MarketWatch's top stories, March 22 - 26
But the news from Europe was more encouraging for investors, as Greece's neighbors unveiled a plan to bail out the debt-laden nation in conjunction with the International Monetary Fund if necessary. U.S. equity markets gained about 1% for the week.
Please be sure to have a look at our market videos for what's coming up in the United States, Asia and Europe.
-- Greg Morcroft, assistant managing editor
U.S. Week Ahead: Autos, Countdown to iPad
Asia's Week Ahead: Tankan and Chinese purchasing
Europe's Week Ahead: Aer Lingus, Burberry and U.K. PMI
President Barack Obama signed a sweeping overhaul of the U.S. health-care system into law on Tuesday, promising that Americans will see some immediate benefits and invoking the names of leaders who fought for health reform. No more worrying about lifetime limits on health coverage, about whether your insurer will dump you when you get sick, or about whether your adult child will be booted off your plan when he turns 18. These are some of the changes that will kick in this year as part of the landmark health-overhaul legislation the U.S. Congress passed on Sunday. See MarketWatch story on historic legislation.
With projections of millions of foreclosures over the next five years, the Obama administration announced Friday it would make major adjustments to its $75 billion mortgage-modification program, aimed at assisting a greater number of unemployed and other troubled homeowners in modifying or refinancing their mortgages. Bank of America Corp. (BAC), the largest U.S. mortgage lender also unveiled a program to cut principal on up to 45,000 underwater home loans by as much as 30%. See MarketWatch story on new mortgage efforts.
Treasury prices posted gains on Friday, but remained headed for a weekly loss as yields on 10-year notes touched the highest levels since June amid heightened concerns about the government's ability to finance its deficits and as investors turn to seeking out higher yields in other asset classes. "What's changed is that investor outlooks on the fiscal side have turned decidedly more downbeat since Greece's debt woes were first splashed onto the front pages of the main papers," RBS Securities' Bill O'Donnell and Aaron Kohli said. See MarketWatch bond report.
Caterpillar Inc. (CAT), Deere & Co (DE) and AT&T Inc. (T) all said this week that they will see costs increase this year when a government subsidy for retiree drug benefits loses its tax-exempt status under the new health-care law. But investors were unconcerned about the new tax provisions and focused instead on evidence the economy was improving. See MarketWatch story on AT&T and others.
European stock markets and the euro got a painful reminder on Wednesday that all is still not well among the region's more troubled economies after Fitch Ratings downgraded Portugal's long-term credit rating to AA- from AA. As U.S. stocks crawled to new highs for the year early this week, calls that the market was long overdue for a correction continued to mount. Setting aside the reality of the debt problem in Portugal, market behavior this week suggests that for stocks, in any case, this too shall pass. See MarketWatch story on Portugal effect on U.S. stocks.
Resales of U.S. homes and condominiums fell 0.6% in February to a seasonally adjusted annual rate of 5.02 million, the lowest level in eight months, raising doubts about the durability of the housing recovery, the National Association of Realtors reported Tuesday. Sales of existing homes have thus fallen three consecutive months, after having risen steadily through the fall in response to a federal subsidy for first-time home buyers. The tax credit has been restored and expanded to repeat buyers, but there has been no rebound in sales yet. See MarketWatch story on weak home sales data.
Google Inc. (GOOG) has stopped censoring results on its Chinese search engine after weeks of negotiations with local authorities over the matter, effectively shutting it down in a dramatic move that could imperil the company's presence in the world's largest Internet market. Google is now redirecting traffic away from google.cn to Hong Kong-based google.com.hk, which offers Chinese-language service with uncensored results. See MarketWatch story on Google halting China search.
The U.S. government is setting up a program to sell its 27% stake in Citigroup Inc. (C) and the plan could be announced next month, according to a report Thursday, citing unidentified people with direct knowledge of the matter. The U.S. Treasury plans to sell its Citi shares using a preset trading plan that will lock the government into a schedule for selling its shares. See MarketWatch story on Sale of Citi stake.
Far-reaching legislation aimed at overhauling the nation's financial-services regulatory system is moving forward in Congress, but advocates say some of the proposed consumer protections are too weak. With consumers and homeowners continuing to struggle through the after-effects of the worst financial crisis in decades, few experts argue that the current system provides adequate safeguards. See MarketWatch story on consumer financial protections.
China may allow its currency to move more freely if the economy continues to improve, but the move won't do much to remedy structural economic problems in the United States, a top adviser to the People's Bank of China said Friday. "China may resume a "managed float" of its exchange rate, particularly if the uncertainty of the overall post-crisis economic situation diminishes," said Fan Gang in an opinion piece published in the state run China Daily Friday. See MarketWatch story on latest prospect of Chinese currency reform.