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Sep 2, 2011

Reuters - Daily Investor Update: Job growth stalls, fuels recession fears






News

LATEST NEWS
Labor market woes sink Wall Street
NEW YORK (Reuters) - Stocks tumbled 2 percent on Friday after data showing zero jobs growth in August brought investors face-to-face with the prospect of another recession. | Full Article

U.S. regulator sues major banks over mortgages
September 02, 2011 04:29 PM ET
WASHINGTON/NEW YORK (Reuters) - A U.S. regulator sued a series of big banks on Friday over losses on more than $41 billion in subprime mortgage bonds, which could hamper a broader government mortgage settlement with banks. | Full Article
Job growth stalls, fuels recession fears
September 02, 2011 04:33 PM ET
WASHINGTON (Reuters) - U.S. employment growth ground to a halt in August, reviving recession fears and piling pressure on both President Barack Obama and the Federal Reserve to provide more stimulus to aid the frail economy. | Full Article
Berkshire revised Wesco docs under SEC pressure
September 02, 2011 02:45 PM ET
NEW YORK (Reuters) - Berkshire Hathaway extensively revised documents related to the acquisition of Wesco Financial at the insistence of securities regulators, according to an April letter made public on Friday. | Full Article
Murdoch and son get big bonuses, James declines
September 02, 2011 04:36 PM ET
NEW YORK (Reuters) - News Corp awarded Rupert Murdoch and his son James big compensation increases, though James declined his bonus, citing controversy over a phone hacking scandal at the UK newspaper unit that he oversees. | Full Article
US TOP NEWS
U.S. regulator to sue major banks over mortgages
September 02, 2011 04:23 PM ET
WASHINGTON/NEW YORK (Reuters) - A U.S. regulator plans to sue major banks in coming days over subprime mortgage bonds, two sources said, in a lawsuit that may hamper a broader government mortgage settlement with banks. | Full Article
Obama backtracks on smog plan
September 02, 2011 03:40 PM ET
WASHINGTON (Reuters) - President Barack Obama put a stop on Friday to new rules that would limit smog pollution, unexpectedly reversing course on a key policy measure after businesses argued it would kill jobs and cost them billions of dollars. | Full Article
Analysis: Damages ruling may be pivotal in BP case
September 02, 2011 12:58 PM ET
NEW YORK (Reuters) - A key court ruling in the Gulf of Mexico oil spill litigation could change the landscape in the massive case -- encouraging more plaintiffs to sue, or spurring the parties to make a deal to resolve what could be a long string of trials over damages. | Full Article
Fed asks BofA to list contingency plan: report
September 02, 2011 04:12 AM ET
(Reuters) - The Federal Reserve has asked Bank of America Corp to show what measures it could take if business conditions worsen, the Wall Street Journal said, citing people familiar with the situation. | Full Article
Napolitano: no 9/11 anniversary Qaeda plot seen
September 02, 2011 11:49 AM ET
WASHINGTON (Reuters) - Homeland Security Secretary Janet Napolitano said on Friday there was no credible intelligence that al Qaeda was plotting an attack for the September 11 anniversary, but the United States remained at a heightened state of vigilance. | Full Article
HEALTH NEWS
Space missions may damage eyes
Obese kids have more asthma flare-ups
Folate tied to lower colon cancer risk
Two U.S. children develop flu from pigs: CDC
9/11 firefighters have higher cancer risk: study

U.S. sues 17 big banks over mortgage-backed securities: Banking Fraud: Market Pulse | MarketWatch|

By Ronald D. Orol 
 
WASHINGTON (MarketWatch) -- A federal U.S. agency on Friday afternoon sued seventeen major banks, arguing that they misrepresented the quality of mortgage securities they put together and sold in the run-up to the bursting of the housing bubble. The Federal Housing Finance Agency sued the banks over soured mortgages including charges against Bank of America Corp. BAC -0.14% over $6 billion in soured mortgages. It also sued Citigroup Inc. [S: C] over $3.5 billion in mortgages, Barclays over $4.98 billion in loans. 

