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Sep 30, 2011

Marketwatch Top Ten Stories, September, 26 -30


MarketWatch

Weekly Roundup
SEPTEMBER 30, 2011

MarketWatch top 10 stories, Sept. 26 - 30

By MarketWatch



NEW YORK (MarketWatch) — U.S. stock indexes dropped more than 2% Friday, ending their worst quarter since the depth of the financial crisis, with worries over Europe dominating.

The Dow Jones Industrial Average (DJIA) fell 240.60 points, or 2.2%, at 10,913.38. It gained 1.3% for the week but lost 6% for the month, its fifth monthly loss in a row.

The 12.1% quarterly loss was the worst since the March 2009 quarter. The S&P 500 Index (SPX) fell 28.98 points, or 2.5%, at 1,131.42 Friday. It was off 0.4% for the week, down 7.2% for the month and off 14.3% for the quarter — its worst quarter since December 2008.

The Nasdaq Composite Index (COMP) lost 65.36 points, or 2.6%, at 2,415.40. It fell 2.7% for the week, lost 6.4% for the month and 12.9% for the quarter.

Get a head start on what's coming up with our Week Ahead videos. Also, check out our new Trading Deck for the latest commentary and investing ideas.

Greg Morcroft assistant managing editor

 Europe Week Ahead: Will the ECB cut rates?

 U.S. Week Ahead: What to watch for in the fourth quarter

Amazon unveils new Kindle Fire tablet

Amazon.com Inc. (AMZN) lifted the wraps on its long-rumored tablet called the Kindle Fire — surprising investors with a $199 starting price that puts the device at a 60% discount to the cheapest version of the iPad. Amazon showed off the new tablet at a packed media event to about 300 journalists in New York. "We are building premium products at nonpremium prices," Chief Executive Jeff Bezos said. Read MarketWatch coverage of Amazon's Kindle Fire.

Merkel wins vote to expand Europe bailout

The German parliament on Thursday voted overwhelmingly to increase the size and flexibility of the euro-zone rescue fund, providing an important victory for Chancellor Angela Merkel as she battles growing public skepticism over the country's role in bailing out its currency partners. In a closely watched vote, 523 members of the Bundestag, the lower house of parliament, voted in favor of the enhanced powers, while 85 voted against and three abstained. More crucially, Merkel's ruling center-right coalition provided 315 votes, news reports said, meaning she didn't have to rely on the backing of opposition parties to win passage of the measures. Read MarketWatch coverage of German Parliamentary vote.

Bank of America setting debit card fee

Bank of America Corp. (BAC), the largest U.S. bank by assets, plans to charge customers a $5 monthly fee for making debit-card purchases starting early next year, according to an internal memo sent to bank executives. The fee will apply to customers with various checking accounts during any month they use their debit card to make a purchase. The fee will not apply to customers who do not use their debit card to make a purchase, or who only use it to make ATM transactions. Read MarketWatch coverage of Bank of America debit fee.

Something big is happening in the markets

The stock and bond markets are behaving in a way that, with only one exception at the depths of the 2008-09 crisis, they have not since 1958 — 53 years ago: The stock market's dividend yield is now above the interest rate on the 10-year Treasury note. For example, the dividend yield on the Dow is 2.8%, and on the S&P 500 it is 2.2%. The 10-year T-note yield, in contrast, is just 2%. This might not initially strike you as that big of a deal, but it is. Read Mark Hulbert's commentary on MarketWatch.

How to keep more of what you earn for retirement

It's not what you earn, but what you keep. That old adage is true when saving for retirement and it's equally important — if not more so — when it comes to withdrawing money from your various accounts earmarked for retirement. But the conventional wisdom and advice about the best way to take money out of those accounts just might leave you with less, not more, after-tax wealth. As a general rule, it's usually better to sell long-term investments held in taxable accounts instead of taking money from tax-deferred accounts before you have to. But this general rule could be hazardous to your after-tax income and after-tax wealth. Read Robert Powell commentary on MarketWatch.

