Stocks slide further as Obamacare is upheld
Shares are down more than 1% after the Supreme Court rules in favor of the health care reform law. Investor outlook darkens for this week's eurozone summit. New unemployment claims dip.
By Andrea Tse
Stocks fell Thursday as investor sentiment softened on a gloomy outlook for the eurozone summit and after the U.S. Supreme Court upheld the core of President Barack Obama's health care overhaul.
The ruling preserves most of a law that would expand insurance to millions of Americans, Bloomberg reported. The justices voted 5-4 in saying Congress can make people carry insurance or pay a penalty. The law also requires insurers to cover people with pre-existing health conditions, Bloomberg said. The court limited the law's extension of Medicaid by saying the government may not threaten to withhold money from states that don't fully comply.
Stocks rose Wednesday, buoyed by better-than-expected reports on durable goods orders and pending home sales. The advance came ahead of what's now expected to be an essentially fruitless eurozone summit on Thursday and Friday.
"Expectations for the summit seem to be so low as to create the risk of a positive surprise," perhaps on banking integration, said Paul Donovan, a global economist with UBS. "However, there is also a credibility deficit around euro policy, so any surprise would need to overcome expectations and the credibility shortfall to prevent cynicism re-emerging."
"Europe continues to generate a great deal of heat but very little light," a Birinyi Associates report said. "While the Greek drama has slowed somewhat with their election, the crisis is far from over. Now Spanish banks are the concern d'jour while Italy and the fate of the Euro are right behind."
The stock market research firm noted that while it continues to be optimistic about the stock market, it also advises caution, as there are still too many variables that are beyond investors' capability to absorb and forecast.
Europe is one of them, as are the slowing U.S. economy and those of China, India and Brazil. Also of concern are more financial regulations after the JPMorgan Chase (JPM) and MF Global debacles, recent downgrades of banks by Moody's, and the disillusioning impact of the problem that plagued Facebook's (FB) initial public offering.
The FTSE in London was slipping 0.94%, and the DAX in Germany was sliding 1.64%. The Hong Kong Hang Seng index settled down by 0.79%, and the Nikkei in Japan closed ahead by 1.65%.
In U.S. economic news, the Labor Department reported that initial jobless claims for the week ended Jun. 23 fell by 6,000 to 386,000 from the previous week's upwardly revised figure of 392,000, foreshadowing weakness in the upcoming monthly jobs report. Economists were calling for initial claims of 385,000, according to Briefing.com.
The four-week moving average was 386,750, a decrease of 750 from the previous week's average of 387,500. Continuing claims for the week ended Jun. 16 were at 3.296 million, a decrease of 15,000 from the preceding week's level of 3.311 million.
First-quarter gross domestic product remained at 1.9%, as expected, according to a final read by the Commerce Department.
In corporate news, JPMorgan Chase's (JPM) trading loss related to hedging could total as much as $9 billion, The New York Times reported. CEO Jamie Dimon last month estimated that losses from the bad bet on credit derivatives could double within the next few quarters. But the losses have been mounting in recent weeks as the bank has been unwinding its positions, the Times reported, according to interviews with current and former traders and executives at the bank. The Times said JPMorgan is now out of more than half of the trade and may be completely free this year. JPMorgan will disclose part of the total losses on the hedging bet on July 13, when it reports second-quarter earnings.
The board of News Corp. (NWSA) unanimously approved a plan to split the media giant into two, separating its entertainment operations from its smaller publishing business. The split was formally announced early Thursday morning. One company will include entertainment businesses like 20th Century Fox, Fox broadcast network and Fox News Channel, while the other will encompass publishing assets such as The Wall Street Journal and HarperCollins book publishing.
Research In Motion (RIMM) is expected to post a fiscal-first-quarter loss of 1 cent a share for the three months ended in May on revenue of $3.11 billion. The BlackBerry maker will release earnings after the close. RIM last month said it expected to post an operating loss for the first quarter, citing "lower volumes and highly competitive pricing dynamics in the marketplace." The company has hired bankers to help it examine its strategic options.
