By Jonathan Stempel
NEW YORK (Reuters) – Financial news service Theflyonthewall.com Inc has urged a Manhattan federal judge to lift a ban on its quickly reporting “hot news” about analyst research from three Wall Street banks, saying the ban has cost it subscribers and could threaten its survival.
The company made its request to U.S. District Judge Denise Cote, who last month issued an injunction requiring it to wait two or more hours before publishing research from Bank of America Corp’s Merrill Lynch unit, Barclays Plc and Morgan Stanley.
Such a delay “constitutes irreparable harm of the highest order,” Theflyonthewall.com President Ron Etergino said in a court filing.
He said the order puts the Summit, New Jersey-based company at a “distinct competitive disadvantage in the online financial news business,” and will cause “substantial adverse financial consequences” as time passes.
(more…)
For those of you who don’t know who Charles Munger is, let’s just say he and Warren Buffett have been making money together for a long time. Munger is the Vice-Chairman of Berkshire Hathaway Corp. and considered by Buffett to be his partner there. He knows what he’s talking about. Mr. Munger often writes parables to explain complicated financial matters in a way that the average person can understand. I think he must be a great storyteller and I would love the opportunity to hang with him for an evening by the fire. It would be fascinating!
His latest parable is disturbing, however. Posted on Slate.com a couple Sundays ago, “Basically, It’s Over” is a tale about the birth, growth and death of “Basicland” (clearly meant to be the United States) and its’ demise into “Sorrowland”. I won’t comment on it other than to suggest you click above and read it. When guys like Munger say things like this, I listen…and I worry.
By Edward Krudy
NEW YORK (Reuters) – U.S. stocks fell on Tuesday as consumer sentiment dropped sharply and house prices unexpectedly dipped, denting optimism about a economic recovery.
Concerns about the economy overshadowed better-than-expected quarterly earnings from retailers, including Home Depot Inc <HD.N>. The top U.S. home improvement chain beat estimates and raised its profit forecast, sending its shares up 1 percent to $30.62.
The February consumer confidence data fell in February to the lowest in 10 months, and the Standard & Poor’s/Case-Shiller indexes unexpectedly slipped in December. The releases followed an unexpected decline in business sentiment in Germany, which pressured overseas markets and fed uncertainty among investors who were worried about the U.S. Federal Reserve’s plans for interest rates and worries over possible sovereign debt defaults in Europe.
“Overall, there’s not a lot of positive stuff to see,” said Michael Sheldon, chief market strategist at RDM Financial in Westport, Connecticut. “With equity markets having retraced about two-thirds of their recent decline, today’s report (on consumer sentiment) could be the catalyst that leads to profit taking.”
The Dow Jones industrial average <.DJI> dropped 60.16 points, or 0.58 percent, to 10,323.22. The Standard & Poor’s 500 Index <.SPX> fell 8.84 points, or 0.80 percent, to 1,099.17. The Nasdaq Composite Index <.IXIC> lost 22.37 points, or 1.00 percent, to 2,219.66.
Investors were also confronted by a report from the Federal Deposit Insurance Corp that the total number of “problem” U.S. banks jumped 27 percent to 702 during the fourth quarter of 2009, reaching the highest level since 1993 amid signs the industry’s recovery is still shaky.
(Reporting by Edward Krudy; Additional reporting by Ryan Vlastelica; editing by Jeffrey Benkoe)
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NEW YORK (Reuters) – Wall Street paid out $20.3 billion in bonuses in 2009, up 17 percent from a year earlier, New York State’s comptroller said, as the financial industry recovered fitfully from a near meltdown.
Comptroller Thomas DiNapoli said on Tuesday profit for all of Wall Street could top $55 billion for 2009, nearly triple the previous record year. Last year, the U.S. economy began to stabilize as lenders raced to repay federal bailout money they had come to view as a stigma.
Average taxable bonuses on Wall Street rose to $123,850 in 2009, DiNapoli said in a statement. Compensation at Goldman Sachs Group Inc, JPMorgan Chase & Co and Morgan Stanley, three of New York’s biggest banks, rose 31 percent, he added.
