Yahoo, Bank of America spur stock surge
Investors cheer management shakeups at the tech and finance stalwarts. President Obama may announce a $300 billion program to boost the economy. European markets spike after a German court upholds eurozone bailouts. Gold prices plummet.
By Chao Deng, TheStreet
Updated at 1:13 p.m.
Speculation around President Obama’s jobs plans and management changes at Bank of America (BAC) and Yahoo (YHOO) helped push U.S. stocks higher Wednesday following three days of triple-digit losses.
The positive tone Wednesday follows gains in global markets, where European stocks rallied after a German court upheld the country's decision to help bail out troubled neighboring countries.
“We were due for something of a bounce,” said Sam Stovall, investment strategist at Standard & Poor’s. “Investors can breathe a sigh of relief on the German supreme court’s ruling. At least we dodged a bullet in the near term.”
The FTSE in London gained 3.1%, and the DAX in Frankfurt vaulted 4%. In Asia, Hong Kong's Hang Seng rose 1.7% while Japan's Nikkei lost 2%.
Shares of Yahoo (YHOO) were surging 3.4% to $13.36 after the company announced late Tuesday that it had fired chief executive officer Carol Bartz. Tim Morse, chief financial officer, will serve as interim chief executive.
Bank of America (BAC) was soaring 5.9% to $7.41 after CEO Brian Moynihan ousted two top executives -- head of wealth and investment management Sallie Krawcheck and president of consumer and small-business banking Joe Price. Shares of the company have plummeted almost 50% this year amid fears over the bank’s losses in the mortgage business.
The outlook for President Obama’s speech to Congress tomorrow evening helped Wall Street take a more optimistic view on jobs growth in the country. According to Bloomberg, Obama has a $300 billion package in the works that includes tax cuts, infrastructure spending and help for local governments. The dismal jobs picture has been weighing heavily on investors’ minds since last week’s unemployment report that showed no new jobs creation in August. After the debt ceiling fiasco in Washington, many are skeptical that lawmakers can come together with an effective strategy to revive the struggling economy.
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"Investors will be listening to President Obama very closely, although no one expects the Republicans to take up his agenda. What we will be looking for are signs of concessions," writes Marc Pado, U.S. market strategist at Cantor Fitzgerald. "Like Bernanke, Obama is no magician. There is no black hat. There is no bunny rabbit. The best that we can hope for is a request for stimulus in the short-term in exchange for something closer to $2 trillion in cuts longer-term."
All components on the Dow were trading in the green with the exception of Verizon Communications (VZ). Leading the Dow were financial stocks JPMorgan Chase (JPM) and Bank of America (BAC).
In other corporate news, graphics chipmaker Nvidia (NVDA) projected a revenue of $4.7 billion to $5 billion for fiscal 2013, starting in Jan. 30, 2013, compared to the current average estimate of analysts polled by Thomson Reuters for a revenue of $4.45 billion in fiscal 2013. Shares of the chipmaker were gaining 8.1% to $14.26.
The Federal Reserve will release it's Beige Book at 2 p.m. Investors will scrutinize the report for clues that might suggest the Fed will take more action to boost the economy. The Fed will meet in late September.
As equities advanced, the appeal of haven investments decreased. Gold for December delivery was slipping $47.90 to $1,825.40 an ounce.
The October crude oil contract was gaining $3.41 to $89.43 a barrel.
The benchmark 10-year Treasury was losing 9/32, pushing the yield to 2.008%. The dollar weakened against a basket of currencies, with the dollar index slipping 0.386%.
People are such chumps. When are you going to get it through your thick heads it is BOTH parties doing the damage repeatedly. People feel they have to stick with their guy and it is ridiculous. Bush was terrible just as Obama is. And if a republican other than Ron Paul is elected he/she will be terrible as well. They are all bought and paid for by big banks/corporations. The whole left/right game is just to divide and conquer US. Wake up!
If you scrape off the sugar coating, it boils down to buying those suffering most a new pair of sunglasses to knock the blinding glare off the core issues big business and government are trying to sidestep. What's your sleep number, 300 billion?
What was spent to bailout the big banks would have paid $ 40 k on every mortgage in the US with a balance under $ 200 k and had money left over. It would have paid off in full the @ 2 million delinquent loans. Do the math. Those big banks who need to pay big $ to keep the "best talent" could not have possibly been so incompetent as to lose that much on bad loans. Where did the money disappear?
Anybody benefit from those "shovel-ready jobs" which were supposed to happen in the last "stimulus"? That was even much more money paid to buy votes. Where did that money go?
More payoffs. Not good.
If Obama does propose a $300B jobs plan, that money will be headed towards unions. Last week the unions publicly announced that they are not happy with Obama. It is time for Obama to pay them off again. Some of the money will to the States so they can keep overpaying the public union sector employees. Some of the money will go towards infrastructure jobs with the same strings attached as the last '"stimulus" plan. Those jobs will only be allowed to be completed by union labor.
Maybe Obama can find a way to just give money to his UAW voters. He should just fill envelopes with money and put them under the pillows at the GM and Chrysler factories.
Rather than keep track of the jobs that $300B supposedly creates, we should keep track of how many votes $300B buys. What a deal for Obama. He gets to campain with $300B of taxpayer money.
It is noted that the President's plan includes a tax break to business that hire "unemployed" people. There are many in the currently employed workforce that are also seeking positions. Any tax break given to a business should be for NEW positions created. That is job growth! If a currently employed person is hired into a "new" position, it leaves an opening to be filled at their old company. Under the "proposed plan", would there be oversight that a business would not layoff or fire an existing employee merely to hire an unemployed one for the tax break?
Hey! give Ubama another Nobel Peace Prize. Seriously folks. He hasn't even said a word, yet the media -well, the leftleaning media- are already crediting his "plan" with causing the stock market to "rebound." Ever notice that whenever something negative happens around here it's "unexpected" and Ubama isn't mentioned at all? But let the stock market eke upward from the depths (it still has over 1,000 points to go to get back to even) and Ubama's smiling face is plastered everywhere. Next we'll hear that the "recovery" is back on.
And who can forget the effect of the $152 billion Economic Stimulis Act of 2008 from "W" jr. and Big Ben. Ya, that $600 per couple went to pay bills and fill gas tanks. Wages are stagnant, energy, insurance and food costs thru the roof, and another wave of forclosures to hit the books. Our gov is broken, too big, and clueless about how to fix it. The only fix that may help immediately is to lower and freeze gas and diesel prices to kick start the economy. Give consumers a few extra dollars in spending power and businesses a chance to expand, grow and hire. Throwing billions into the wind just further exacerbates the wound.
in the last stimulus, i read los angeles bought train commuter cars from germany. other states bought wind mills from china and germany. i'm pissed that my town only put up bicylce stands and painted a lot of curbs red to denote no parking areas.
10 to 1 the jobs they are talking about creating are in China!
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