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Jul 25, 2012

Stocks and Markets in the News | After Hours: Whole Foods, Akamai shares leap after hours

By Carla Mozee, MarketWatch 

LOS ANGELES (MarketWatch)Shares of Whole Foods Market Inc. and Akamai Technologies Inc. rallied more than 10% Wednesday evening following better-than-expected quarterly results from the grocer and the online content-services provider. 

Whole Foods shares WFM -0.83%  bounced 11% higher to $93.80 as the company said fiscal third-quarter earnings were 63 cents a share, up from 50 cents a share, in the year-ago period. Analysts surveyed by FactSet expected 61 cents a share. Sales rose 14% to $2.7 billion, and comparable-store sales increased 8.2%. Whole Foods also raised its 2012 earnings target. 

Stock in Akamai AKAM +1.19%  jumped 11% to $31.41 following the company’s report of second-quarter adjusted earnings of 43 cents a share. The result was higher than the FactSet consensus estimate of 37 cents a share. Revenue of $331 million also surpassed Wall Street’s target of $326.2 million.
Revenue in the year-ago period was $319 million. Akamai’s profit was $44 million, or 24 cents a share, compared with $48 million, or 25 cents a share, in the same quarter of last year.

In dayside trading, blue-chips ended higher after Caterpillar Inc. CAT +0.15%  and Boeing Co. BA +0.32%  each raised their forecasts, leaving the Dow Jones Industrial Average DJIA +0.47%  up 59 points, or 0.5%, to 12,676.05.

But an earnings miss from Apple Inc. AAPL +0.55%  prompted a 4.3% fall in its shares, contributing to a 0.3% loss for the Nasdaq Composite Index COMP -0.31%  to 2,854.24. The S&P 500 Index SPX
  -0.03%  slipped less than 1 point to 1,337.89. More in Market Snapshot. 
 
Carla Mozee is a reporter for MarketWatch, based in Los Angeles.

CBS NEWS | Political Hotsheet Top Stories: Biden to firefighters: Romney doesn't get you

The CBS News Political Hotsheet newsletter
CBS POLITICAL HOTSHEET TOP STORIES    



   
Vice president uses speech to defend administration's call for "shared responsibility"
Read full story
Biden to firefighters: Romney doesn't get you

No letting up on A campaign spokesperson Wednesday rejected the idea that they are worried about the impact of Romney's attacks

Presidential debate formats announced The Commission on Presidential Debates detailed the formats of this year's presidential and vice presidential debates

Romney camp wants probe into Va. voter forms Campaign lawyer wants investigation into voter registration forms sent to deceased infants, family pets in Va.

Lingle blasts GOP Rep. who backed her Dem opponent Former Hawaii governor, a Republican, now running for Senate, criticizes Republican Rep. Don Young after he appeared in a campaign video with her opponent

BIV Today's Business News




Technology

computer and cellphone

Wertz launches tech micro-venture fund

Angel investor Boris Wertz has announced the launch of Version One Ventures, a new $15 million micro-venture capital fund focused on mobile and web technology across North America.

Politics and Policy

 

B.C. doctors sign four-year contract with province

B.C.’s doctors have voted in favour of a new four-year agreement with the provincial government, although critical issues of compensation and program funding have not been settled beyond two years.

Richmond city planner tapped by Vancouver

The City of Vancouver did not need to look far to find a replacement for Brent Toderian, the city planner fired six months ago. The city has hired Brian Jackson, former Richmond's director of development, as the city's new general manager of planning and development.

Mining and Energy

 

Teck Q2 profits fall by half compared with previous year

Vancouver-based Teck Resources Ltd.’s (TSX: TCK.A and B) profits fell to $312 million in 2012’s second quarter, compared with $663 million in the same quarter last year, on the heels of low commodity prices and global economic uncertainty.

Quebec power company makes B.C. acquisition

Quebec-based Boralex Inc. (TSX: BLX) is set to acquire a 22MW run-of-the-river hydroelectric project owned by Sequoia Energy Inc. near Gold Bridge, B.C.

Law

 

Richmond company fined $100K for tax evasion software

A company owned by well-known Richmond businessman Pius Chan has been fined $100,000 for fraud related to “zapping” software the company made and sold to help businesses to avoid paying taxes.

Stocks and Markets in the News | Wall Street at Close: U.S. stock-index gains limited to Dow industrials


NEW YORK (MarketWatch) - U.S. stocks closed mainly lower Wednesday as an earnings miss from Apple Inc. dented cheer in the technology sector. Upbeat outlooks from Caterpillar Inc. and Boeing Co. helped the Dow Jones Industrial Average avoid a fourth down session. The Dow industrials rose 58.73 points, or 0.5%, to 12,676.05. The S&P 500 index fell nearly half a point to 1,337.89. The Nasdaq Composite fell 8.75 points, or 0.3%, to 2,854.24. "Earnings are a mixed bag and we're getting a mixed reaction," said Art Hogan, a strategist at Lazard Capital Markets.