The comptroller’s annual report on Wall Street pay is closely watched not only by Wall Street, but also by politicians eager to rein in runaway pay in a still-weakened economy where unemployment remains high and tax revenue remains depressed.
While bonuses are well below the level set in 2007 and are now more closely tied to company performance, DiNapoli acknowledged that many may consider them out-sized given the lingering problems in the economy.
“(F)or most Americans, these huge bonuses are a bitter pill and hard to comprehend,” he said.
By Rodrigo Campos
NEW YORK (Reuters) – U.S. stocks fell slightly in choppy trading on Monday on investor uncertainty about the Federal Reserve’s intentions after last week’s increase in the interest rate for emergency loans to banks.
The Standard & Poor’s 500 index also was weighed down by energy shares, while investors took a positive view of the financial sector, sending bank stocks higher.
Shares of oilfield services company Schlumberger Ltd <SLB.N> fell after it agreed to buy Smith International Inc <SII.N> for $11.34 billion in stock, which some analysts said was too high.
Schlumberger shares tumbled 5.7 percent to $60.23 and led declines on the S&P energy index <.GSPE>, which fell 1.4 percent. Smith International rose 6.6 percent to $40.20.
Fed Chairman Ben Bernanke is scheduled to testify on the Fed’s rate hike and monetary policy in general before House and Senate committees on Wednesday and Thursday.
Amid what seems to be a continuous stream of “What, me worry?” chatter from the White House and other Administration officials (and picked up by most of the main stream media) about how “the worst is behind us” and “we’ve avoided a second depression’, etc., there is this growing buzz in the background. It’s not yet the tornado siren, tsunami warning or even the train whistle, but maybe more like the truck back-up beep or even just the buzz of an annoying mosquito. But, it’s there and it’s getting louder.
In recent weeks, as the government goes about telling us everything is fine, a growing number of financial experts have begun making noise.
Robert Prechter, President of Elliott Wave Int’l. and Executive Director of the Socionomics Institute known recently for his accurate predictions of the stock market meltdown in the Fall of 2008 and its’ subsequent interim bottom in March, 2009 is looking for an all-out economic meltdown…a virtual financial Armageddon. Indeed, his most recent newsletter, The Elliot Wave Theorist has this headline: “STARTING IN 2010: THE BIGGEST DOWN WAVE EVER FOR FINANCIAL ASSETS IN AN ENVIRONMENT OF RUNAWAY DEFLATION”. In it, he says that “This is a very rare event…” and that “its upcoming occurrence will be stunning enough to set records for financial panic.” He advises his subscribers to “convert bank balances to greenback cash and keep it in safe places.” Those are strong words…
Harry S. Dent who writes the HS Dent Forecast advises his subscribers to “Get ready for the most extreme two years of your lifetime…” predicting that the “ticking time bomb will very likely start to blow between July and August 2010…”
Richard Russell, who has been writing the Dow Theory Letter daily for over 50 years says to subscribers: “What does it all add up to? I think it adds up to hard times ahead.” He considers the stock market to be in a primary bear market advising investors to remember his long-held thesis: “In a primary bear market everyone loses and the winner is the one who loses the least.”
Much of the basis for these dire predictions stems from the unprecedented level of debt and spending by the US government and the creeping dread about the level of promises made to future generations that simply can’t be fulfilled without plunging the United States into an economic malaise that may last for generations.
Couple that with the disarray, lack of courage, special interest influence and partisan bickering that is our political system and you begin to see why these predictions are being made.
Bill Gross, the legendary bond investor and head of PIMCO, the largest bond investment company on the planet, recently penned a piece called Let’s Get Fisical. In it, he asks “What has become of the American nation?” and states that “Our government doesn’t work anymore, or perhaps more accurately, when it does, it works for special interests and not the American people.” Wow! Strong words from a normally rational and unemotional money manager. He goes on to discuss how actions of the Fed and the absence of ongoing government “stimulus” will likely lead to conditions where “market returns may not be so “fine” in 2010.”