Why it makes sense to buy a newly built home

Given the bloated supply of existing homes for sale, including a glut of foreclosure there aren't many people willing to shell out a premium price for a newly built house. Despite a likely higher price tag, a home builder will say that you're buying a better product when you buy new. For one, it's a home designed for the way Americans live today, maximizing the usability of space and offering amenities that speak to modern needs, such as big closets. Plus, new homes are built to be more energy-efficient. Read Amy Hoak's Home Economics column on MarketWatch.

Where the good jobs are

Unemployment remains high and the job market is tough for many. But people still need other people to repair their cars, do their accounting, repair computers, write apps and even sell them things. And there currently are more opportunities in those occupations than others, according to online job postings. Here's are some examples of occupations with relatively good online job ad growth. Read Ruth Mantell's On The Job column, on MarketWatch.

Why European stocks are screaming buy

Europe is bust. Buy Europe! That, at least, is the call from the smartest investor I know — Crispin Odey, a hedge-fund manager in London. "It may be confusing to find someone who believes that a crisis is on its way but is also happy to buy equities ahead of the crisis," he writes in his latest bulletin to investors. "My reason is that the worries have been there for so long, the causes are so obvious and the valuations are so cheap that this is a case of buying early. For me, the crisis will bring resolution and with it higher prices." Read Brett Arends's column on MarketWatch.

10 things your government has done for you

"The government is the problem," they say. "The government can't create jobs." Or: "The government should just get out of the way." How many times over the past three — or 30 — years have you heard conservatives (and even a few liberals) say that there's no role for government in fixing our economy? They're wrong, but this constant refrain is having an impact on our political system; it's narrowing our options as we struggle with excessive unemployment, burdensome debt and wasted lives. But the idea that the American government can do nothing right has become so pervasive that I feel compelled to point out what used to be obvious to everyone: Our democratic government — along with you, me and our ancestors — created the conditions that have allowed private citizens and companies to build a great nation. This land was made by you and me. Here are the 10 best things the government has done to improve our lives. Read Rex Nutting's commentary on MarketWatch.

3 investments to hit back at inflation

The Labor Department recently released August inflation numbers, showing that consumer prices rose 0.4% on the month. That's an annualized rate of 3.8% and the ugliest pace since November 2008. But don't get mad at inflation. Get even. A savvy investor can profit from the big inflationary trends now and hopefully offset the damage caused by price increases — and then some. Here are three moves to make now to profit from inflationary pressures. Read Jeff Reeves's investment advice on MarketWatch's new Trading Deck.

Kitco New York Market Close Report



New York Market Close Sep 30/11 05:21 PM EDT
Metals
Bid
Ask
Change
Low
High
Gold
1624.80
1625.80
8.90
0.55%
1606.10
1635.80
Silver
29.97
30.07
-0.70
-2.28%
29.56
31.27
Platinum
1523.00
1529.00
3.00
0.2%
1498.00
1562.00
Palladium
611.00
616.00
-9.00
-1.45%
604.00
639.00

U.S. government bond funds surge in quarter: MarketWatch | Personal Finance Daily


MarketWatch

Personal Finance Daily
SEPTEMBER 30, 2011

U.S. government bond funds surge in quarter

By MarketWatch



Don't miss these top stories:

Most fund investors looked at U.S. Treasury debt and state-issued debt favorably in the history-making third quarter, even as the bond market's already largely unchecked 2011 win streak gets more and more stretched, Rachel Koning Beals writes in the first in our three-part special report on third-quarter mutual fund and ETF performance. Look this weekend for reports on international and U.S. stock funds. See the special report, along with a recap of previous quarters' reports, here.

Also on MarketWatch today, Kim Hjelmgaard offers an inside look at the cloistered world of the international diamond business and explains how the pricing of polished diamonds is a contested practice going through industry reexamination.

Anne Stanley , Managing Editor, Personal Finance

U.S. government bond funds leap in third quarter

It's been a history-making third quarter in financial markets, featuring events that renewed investor demand for the relative security of bond funds. The Fed dusted off a program to manipulate the yield curve that the U.S. central bank had last used some 50 years ago. And, the U.S.'s sterling credit rating got an unprecedented downgrade. These were two moves that in theory should have had a noticeable impact on the government-debt yield curve — but in reality caused barely a ripple.
Read more: U.S. government bond funds leap in third quarter.


