Stocks shake off an early downdraft and long spell of dithering to finish higher, spurred on by one of those oft-seen final-hour surges.
Two stocks — IBM and Travelers — do most of the lifting for the Dow Industrials, with the two combining for about 47% of the average’s gain. S&P 500 closes on resistance (and session high) at 1150. Sector leaders include financials, consumer discretionary, materials and telecom.
DJIA rises 44.51 to 10611.84, and Nasdaq Comp add 9.51 to 2368.46. S&P 500 rises 4.63 to 1150.24.
Week’s busiest day for data comes tomorrow, with February retail sales, Reuters/Univ of Michigan consumer sentiment and January business inventories all set for release.
S&P 500 finishes at its highest close since October 1, 2008; Nasdaq Comp reaches its highest close since August 28, ’08. Stocks once again pricing in a pretty optimistic (if not V-shaped) view of recovery.
Newswires’ editors Eduardo Kaplan and Madeleine Lim discuss California’s $2.5 billion bond deal, President Obama’s move to improve US trade and US household net worth figures. It’s Tomorrow’s News Today:
- Potential candidates for Fed Board vacancies should be known to have anticipated the financial crisis in advance, have a pro-consumer stance and be willing to release AIG-related emails, Yves Smith says.
- In the next year or so, if we are to have a sustained recovery, I think we would be much better off with stingy banks, than with thrifty consumers,” Stephen Gandel writes.
- The notion that newspaper publishers should torch their print editions and just embrace the Web is “just plain nutty,” Newsosaur blogger Alan Mutter says. “It doesn’t take a certifiable Silicon Valley genius to see that no business can walk away from some 90% of its revenue base without imploding.”
- Jobless claims have been stuck at current levels for nearly four months, Economist’s Free Exchange blog notes. “The wait for the dip back to normal levels continues.”
- Google and retailers are teaming up to help customers find products.
- Consumer credit has contracted about 6% since the recession began, and banks’ lending standards are getting even tougher. “It will be interesting to see to what extent the tightening of standards for revolving credit impact overall lending,” writes Atlanta Fed’s Ellyn Terry.
- Latest AAII weekly poll shows surging bullish reading of 45.3%. “This has served as a fairly reliable contrarian indicator in the past as small investors tend to pile into stocks near the end of rallies,” Pragmatic Capitalist says.
- Is a housing bubble developing in China? Calculated Risk weighs in.
- Peter Boone and Simon Johnson say beware of the coming Greek debt bubble. Paul Krugman isn’t so sure.
- Sen. Chris Dodd will introduce his sweeping plan to overhaul financial regulations on Monday without any Republican support.
Posted by Steven Russolilloon March 11, 2010 Economy, Markets /
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FusionIQ CEO Barry Ritholtz says it’s time to regulate derivatives just like all other financial instruments.
In order to reduce the systemic risk that derivatives present, he says Commodity Futures Act of 2000 needs to be repealed, derivatives need to be treated like all other financial products and CFTC needs “full oversight and teeth to enforce the rules,” he argues.
Wall Street and the banks will fight this tooth and nail, as they are reaping billions in derivative trading profits. Never mind that whole 2008-09 meltdown thingie — that’s ancient history.
This is simple, folks: Derivatives should not receive special treatment — they need to be regulated the way most other financial products in the world are.
Roger Ehrenberg, managing partner of IA Venture Strategies, offers a different argument. In a blog post published last month, he wonders whether derivatives are the real problem. Derivatives are a hot-button issue these days, but reactive policy-making isn’t the answer, he says.
The problem, however, isn’t exclusive to derivatives; it’s the underlying “business purpose” of transactions. Hedging has a legitimate business purpose. Making markets, speculation, and financing projects have solid business foundations as well. But entering into transactions that serve to hide or obfuscate economic reality work against this principle. And this lack of business purpose is not confined to the derivatives markets, but frequently takes place in the cash markets as well.
So to blame derivatives, and derivatives alone, isn’t the answer. “Let’s be clear. The issue isn’t derivatives; it’s all financial transactions whose objective is to deceive or to weaken financial transparency,” he says.
No doubt, we’re in a fix here in America, with our fragile economic recovery, ballooning deficits, cash-strapped states and sky-high unemployment, to name just a few of our more pressing issues.
There’s been a lot of finger-pointing and plenty of blame thrown around for how we got here. But at least we all acknowledge one painful reality – as a country, we did this to ourselves.
Unions protested in Athens today over Greece’s sharp belt-tightening measures, and here’s some comments that caught our eye from Dimitris Papageorgiou, a 49-year old worker at the Bank of Greece. “Why do the people always have to pay? Who is at fault? It’s the foreign speculators and the useless policies of previous governments.”
It’s the foreign speculators fault? Maybe he’s right about “the useless policies of previous governments,” but the foreign speculators? Come on, Dimitris, look in the mirror. Is it the foreign speculators fault that Greece’s citizens seem to collectively think only suckers pay taxes? It wasn’t foreign speculators that ran Greece’s budget deficit up to nearly 13% of the country’s GDP.
Recovery pushers seem dead set on believing the March nonfarm payroll report will show the economy added jobs. Everyone blames snow for February’s small decline, which supposedly puts March on track for not just a positive number, but a substantial increase.
Sorry, but the trend in initial jobless claims doesn’t paint such a promising picture.
Initial jobless claims did fall for the second consecutive week, but don’t get too excited as the report has its fair share of blemishes. Number of workers filing for jobless claims stood at 462,000 in the week ended March 6, from a downwardly revised 468,000 in the prior week (originally put at 469,000). But the weekly drop fell short of the 9,000 decline economists expected.
Keep in mind that this number needs to be much closer to 400,000 for the economy to add jobs on a consistent basis.
Still not much sign that either bulls or bears are ready to seize the initiative, with premarket US stock futures suggesting a slightly lower open.
US dollar index at 80.42, now well below yesterday’s highs, with riskier assets not benefiting much from USD’s decline; oil slightly above $82/bbl, gold down a little.
Weekly jobless claims data at 8:30am likely to influence the markets’ early direction. Also due at 8:30am, January trade deficit.
Mixed session for Asian stocks overnight, European markets are lower. S&P futures down 2.20; 10-yr lower, yield at 3.74%.
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 […]
I am not going to apply online to be lululemon’s next CEO because I don’t want my application getting lost in the pile. The slightly troubled yoga clothing retailer is taking applications from anyone on its website. Click here if you would like to apply. And click here to read more details from The Associated […]