MarketWatch | Weekly Roundup - Top Ten Stories Aug.29 - Sept 2

MarketWatch
Weekly Roundup
SEPTEMBER 02, 2011

MarketWatch top 10 stories Aug. 29 - Sept 2

By Greg Morcroft, MarketWatch



NEW YORK (MarketWatch) — U.S. stocks sank Friday, as a report showing the economy added no new jobs in August prompted investors to question what steps, if any, the U.S. Federal Reserve will take to bolster the economy.

The Dow Jones Industrial Average (DJIA)  finished the daily session down 253.08 points, or 2.2%, at 11,240.49. The S&P 500 Index (SPX)  fell 30.46 points, or 2.5%, to 1,173.96, and the Nasdaq Composite Index (COMP) lost 65.71 points, or 2.6%, to 2,480.33.

The weekly results for the indexes were mixed, with the Dow industrials off 0.4% and the S&P 500 Index down 0.2%, marking a second straight week of declines for both. The Nasdaq Composite, meanwhile, clung to a minor weekly gain of 0.02%.

Also, please be sure to watch our Week Ahead videos for Asia and Europe.

 Europe Week Ahead ECB, Bank of England rate decisions

 Asia Wee Ahead: Asia's Next Round of Interest-Rate Decision

Greg Morcroft, assistant managing editor

Hiring grinds to halt in August

The U.S. economy did not add any jobs in August, a weak performance that casts a cloud over the sputtering recovery, economic data showed Friday. Nonfarm payrolls were unchanged in August, lower than the 53,000 gain expected by economists surveyed by MarketWatch and the weakest performance in nonfarm payroll since a decline in September 2010. The unemployment rate held steady at 9.1% in August, as expected. Read MarketWatch's economic coverage.

U.S. said ready to sue big banks over mortgages

A federal agency is ready to sue more than a dozen major banks, arguing that they misrepresented the quality of mortgage securities they put together and sold in the run-up to the bursting of the housing bubble, according to a published report. The Federal Housing Finance Agency, which oversees government-seized mortgage firms Fannie Mae / and Freddie Mac, is expected to seek billions in compensation. The lawsuits are expected to be filed in federal court Friday or Tuesday. Read MarketWatch coverage of banking sector's latest legal trouble.

Avoid these 5 ‘victims of Apple and Google'

It's time we add a new subsector to the technology category. Along with hardware, software and chips, the latest group could well be Victims of Apple(AAPL)  and Google (GOOG) . As the two monsters of innovation grow ever more dominant, many other companies are seeing their products and services marginalized. The result has been an expanding roster of stocks that investors need to avoid despite their tempting, single-digit profit-to-earnings ratios. Read more on MarketWatch about Apple and Google's victims.

Contrarians are bullish

The sentiment stars are aligned nicely in favor of the stock market's rally continuing at least a while longer.That's because, despite an impressive rally over the last two weeks, the average adviser remains profoundly skeptical that the advance will continue. That's a bullish sign, according to contrarian analysis.Consider the average recommended equity exposure among the short-term market timers tracked by the Hulbert Financial Digest (as measured by the Hulbert Stock Newsletter Sentiment Index, or HSNSI). On Aug. 10, the day of this summer's closing low, this average stood at minus 16.6%, which meant that the average short-term timer was at that time recommending to clients to allocate a sixth of their equity portfolios to going short.

Looking at a scary September

The much ballyhooed Jackson Hole Federal Reserve conclave has come to a close, and now exchange-traded fund investors face a treacherous September. This September is likely to be particularly volatile as Federal Reserve Chairman Ben Bernanke deferred any new simulative action until the now two-day Fed meeting on Sept. 20 and 21. Seasonality also points to a rocky ride ahead as Septembers are historically the worst performing month for the stock market. Since 1928, September has recorded more down months than any other month and also holds the record for the worst monthly drop in history which came in September, 1931, when the Dow lost -30%. Read more about rocky ride John Nyardi sees for September.

 See video

Follow Buffett at your own risk

When it comes to Warren Buffett, an old axiom comes to mind: "It takes money to make money." For Buffett's legion of copycats, there is an addendum: "... and unless your name is Warren Buffett, even if you have money, you might not make money at all." That's the reality facing investors after Buffett shocked Wall Street on Friday by announcing a $5 billion investment through Berkshire Hathaway in star-crossed Bank of America Corp. Simply put, this is a great deal for Warren Buffett. For everyone else, it's probably a loser. Read David Weidner's Read David Weidner's commentary on Warren Buffett's Bank of America investment.