Diamond prices latest frontier in industry battle

Diamonds, coveted by millions of people around the world, undertake a convoluted journey from the earth's interior to a prized consumer object capable of holding deep emotional meaning.
Read more diamond prices latest frontier in industry battle.


Awaiting FHA changes on refinancing

The wheels of government grind slowly, Lew Sichelman writes, but those who refinance their FHA-insured loans could, someday, be in for a big payday.
Read more: Awaiting FHA changes on refinancing.


Currency rates, season make Europe a deal

If you called off your summer European trip this year because airfares skyrocketed and the euro/dollar exchange rate meant that meals had to be kept to a minimum, you might want to start packing now.
Read more: Currency rates, season make Europe a deal.


ECONOMY AND POLITICS

Incomes fall for first time in almost two years

Personal income declines in August for the first time since October 2009, easing 0.1%, as consumer spending moderates from a strong pace in July. The savings rate hits its lowest level since November 2009.
Read more: Incomes fall for first time in almost two years.


Consumer sentiment rises in September

After tumbling in August, a gauge of consumer sentiment rises in September, while remaining at relatively low levels, according to data from Thomson Reuters/University of Michigan.
Read more: Consumer sentiment rises in September.


China PMI points to flat September activity

HSBC's survey of Chinese purchasing managers for September comes in flat with its reading for August, indicating conditions remain marginally in contraction.
Read more: China PMI points to flat September activity.


U.S. missed chance to hike bank capital: report

Regulators missed a chance to further strengthen the quality of the capital base of big banks by not waiting until the institutions were in a position to meet private Federal Reserve guidance for paying back taxpayer-infusions, a watchdog reports.
Read more: U.S. missed change to hike bank capital.


INVESTING

Gold, silver bullion coins and their ‘fondle factor'

If you're looking for a safer place to park your money these days, gold and silver bullion coins may be it, but don't expect to make a quick buck.
Read more: Gold, silver bullion coins' ‘fondle factor.'


Market's dividend yield higher than 10-year Treasury note's

Believe it or not, the stock and bond markets are behaving in a way that, with only one exception at the depths of the 2008-2009 credit crisis, they have not since 1958 — 53 years ago: The stock market's dividend yield is now above the interest rate on the 10-year Treasury note, writes Mark Hulbert.
Read more: Market's dividend yield higher than 10-year Treasury note's.


The King of Balloons isn't just a blowhard

Treb Heining started small as a balloon vendor at Disneyland. Now, he's transformed the whole industry, Al Lewis reports.
Read more: The king of balloons isn't just a blowhard.


Dipping into savings isn't a long-term growth plan

The problem in the economy isn't spending, it's incomes, writes Rex Nutting.
Read more: Dipping into savings isn't a long-term growth plan.


Many markets are deep in bear territory

The S&P may not technically be in bear-market territory yet, but many market sectors are. And huge swaths of overseas markets are deep in a real bear market.
Read more: Many markets are deep in bear territory,

Kodak shares plummet on restructuring fears: Reuters - Business Update



News
LATEST NEWS
Kodak shares plummet on restructuring fears
(Reuters)- Eastman Kodak Co shares fell almost 70 percent on Friday afternoon on concerns the photography pioneer could file for bankruptcy. | Full Article

Wall Street ends worst quarter since 2008 meltdown
September 30, 2011 04:36 PM ET
NEW YORK (Reuters) - Stocks ended their worst quarter since the depths of the 2008 credit crisis, crippled by Europe's debt debacle, a U.S. credit downgrade and a sputtering global economy. | Full Article
SEC finds failures at credit raters
September 30, 2011 12:38 PM ET
WASHINGTON (Reuters) - Securities and Exchange Commission staff found "apparent failures" at each of the 10 credit rating agencies they examined, including Standard & Poor's, Moody's, and Fitch, the agency said on Friday in its first annual report on credit raters. | Full Article
JPMorgan, BofA sued over mortgage debt losses
September 30, 2011 04:34 PM ET
(Reuters) - JPMorgan Chase & Co and Bank of America Corp were hit with new lawsuits by investors claiming losses on $4.5 billion of soured mortgage debt, adding to litigation targeting the two largest U.S. banks. | Full Article
Sarkozy to meet Merkel in coming days on Greece
September 30, 2011 03:49 PM ET
PARIS (Reuters) - French President Nicolas Sarkozy said on Friday he would meet German Chancellor Angela Merkel in the coming days in Germany to discuss Greece's debt troubles, calling support for Greece a "moral obligation" for Europe. | Full Article

NYT: Afternoon Business News: Patricia Kluge Loses Her Fortune in the Downturn



BUSINESS

Patricia Kluge Loses Her Fortune in the Downturn

By GERALDINE FABRIKANT
The former wife of the media magnate John Kluge is in bankruptcy after losing millions in a risky winery venture in Virginia.

