Financial News 5/6/12 – 5/12/12

Economy

-Consumer credit surged in March up 10.2%.  It was the largest jump in borrowing in more than 10 years. 5/8

-Jobless claims dropped for the week beating expectations, and the 4 week moving average fell to 379,000.  5/11

-Spain is requiring banks to set aside $38.8 billion to meet potential loan losses and quicken the sale of troubled assets.  5/12

-China’s growth slowed in April, resulting in analysts dropping GDP expectations for the quarter and increasingly the likely hood that Chinese officials implement stimulus measures.  5/12

-Wholesale prices in the U.S. fell for the first time in 2012 dropping 0.2%.  The fall was a result of reduced energy prices.  5/12

Corporate

-HSBC’s profit rose 25% in the first quarter excluding onetime charges on its investment banking and emerging markets operations, but its costs remain high. 5/9

-Disney’s fiscal second quarter saw earnings gains of 21% led by its theme parks and cable channels offsetting weakness in its movie division.  5/9

-News Corp earnings rose 47% due to growth from its cable networks.  5/10

-Cisco’s earnings gained 20%, but had a cautious outlook. 5/10

-Fannie Mae had a $2.7 billion profit for the quarter, its best quarter since it was bailed out nearly 4 years ago, and will be repaying $2.8 billion it owes the government. 5/10

-Spain announced it will take a stake in troubled Spanish bank Bankia SA to rescue the weak bank.  5/10

-J.P. Morgan admitted to a $2 billion trading loss as a result of a complex trade of its own capital that depended upon a continued economic recovery.  5/11

Market

-Gas price continue to fall and are down for the 5th straight week.  The average price for a gallon is down to $3.79 from $3.94 at the beginning of April. 5/8

-The U.S. Stock market showed little concern over the election results in France and Greece with the S&P 500 up 0.04%.  Both countries saw changes in top leaders which are not as friendly to the austerity cuts the countries have undertaken to fight their sovereign debt issues. 5/8

-The price of oil has continued to fall as it dropped to $97.01 a barrel on Tuesday.  It is down $9 for the month.  5/9

-Markets continued to fall as jitters over Europe, and specifically Greece’s change in government, were more pronounced.  The Dow dropped for the 5th straight day falling 0.6% and the S&P fell 0.4% to 1363.7, its lowest close in close to a month.  European markets fell more abruptly with concerns the Greece may reject the austerity plan that had been developed for them.  Europe as a whole fell 1.7%. 5/9

-U.S. markets continued to fall as worries over Greece and Spain weighed on markets.  The Dow fell 0.8%, the S&P fell 0.7%.  Europe as a whole hit its lowest level in three months and Spain’s stock market reached an 8 and a half year low.  In response to growing global concerns a 10 year U.S. treasury auction resulted in the lowest yield on record of 1.855% and in the secondary market the 10 year U.S. Treasury yield dropped to 1.835% a three month low.  5/10

-Europe agreed to release a portion of a bailout payment to Greece, but held back $1.3 billion as a warning to the country to get its government in order.  5/10

-On European concerns and the trading loss for J.P. Morgan U.S. markets had a down week.  The Dow has its worst week in 5 months falling 1.7%. The S&P 500 fell 1.1% for the week.  Internationally, Japan was down 4.6% and Europe fell 0.4%.  Commodities continued to retreat with Oil falling 1% to $96.123 a barrel and gold dropped to $1,583.60 a troy ounce.  The 10 year rallied over the course of the week finishing at 1.841%.  5/12

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