U.S. stock-index gains limited to Dow industrials

DealBook | DealB%K Afternoon Edition: Weill Calls for Splitting Up Big Banks


Wednesday, July 25, 2012
TOP STORY
Weill Calls for Splitting Up Big Banks
Weill Calls for Splitting Up Big Banks They were words no one ever expected Sanford I. Weill to utter. "What we should probably do," said the man who helped usher in the age of the financial supermarket, "is go and split up investment banking from banking."
  • DEALBOOK »
  •  
  • DEALBOOK HIGHLIGHTS
    Timothy F. Geithner, the Treasury secretary, answered questions from lawmakers on Wednesday.
    Facing Congress, Geithner Grilled on Rate-Rigging Timothy F. Geithner was grilled on Wednesday about the growing interest rate rigging scandal, as lawmakers questioned why he failed to thwart the illegal activity during the financial crisis.
    Europe Aims to Make Rate Manipulation a Criminal Offense The European Commission announced plans on Wednesday to make the manipulation of benchmark interest rates a criminal offense, while saying British authorities did not do enough to stop rate-rigging.
    Head of Barclays' Compensation Committee Resigns Barclays said on Wednesday that one of its directors, Alison Carnwath, had resigned from the beleaguered bank, citing undisclosed "personal reasons."
    Shareholders of London Metal Exchange Back $2.1 Billion Takeover Hong Kong Exchanges and Clearing won overwhelming support from London Metal Exchange's shareholders for its $2.1 billion takeover deal.
    Hong Kong Tycoon to Pay $1 Billion for British Gas Firm The bid for MGN Gas Networks by four companies controlled by Li Ka-shing, Asia's richest person, seeks to broaden his global footprint in the energy sector.
    New Enterprise Associates Raises $2.6 Billion Fund The venture capital firm, which has backed Groupon and Diapers.com, has raised $2.6 billion for its latest fund.
    BUZZ TRACKER
    Shell Strikes New Deals With 2 Chinese Oil Giants Royal Dutch Shell said on Wednesday that it had struck new partnerships with two Chinese oil companies, days after the China National Offshore Oil Corporation announced a $15 billion deal for Nexen of Canada.
    LOOKING AHEAD
    Economic Reports Data released on Thursday will include durable goods orders for June and weekly initial jobless claims.
    Corporate Earnings Companies scheduled to report results on Thursday include 3M, Boston Scientific, Colgate-Palmolive, Dow Chemical, Exxon Mobil, Hyundai, International Paper, the Interpublic Group, Kimberly-Clark, McGraw-Hill, Moody's, Raytheon, Royal Dutch Shell, Sprint Nextel, United Continental, United Technologies, Volkswagen, Amazon.com, Facebook and Starbucks.
    In the United States On Thursday, a House Financial Services subcommittee will hold a hearing about the 10th anniversary of the Sarbanes-Oxley Act; Treasury Secretary Timothy F. Geithner will testify before the Senate Banking Committee about the annual report of the Financial Stability Oversight Council.

    DealBook Video
    Business Day Live: Fed to Weigh Action
    Business Day Live: Fed to Weigh Action The Fed considers new stimulus measures. | How the News of the World editors' prosecutions will affect British media. | The vending machine business gets a technology makeover.

     

The Greatest Paradox in the Greatest Manipulation Ever Seen Nowadays, by Fernando Gumán Cavero

The Greatest Paradox in the Greatest Manipulations Ever Seen


  Is there any sound logic or magic logic, in today's rebound of major market indexes? my answer is No. In Absolute and  relatively terms  NO. Who are the real winners' and, Who the real losers? Those influenced by unscrupulous brokers or dealers that synchronize the day's  profit with that of the media.

At first time in the morning, the expectations were not all  clear enough, following by  opening of Wall Street  by a  one hundred points surge  than previous day, for immediately drop  almost to its opening level due to
ESA release of new home sales stats
If this is not done by the power behind the power... I wonder?.. Who does  it?.. Who or Whom Allows it?


Fernando Guzmán Cavero

Money Show Traders Daily Alert: 3 Stocks Under $5 with Insider Buying

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ADVFN III World Daily Markets Bulletin


ADVFN III World Daily Markets Bulletin
Daily world financial news

Wednesday, 25 July 2012

US Market Reports
Stocks Showing A Lack Of Direction In Early Trading

After moving notably lower over the past few sessions, stocks are turning in a lackluster performance in early trading on Wednesday. The major averages have turned mixed but are showing only modest moves.

The major averages are currently on opposite sides of the unchanged line, with the Nasdaq posting a modest loss. While the Nasdaq is down 1.41 points or 0.1 percent at 2,861.58, the Dow is up 76.06 points or 0.6 percent at 12,693.38 and the S&P 500 is up 1.53 points or 0.1 percent at 1,339.84.

The choppy trading on Wall Street comes as traders are digesting a mixed batch of earnings news, with disappointing news from Apple (AAPL) partly offset by upbeat results from blue chips such as Caterpillar (CAT) and Boeing (BA).

After the close of trading on Tuesday, Apple reported third quarter earnings that rose year-over-year but still came in well below analyst estimates. The iPhone and iPad maker also provided disappointing fourth quarter guidance. Shares of Apple are down by 4.4 percent on the news.

Meanwhile, shares of Caterpillar and Boeing are moving to the upside after both companies reported better than expected second quarter earnings and provided upbeat guidance. Caterpillar is up by 2.5 percent, while Boeing is up by 1.8 percent.

Ford's (F) second quarter earnings also came in above expectations, although the auto giant also said it now expects to lose more than $1 billion in Europe this year, double its previous estimate.

On a busy day on the earnings front, traders are also digesting quarterly results from well known companies such as PepsiCo (PEP), Bristol-Myers (BMY), and ConocoPhillips (COP).