Austria Approves Euro Bailout Fund

By NICHOLAS KULISH
The measure, supporting an expansion of the euro currency zone's bailout fund for heavily indebted countries, passed following a bruising debate in Parliament.

Stocks Fall on Fresh Economic Data

By DAVID JOLLY
Shares dipped following disappointing data on American spending and incomes and European inflation.

Troubled Poker Site May Be Bought by French Entrepreneur

By MATT RICHTEL
Full Tilt Poker has agreed to be bought by Groupe Bernard Tapie, which will repay customers who have not been able to withdraw their gambling money.

S.E.C. Finds Problems at Credit-Rating Agencies

By EDWARD WYATT
The Securities and Exchange Commission report said the companies repeatedly failed to follow their own procedures, but it did not identify the companies by name.

Will Obama's foreign policy wins cancel out economy : CBS NEWS | Political Hotsheet Top Stories

The CBS News Political Hotsheet newsletter


CBS POLITICAL HOTSHEET TOP STORIES    



   
John Dickerson's reporters roundtable on the U.S. killing of al-Awlaki and its impact on the 2012 race for the White House
Read full story
Will Obama's foreign policy wins cancel out economy losses?

Huckabee mulling another White House run? Former Arkansas governor reportedly approached by conservatives unhappy with current crop of candidates; previously ruled out 2012 run

For Possible concert draws attention to protest movement, but decision by unions to join up is the real story

Ron Paul, ACLU condemn Anwar al-Awlaki killing Critics say U.S. government should not be authorizing the killing of American citizens without due process of the law

Obama blames debt debate for weak fundraising Mr. Obama's campaign is blaming the debt ceiling standoff this summer for taking away time from fundraising for the president

The Economist | Selected New Articles: Americas View / Audio / Banyan /... and more

The Economist


Americas view: Steps forward and back
Mexico's supreme court backs conservative anti-abortion laws
read more »

Audio: Not giving up
Our Asia editor and Pakistan correspondent discuss the Haqqani network
listen »

Banyan: Mistah Khurts, he free
A murky Mongolian saga
read more »

Eastern approaches: Britain looks east
An interview with Nick Clegg, deputy prime-minister of Britain, in Warsaw
read more »

Babbage: Difference Engine
How to deter thieves intent on swiping electronic goodies
read more »

Game theory: The gnarled and the gnarly
Why so many top surfers are relatively old
read more »

Daily chart: Retreat!
The currency war, continued
read more »

Online debate: The yuan
This house does not believe the yuan will be the world's main reserve currency within ten years
read more »

The Economist's Fine Properties Fair—online October 18th and 19th 2011—FREE
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Morning Market Briefing