Several studies seem to support what these guys are saying. Most recently, a study from the Peterson-Pew Commission on Budget Reform titled Red Ink Rising- A Call to Action to Stem the Mounting Federal Debt said that its Commission members “share a common concern: the fiscal future we leave to succeeding generations will lower their standards of Living.” It is a call to action to prevent government debt from burying the nation. But it says: “It is our strong belief that we must begin to take action now…”
Fox News’ Glenn Beck said this week that we “must prepare for great change” comparing the US to the ill-fated Titanic saying that we are now at the point where the iceberg has been struck, but only a few realize that the ship has been dealt a fatal blow. (VIDEO)
So, is this to be? Well, there are signs of hope in the middle of this mess. The previously “silent” majority in our country is no longer silent expressing its growing concern in the form of the Tea Party movement demonstrating that we don’t need to resort to violence to correct what we see as wrong. We can use an equally effective and more powerful weapon…the vote. Witness the results so far in Mass., NJ and Virginia where ‘We, the People” are taking back their government. Even Fox’s Beck says that the Titanic can sink…if we get together now to rescue the passengers. We will then just build another one or even a “fleet of them”. But, as the Peterson-Pew report says: “we must begin to take action now…”
That noise…
Shhh….there it is again, do you hear it?
NEW YORK (Reuters) – Wall Street could keep rallying after notching its best week this year if Federal Reserve Chairman Ben Bernanke gives a reassuring assessment of the recovery and retail earnings show improvement.
Investors are eager to hear more on the thinking behind the Fed’s surprise move to raise its discount rate, especially because the Fed’s loose monetary policy has provided a crucial spur to equities’ advance since their March 2009 bottom.
While the rate hike suggested that the Fed now considers the financial sector to have healed sufficiently to warrant taking back extraordinary liquidity, the hike also sparked unease about a possible broader removal of economic stimuli.
Bernanke’s semiannual testimony on monetary policy before congressional panels next week takes on an even more important dimension as investors look for clarity on the Fed’s intentions and how Bernanke sees the recovery progressing.
“We will be watching for more confirmation of which track the Fed is on,” said John Praveen, chief investment strategist at Prudential International Investments Advisers LLC in Newark, New Jersey. “We will be looking for more color on the timing of the (exit strategy).”
The Fed has said its benchmark fed funds rate would remain exceptionally low for an extended period to sustain the recovery, but there has been little light on the timeline of its exit strategy and what risks might that entail, more so with a high U.S. unemployment rate still a big menace.
“Is (the rate hike) a reflection of its confidence in the stabilization of markets and the economic recovery, or are they very worried about inflation and therefore are hiking rates?” added Praveen.
RETAILERS IN THE BULL’S-EYE
Earnings from major retailers, including Home Depot Inc <HD.N>, Target Corp <TGT.N> and Macy’s Inc <M.N> will also be in the spotlight, along with key economic data, including February consumer sentiment and January new home sales. For the full economic diary, see <ECI/US>
Luxury homebuilder Toll Brothers <TOL.N>, gold miner Newmont Mining Corp <NEM.N> and grocer Safeway Inc <SWY.N> are on the earnings scoreboard. For the full earnings diary, see
<RESF/US>
By Rodrigo Campos
NEW YORK (Reuters) – Stocks edged higher in choppy trading on Friday as investors took the Federal Reserve’s surprise increase in its discount rate as further evidence the financial system is strengthening.
The latest U.S. inflation data seemed to support the view the Fed was not facing urgent pressure to raise its benchmark fed funds rate. The Labor Department said its Consumer Price Index rose less than expected in January.
In raising the discount rate, which the Fed charges banks for emergency loans, the U.S. central bank late on Thursday insisted the move was not an indication of a broader tightening of the easy monetary policy that has fueled a broad advance in stocks.
Morgan Stanley recommended investors buy a number of banks, including Northern Trust Corp <NTRS.O>, whose shares rose 4 percent.
“By the time the markets opened today investors had begun to assimilate the implications of the Fed move,” said Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey.
“The market had accepted the Fed’s rationale… and the (U.S. central bank) would remain on hold until further notice.”
The Dow Jones industrial average <.DJI> gained 10.66 points, or 0.10 percent, to 10,403.56. The Standard & Poor’s 500 Index <.SPX> added 2.51 points, or 0.23 percent, to 1,109.26. The Nasdaq Composite Index <.IXIC> rose 2.78 points, or 0.12 percent, to 2,244.49.
