same month that many believe would slump.

The government will provide a final revision of the 2010 first quarter gross domestic product (GDP) growth, which is expected to remain unchanged at 3.0 percent.

‘All of those data releases have the potential to move the markets,’ analysts at Briefing.com cautioned clients in a note.

Traders are expected to remain cautious even though stocks climbed nearly all of last week.

The stock market is expected to ‘continue to drift going into second quarter earnings season (July), moving up and down in tandem with the movement of the euro and headline news coming out of Europe and the Gulf of Mexico,’ said Frederic Dickson, chief market strategist with DA Davidson Co.
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12
Jun
10

BP Woes Spill into Markets

NEWS
BP Woes Spill into Markets

Saturday, June 12, 2010

BP shares rallied on Friday on bargain-hunting after recent sharp losses.

The gains came as British Prime Minister David Cameron threw his support behind a ‘financially strong’ BP in talks with its chairman, Carl-Henric Svanberg, while voicing frustration over the oil spill, his office said.

At the close of trade, the company’s share price soared 7.22 percent to 391.9 pence on London’s FTSE 100 shares index, which was 0.61 percent higher.

Despite the gains, the British oil giant’s share price has plunged by as much as 49 per cent, wiping tens of billions of dollars off its market value since the BP-operated Deepwater Horizon rig sank on April 22.

The accident, following a explosion that killed 11 people two days earlier, sparked an enormous oil spill from a leaking well head on the sea bed.

The disaster has seen huge amounts of oil wash up on the U.S. Gulf coastline, threatening precious wildlife and local communities, and provoking the wrath of U.S. President Barack Obama, who has demanded BP scrap its shareholder dividend.

‘We are considering all options on the dividend. But no decision has been made,’ BP chief executive Tony Hayward said on Friday.

The group is preparing to defer the payment of its next dividend, according to the BBC and The Times newspaper.

The Times, which cited people familiar with the situation, reported that the money would be held in an escrow account, held by a third party, until its liabilities from the disaster become clear.

The BBC said it understood BP was planning to suspend the dividend, with BP directors due to meet on Monday to discuss the payments.

The meeting ‘will be about when to suspend the payments, how long to suspend the payments, and what to do with the billions of dollars that would be saved and not paid to shareholders,’ BBC business editor Robert Peston said.

A BP spokesman declined to comment on the stories, but stressed that the company was considering all its options.

The company’s share price was meanwhile boosted after U.S. bank Goldman Sachs issued an upbeat outlook for embattled BP.

‘BP shares now have as much upside potential as the rest of the European integrated oil sector,’ Goldman said in a research note.

The stock had plunged on Thursday, striking a low of 330 pence, as investors fretted about the financial impact of the oil spill and the possible loss of the group’s shareholder dividend.

CMC Markets analyst James Hughes described Friday’s gains as an ‘inevitable bounce after the moves of the last few days’ but warned that the share price has further to fall.

Cameron will discuss BP’s handling of the Gulf of Mexico oil spill with Obama over the weekend amid fears of an anti-British backlash in the United States.

BP chairman Svanberg has been summoned to meet Obama at the White House next week, as several US media reported the Swede was being lined up as a ‘fall guy’ for the disaster.

Cameron, who is visiting Afghanistan and the United Arab Emirates, had a ‘constructive’ telephone conversation with Svanberg, a Downing Street spokesman said.

‘The prime minister explained that he was frustrated and concerned about the environmental damage caused by the leak but made clear his view that BP is an economically important company in the UK, US and other countries,’ he said.

Cameron said: ‘It is in everyone’s interests that BP continues to be a financially strong and stable company.’

Svanberg met with finance minister George Osborne and other senior officials in Downing Street on Friday.

After the talks, the Swede told ITN television: ‘I think we have done everything we can to try to fill the well, and we have said we would do everything expected from us in cleaning up the beach, taking care of all the claims and learn from this incident and make deepsea drilling an even safer place.’
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12
Jun
10

U.S. stocks recover from heavy losses

NEWS
U.S. stocks recover from heavy losses

Saturday, June 12, 2010

U.S. stocks have clawed back from losses to close with modest gains as reports on consumers’ outlook and retail spending sent mixed signals about the health of the economic recovery.

The Dow Jones Industrial Average rose 38.62 points (0.38 percent) to 10,211.15 in closing trades.

The Nasdaq index climbed 24.89 points (1.12 percent) to 2,243.60 and the broad-market SP 500 index advanced 4.76 points (0.44 percent) to a provisional 1,091.60.

Stocks initially opened lower after a disappointing May retail sales report but clawed back losses after a private survey showed a stronger-than-expected rise in consumer sentiment in June helping to allay recovery concerns.
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03
Jun
10

Stocks show small gains

NEWS
Stocks show small gains

Thursday, June 3, 2010

U.S. stocks eked out minor gains on Thursday as investors mulled mixed signals on the U.S. economic recovery ahead of a highly awaited May jobs report.

After opening with modest gains, the major indices slid lower but clawed their way back to close in positive territory.

The Dow Jones Industrial Average rose a scant 4.99 points (0.05 percent) to 10,254.07 at the market close, extending Wednesday’s sharp rally.

The tech-rich Nasdaq index outperformed, up 21.96 points (0.96 percent) at 2,303.03, while the broad-market SP 500 index advanced 4.37 points (0.40 percent) to a provisional 1,102.75.

‘Investors appear cautious ahead of tomorrow’s key jobs report,’ said Scott Marcouiller at Wells Fargo Advisors.

Most analysts expected the Labor Department on Friday would report 500,000 nonfarm jobs were created last month, up from 290,000 in April, and the unemployment rate slipped a notch to 9.8 percent from 9.9 percent.
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29
May
10

Shell Buys U.S. Gas Assets From East Resources for $4.7 Billion

NEWS
Shell Buys U.S. Gas Assets From East Resources for $4.7 Billion
Saturday, May 29, 2010

••• Royal Dutch Shell, the energy major, has almost doubled its reserves of shale gas with the $4.7 Billion in cash acquisition of East Resources.

East Resources owns and operates more than 2,500 producing oil and gas wells in New York, Pennsylvania, West Virginia, and Colorado and is actively exploring drilling programs in Wyoming, according to its website. It has been operating in the Marcellus Shale Area for 25 years.

Companies from India’s Reliance Industries Ltd to Japan’s Mitsui & Co are spending billions of dollars on drilling to dislodge natural gas from shale – sedimentary rock composed of mud, quartz and calcite. Shell expects its share of gas in total output to rise to 52 percent in 2012.
“They’ve seen others take material positions in U.S. gas, and this is one way they can also play a part in that business,” said Jason Kenney, head of oil and gas research at ING Commercial Banking in Edinburgh.

The acquisition is the second-biggest oil and gas deal this year, after BP Plc’s acquisition of deepwater assets from Devon Energy Corp for $7 billion in March, according to Bloomberg data.

“We are enhancing our world-wide upstream portfolio for profitable growth, through exploration and focused acquisitions, and through divestment of non-core positions,” Chief Executive Officer Peter Voser said in a statement today.

Exxon Mobil Corp, the biggest U.S. oil company, agreed in December to buy XTO Energy Inc, the country’s largest natural gas producer, for $31 billion to gain control of shale-gas assets.
• Source(s): Royal Dutch Shell PLC and Bloomberg L.P.
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