Financial News 7/29/12 – 8/4/12

Economy

-The savings rate in the U.S. rose to 4.4% in June from 4% in May to reach its highest level in a year. 8/1

-Home prices rose in May for the second straight month providing further support that the battered industry might be turning the corner. 8/1

-Consumer confidence rose in July more than expected. 8/1

-Construction spending inched up 0.4% in July driven mostly by residential construction spending.  The measure is up 7% from a year ago and is the latest measure showing improvement in the housing market.  8/2

-Auto sales in the U.S. rose 8.9% in July and Japanese car makers gained market share from those in the U.S.  8/2

-U.S. factory activity fell for the second month in a row in July.  The trend globally saw weakening activity as well as Europe contracted and China, while growing, saw its lowest level since November.  8/2

-After its policy meeting the Fed announced that it planned additional stimulus for the U.S. economy, but would not take action immediately.  8/2

-The Thomson Reuters index tracking retail sales saw a rise of 4.6% in July up from June, but the pace was slower then July a year ago.  8/3

-ECB president said the bank stands ready to act, but did not announce any moves like European bond purchases disappointing investors and sending markets down for the day.  8/3

-Jobless claims rose to 365K last week however the number was less than expected.  8/3

-Hiring picked up in July significantly beating expectations.  Nonfarm payrolls jumped up by 163K in the month for the largest degree of hiring since February, but the unemployment rate ticked up to 8.3%. 8/4

Corporate

-Increasing profit warnings by companies means that the third quarter will likely be the first quarter in the past 10 that will not see increasing profit growth.  7/30

-Chrysler posted a $436 million profit in the second quarter on stronger sales in North America in a turnaround from the loss posted a year ago.  7/31

-HSBC’s profit dropped 9% in the first half of the year as $2 billion the firm set aside to cover potential fines for money laundering and other issues ate into earnings.  7/31

-BP saw a precipitous drop in earnings in the second quarter as it wrote down several assets in the U.S. by $5 billion and is still feeling the ill effects from the Deepwater Horizon oil spill.  8/1

-Deutsche bank announced it was cutting 1,900 jobs from its investment banking unit. 8/1

-Pfizer and U.S. steel posted earnings that were better than expected.  8/1

-GM’s earnings fell 38% driven by operating losses in Europe and South America. 8/3

-Knight Capital Group’s stock was reeling after the firm revealed that the trading glitch that affected about 150 stocks resulted in a $440 million loss for the company.  The firm’s stock plummeted 63% over the day and over the two days since the issues began the firm’s market capitalization dropped from $1.01 billion to $253.4 million.  8/3

-Toyota bounced back from the tsunami and flood problems of last year in their fiscal first quarter with its best earnings in 4 years.  The company also reaffirmed its earnings forecast for the full year.  8/4

-Berkshire Hathaway’s profit dropped by 9% in the second quarter from a year earlier to $3.11 billion as a result of a large investment gain realized last year.  8/4

-Knight capital announced that it had secured a credit line of $400 million to shore up the company after its recent significant trading losses. 8/4

Market

-U.S markets eased on the final day of July awaiting the Fed’s statement.  For the month the S&P 500 gained 1.3% and the Dow rose 1%.  On the commodity side Oil finished the month up 3.6% and gold rose 0.4%. 8/1

-Greece’s government reached agreement on a new set of austerity measures which will allow it to receive the next round of bailout funds if their international lenders approve of the measures.  8/2

-A glitch in an electronic trading platform from brokerage Knight Capital disrupted trading in 150 stocks creating unusual price moves and heavily increasing some stocks trading volume.  8/2

-Disappointment over lack of action by the ECB sent world markets down for the day.  The S&P 500 and Dow fell 0.7% and Europe sank 1.3%.  Oil fell 2% to $87.13 a barrel and gold dropped 1% to $1,587.  8/3

-Stocks jumped on the strong July hiring numbers.  The S&P rose 1.9%, the Dow Jumped 1.7% to a three month closing high, and Europe shot up 2.4%.  Oil advanced 4.9% to finish at $91.40 a barrel and the 10 year treasury yield soared on the news rising to 1.575%.  8/4

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