Stocks struggle as euro worries douse week's rally
Obama urges quick action on the eurozone crisis. Spain is expected to ask for financial assistance. German exports fall. The US trade deficit shrinks less than forecast, but wholesale stockpiles are up more than anticipated.
By Andrea Tse
Stocks wavered Friday, slowing the S&P 500's biggest weekly gain of the year, as economic data in Europe fueled further worries about a global slowdown and as Spain geared up to ask eurozone finance leaders for help.
President Barack Obama, Speaking from the White House, urged European leaders to act quickly and decisively on the region's economic crisis, The Associated Press reported. The president specifically addressed Greece, warning that its situation will only worsen if the nation leaves the eurozone. Obama contends Europe's crisis has dragged down the U.S. economy, the AP said.
A wider-than-expected U.S. trade deficit also put a damper on investor confidence.
German exports fell in April for the first time this year on weaker global demand, Bloomberg reported. French business confidence and Italian output also declined. German exports declined 1.7% in April after spiking 0.8% in March, according to the Federal Statistics Office.
Over the weekend, Spain is expected to ask eurozone leaders for help in recapitalizing its banks, sources in Brussels and Berlin told Reuters. An aid plan would make Spain the fourth country in the region to seek assistance since the debt crisis began. The nation saw its credit ratings downgraded by Fitch to BBB from A, with the move attributed to the burden of recapitalizing the nation's banking system amid a deepening recession.
The U.S. Commerce Department reported that the U.S. trade deficit shrank to $50.06 billion in April from an unfavorably revised $52.62 billion in March. The figure missed the expected $49.9 billion.
The government also said businesses in April restocked their shelves faster than expected, the AP reported. Wholesale stockpiles grew 0.6%, twice as fast as in March, signaling an increase in factory production and sales. Investors had forecast more sluggish growth, the AP said.
U.S. stocks closed mixed Thursday, held in check by Bernanke's noncommittal stance on additional stimulus and by a downgrade of Spain's credit rating by Fitch.
But they had gotten an early lift after the People's Bank of China slashed its benchmark lending and deposit rates by 0.25 percentage points to prevent excessive cooling of economic growth. Now investors worry that the move was a sign the market could expect some disappointing data out of the country this weekend, when it releases almost all its heavyweight economic reports for May.
The Hang Seng Index in Hong Kong finished lower by 0.9%, and the Nikkei in Japan fell 2.1%. The FTSE in London was down 0.6%, and the DAX in Germany was falling 0.5%.
In corporate news, McDonald's (MCD) reported that global same-stores sales rose 3.3% in May, below Wall Street's target of 4.6%.
Molina Healthcare (MOH) withdrew its 2012 earnings guidance Wednesday because of potential expansion-related costs in Texas. But the company said it will be able to keep providing managed-care services for Medicaid beneficiaries as of 2013 in Ohio.
Best Buy (BBY) founder and chairman Richard Schulze resigned from the board Thursday. Schulze said he is exploring options for his 20.1% stake in the electronics retailer.
Francesca's Holdings (FRAN), a Houston specialty apparel retailer, on Thursday reported better-than-expected quarterly results and gave a solid outlook. The company forecast earnings of 22 to 23 cents a share for its fiscal second quarter ending in July on sales of between $69 million and $71 million. Analysts had forecast profit of 22 cents a share on sales of $68.6 million.
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Our whole approach to personal finance has changed, including the language we use, and most of it is a result of of the cheap money available thanks to artificially low interest rates. Has this been a change for the better?
The recall election in Wisconsin was a snapshot of what is coming in November. You better pay close attention to this ! What our ELECTED officials didn't learn in 2010, are about to get another round of, lets call it, QUALITATIVE EDUCATION . Do what we elect you to do, or YOUR OUT !!
Gov. Walker has done what HE SAID he would do and backed it up with actions. Within a couple of years, you're going to see Wisconsin's financial situation improve dramatically. Then, they'll be able to move past some these 'austerity' measures, to provide for the teachers, police & other public service entities.
Romney will be able to bring some sanity back and curtail all of this careless spending and borrowing that's dragging down OUR economy.
20,000,000 Americans out of work and the Private Sector is doing fine the President says.
And, he's smart? He should ask thise guys and the small business owners who used to employ them if the Private sector is doing fine. Only weakness is in construction and public employees. Realy?
>>>music7, it all started with no margin requirements in real estate... along with interest deductions, and zero capital gains on profits is it any wonder we had a huge speculative bubble in real estate. Government policies caused the mess...<<<
I would have to agree with this. I couldn't believe it either when banks were offereing zero down mortgages, and refinancing existing up to 125% of a home's value.
Our trade deficet is about 52 billion dollars a month. Why on earth would so many people be afraid of US isolationism?
If we stopped all trade we would have a net gain of approx. 650 billion dollars a yr. Some jobs would be lost, but over all we would have a big net gain. Then close our foreign military bases down, rebuild them here on our borders and spend that money at HOME instead of abroad. Throw in some infrastructure work and WALLA, we have a booming economy.
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[BRIEFING.COM] Stocks entered the weekend on a mixed note as the S&P 500 shed 0.1% while the Dow ended with a gain of 0.1%.
The major averages began the day on a lower note as nine of ten sectors saw losses of more than 0.5%.
The consumer staples sector was the lone exception as the group spent the entire day in positive territory thanks to the relative strength of Dow component Procter & Gamble (PG 81.89, +3.19). The second-largest staple stock advanced ... More
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