While most of the major sectors are showing only modest moves, early strength has emerged among semiconductor stocks. The Philadelphia Semiconductor Index has surged up by 2.6 percent amid strong gains by Altera (ALTR) and Broadcom (BRCM).

Gold stocks have also shown a notable upward move, moving higher along with the price of the precious metal. With gold for August delivery climbing $23.20 to $1,599.40 an ounce, the NYSE Arca Gold Bugs Index is up by 1.6 percent.

On the other hand, health insurance stocks have come under pressure in early trading, dragging the Morgan Stanley Healthcare Payor Index down by 4 percent. WellPoint (WLP) is leading the sector lower after reporting weaker than expected second quarter earnings and cuttings it full year guidance.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan's Nikkei 225 Index tumbled by 1.4 percent, while China's Shanghai Composite Index fell by 0.5 percent.

Meanwhile, the major European markets have moved to the upside on the day. While the U.K.'s FTSE 100 Index has edged up by 0.3 percent, the French CAC 40 Index and the German DAX Index are jumping by 1.1 percent and 1.2 percent, respectively.

In the bond market, treasuries are showing a lack of direction following recent strength. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by less than a basis point at 1.409 percent.

Canadian Market Report
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TSX Up At Open Wednesday

Toronto stocks opened higher Wednesday amid marginal buying in commodities, with the S&P/TSX Composite Index edging up 27.99 points or 0.24 percent to 11,494.94.

The Global Gold Index rose nearly 2 percent, with Alamos Gold Inc. and Kirkland Lake Gold  gaining nearly 5 percent each. Agnico-Eagle Mines, Goldcorp. and Detour Gold gathered around 2 percent each.

In the oil patch, energy company Suncor Energy Inc. rose over 1 percent despite reporting a lower second quarter net earnings.

Canadian Pacific Railway Ltd. gathered nearly 2 percent even after recording a much lower second quarter net income. CN Rail . edged up 0.40 percent after reporting improved second-quarter net income.

Meanwhile, Energy producer Encana Corp. shed over 1 percent after slipping into the red in second quarter. Base-metals miner Teck Resources Ltd. was down over 2 percent after reporting a plunge in second-quarter profit. Information technology services provider CGI Group, Inc. lost 2 percent after reporting a decline in its third quarter net earnings.

The price of crude oil was extending gains Wednesday morning as traders await cues from the official inventories data, due out later during the session. Analysts expect crude oil inventories to ease 250,000 barrels and gasoline stocks to shed 750,000 barrels last week. Crude for September edged up $0.47 to $88.97 a barrel.

The price of gold was moving higher as the euro spiked after reports quoted European Central Bank council member Ewald Nowotny as saying that there are arguments in favor of giving Europe's rescue fund a banking license. Gold for August gained $25.70 to $1,601.90 an ounce.

In corporate news from Canada, integrated energy company Suncor Energy Inc. reported that its second quarter net earnings declined to C$333 million or C$0.21 per common share from C$562 million or C$0.36 per common share in the previous year quarter. For the full year, the company revised its total production outlook to 540,000- 580,000 boe/d from previously expected range of 530,000 - 580,000 boe/d.

Energy producer Encana Corp. slipped into the red in second quarter, reporting net loss of $1.48 billion, compared to last year's profit of $383 million. Operating earnings, which excluded items, declined to $198 million or $0.27 per share from last year's $352 million or $0.48 per share. Analysts were expecting the company to report earnings of $0.19 per share.

Colombia focused oil Ecopetrol S.A. reported second-quarter unconsolidated net income of COL$3.68 billion or COL$89.39 per share, compared to COL$3.41 billion or COL$84.36 per share last year.

Information technology services provider CGI Group, Inc. reported net earnings of C$87.2 million or C$0.33 per share for the third quarter, a decline from C$123.2 million or C$0.45 per share earned a year ago.

Canadian Pacific Railway Ltd. reported a much lower second quarter net income at C$103 million or C$0.60 per share compared to C$128 million or C$0.75 per share recorded a year ago. Analysts were expecting the company to report earnings of $0.83 per share.

CN Rail reported improved second-quarter net income of C$631 million or C$1.44 per share compared to C$538 million or C$1.18 per share in the same quarter last year. Adjusted net income for the quarter rose to $659 million, or $1.50 per share from $578 million or $1.26 per share in the prior year quarter. Analysts were expecting the company to report earnings of C$1.48 per share.

Food and drug retailer Loblaw Companies posted lower second-quarter net earnings of C$159 million or C$0.56 per share, versus C$197 million or C$0.69 per share a year before. Analysts were expecting the company to report earnings of $0.62 per share.

Base-metals miner Teck Resources Ltd. reported a plunge in second-quarter profit to C$268 million or C$0.46 per share, from C$756 million or C$1.28 per share last year. Excluding the effect of certain transactions, adjusted profit totaled C$312 million, or C$0.53 per share, significantly lower than C$663 million or C$1.12 per share in 2011.

Egypt focused gold miner Centamin Plc said it has temporarily halted operations at its Sukari Gold Mine in Egypt due to illegal labor unrest from a small percentage of the Sukari workforce.

Financial services company Accord Financial Corp. reported a decline in second quarter profit at C$1.24 million or C$0.15 per share compared to C$1.39 million or C$0.16 per share last year.

Telecommunications company Bell Aliant Inc. reported a lower second quarter profit of C$79 million or C$0.35 per share compared to C$83 million or C$0.36 per share in the same period last year.