Uncertainty drove August trading; it could last

Dwindling confidence in policy makers to solve global economic problems spawned a level of uncertainty that fueled August's volatility spike and is likely to be a market fixture for the foreseeable future, say money managers.Even though stocks have hit an updraft in recent days, the major exchanges have dropped in August, losing about 4% to 6% and — except for the Dow average — relinquishing gains for the year. Volume and volatility measures jumped. Read MarketWatch coverage of August volatility.

The regulator who could block the mortgage refi plan

A possible White House effort to kick-start the moribund housing market, and create a major backdoor stimulus to boost consumer spending, may be undercut by the regulator for government-seized housing giants Fannie Mae and Freddie Mac. for the White House to propose such an approach it would need the Federal Housing Finance Agency, an independent regulator which oversees Fannie Mae and Freddie Mac, to implement it. That may be difficult, regulatory onlookers say, because FHFA's acting chief Edward DeMarco has sought to limit costs of the two firms to taxpayers and that such a program would likely hike taxpayer expenditures. Read about Edward DeMarco's make or break decision on refi plan.

U.S. sues to block AT&T buying T-Mobile

The Justice Department on Wednesday sued to block AT&T's (T) planned $39 billion of acquisition of T-Mobile USA , which would concentrate 80% of the mobile phone market between two competitors. The Justice Department said the deal if completed would reduce competition and raise prices. Deputy Attorney-General James Cole said price, quality and innovation would be diminished if the deal went through. He noted the two companies compete in 97 of the 100 top markets. Read MarketWatch coverage U.S. versus AT&T.

Foreclosures make up 31% of home sales

Thirty-one percent of home sales in the second quarter were on properties in some stage of foreclosure or sold by the bank, according a report released by RealtyTrac. That's up from 24% at the same time last year. Homes in foreclosure or bank owned had an average sales price of 32% below the average price for non-foreclosure homes. "The jump in pre-foreclosure sales volume coupled with bigger discounts on pre-foreclosures and a shorter average time to sell pre-foreclosures all point to a housing market that is starting to focus on more efficiently clearing distressed inventory through more streamlined short sales — at least in some areas," said James Saccacio, chief executive of RealtyTrac. Read MarketWatch's Real Estate Weekly.

NYT: Afternoon Business News: The Expensive Goodbye For Bank of New York Mellon's Kelly


Latest News at time of Posting

5 minutes ago
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13 minutes ago
Bank Suits Over Mortgages Are Filed
14 minutes ago
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BUSINESS

Wall Street Slides After Jobs Figures

By CHRISTINE HAUSER
The Dow Jones industrial average quickly lost more than 200 points after the government reported that job growth was nil in August.

U.S. Is Set to Sue a Dozen Big Banks Over Mortgages

By NELSON D. SCHWARTZ
The federal agency that oversees Fannie Mae and Freddie Mac is expected to sue Bank of America, Goldman Sachs and others, accusing them of failures in vetting mortgages during the housing bubble.

Sovereign Debt Worries Flare Again in Europe

By MATTHEW SALTMARSH AND NIKI KITSANTONIS
Concerns resurfaced after talks between Greece and its foreign creditors were interrupted and the head of the European Central Bank warned Italy to stick to its austerity program.
Media Decoder Blog

News Corp. Board Undergoes a Shuffle

By JEREMY W. PETERS
James W. Breyer, a prominent venture capitalist, will be nominated to the News Corporation board, the company said. Two longtime board members, Kenneth E. Cowley and Thomas J. Perkins, are leaving.
Bits Blog

AOL Says Arrington No Longer Works at TechCrunch

By CLAIRE CAIN MILLER
A day after Michael Arrington, the TechCrunch blogger, introduced a venture capital fund, AOL said his editorial role was over. Mr. Arrington says that he is confused by AOL's back-and-forth.

bBNET - CBS InterActive Business Network: Why You Need a Social Media Diet


logo

Why You Need a Social Media Diet

The best marketing results may come from avoiding the social media marketing buffet table. Read More

Are You Sure Your Company Blog Is Legal?

