Financial News and Notes 7/15/12 – 7/21/12

Economy

-The IMF lowered its world growth forecast to 3.5% and called on policy makers to do more to combat the slowdown.  7/17

-Retail sales fell more than expected in June, dropping 0.5% for the third straight monthly decline. 7/17

-Factory output rose 0.7% in June after falling in May. 7/18

-Bernanke testified before congress and gave a dreary forecast for the US economy, but did not offer any additional hints about further stimulus initiatives offered by the Fed. 7/18

-Home construction start rose 6.9% in June and builders broke grown on more homes than in any month over the past 4 years.  7/19

-Previously owned home sales fell in June dropping 5.4%from May, a negative development from housing which had been showing signs of life.  7/20

Corporate

-Citigroup gave an upbeat earnings forecast for emerging markets, where they are heavily invested, and beat market earnings expectations.  However, the firm posted a 12% drop in profitability over the past quarter to $2.95 billion. 7/17

-Goldman Sachs 2Q profit dropped 11% and revenue fell 9%, but the numbers still beat expectations.  The firm also announced it was creating an in house bank to lend to high net worth individuals and corporate clients. The move into the lower margin busine3ss represents a shift for the investment house.  7/17

-The second quarter saw the lowest level of mergers since the third quarter of 2009.  7/17

-Yahoo named former Google executive Marissa Mayer as its new CEO. 7/17

-Intel announced a 4% decline in 2nd quarter earnings and lowered their earnings guidance for the rest of the year based on weaker demand for personal computers.  7/18

-Yahoo’s 2nd quarter earnings were meager with profit falling 4% from a year earlier and revenue falling 1%.  7/18

-IBM’s revenue fell 3.3% missing estimates, but the company raised its full year earnings outlook.  7/19

-Bank of America beat earnings estimates and was in the black in the second quarter, however the majority of its business units saw revenue fall.  7/19

-Several large financial institutions have stated that they are chopping a large number of jobs and trying to cut costs due to the rocky economy and increasingly regulated industry.  7/19

-Morgan Stanley saw earnings fall 54% and miss analysts’ estimates.  7/20

-Microsoft saw a loss in the second quarter due to a onetime charge from its money losing internet business.  The company’s revenue rose 4% for the quarter.  7/20

-Google’s profit rose 11% and revenue soared up 35% including the performance of the newly acquired hardware business from Motorola, which had an operating loss.  7/20

Market

-US Stocks posted strong gains on solid corporate earnings and hopes on new moves by the Fed.  The Dow rose 0.8% and the S&P 500 gained 0.7% both moving into positive territory for the month.  7/19

-Spanish lawmakers approved more austerity measures as the countries borrowing costs encroached on a record high with the 10 year yield reaching 7.01%.  7/20

-Spain announced its recession could last until 2013, sparking concerns among investors fearing the country could need a bailout from the EU.  The countries bonds suffered with yields rising to 7.28%. 7/21

-Worries over Spain’s ability to handle its rising borrowing costs sank world equity markets on Friday.  The Dow fell 0.9%, the S&P 500 dropped 1.0%, Europe sank 1.4% and Japan fell 1.4%.  However, for the week the U.S. and Europe still saw gains with the Dow and S&P up 0.4% and Europe rising 0.7%.  Japan finished the week down 0.6%.  The ten year treasury yield fell to 1.459% to end the week.  7/21

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