European Market Report
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European Stocks Higher Despite Weak Data

European stocks edged higher on Wednesday, as bargain hunting on hopes of further stimulus measures from the Federal Reserve offset weak German business confidence and U.K. GDP data. Also, sentiment improved a little bit after European Central Bank council member Ewald Nowotny said that there are arguments in favor of giving Europe's rescue fund a banking license.

The Euro Stoxx 50 index of eurozone bluechip stocks is gaining 0.73 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is up marginally. Around Europe, Switzerland's SMI, the U.K.'s FTSE 100, the German DAX and France's CAC 40 are up between 0.1 percent and 0.7 percent.

Daimler is rallying 4.2 percent after the luxury carmaker kept its full-year earnings guidance intact, despite reporting a sharp drop in second-quarter profits. Rival Volkswagen is up almost 2 percent.

Qiagen is climbing 4 percent in Frankfurt after the company lifted its outlook for net sales and adjusted earnings growth in 2012.

Rolls-Royce Holdings Plc is down 1.7 percent in London. The engine maker said it received orders worth over £70 million from several customers to supply large thrusters for offshore drilling vessels.

ARM Holdings is up over 6 percent after its second-quarter profit beat expectations. Shares of ArcelorMittal are up 2 percent even as the steel giant reported a sharp drop in profit for the second quarter, as revenues were hurt by lower steel shipment volumes.

British American Tobacco Plc is moving down 0.7 percent after it reported a slight increase in first-half net profit amid stagnant volumes.

In economic releases, Germany's business confidence declined more than expected in July, the latest survey results from Ifo Institute showed. The Ifo business climate index fell to 103.3 in July from a revised 105.2 in June.

Separately, the preliminary estimate from the Office for National Statistics showed that the U.K. economy contracted at a faster than expected pace in the second quarter. The gross domestic product was down 0.7 percent sequentially, marking the biggest fall since the first quarter of 2009.

The decline follows a 0.3 percent fall in the first quarter and 0.4 percent decrease in the fourth quarter of 2011. Economists expected a decline of 0.2 percent. GDP dropped 0.8 percent from the same period of last year, bigger than the 0.3 percent fall expected by economists.

Elsewhere, Asian markets ended broadly lower, as rising Spanish borrowing costs and growing fears that Greece may need further restructuring curbed appetite for risk. Tech shares bore the brunt of the selling after Apple's quarterly sales and profit growth missed estimates.

Commodities such as crude and copper are edging higher, in line with a rebounding euro, while the Dow futures are up 36 points ahead of some key economic data due this week, including new home sales today and reports on weekly jobless claims, durable-goods orders and pending-home sales due out tomorrow.

Asia Market Reports
Asian Stocks Drop On Eurozone Debt Worries

Asian stocks fell broadly on Wednesday, as worsening European debt crisis and lingering worries over slowing Chinese growth kept investors on the edge. With Spanish borrowing costs hitting a fresh historic high yesterday, Spanish and German finance ministers sought to contain Spanish bailout fears, saying that high borrowing costs do not reflect the country's economic strengths.

Officials representing the so-called "troika" of Greek creditors - the IMF, European Central Bank and European Commission - are in Athens to assess how far the debt-stricken nation has strayed from bailout terms. In this backdrop, reports quoted EU officials as saying that Greece may need further debt restructuring to meet its obligations.

Tokyo stocks fell for the fourth straight session, with the Nikkei average sliding to a seven-week closing low, as Apple's disappointing earnings report dragged down iPhone component manufacturers such as Toshiba and Sharp, which fell 7.3 percent and 10 percent, respectively.

Shares of Ibiden plunged 6.5 percent, while other tech shares like Nikon and Tokyo Electron lost 4-6 percent. However, Softbank soared 4 percent on a brokerage upgrade. The Nikkei index fell 1.44 percent, while the broader Topix index finished 1.56 percent lower.

In economic news, trade data released just before the market open revealed that Japan posted a merchandise trade surplus of 61.7 billion yen in June, bouncing into the black for just the second time in nine months as exports to Europe and China contracted.

China's Shanghai Composite index slid half a percent and Hong Kong's Hang Seng index edged down 0.14 percent as reports that Greece may need up to 50 billion euros in additional aid fanned concerns of contagion spreading from the euro-area's financial turmoil.

Australian shares recouped early losses, as benign inflation data domestically and continuing hopes that the Federal Reserve may announce new steps to boost U.S. growth spurred bargain hunting at lower levels. The benchmark S&P/ASX 200 fell more than a percent in early trading before paring losses to end down 0.23 percent at 4,124.

Big miner BHP Billiton edged down 0.3 percent after first-hand accounts of a Corporate Confidence Index suggested that investor confidence in Chief Executive Kloppers' leadership has declined steadily throughout his five-year tenure. Rio Tinto fell 1.5 percent, but smaller rival Fortescue rose 1.7 percent. Atlas Iron tumbled 3.7 percent after releasing its shipments data for the June quarter.

In the financial sector, ANZ slid half a percent and Westpac declined 0.8 percent, while Commonwealth and NAB rose 0.2 percent and 0.7 percent, respectively. Macquarie Group fell 1.8 percent despite forecasting an improved result for the 2013 financial year.

Seoul shares fell to a seven-month low after Bank of Korea Governor Kim Choong-soo said that the economy will likely grow at a slower pace than thought due to worsening global economic conditions. South Korean consumer confidence dropped to a five-month low in July, while inflation expectations eased to the lowest level in 19 months, as the economic outlook became bleaker due to the eurozone debt crisis and China's slowing growth, according to the central bank. The benchmark Kospi index ended down 25 points or 1.37 percent at 1,769.