Commentary
Stocks are likely to come under pressure in early trading on Friday, as traders express continued concerns about the outlook for the global economy. The major index futures are currently pointing to a sharply lower open, with the Dow futures down by 130 points. (Sep 30, 2011) Full Article
Economic News
Industrial output in South Korea climbed 4.8 percent on year in August, Statistics Korea said on Friday, expanding for the 26th consecutive month. (Sep 30, 2011) Full Article
Industrial output in Japan was up a seasonally adjusted 0.8 percent on month in August, the Ministry of Economy, Trade and Industry said on Friday in a preliminary reading - continuing to reflect the results of the devastating earthquake and tsunami on March 11. (Sep 30, 2011) Full Article
International rating agencies Standard & Poor's and Fitch Ratings on Friday downgraded New Zealand's credit rating by one notch, citing the economy's deteriorating external position. (Sep 30, 2011) Full Article
China's manufacturing activity shrank only marginally in September despite the weakening global growth, the latest report from Markit Economics showed Friday. However, inflation quickened to a four-month high during the month. (Sep 30, 2011) Full Article
German retail sales dropped at the steepest pace in more than four years in August as mounting concerns about the potential impact of the region's debt crisis made consumers reluctant to spend. (Sep 30, 2011) Full Article
Eurozone annual inflation increased unexpectedly in September to the highest level since October 2008. (Sep 30, 2011) Full Article
Personal income in the U.S. showed a modest decrease in the month of August, according to a report released by the Commerce Department on Friday, although the report also showed a continued increase in personal spending. (Sep 30, 2011) Full Article
Earnings News
Micron Technology Inc. (MU) Thursday posted a fourth-quarter loss as a result of lower margins and a drop in sales. While the loss was contrary to analysts' estimates, revenues topped the market view. (Sep 30, 2011) Full Article
Ingersoll Rand plc (IR) Friday reported lowering its earnings and revenues estimates for the third-quarter and full-year 2011 due to “lower than expected” demand in the North American commercial and residential security markets. (Sep 30, 2011) Full Article
Broker Ratings Changes
FBR Capital Markets Downgrades CubeSmart (CUBE) To Underperform From Outperform With $8 down from $12.50 Price Target
(Sep 30, 2011) 
RBC Capital Markets Lowers Seadrill Ltd. (SDRL.L) To Sector Perform From Outperform With $31 down from $37 Price Target
(Sep 30, 2011) 
RBC Capital Markets Starts SandRidge Permian Trust (PER) At Outperform With $24 Price Target
(Sep 30, 2011)
Stocks To Watch
This independent energy company comes on our radar with consistent operating results, growing production, and expanding operating margin. (Sep 30, 2011) Full Article

Real Disposable personal income decreased .03%. Financial and Forex Info News | ESA - Personal Income and Outlays Stats.


Personal income in August 2011 fell 0.1 percent. Nominal personal consumption expenditures (PCE) increased 0.2 percent and real PCE was unchanged. Nominal disposable personal income (DPI) was also unchanged and real DPI decreased 0.3 percent. The personal saving rate as a percentage of DPI was 4.5 percent in August.

Stocks & Markets in the News: Futures Lower based on fears of a global slowdown.

Stock futures lower as China manufacturing contracts NEW YORK (Reuters) - Stock index futures fell on Friday after data showing a continued contraction in China stirred fears the global economy was slowing. | Full Article


Britain's cure for economic slowdown - drive faster

Britain's cure for economic slowdown - drive faster LONDON (Reuters) - The British government has come up with a literal cure for economic slowdown -- it wants drivers to drive faster on the nation's motorways. | Full Article

Kitco Market Hourly Report



Market snapshot as of Fri Sep 30 07:01:03 EDT 2011 New York time (GMT - 5)
Gold
 Bid 1621.3
 Ask 1622.3
 Change
5.4
0.33%
 High 1635.8
 Low 1614.2
Silver
 Bid 30.43
 Ask 30.53
 Change
-0.24
-0.78%
 High 31.27
 Low 30.32
Platinum
 Bid 1526.0
 Ask 1534.0
 Change
6.0
0.39%
 High 1562.0
 Low 1518.0
Palladium
 Bid 617.0
 Ask 622.0
 Change
-3.0
-0.48%
 High 639.0
 Low 613.0

London Fix
  Gold Silver Platinum Palladium
  AM PM - AM PM AM PM
 $USD   1629.0  0.0  0.0  1538.0  0.0  627.0  0.0

Inside The Mind Of The UBS 'Rogue' Trader: Economy Watch



Inside The Mind Of The UBS 'Rogue' Trader

30 September 2011. There have been many rogue traders in the course of financial history. Bernard "Bernie" Madoff operated the world's largest Ponzi scheme and was sentenced to 150 years behind bars in June 2009. One would imagine that a recent precedent in Madoff would deter financial fraudsters from striking again, at least for a while. Apparently not. Click here to continue reading.