Family Dollar (FDO) reported third-quarter net income of $124.5 million, or $1.06 a share, up from year-earlier earnings of $111.1 million, or 91 cents a share. On average, analysts were anticipating third-quarter profit of $1.07 a share. Family Dollar said it expects fourth-quarter same-store sales to rise between 5% and 7% and projects fourth-quarter earnings per share of between 71 cents and 81 cents a share. For the fourth quarter, analysts are expecting earnings of 77 cents a share.
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Pretty sure that group got the call already that their $5 million bonus pensions sitting in the offshore Cayman Bank accounts are in jeopardy unless they don't jump around and make threats like good puppet government. Does anyone take a (R) Governor seriously today? New World Order took a big hit today.
An educated workforce is also likely to require full disclosure on credit products, literally eliminating the shoddy programs processes and commodity facilitation that is the trademark failures of banks. Educated people are also more likely to have a home inspected before buying and have pride in ownership that affords regular upkeep and maintenance.
I can kind of see what you are saying, but I think you miss the increase in income potential that comes with the education.
I'll use myself as an example.
I went to a Technical College out of High School, because I was leary of the tens of thousands of dollars that came with going to a 4 year school. I figured if I enjoyed the field I could always go back.
However, I did still incur substantial debt...(especially to a guy make 5 dollars an hour at the time) Now, alot of guys I went to HS with got a job straight out of HS making double what I was... and they were buying new cars, toys, etc. I was the schmuck living at home, working two jobs and going to school...
Fast forward 5+ years, student debt paid off... and I make substantially more than 10 dollars an hour and am going back to school to get my BS. Yes, I did incur debt... but it sure paid off in my case as I have a nice home... and investments for my children's education.
I'm not saying this always happens, but it does in many cases. (NOT all)
Are you saying that the average high school grad will have the same earnings potential as a BA?
Divine: Check out the youtube video "Libertarian Paradise"
2Sick: And why is a broadly educated workforce bad? Especially when that educated workforce has the ability to decide if they are going to rely on loans, or go for scholarships, grants and other means? Remember that people largely go to school to qualify for jobs. Unfortunately most of us can't view education as a past-time. So people flooded schools because to have any career prospects you need a BA. Gains from that BA, when matches against the total cost of attendance, pretty much always a win. In many cases a cash flow win on year 1. it's a win for the people attending, their families, their communities, and the nation as a whole.
I do think you are right on one thing. I do think secretly, behind closed doors, that the mainstream Repubs are ECSTATIC!!!!
"Obamacare is upheld"
We're on the road to serfdom, goodbye liberty.
The same argument was made in the mid-naughts about buying a home, and we see how that worked out......
"Guaranteed increased income....... FOR EVER!!!!"
Until it's not...... the we go BOOM....... again.
Would you rather stay on a private beach or a public beach? Would you rather live in a private home or public housing? Would you rather buy your own clothes or rely on government issue? Would you rather buy your own private car or rely on government issue/transportation? Private is always better than Public. We need to privatize more, and reduce as much public assistance as possible.
And if they ran to loans instead of looking for scholarships and grants as well.. shame on them. They get less gravy over their increased earnings.
Of course these people also don't seem to understand their loans either. One guy talking about now making his payment if the existing loan's interest increases. And these people are talking about how they feel like they can't get a car or house or whatever. It doesn't sound like they've sat down with anyone to actually find out that they aren't nearly as oppressive as the number sounds.
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[BRIEFING.COM] Stocks ended modestly higher as the S&P 500 climbed 0.2%, and the Dow added 0.4% to register its 19th consecutive Tuesday of gains.
The major averages saw little change during morning action, but afternoon buying interest helped lift the indices to session highs. Most cyclical sectors (with the exception of materials and technology) finished among the leaders, but the defensively-geared health care sector settled atop the leaderboard as biotechnology outperformed. ... More
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