Shares of LG Electronics fell 2.1 percent after the company said its mobile phone business swung to a loss in the second quarter. Samsung Electronics slid a percent and LG Display plunged 4.8 percent after Apple's latest quarterly results missed expectations.

New Zealand shares edged down marginally, joining a global slide on persisting concerns over the situation in Greece and Spain. The benchmark NZX edged down about 2 points or 0.05 percent to 3,459, extending declines for a second day. Among the prominent decliners, Xero, the cloud accounting platform provider, slumped 5.5 percent ahead of its annual shareholder meeting on Thursday, while gold miner Oceanagold slid 0.8 percent before its half-year results due tomorrow.

Australian food ingredients manufacturer Goodman Fielder lost 3.2 percent, SkyCity Entertainment, the casino and hotel operator, fell 2 percent and Fletcher Building, the nation's largest construction company, eased 0.7 percent. Healthcare group Wakefield Health soared 19 percent after major shareholders Royston Hospital Trust Board and Medusa launched a partial takeover offer for the company at $6 a share.

Elsewhere, India's benchmark Sensex was last trading 0.4 percent, Singapore's Straits Times index slipped 0.3 percent and the Taiwan Weighted average ended down 0.4 percent, while Indonesia's Jakarta Composite index and Malaysia's KLSE Composite were up about 0.2 percent each.

Commodities
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Crude Edges Up Ahead Of Inventories Report

The price of crude oil was extending gains Wednesday morning as traders await cues from the official inventories data, due out later during the session.

Light Sweet Crude Oil (WTI) futures for September delivery, edged up $0.27 to $88.77 a barrel. Yesterday, oil settled marginally higher as demand concerns eased with data out of China showing a minor recovery in the nation's manufacturing sector. Nevertheless, investor concerns over the euro zone sovereign debt crisis remained and continued to be a drag on prices.

Tuesday after the trading hours, the API said U.S. crude oil inventories rose 1.30 million barrels and gasoline stocks moved up 2.3 million barrels in the weekended July 20

This morning, the U.S. dollar was leveling off from its 2-year high versus the euro, while moving up near a two-week high against sterling. The buck was lingering near a two-month low versus the yen and trading flat against the Swiss franc.

In economic news, Germany's business confidence declined more than expected in July, reports said citing the latest survey results from Ifo Institute. The Ifo business climate index fell to 103.3 in July from a revised 105.2 in June. Economists expected the index to fall to 104.5.

Meanwhile, the U.K. economy contracted at a faster than expected pace in the second quarter, the preliminary estimate from the Office for National Statistics showed The gross domestic product was down 0.7 percent sequentially, marking the biggest fall since the first quarter of 2009. The decline follows a 0.3 percent fall in the first quarter and 0.4 percent decrease in the fourth quarter of 2011. Economists expected a decline of 0.2 percent.

Traders will look to the report on new home sales from the U.S. Commerce Department, due out shortly after the markets open. The consensus estimate calls for new homes sales of 370,000 after sales rose 7.6 percent to 369,000 in May.

Today during trading hours, the EIA will release its U.S. crude oil inventories report for the weekended July 20. Analysts expect crude oil inventories to ease 250,000 barrels and gasoline stocks to shed 750,000 barrels last week.

ESA | New Residential Sales: Sales of new single-family homes in June 2012 were 350,000 at a seasonally-adjusted annual rate, down 8.4 percent from May’s revised rate but up 15.1 percent from June 2011.


Economics and Statistics Administration Logo

U.S. Census Bureau NewsJoint ReleaseU.S. Department of Housing and Urban DevelopmentU.S. Department of Commerce Washington, D.C. 20233

FOR IMMEDIATE RELEASE WEDNESDAY, JULY 25, 2012 AT 10:00 A.M. EDT
CB12-132
Raemeka Mayo or Stephen Cooper
Manufacturing and Construction Division
(301) 763-5160
NEW RESIDENTIAL SALES IN JUNE 2012
Sales of new single-family houses in June 2012 were at a seasonally adjusted annual rate of 350,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 8.4 percent (±12.4%)* below the revised May rate of 382,000, but is 15.1 percent (±16.7%)* above the June 2011 estimate of 304,000.
The median sales price of new houses sold in June 2012 was $232,600; the average sales price was $273,900. The seasonally adjusted estimate of new houses for sale at the end of June was 144,000. This represents a supply of 4.9 months at the current sales rate.

Wonkbook: Will the Fed get back in the game?: Ezra Klein's Wonkbook | The Washington Post






RCP Obama vs. RomneyObama +1.8%; 7-day change: Obama -0.2%.
RCP Obama approval47.0%; 7-day change: -0.2%.

Top story: Summertime and the Fed might be easing

The Fed is moving closer to action. “Federal Reserve officials, impatient with the economy’s sluggish growth and high unemployment, are moving closer to taking new steps to spur activity and hiring. Since their June policy meeting, officials have made clear–in interviews, speeches and testimony to Congress–that they find the current state of the economy unacceptable. Many officials appear increasingly inclined to move unless they see evidence soon that activity is picking up on its own. Amid the recent wave of disappointing economic news, conversation inside the Fed has turned more intensely toward the questions of how and when to move. Central bank officials could take new steps at their meeting next week, July 31 and Aug. 1, though they might wait until their September meeting to accumulate more information on the pace of growth and job gains before deciding whether to act.” Jon Hilsenrath in The Wall Street Journal.
@jamespoulos: QE3 QED
@ryanavent: Is this really the best the Fed can do? This is absurdly lame.
Why the Fed might act (in one chart): http://wapo.st/PZNqZH.

