Stocks flat as investors await stimulus

Traders are taking a wait-and-see approach ahead of Bernanke's speech Friday and the ECB chief's address Saturday. Apple surges on a court victory in a patent battle with Samsung.

By Melly Alazraki Aug 27, 2012 9:31AM

Updated at 12:32 p.m. ET


Stocks were mostly flat by midday Monday as investors took a cautious approach while waiting for central banks to decide whether they plan to inject more stimulus into the economy. Apple (AAPL) shares jumped after a court victory in the company's patent battle with Samsung helping to boost techs.

 

The Dow Jones Industrial Average ($INDU) was unchanged at 13,158. The S&P 500 ($INX) was up 3 points at 1,414. The Nasdaq Composite ($COMPX) was up 7 points at 3,077.

 

Investors are looking ahead for key speeches from Federal Reserve Chairman Ben Bernanke, who will speak Friday at the Fed's annual symposium in Jackson Hole, Wyo., and from European Central Bank President Mario Draghi, who is expected to speak at the conference Saturday, hoping to get signals about the banks' intentions regarding further stimulus measures.

 

Central bank action remains in focus

Last week markets moved higher or lower along with any sign that the ECB may implement a bond-buying plan and the Fed may unveil another round of quantitative easing to bolster weak growth.

 

Along with official statements such as the Fed's minutes, investors interpreted any remark or newspaper article as hints about the central banks' intentions. This is likely to continue this week.

 

Markets finished higher Friday after Bernanke reiterated in a letter to House Oversight Chairman Darrell Issa that there is scope for further action by the Fed.

 

On Monday, Chicago Federal Reserve Bank President Charles Evans said the Fed should launch new stimulus immediately, buying bonds for as long as it takes to produce a steady decline in the jobless rate.

 

While no U.S. economic reports are due out Monday, several indicators will be released this week, including data on housing, consumer confidence and GDP.

Treasurys advanced ahead of Bernanke's speech, but gold turned lower after hitting a 4.5-month high earlier Monday. Oil, too, reversed an earlier gain. The dollar also slipped.

 

Global shares

European markets struggled to remain positive Monday as a holiday in London kept action muted and disappointing German data pressured markets. Nokia (NOK) shares jumped after Apple's court victory over Samsung.

 

Business sentiment slipped for the fourth consecutive month in August, according to the Ifo Business Climate Index, signaling that there may be further weakness in Europe's largest economy.

 

Asian shares were mostly lower Monday after data released by the National Bureau of Statistics on Monday showed a 5.4% decline in profit for China's major industrial enterprises for July compared with the year-ago period. Samsung shares slumped some 7.5% after the company lost its court battle with Apple, weighing on South Korean markets. Japan shares, however, trended higher.

 

Apple wins court battle

Shares of iPad and iPhone maker Apple (AAPL) rose after a federal court jury on Friday found that Samsung Electronics infringed upon six Apple patents and awarded $1.05 billion in damages. Shares of the South Korean company ended down 7.5% in Korean trade Monday. Apple last week became the most valuable public company.

 

Nokia (NOK) shares surged 8%. Nokia doesn't make Google's Android phones but is partnered with Microsoft (MSFT) and uses its mobile OS. Microsoft could further benefit as the alternative mobile OS. (Microsoft owns and publishes Top Stocks, an MSN Money site.)


Google (GOOG) says many of the infringement claims don't have anything to do with the Android software. With GOOG shares lower, Wall Street clearly thinks the infringements aren't limited to Samsung's hardware but pose a risk to the Android operating system.


Another mover following the court decision is Research In Motion (RIMM), which uses its own OS and is perhaps also seen as another smartphone alternative. RIM may still be up for sale, and one suitor has been rumored to be Samsung.

 

Other stocks to watch

Tiffany (TIF) reported disappointing top and bottom lines. The luxury goods retailer also cut its fiscal-year sales and profit forecasts for the second straight quarter, citing the tough global economy, weakness in key markets such as New York and Asia, and lower expectations for the holiday season, Reuters reported. Shares, however, advanced as the reduction is not as steep as Wall Street feared.

 

Hertz Global Holdings (HTZ) said late Sunday it had signed a deal to buy rival Dollar Thrifty Automotive Group (DTG) for approximately $2.3 billion in cash or $87.50 a share, a premium over DTG's $81 closing price Friday.

 

AOL (AOL) declared a special dividend of $5.15 a share and entered a $600 million accelerated stock-buyback agreement with Barclays PLC. AOL called the moves the final steps in returning $1.1 billion to its holders.

 

Best Buy (BBY) shares surged after the company announced it had reached an agreement with founder Richard Schulze that would allow Schulze to conduct certain due diligence on the company in preparation for a possible sale.

160Comments
Aug 27, 2012 10:37AM
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NBC:  At least nine people were killed and 28 others wounded in a spate of shootings since Friday night in Chicago, according to local reports. 

