Financial News 6/10/12 – 6/16/12

Economy

-China released data that showed the country’s economy was performing better than many economists had feared. Industrial production rose slightly, auto sales gained and inflation eased to a 3% annual rate from April’s 3.4%. 6/11

-The median net worth for U.S. families sank close to 40% between 2007 and 2010 with much of the fall driven by plunging home values. 6/12

-The World Bank reduced its estimate for global growth for 2012 to 2.5%, the slowest pace since the recession. 6/13

-Retail sales excluding autos fell 0.4% in May for the second month in a row. 6/14

-Whole sale prices fell in May dropping 1.0%. 6/14

-Inflation has stabilized with core inflation at a 2.3% annual rate and the CPI-U falling in May on plummeting oil prices. 6/15 

-Initial jobless claims rose, going against expectations, and the prior week’s numbers were revised upwards. 6/15

-May saw a drop in industrial production for the second time in three months. 6/16 -Consumer sentiment hit its lowest level since December. 6/16

Corporate

-Facebook’s growth of U.S. users is slowing substantially. The site had a 5% increase in unique visitors in April. 6/11

-Verizon unveiled a sweeping new pricing plan that lets users share data across up to 10 devices. The plan will be available later this month. The shift likely benefits heavy users, but will drive up costs for those who use their devices more sparingly. 6/13

-Due to its weakening cell phone business Nokia announced it would be cutting 10,000 jobs. 6/15

Regulatory

-ING was fined a record $619 million for moving millions of dollars through the U.S. banking system for clients from Iran and Cuba. 6/13

-R. Allen Stanford was sentenced to 110 years in prison for the $7 billion Ponzi scheme he orchestrated. 6/15

-Rajat Gupta, a former board member at Goldman Sachs and Proctor and Gamble, was convicted of insider trading as the SEC scored another big victory. 6/16

Market

-Spain announced that it is requesting a bailout of up to $125 billion to help repair its tattered banking system. Questions remain whether the country itself will need a bailout as well. 6/11

-Spanish bond yields after a brief rally on Monday after the bailout announcement over the weekend rose once again settling at 6.52%, near their May highs. 6/12

-Investors were not satisfied with the Spanish bank bailout and global markets sank. While European markets initially jumped they trailed off over the day to finish slightly down. The U.S. saw a similar pattern with the S&P 500 ending the day down 1.3% and the Dow dropping 1.1%. 6/12

-U.S. Stocks jumped back up erasing Monday’s drop on comments by the Chicago Fed president over potential additional stimulus measures. The Dow rose 1.3% and the S&P 500 had a 1.2% gain. Europe was up 0.6% as turmoil in the region continued. 6/13

-Borrowing costs for Spain and Italy continued to rise. The 10 year yield for Spanish debt rose to 6.72% a closing high for the Euro era. In Italy borrowing costs rose to 6.26% for 10 year debt, its highest point of the year. 6/13

-The owner of Greece’s largest foreign held bank, France’s Credit Agricole, is planning to walk away from the bank if Greece leaves the euro zone. The country is holding elections on the 17th that are expected to determine the future of Greece. 6/14

-Spain’s borrowing costs hit another record high with the 10 year yield reaching 6.931%. The continued rise is increasing concerns that the bailout arranged for the countries banks won’t be enough to help the country avoid its own bailout. 6/15

-The U.K. announced plans to attempt to insulate the country from the growing European crisis. The bank of England will flood banks with cheap money in hopes of spurring lending to British consumers. 6/15

-U.S. markets rose as weakening economic numbers and the unsettled European picture spurred hopes that central banks will intervene. The Dow jumped 1.2% and the S&P 500 rose 1.1%. 6/15

-Stock markets ended the week with another up day as confidence grew that central banks would step in with stimulus measures to support global economies. The S&P 500 climbed 1.0% and the Doe rose 0.9%. European stocks rose 12.0% and Japan inched up 0.1%. For the week the Dow rose 1.7%, the S&P 500 gained 1.3% Japan saw an increase of 1.3% and Europe advanced 0.9%. The 10 year U.S. Treasury yield settled at 1.588%. 6/18

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