Treasury investors cut bets on inflation to the least in six months. “Treasury investors cut bets on inflation to the least in six months and yields reached record lows as Bill Gross, who runs the world’s biggest bond fund, warned the U.S. economy may stop growing. The difference between the rate on 10-year notes and same- maturity Treasury Inflation Protected Securities, a gauge of trader expectations for consumer prices over the life of the debt, narrowed to 2 percentage points. It was the least since Jan. 4 and compares with an average of 2.15 over the past decade. The U.S. plans to sell $35 billion of five-year debt today, as slowing growth and Europe’s debt crisis fuel demand for the relative safety of Treasuries. ‘The market is implying that there is deflation in the economy, that the U.S. economy will get weaker,’ said Kevin Yang, head of bond investment in Taipei at Hontai Life Insurance Co., which has $6 billion in assets.” Wes Goodman and Kristine Aquino in Bloomberg.

An audit the Fed bill is expected to pass the House today. “Several senior House Democrats warned that passing a bill from Rep. Ron Paul (R-Texas) requiring a full audit of the Federal Reserve Board’s monetary policy decisions will allow Congress greater leverage to put political pressure on these decisions, which they said would cause serious problems in the U.S. and global financial markets. The Federal Reserve Transparency Act, H.R. 459, was expected to come up for a vote Wednesday, and seemed poised for passage given its 270 co-sponsors, including nearly four dozen Democrats. Nonetheless, many Democrats used the Tuesday floor debate to warn about the chances that Congress might use the audit to politicize monetary policy decisions.” Pete Kasperowicz in The Hill.

@dwreilly2: So, wait. Will the “Audit the Fed” bill tell us where Roger gets those classy knit sweaters he rocks after a match?
MALLABY: The Fed should raise its inflation target. “The Fed faces a dilemma. With inflation below target and unemployment far above the neutral rate, there is a clear case for stimulus. But the familiar tools of stimulus seem unlikely to work. So the markets expect next week’s Fed policy meeting to produce more equivocation. The better way forward would be to come up with new tools…The Fed could couple more quantitative easing with a formal announcement of a higher inflation target. Some Fed leaders are open to this. Charles Evans, the Chicago Fed president, has floated the idea of a 3 per cent target, effective until unemployment falls below 7 per cent. A higher inflation target would lead markets to understand the Fed is committed to quantitative easing of game-changing magnitude, inducing the behavioural shifts needed to make the policy succeed.” Sebastian Mallaby in The Financial Times.
@mattyglesias: Let’s hope Ben Bernanke reads Sebastian Mallaby

Inflation would be at 4.2% if it was as far from target as unemployment: http://on.wsj.com/OYU3Kv.
CROOK: Elected government inaction has forced central banks to step up. “The defining feature of policy since the Great Recession began has been a fundamental shift in what we ask of elected governments on one side and unelected central banks on the other. Governments have failed, and are still failing, to get fiscal policy right. So, with varying degrees of reluctance, central banks have had to step in with quasi-fiscal measures, such as buying long-term government debt or absorbing risks previously borne by the private sector. This reassignment of duties is no mere technicality. It’s a momentous and troubling development. To be clear, central banks have good reason to engage in fiscal policy in today’s extraordinary circumstances…The longer-term implications of this reversal, though, aren’t good.” Clive Crook in Bloomberg.

HILTZIK: Inflation can be our friend. “Wars and other crises have a way of remaking your oldest enemies into your best friends (and vice versa — just look at the history of U.S.-Soviet relations from 1939 to 1945). Given the depth and persistence of the financial crisis here and in Europe, isn’t it time to embrace one of our oldest economic foes, inflation?…Inflation hasn’t always been regarded as the fearsome gargoyle it is now. In fact, it’s more commonly been treated as a useful policymaker’s tool in times of economic crisis…Stable prices, it was understood then, benefited bondholders and other creditors by maintaining the value of their claims at the expense of debtors and the working class. That’s still true.” Michael Hiltzik in The Los Angeles Times.

Top op-eds

1) GORDON AND WEST: Don’t worry about the fiscal cliff. “Why do pundits and politicians continue to act as if the U.S. is a risky sovereign like Greece, in desperate need of a fiscal plan and in constant search of pliant lenders lest it face a crisis? Such dire prognostications are way off base — and the so- called fiscal cliff is perhaps the biggest red herring…Officials in Washington must resolve a fiscal drag equal to 5 percent of gross domestic product. In an emerging market — or Europe, for that matter — this would be a recipe for disaster: a sharply divided legislature would need to choose between reneging on fiscal promises designed to placate lenders or brokering a politically treacherous substitute deal in a condensed time frame. But policy makers have an easy way out because the U.S. will not be subject to such financial pressures. U.S. haven status all but guarantees that the lame-duck Congress and Obama will agree to forgo the austerity that makes up the fiscal cliff, and they won’t suffer for doing so.” David Gordon and Sean West in Bloomberg.
2) FRUM: Republicans should reform, not repeal, Obamacare. “‘Repeal and replace’ has been the Republican slogan against the giant Democratic health reform enacted in 2010. But replace with what? The reform, for all its many, many faults, did one important thing: extend health insurance coverage to almost all Americans. A Republican alternative should aspire to do the same. That statement is controversial in today’s GOP. It should not be. Universal coverage need not mean higher costs, nor more statism. But how to get there while meeting Republican concerns?…Obamacare leaves Medicare, the scheme for the elderly, almost untouched. This reliance on existing programmes has dangerous effects…The exchanges offered an alternative vision: a marketplace operated by the states in which providers would compete to offer programmes to ensure their clients’ health and wellbeing. Individuals would choose from a regulated menu of such programmes. This managed competition model should be extended rather than eliminated.” David Frum in The Financial Times.

