Sharp late selloff tanks US stocks, as Bernanke looks for another term, the White House looks for some way to create jobs, and investors are looking nervous.
DJIA drops 87 (0.8%) to 10366, S&P 500 loses 9 (0.8%) to 1099.92, Nasdaq Comp drops 12 (0.5%) to 2173. Financials suffer worst losses. Stocks were flat most of the day, before late plunge; might just be nerves ahead of tomorrow’s monthly jobs report.
Weekly jobless claims dip another 5,000, but continuing claims rise. ISM services index slips into contraction territory. Comcast finalizes deal to buy NBC Universal.
There is an awful lot of stuff floating around in the market. There was that offhand comment from White House press secretary Robert Gibbs, in response to a question about tomorrow’s jobs report, that the unemployment rate could rise. Immediately, people started wondering, what does the White House know?
There was a headline that crossed the tape late in the session, quote St. Louis Fed president James Bullard, who said a high unemployment rate might not preclude the Fed from raising interest rates.
But like I mentioned yesterday, stocks, and the S&P 500 especially, are at a pretty critical juncture technically, and it’s going to take some effort to push them past this. And if tomorrow’s jobs report comes in weak, it will add a bucket of gas to that little pile of smoldering twigs over there in the corner.
Some day, they’re going to have to give Madeleine and I more than three minutes to get through the news. But until that day, here’s Tomorrow’s News Today, everything you need to know in three minutes.
Today tackle the Bernanke hearings, ISM services report, jobless claims and the ECB latest nonmove on interest rates.
- Retailers had a tough November as same-store sales missed analysts’ muted expectations. The industry still recorded a slight increase from prior-year levels.
- TARP’s moral hazard not going away anytime soon.
- Bank of America (BAC) finally ready to repay taxpayers.
Posted by Steven Russolilloon December 03, 2009 Economy, Markets, Media /
Comments Off
30 Rock
Newswires’ Shara Tibken reports:
NBC employees walking around the Rockefeller Center headquarters Thursday generally seemed upbeat about Comcast’s (CMCSA) planned takeover of NBC Universal from General Electric (GE).
An employee at NBC’s local division says people are going about business as usual and are excited, if anything, because Comcast is more of a pure media company.
“It’s going to take a year to complete the deal, so that also has people less worried,” he adds.
Others – mostly in the cable channel branches of the business – say they could even benefit from Comcast’s ownership. Comcast has highlighted NBC’s cable networks – which have held up better during the recent downturn – as the deal’s main attraction.
“The problem with GE is that we’re the only media company GE has, while Comcast is in the business, so I think they could understand us a little bit better,” a USA Network employee says.
The Comcast/NBC Universal deal is finally official, but the regulatory scrutiny is just beginning.
The deal, valued at more than $30 billion, gives Comcast (CMCSA) a majority-ownership of NBC Universal and ends General Electric’s (GE) more than two-decade reign over the network. Comcast also attempts to soothe shareholder concerns buy announcing a 40% dividend hike and says it will complete its $3.6 billion stock-buyback plan over the next three years.
The deal now faces an extensive regulatory process that could last more than a year, although Comcast says it isn’t worried about the scrutiny it’ll face from consumer groups and lawmakers.
Dow Jones’ Nat Worden reports:
“We believe this is an approvable transaction,” Comcast Chief Executive Brian Roberts said on a conference call following the announcement. “There will be a thorough review – that is obviously appropriate. There will be conditions, but we do not foresee, nor would we want to proceed, if they had a material effect on the company, and we don’t anticipate that occurring.”
Posted by Steven Russolilloon December 03, 2009 Economy, Markets, Media /
Comments Off
The WSJ News Hub discusses how the Comcast/NBC Universal deal reshapes the media landscape and what exactly it means for the industry as well as shareholders.
On Monday, we warned that an ebullient stock market was going to face some possibly nonconforming data, in this week’s ISM reports. The Chicago PMI was expected to slip, as was the ISM’s manufacturing index. The ISM’s services index was expected to show some improvement.
Well, the Chicago PMI actually rose, but both ISM reports showed “slippage,” and this morning’s report on the services sector actually fell below the magical 50 line, the demarcation between expansion and contraction. And seeing as the Chicago report is regional whereas the other two are national, it’s the latter that carry more weight.
All of this adds to a picture of an economy that is growing only through intense government effort. The CBO yesterday said federal stimulus added somewhere between 1% and 3% to the 3Q GDP number. GDP came in at a revised 2.8% (and may yet be revised even further down,) so it’s clear that the stimulus package is mainly, if not totally, responsible for the GDP numbers.
The market doesn’t usually pay too much attention to the services index, but it did today. Stocks slipped into the red right after the report hit the tape. The services sector, after all, does comprise about 80% of the jobs in this country.
Fed Chairman Ben Bernanke’s in the mist of a difficult morning.
He’s sitting before a Senate committee confirmation panel as part of a bid to keep his job, and senators aren’t going to give the Fed chief an easy go of it. He’s being smacked by both populist anger and more pointed barbs over the controversial way the central bank has navigated the past two years.
Bernanke has also been challenged by legislation that would both strip away the Fed’s bank supervisory powers and impose an auditing function over monetary policy.
In prepared remarks, he defended the Fed’s role fighting against the crisis and said the meltdown could’ve been much worse without action from the central bank. From WSJ:
“Taken together, the Federal Reserve’s actions have contributed substantially to the significant improvement in financial conditions and to what now appear to be the beginnings of a turnaround in both the U.S. and foreign economies,” Mr. Bernanke said.
The committee’s chairman, Sen. Chris Dodd (D., Conn.), believes Bernanke should get a second term. But attempts to block Bernanke’s reappointment are gaining traction. Sen. Bernie Sanders (I., Verm.) is putting a hold on Bernanke’s confirmation.
“This is actually pretty serious and seldom done,” Yves Smith writes at naked capitalism.
There’s a recurring bit in the movie “The Princess Bride” where the kidnapper Vizzini, every time he sees the Man in Black do something he can’t believe that’s ruining the kidnapping, shouts “inconceivable!” After about four or five times of this, his henchman Inigo Montoya says “You keep using that word. I do not think it means what you think it means.”
To most everybody on Wall Street, and probably down in Washington, too, it’s inconceivable to think that we haven’t put the Great Recession behind us. A 60% plus jump in the stock market, along with a positive print on GDP (who cares it was almost all government-induced) will do a lot to change people’s thinking.
But is it so inconceivable to think that we actually haven’t left the recession behind?
US stocks futures slightly higher, and the focus is on Capitol City today. First off is this purported “jobs summit” at the White House. But the Bernanke reconfirmation hearings could also produce fireworks; it seems a long shot that he won’t get reappointed, but anything’s possible these days.
Then of course there’s BofA’s announcement it’ll pay back its TARP loan.
J.P. Morgan reported some strong earnings today. But what this bloggers eye were some of the sub-numbers in the earnings report. The bank booked $1.8 billion in investment banking fees. But don’t be fooled – that wasn’t from big M&A advising. But $429 million was in advisory fees. Instead, that $1.3 billion + remaining fees […]
David Oreck, founder of a well-known maker of vacuums and air purifiers, says he’s upset his namesake company is in bankruptcy. He says Nashville, Tenn.-based Oreck Corp. was a perfectly profitable company when he sold his stake in it to a private equity firm in 2004. He blames the firm, New York-based American Securities Capital […]