And they worry about a chicken joint...
Aug 27, 2012 10:26AM
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OH CRAP !!!The wind is blowing and its raining in the gulf.Quick jack up the already inflated oil prices while we have another BS reason ! ! ! ! ! ! !
Aug 27, 2012 10:19AM
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4 years ago, we had 50.5 million people collecting SS and SS disability benefits.  Today that number has grown to 67.7 million. 

"Looks like we've got a few more mouths to feed!"

Imagine how bad the UE rate would be if just half of these 17 million people were still looking for work. 

Now, where to invest to profit off the aging population?  Medical device companies?  Casket companies?  Pharma? Wonder if there are any REITs that specialize in assisted living properties? 


Aug 27, 2012 10:51AM
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What political party has run that Chicago for the past 50 years ?

What political party has run Detroit (and into the ground) ?

Find a state or municipality in trouble, 70% of the time you will smell the foul air of Democrats.
Aug 27, 2012 11:50AM
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QE3 Already happened and is ongoing, just renamed The Twist. Every time Quatitative Easing is announced the markets gap up. The real problem is QE robs us of our wealth. It, kills job creation, increases deficits, devalues currency, and creates artificial demand for stocks not allowing for markets to correct. We have become slaves to stimulous and the propping up of almost every market and these measures are less effective than past efforts by the Fed. We as a nation cannot survive this kind of an economic policy very much longer. Our wealth as a nation is suffering big time.
Aug 27, 2012 11:21AM
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Does anyone really believe the government when it constantly chants the recession ended a few years ago, and since then the $14 trillion GDP has been "growing"? The real GDP should not include the $1 trillion plus annual government deficit spending and its multiplier effect, nor the effects of the Feds money printing, nor the rip-off pricing of everything from oil to medical care. Subtract all this fluff from the phony GDP and the real GDP is about $9 or $10 trillion. Where we really are is 30% below 2007.
Aug 27, 2012 10:42AM
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All these wars are about global domination and the NWO...it is not about OIL...! This is about enslaving every one of us. THE US HAS SUPPRESSED TECHNOLOGY THAT MAKES ALL OF US OIL FREE AND FREE OF ELECTRIC MONOPOLY CONTROL....!!!! HAS YOUR STATE DECLARED SOVERIGNTY Yet? That is how bad the states what to distance themselves from WASHINGTON D.C. AND THE PRESIDENT'S ,CONGRESS, THE COURTS  TYRANNICAL LAWS AND RULE..TO TAKE OUR SOVERGN POWER AWAY------.FEMA, CIA, FBI, FUSION CENTERS, MARTIAL LAW, FEAR, WAR, ALIENS AND MORE...ALL THE MAIN STREAM MEDIA OUTLETS ARE MONEY CENTERS THE TRADE SUPPRESSING THE TRUTH FOR AD DOLLARS ALL TO KEEP YOU DISTRACTED AND ASLEEP..........WAKE UP AND KNOW THE REAL ENEMY FROM WITHIN.....! WAKE UP....THE HUMAN RACE NEEDS REAL PATRIOTS....STAND UP FOR YOUR GOD GIVEN RIGHTS...!!! 
Aug 27, 2012 10:50AM
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Yeah that's just what we need; for 'Printing Press' Bernanke to prop up the dead horse yet again with more worthless dollars. IT DOES NOT WORK!!!!!!!
Aug 27, 2012 10:44AM
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The U. S. federal debt is approximatley 100 % of GDP.  In 2005 the national debt of Greece was 100% of its GDP.  (7 YEARS LATER) - 2012 Greek debt is 170% of GDP. 

 

Is this sounding like what is is happening in the good ole USA?

 

U.S. debt also was 100 of GDP in 1952.  10 year Treasury rates were 2.68% and interest expense totaled 7% of federal revenues that year.  10 year rates are currently 1.6% and interest expense totals 10% of federal revenues.

 

For those who think we are not headed to the same path as Greece - take note - we as a =Nation can not continue to spend money and print money like there is no tomorrow.

 

The Fed (Bernanke) is keeping interest rates artifically low to finance our National Pawn Lender -The Fed.  If we had real interest rates the 10 year treasury rate probably be at least 2.75% or 72% more than the current 1.6% rate.

 

We all better vote for people who will do their job and we better hold them accountable for doing what is right for our country and not their reelection - party does not matter - I want character, honesty, and no more political correctness bull****!

 

We are heading for a monetary cliff - class warfare is not the issue. - Countries with child labor, no OASA and other regulations, lead paint from China, no tariffs on them but we pay for our products going to them AND not utilizing and tapping our oil and coal resources is - is suicide!!! 

Aug 27, 2012 9:58AM
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funny when you read articles like the "HP" one today.  computer sellers like HP and Dell can't seem to find their nitche anymore. 

 

well, the typical computer has more horsepower than what was used to land on the moon.  my 5 year old PC is still strong.  i would LIKE an upgrade to more speed and extras, but the drudgery of reloading all my old software shuts me down. 

 

why don't they sell a PC that enables me to pull a chip or board and replace it without having to reload or move all my files? 