3) HAY: It’s not the time to raise taxes on investment income. “If Congress fails to act, tax rates for investment income will soar beginning Jan. 1, 2013. The top tax rate on capital gains will jump to 23.8% from 15% and the top rate on dividends will nearly triple to 43.4% from 15%. The House of Representatives is considering legislation to extend the current 15% tax rate on investment income for one year. But the Senate plan, scheduled for a vote this Wednesday, would raise the top tax rate on capital gains and dividend income to 23.8% for individuals making more than $200,000 per year and joint filers earning more than $250,000. Now is not the time to raise tax rates on investment income–even if limited to upper-income taxpayers. Raising taxes on dividends and capital gains will have a devastating, domino-like effect that would hurt the economic security of millions of Americans at every income level.” Lewis Hay II in The Wall Street Journal.

4) ORSZAG: Congress should privatize the Postal Service. “Those who believe in the usefulness of government must be vigilant about making sure all its activities are vital ones, since the unnecessary ones undermine public confidence. With this in mind, Congress should now privatize the U.S. Postal Service. Further evidence for why this should happen came last week, when the Postal Service announced that it would be unable to meet billions of dollars in payments that are coming due in August and September for future retiree health benefits. Privatization is not always the best way to improve efficiency, but the problems facing the Postal Service will be difficult to address if it remains within the government, and there is no longer any sound reason for it not to go private.” Peter Orszag in Bloomberg.

5) FELDSTEIN: The declining value of the euro is the key to its survival. “The last eurozone summit ended with an optimistic communiqué but nothing of substance. Meanwhile, financial markets may already be in the process of forcing a solution upon Brussels policy makers. The declining value of the euro holds the key to the eurozone’s survival…A lower value of the euro would reduce the prices of eurozone exports and raise the cost of imports, reducing or eliminating the current account deficits of the peripheral European countries, since about half of their trade is with countries outside the eurozone…The decline of the euro can therefore occur without specific action by the European Central Bank. But a further shift by the ECB toward a looser monetary policy would speed the euro’s decline.” Martin Feldstein in The Financial Times.
@BCAppelbaum: Trying to remember what we all did for entertainment back before the Euro crisis.
Chan Marshall interlude: Cat Power plays Love and Communication at Rolling Stone.

Still to come:NY Fed was quiet on Libor; a new CBO score for Obamacare; cybersecurity is scaled back; historic thaw for the Greenland ice sheet; and a dog gives a cat a piggyback ride.

Economy
The New York Fed was quiet on Barclays’ admission of rigging Libor. “Treasury Secretary Timothy F. Geithner has said that he sounded the alarm four years ago to regulators about problems with the benchmark interest rate known as Libor. But Geithner, who was then head of the Federal Reserve Bank of New York, did not communicate in key meetings with top regulators that British bank Barclays had admitted to Fed staffers that it was rigging Libor, according to people familiar with the matter. Instead, regulators at the Commodity Futures Trading Commission and the Justice Department worked largely without the Fed’s help to build a case against Barclays. That work has culminated in a massive scandal rocking the banking industry on both sides of the Atlantic.” Jia Lynn Yang and Danielle Douglas in The Washington Post.
Congressional Republicans doubt Romney’s plan to repeal Dodd-Frank. “Mitt Romney says President Barack Obama’s financial reform is strangling the economy – and he’s pledging to repeal it once he’s in office. The problem: Republicans in Congress say that’s impossible. The Dodd-Frank law celebrated its second anniversary this month, and its critics concede it’s just too far along to fully repeal it. That leaves Romney’s campaign rhetoric as just that – words that sound good on the stump, but don’t offer Republicans in Congress much guidance on what their Wall Street agenda should look like, even if they had a fellow GOPer in the White House.” Patrick Reis and MJ Lee in Politico.

The Senate votes today on tax cuts. “The legislative battle set for Wednesday is largely meaningless. Neither side has the 60 votes necessary to overcome a filibuster and push its preferred tax package to final passage. Leaders in both parties acknowledge that the issue of what to do about the expiring tax cuts enacted during the George W. Bush administration will be resolved only after the November elections. For now, Senate Democrats hope to muster 50 votes for their $250 billion proposal to extend the middle-class tax cuts through 2013, an outcome that would permit them at least to claim majority support and press the argument that Republicans are holding the middle class hostage…The Republican-controlled House, meanwhile, was laying plans to vote next week on a $400 billion one-year extension of the tax cuts virtually identical to the one proposed by Senate Republicans.” Lori Montgomery in The Washington Post.
Congress split over online sales taxes. “A move to make all online retailers levy sales tax continues to face resistance from some legislators in the US Congress even as it is backed by Amazon, which wants to avoid being singled out by individual states that are forcing it to collect. Laws that let internet sellers avoid collecting the tax from customers are the most incendiary political issue in US retailing, the source of rifts between online and bricks-and-mortar stores and between big businesses and small rivals.” Barney Jopson in The Financial Times.