The Internet is forever. Are you sure you want to publish that? BNET's Evil HR Lady offers seven reminders that should make you think twice. Read More

Is Cyberloafing Good for You?

New research offers surprising ideas on how to use the Web to boost your brainpower. Read More

5 Clever Ways to Trick Out Wikipedia

These wikishortcuts can help you be the best informed person on earth. Read More on CNET

VIDEO: The Future of Cash Registers

The forthcoming cash register revolution will likely save you heaps of time -- and change your life for good. Read More

Dow ends down 253 points on weakest jobs report since September 2010: MarketWatch - Dow Index at Close




Sep 2, 2011 4:05 p.m.
11,240.26
-253.31 -2.20%
Volume 174.65m

Index Components

Symbol Last Change % Change Headlines
T 28.09 -0.18
-0.64%
VZ 35.54 -0.34
-0.95%
KO 69.73 -0.72
-1.02%
MCD 89.14 -0.93
-1.03%
PG 62.58 -0.68
-1.07%
WMT 52.02 -0.63
-1.20%
KFT 34.28 -0.53
-1.52%
MSFT 25.80 -0.41
-1.56%
MRK 32.38 -0.52
-1.58%
INTC 19.64 -0.35
-1.75%
XOM 72.15 -1.34
-1.82%
JNJ 64.08 -1.25
-1.91%
IBM 166.94 -3.39
-1.99%
AXP 48.50 -1.00
-2.02%
CVX 96.48 -2.04
-2.07%
DD 46.76 -1.06
-2.22%
PFE 18.48 -0.43
-2.27%
HD 32.18 -0.76
-2.29%
TRV 48.91 -1.30
-2.59%
CSCO 15.41 -0.41
-2.59%
MMM 79.40 -2.21
-2.71%
DIS 32.47 -0.91
-2.73%
UTX 71.05 -2.00
-2.74%
GE 15.76 -0.45
-2.75%
BA 64.05 -2.00
-3.03%
[BA] Boeing to deliver first 747-8 freighter Sept. 19 - 10:02 a.m.
AA 12.05 -0.45
-3.56%
CAT 85.36 -3.19
-3.60%
JPM 34.64 -1.66
-4.57%
HPQ 24.36 -1.31
-5.10%
The Dell opportunity - 3:09 p.m.
BAC 7.26 -0.66
-8.28%
[BAC] S&P financial stocks close off 4.1% - 1 min ago

NFA enforcement actions: NFA takes emergency enforcement action against SureInvestment, LLC and its principal

Money Show Traders Daily Alert: Corey Rosenbloom, 5 Most Overbought and Oversold Stocks




Traders Daily Alert
Tips for Traders
Silver ETF Poised for Major Move, Frank Kollar

Options Idea
Traders Increase Put Positions on TZOO, Andrea Kramer

Charts in Play
Get an Edge on S&P...from Crude Oil, Tom Aspray

Currency Corner
Why the USD Index Needs an Overhaul, Justice Litle

Trading Idea of the Day
5 Most Overbought and Oversold Stocks, Corey Rosenbloom

Daily Market Studies
Trading Outlook for Today: Sept. 2, Daniel Gramza

MoneyShow.com Exclusive Interviews
3 Pro Habits Rookie Traders Can Copy, Travis McKenzie

Today's Featured Videos
How Moving Averages Can Help Your Trading, Toni Turner
Make One Market Your Specialty, Hubert Senters

The Economist | Selected New Articles: Free exchange: Treading water / Prospero: After the unthinkable / Schumpeter: The incredible shrinking agency... and more

The Economist




Free exchange: Treading water
America's jobs report disappoints again
read more »

Prospero: After the unthinkable
In the days and weeks after 9/11 a number of writers asked what the future of fiction could be after such a rupture
read more »

Schumpeter: The incredible shrinking agency
The boss of America's National Labour Relations Board steps down, putting President Obama in an awkward situation
read more »

Babbage: A whole lot of shaking
Small earthquake in Virginia rattles more than nerves
read more »