mock image
T
 
he gigantic $2.3 billion losses that Union Bank of Switzerland is blaming on a Ghanaian-born "rogue" trader have added power to the elbows of all those who believe that "casino" banking ought to be completely separated from "utility" banking and should never be underwritten by the taxpayer.
UBS, whose City of London acquisitions have included the merchant bank SG Warburg and broker dealers Phillips & Drew, has yet to provide a credible excuse of what went wrong, though 31-year-old trader Kweku Adoboli has been charged with "dishonestly abusing" his position as a senior trader in the bank's global synthetic equities division, with the intention of "making a gain for [himself], causing losses to UBS or to expose UBS to risk of loss." The Nottingham University-educated trader also stands accused of falsifying exchange-trade fund transactions dating back to 2008.
There have been reams of speculation about how the Swiss bank and/or Adoboli incurred these massive losses. There has also been some discussion as to whether the bank's German-born chief executive Oswald Gruebel will be able to survive, and whether the bank will now be forced to pull out of investment banking altogether (this was, after all, the area in which the bank lost an astonishing €50bn during the subprime crisis).
Click here to continue reading.

Reuters UK - Finance Weekly


News
LATEST NEWS
Consumer confidence reverses decline in September
LONDON (Reuters) - Confidence among British consumers improved this month for the first time since May, after shoppers' took a more positive view of the economic outlook, a survey showed on Friday. | Full Article

CBI calls for measures to help home buyers
30 SEP 2011 08:30 BST
LONDON (Reuters) - The government should back measures to help home buyers and boost infrastructure spending to get the economy moving, the Confederation of British Industry said on Thursday. | Full Article
Mortgage approvals highest since December 2009
29 SEP 2011 09:34 BST
LONDON (Reuters) - Mortgage approvals rose more strongly than expected last month to hit their highest level since December 2009, and new lending to consumers also picked up, Bank of England figures showed on Thursday. | Full Article
House prices edge higher in September - Nationwide
29 SEP 2011 08:46 BST
LONDON (Reuters) - House prices failed to recover from August's slide this month, due to sluggish demand for new properties and a weak jobs market, data from mortgage lender Nationwide showed on Thursday. | Full Article
G20 risks "massive jobs shortfall" in 2012
27 SEP 2011 11:56 BST
GENEVA (Reuters) - The world's major economies are heading for a "massive jobs shortfall" by the end of next year if governments do not change policy tack, the International Labour Organization said in a study published on Monday. | Full Article

DAILY INVESTOR
SGX, LSE tying up for London Metal Exchange bid - source
30 SEP 2011 11:09 BST
HONG KONG (Reuters) - The Singapore Exchange Ltd is tying up with London's main bourse to make a joint bid for the London Metal Exchange, a source told Reuters on Friday, as the world's largest metal market seeks a suitor in a deal that could be worth 1 billion pounds. | Full Article
Europe set for worst quarter since 2008
30 SEP 2011 10:22 BST
LONDON (Reuters) - World stocks fell on Friday, with European shares set to post their biggest quarterly decline since the collapse of Lehman Brothers three years ago, as investors grappled with a deepening euro zone debt crisis and a slowdown in global growth. | Full Article
Analysis -Greek banks face nationalisation if haircut too severe
30 SEP 2011 11:03 BST
ATHENS (Reuters) - Some of the biggest of Greece's debt-laden banks may be headed for nationalisation, particularly if debt restructuring becomes more aggressive and investors continue to dump their shares. | Full Article
FTSE weak in final session of turbulent quarter
30 SEP 2011 09:27 BST
LONDON (Reuters) - Top shares dropped back in early trade Friday, extending the previous session's falls, weighed by weakness in banks and miners in the final session of a turbulent month and third quarter. | Full Article
Japan fires fresh salvo on yen as economic upswing tails off
30 SEP 2011 10:23 BST
TOKYO (Reuters) - Japan said on Friday it will boost its currency intervention fund and keep watching dealers' trading positions in yet another effort to tame the yen in the face of growing evidence that its strength is stalling the economy's post-quake rebound. | Full Article

WORLD NEWS
Civilians flee Sirte battle, fighting hampers aid - U.N.
Yemen says al Qaeda cleric Awlaki killed
Seven Syrian troops die as armed resistance emerges
Exclusive - Concern grows over militant activity in Libya
Yemen's Saleh says will only quit if foes excluded