Everything You Need to Know About Thursday's Business
The Dow fell 1.0%, the Nasdaq dropped 0.8% and the S&P 500 declined 1.1%.
Catch President Obama’s highly anticipated jobs and debt discussion before a joint session of Congress tonight at 7:00 PM ET. This is a rarity, usually only occurring at times of war, perhaps eight times in total throughout our nation’s history. Here’s to hoping the levity of the matter is not as significant as it seems.
The Bank of England (BOE) today determined to keep its official bank rate paid on commercial bank reserves at 0.5%, and to keep its asset purchases at 200 billion pounds. The European Central Bank (ECB) also kept rates steady today via its monetary policy meeting. Jean-Claude Trichet, the ECB chief, got testy when tested by German reporters, responding with this tirade, “I would very much like to hear congratulations for an institution which has delivered price stability in Germany over almost 13 years at 1.55 per cent approximately… which is better than has been obtained in this country over the last 50 years.” European stocks took a dive in late trading before recovering to close in the green.
The OECD published its interim economic forecast today, and stated that economic recovery appears to have come to a halt in industrialized nations. The group said that growth remained strong in most emerging economies, though at a moderated pace.
The International Trade Report for July showed a dramatic and unexpected narrowing of the trade deficit. The deficit was squeezed to $44.8 billion, down from $51.6 billion in June. The good news was that it occurred due to a pick-up in exports and not lighter demand for imports. Economists surveyed by Bloomberg expected the trade deficit to narrow much less, to $51.9 billion.
Weekly Initial Jobless Claims rose by 2,000 in the week ending September 3, to 414K, versus the revised higher previous period mark of 412K (up from 409K). The four-week moving average increased 3,750, reaching 414,750.
Bloomberg’s Consumer Comfort Index for the week ending September 4 fell to its second lowest mark of the year. The consumer confidence measure reached negative 49.3, down from the prior week’s minus 49.1.
The Quarterly Services Survey, which takes a look at the information and technology industry, offered a bit of good news Thursday. The survey showed a 2.0% quarter-over-quarter increase in information revenue. That was markedly better than the 0.2% revised rise from the first quarter. However, it is the third quarter we’re worried about, and there are signs of information technology spending softness, as we noted in our Factory Orders article.
Consumer Credit data showed a second consecutive strong increase in consumer capital access. July credit expanded by $12 billion, which followed a revised $11.3 billion June increase. Economists were looking for an expansion in credit of just $6.0 billion for July. Both June and July gains were driven by an expansion in non-revolving credit on motor vehicle sales strength.
Commercial crude oil inventory fell by 4 million barrels in the week ending September 2, but remained above the upper limit of the average range for this time of year. Total motor gasoline inventory increased by 0.2 million barrels, and remained within the upper limit of the average range for this time of year. Natural Gas inventory increased by 64 Bcf, though stores remained 60 Bcf below the five-year average.
On the corporate wire, Yahoo (Nasdaq: YHOO) saw Third Point LLC take a 5.15% stake and call for changes in the company’s business strategy. AOL (NYSE: AOL) let Michael Arrington go. Google (Nasdaq: GOOG) bought the well known restaurant rater, Zagat, for an undisclosed amount. It looks as though Amazon.com (Nasdaq: AMZN) may get a break from the state of California, after negotiating and offering to hire a good number of the state’s citizens if the tax were put off. It’s not exactly known what happened, but Amazon’s Cali customers look to have another year of current taxation rules to shop by. FBI agents raided the headquarters of California solar panel maker Solyndra, after it declared bankruptcy just after receiving $500 million in federal loan guarantees. Wal-Mart (NYSE: WMT) is launching its lay-away program early this year (October), in hopes of squeezing as much juice from a dry consumer as possible. Johnson & Johnson (NYSE: JNJ) dropped today after an FDA panel said its stroke-prevention drug should not get expanded use.
The Barclays Capital Back to School Consumer Conference (NYSE: BCS) lined up presenters Procter & Gamble (NYSE: PG) and Coca Cola (NYSE: KO). There were analysts and/or shareholder meetings at General Dynamics (NYSE: GD), Ariba (Nasdaq: ARBA), Ecolab (NYSE: ECL), Covidien (NYSE: COV) and Photronics (Nasdaq: PLAB). EPS reports arrived from ABM Industries (NYSE: ABM), Cherokee (Nasdaq: CHKE), Ditech Networks (Nasdaq: DITC), Globecomm Systems (Nasdaq: GCOM), Korn Ferry (NYSE: KFY), Lakeland Industries (Nasdaq: LAKE), LightPath Technologies (Nasdaq: LPTH), Myrexis (Nasdaq: MYRX), Smithfield Foods (NYSE: SFD), Titan Machinery (Nasdaq: TITN), TRC Cos. (NYSE: TRR), Ulta Salon (Nasdaq: ULTA), United Natural Foods (Nasdaq: UNFI), Verint Systems (Nasdaq: VRNT) and ZBB Energy (AMEX: ZBB).
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