The S&P and the Dow industrials were on track to close their best week in more than three months.
Nevertheless, the Fed’s announcement delivered a jolt to financial markets on Thursday, and U.S. stocks fell initially on Friday.
The Fed said its increase in the discount rate reflected improved financial market conditions that warrant less of a helping hand from the U.S. central bank.
In their recommendation for bank stocks, Morgan Stanley analysts favored Bank of New York Mellon <BK.N>, up 3.8 percent to $28.74, and Northern Trust, which rose to $54.77. The KBW bank index <.BKX> rose 1.2 percent.
FedEx Corp <FDX.N> shares rose 2.3 percent to $81.92 and led gains in the industrial sector of the S&P 500 <.GSPI> and on the Dow Jones transportation average <.DJT>.
U.S. Steel Corp <X.N>, up 4.4 percent to $53.20, boosted the S&P materials sector <.GSPM>.
Among declining shares, Dell Inc <DELL.O> shares fell 6.7 percent to $13.47 a day after the company reported quarterly gross margin that missed Wall Street’s expectations.
Oilfield services company Schlumberger Ltd <SLB.N> shares fell 3.5 percent to $63.53 after a Wall Street Journal report said the company is in advanced talks to buy rival Smith International Inc <SII.N>. Smith shares jumped 13.6 percent to $37.88.
(Editing by Kenneth Barry)
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By Rodrigo Campos
NEW YORK (Reuters) – Stocks edged higher on Wednesday as stronger-than-expected earnings from companies including Deere & Co <DE.N> and upbeat economic data more than offset a decline in commodity-related shares.
A bounce back in recently battered health insurer stocks gave additional support to equities.
Deere stock rose 4.4 percent to $56.13 after the farm equipment maker reported quarterly earnings that topped expectations and raised its fiscal 2010 outlook for machinery sales growth.
Shares of Whole Foods Market Inc <WFMI.O> shot up 12.1 percent to $34.21 and boosted the S&P consumer staples sector <.GSPS> a day after the supermarket chain posted a better-than-expected quarterly profit and raised its full year outlook.
“We’ve seen some good earnings and that’s been the catalyst,” said Andy Fitzpatrick, director of investments at Hinsdale Associates, in Hinsdale Illinois. “Valuation and fundamentals are starting to become more recognized by this market.”
The results follow the upbeat trend in fourth-quarter U.S. corporate earnings, with more than 70 percent of the Standard & Poor’s 500 companies beating analyst estimates so far, according to Thomson Reuters data.
The Dow Jones industrial average <.DJI> gained 19.80 points, or 0.19 percent, to 10,288.61. The Standard & Poor’s 500 Index <.SPX> gained 2.35 points, or 0.21 percent, to 1,097.22. The Nasdaq Composite Index <.IXIC> gained 6.50 points, or 0.29 percent, to 2,220.69.
Also helping sentiment, U.S. housing starts rose to a six-month high in January and industrial output also increased solidly, pointing to an economic recovery that was taking a firm hold.
United Technologies Corp <UTX.N> shares gained 2.3 percent to $67.43 boosted by the output data and after the company’s chief executive said orders from China were not slowing despite that country’s efforts to curb lending. The CEO also hinted of a possible United Tech stock buyback.
Health care stocks were among the biggest gainers as health insurance providers rebounded from recent declines. The Morgan Stanley healthcare payor index <.HMO> , down in six of the last seven weeks, jumped 2.5 percent, its largest daily gain since early January. WellPoint Inc <WLP.N> and Aetna Inc <AET.N> both rose more than 3 percent.
“There’s valuation benefits in the healthcare sector in general,” Fitzpatrick said.
On the down side were energy and materials shares, which gave up some of the gains that led the market to its best day in three months on Tuesday.
U.S. Steel Corp <X.N> shares fell 1.8 percent to $50.20 and Chevron <CVX.N> was off 0.5 percent at $72.64. An index of energy shares <.GSPE> declined 0.7 percent.
(Editing by Kenneth Barry)
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I am fiddling with widgets to help our readers get a quick update on markets. I’m kind of new at this, so bear with me!