Banyan: An oil spill in China
Multinationals, it turns out, are evil after all
read more »

Video: Robert Mundell on growth
The Nobel prize-winning economist on why Obama must lower corporate income tax, and on tough but vital adjustments in Europe
watch »

Daily chart: Running aground
Shipping traffic through the Suez Canal is closely correlated with world GDP
read more »

Online debate: Fiscal stimulus winner
Those favouring the proposition that America needs substantial new fiscal stimulus carried the day, 60% to 40%
read more »

Kitco Market New York Market Close Report,

CMI - Gold & Silver
Spot Prices as of the close of trading in New York
As of: Friday September 02, 2011

  Today Change Week Ago Month Ago Year Ago
Gold $1,875.95 +$46.60 $1,796.35 $1,641.70 $1,252.35
Silver $43.08 +$1.54 $41.02 $40.12 $19.69
Platinum $1,887.40 +$31.60 $1,829.40 $1,796.00 $1,553.60
Palladium $777.10 -$14.10 $759.70 $828.90 $525.55

Dollar up as investors shun riskier assets: Currencies | MarketWatch



By V. Phani Kumar and William L. Watts, MarketWatch 

NEW YORK (MarketWatch) — The dollar rose against major currencies Friday as risk aversion mounted after a keenly-awaited nonfarm payrolls report showed the U.S. economy added zero jobs in August, pulling investors toward asset classes perceived to be safer. 

The dollar index DXY +0.20% , which measures the greenback against a basket of six other currencies, climbed to 74.68 from 74.500 in late North American trading on Thursday. The index had hit a low of 74.31 earlier, as the weak jobs report raised questions about the state of the nation’s economy. 



Global gloom hits Asian factories
Factory activity around the world is stalling, including in many parts of Asia. 
David Watt, a senior fixed income and currency strategist at RBC Capital Markets, said the “decidedly negative” opening for U.S. stocks and the dollar’s safe haven appeal pulled the currency higher after uncertainty weighed the greenback immediately after the payrolls report. 

The nonfarm payrolls report released earlier Friday showed that the U.S. economy added zero jobs in August. That was way short of analyst expectations for an increase of 53,000 during the month. Payroll counts for June and July were also revised lower. 

The data marks the weakest performance in the payrolls data since a decline in September 2010. Read full story on the payrolls data. 
 
“Weak employment data this month and changes to last month’s results will not help assuage anxiety over the possibility of the economy falling back into recession,” Citigroup analysts wrote to clients in a report. 

“Stagnating economic and employment data may also force the Fed to seriously consider taking additional action to stimulate the economy,” they added.
The euro EURUSD -0.45%  lost ground and was fetching $1.4206, versus $1.4270 in late North American trading Thursday.
The Dow Jones Industrial Average DJIA -1.82%  sank 1.5% and the S&P 500 index skidded 1.7% in afternoon trading after the jobs data. Read more on U.S. stocks.
Renewed turmoil surrounding Greece, with the International Monetary Fund and European Union suspending a mission to review the country’s compliance with its bailout terms until mid-September, put added pressure on the euro. Read about Greece’s budget review.
“European equity markets continue to correct, helped by the usual nightmare of European politics,” said Sebastien Galy, currency strategist at Societe General. “It is a familiar tune which we have heard in the past. This is just the latest episode in what will prove a stormy September.”
The British pound GBPUSD +0.21%  traded at $1.6201, up from $1.6175 late Thursday, but well off the day’s $1.6253 high.
But the Swiss franc and the Japanese yen — currencies that also reflect investor aversion toward risk — climbed against the greenback. 

The dollar USDJPY -0.28%  was changing hands for 76.78 yen against the Japanese unit, down slightly from the ¥76.82 it was buying in late trading Thursday. 

Against the Swiss currency USDCHF -1.08% , it was trading at 78.55 centimes, compared with the day’s high at 79.58 centimes. One-hundred centimes make a Swiss franc. 

Varahabhotla Phani Kumar is a reporter in MarketWatch's Hong Kong bureau. William L. Watts is a reporter for MarketWatch in Frankfurt. Sarah Turner in Sydney contributed to this report.