Musical history interlude: The history of whistling.

Health Care
The CBO says the SCOTUS’ ruling will make Obamacare cost less and cover fewer. “In its June 28 ruling, the court upheld the bulk of the Affordable Care Act, but struck down a plan to require states to expand their Medicaid programs to cover residents who earn as much as 138 percent of the federal poverty level. As a result, analysts at the nonpartisan Congressional Budget Office expect that some states will refuse to expand their Medicaid programs or will delay expansion until after 2014, when most other provisions of the law are scheduled to take effect. In those states, people who earn between 100 percent and 138 percent of the poverty level will have the option to receive government subsidies to help them buy private insurance on newly created exchanges. But those who earn less than the full poverty level could be left out, the CBO said.” Lori Montgomery in The Washington Post.

@sarahkliff: Kind of weird to see some Dems celebrating the CBO report. Get that it estimates savings – but only because states will thwart the law!

A proposed definition of ‘affordable’ may leave some children out. “While most uninsured children will qualify for coverage under the federal health law, a small percentage — 6.6 percent of the total, or at least 460,000 — may be shut out because of how the government proposes to define ‘affordable’ coverage, says a report from the U.S. Government Accountability Office. The proposed Treasury Department rule says workers and their families are ineligible for federal subsidies for coverage if an employer offers them affordable coverage at work. An employer’s offer is considered affordable if the worker’s share is less than 9.5 percent of household income. But the rule bases affordability on what a worker would have to pay to cover himself or herself, not on the cost of covering the entire family, which is generally higher.” Julie Appleby in Kaiser Health News.

Domestic Policy
The cybersecurity bill has been greatly scaled back. “A cybersecurity bill likely to reach the Senate floor this week greatly scales back an earlier White House-backed proposal to require power grids, air-traffic-control systems and other critical networks to bolster their protections…The bill’s sponsors–Sens. Joseph I. Lieberman (I., Conn.), Susan Collins (R., Maine) and several Democrats–are seeking to break a logjam on cybersecurity legislation. Earlier versions of the bill stalled largely over Republican objections to the security requirements for critical infrastructure, which they said amounted to new regulations. The latest proposal drops the mandatory protection standards, in a major shift in approach. Adherence to new standards would be voluntary, with participating companies given liability protections under the law.” Siobhan Gorman in The Wall Street Journal.

Reliance on imports leaves the U.S. vulnerable to disasters. “An increasing reliance on imports, combined with the fraying of the nation’s power grid, highways and rail lines, leaves the United States more vulnerable to the damage of natural disasters and terrorist attacks, according to a report to be released Wednesday by former homeland security secretary Tom Ridge. The report, which Ridge shared with homeland security officials Tuesday morning, warns that the offshoring of U.S. factories means that rebounding from a catastrophe will be more difficult because so many critical supplies would have to come from overseas.” Peter Whoriskey in The Washington Post.

Congress will investigate data sellers. “In a move that could lay bare the inner workings of the consumer data industry, eight members of Congress have opened a sweeping investigation into data brokers — companies that collect, collate, analyze and sell billions of details annually about consumers’ offline, online and mobile activities for marketing and other purposes. Representative Edward J. Markey, Democrat of Massachusetts, and Representative Joe L. Barton, Republican of Texas, co-chairmen of the Bipartisan Congressional Privacy Caucus, along with six other lawmakers, sent letters of inquiry on Tuesday afternoon to nine leading industry players. In the letters, the legislators requested extensive information about how the companies amass, refine, sell and share consumer data…The Congressional inquiry heightens the scrutiny of a largely unregulated industry whose companies sell their services to third parties, rarely interacting directly with consumers.” Natasha Singer in The New York Times.

Interspecies friendship interlude: A small dog gives a cat a piggyback.

Energy
The Greenland ice sheet saw its biggest thaw since 1973 this month. “Greenland’s surface ice cover experienced a broader thaw during a three-day period this month than in nearly four decades of satellite record-keeping, according to three independent satellite measurements analyzed by NASA and university scientists. About half of the surface of Greenland’s ice sheet melts on average each summer. But between July 11 and 13, roughly 97 percent of the the sheet — from its coastal edges to its 2-mile-thick center — experienced some thawing. The unusual amount of melt — coming on the heels of the Petermann glacier’s loss of ice last week — has highlighted the extent to which warming temperatures are affecting the Arctic. There has been an unusually strong ridge of warm air, or a heat dome, over Greenland.” Juliet Eilperin in The Washington Post.

The House will vote on a GOP drilling plan today. “Members of the House debated legislation on Tuesday that would replace President Obama’s five-year plan for offshore oil and gas lease sale plan with a Republican plan that would expand lease sales in an effort to increase domestic oil and gas production. The GOP bill, H.R. 6082, would replace the Obama administration’s plan to keep some offshore areas off limits for lease sales, and also require additional lease sales off Alaska’s coast. Obama’s five-year plan was put forward in late June, and Republicans said they are compelled to try to replace it with a more aggressive plan for developing domestic energy…Hastings also announced that Republicans would set up two main votes on Wednesday — one on the GOP bill, and another on a bill that reflects Obama’s five-year plan.” Pete Kasperowicz in The Hill.

Wonkbook is compiled and produced with help from Karl Singer and Michelle Williams.