 

and WHY aren't PC stores (best buy) operating like automotive shops?  i should be able to drop it off one morning, and pick it up later that day all upgraded and all! 

 

duh! 

 

these business models already exist for other products.  why not exploit them? 

Aug 27, 2012 10:53AM
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Who's responsible for the Budget Deficits and the Debt?

While it's tempting to blame the President for Budget Deficits, it's actually the responsibility of Congress to pass a spending budget, which establishes the amount of the Deficit each year and any required borrowings on the Debt. So what does the record show based on who controlled Congress over the last 30 years;

DEFICITS

Total Defici...
ts when Democrats controlled Congress (12 years) = $5.022 Trillion.
Total Deficits when Republicans controlled Congress (10 years) = $1.219 Trillion.
Total Deficits when Congress was split (8 years) = $1.063 Trillion.

NEW DEBT

Total New Debt when Democrats controlled Congress (12 years) = $7.859 Trillion.
Total New Debt when Republicans controlled Congress (10 years) = $3.238 Trillion.
Total New Debt when Congress was split (8 years) = $1.781 Trillion.

Spin it all you want, but these are the FACTS

Democrats controlled Congress from 1987 – 1994, and from 2007 – 2010. Republicans controlled Congress from 1995 – 2000, and from 2003 – 2006. There was a split Congress from 1980 – 1986 and for 2001 & 2002.
Aug 27, 2012 11:58AM
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Ben "Dover" Bernanke and  Mario "The Drag Queen" Draghi are steering the world's money supply to fund the new world order.  They are puppets for the Rothchild family and are destined to implement socialism in what is left of the free world.
Aug 27, 2012 11:46AM
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Why do we need QE3 when Obama told us the great ressesion ended a year ago.
Aug 27, 2012 10:20AM
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What did I tell you!!!! Got all excited about stimulus and now we have doubts.  Nothing more then typical W/S crap and bull crap!!!!! They are using this as a lame excuse, but I feel the reason is because Europe is down, we need to be down also.  Wall Street is so predictable it's not even funny.  Oh and of course all we hear is about apple and their bogus court decision.  When you are based in California and your jury is from there, what would one expect!!!!!
Aug 27, 2012 10:39AM
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Let's split the US in two halves: OBAMAHOOD and ROMNEYHOOD

OBAMAHOOD where all the loons, Dems, Libs, illegals, welfare people and the Occupiers live.

ROMNEYHOOD would be where the Conservatives, all businesses and the military live.

One side would not be able to depend on the other side and we would then see which side can build and sustain itself.

Can you imagine OBAMAHOOD wanting to borrow money from ROMNEYHOOD which would never be repaid?

Aug 27, 2012 10:55AM
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Divest the Banks, banks can be banks,investment houses wll be investment houses, insurance companies have to be insurers..

 

Banks...Deposits,CDs,MMs,and Loans, overnights, ATM,Charge and Debit cards..NOTHING ELSE.

FDIC backed.

 

Investment Companies,..Just that, with no guarantees and no Government backstops.

 

Insurance Companies...Insurers and they invest their money at peril...No Government backing...

 

And all should be strickly regulated to prevent schemes...

 

 

 

 

Aug 27, 2012 11:47AM
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First read   Market down as stimulus hopes dim.

Second read  Market up on stimulus hope.

 

My read   Its makes no difference either way.  

 

Aug 27, 2012 11:21AM
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Get your money out of the worlds largest Ponzi scheme before the truth becomes common knowledge.  Once the "coconut shells" are flipped it will be too late.  The 10% penalty is peanuts compared to nothing!
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Ok what does buying US T-bills that no one in the world has the money nor the stomach to buy have to do with the unemployment rate???

 

Evans at the Federal Reserve seems to think we are stupid. Basically the banks are getting tried of borrowing money from the Federal Reserve at zero percent and buying US T-bills paying 1 percent or less. They want credit card debt where the customer is paying 34 percent interest a year and another 30 percent in late fees and penalty.

 

So what is left the Federal Reserve has to come in and buy US T-bills as no one else in the world has the money.

 

This is why the Republicans wanted to privatize S.S. so their banker friends could charge 401K pension plans 5 percent fees a year and use the money to buy US T-bills. Which would pretty much guaranty that 30 and 40 year olds would retire with no money in their S.S. privatized plans at all.

 

We are just about at the total collapse of the US economic system folks.

 

There is no saving it as the Wall Street bankers would rather go bankrupt and take everyone with them instead of releasing the hoarded 95 percent of the US's wealth in the hands of the 1 percenters.

 

Things are going to get a lot worse folks. The end is upon us now.

 

QUOTE

HONG KONG (Reuters) - The Federal Reserve should launch a fresh round of monetary stimulus immediately, buying bonds for as long as it takes to produce a steady decline in the jobless rate, a top Fed official said on Monday.

Without a change in policy, the unemployment rate, now at 8.3 percent, was unlikely to fall below 7 percent before 2015 at the earliest, Chicago Federal Reserve Bank President Charles Evans told reporters in Hong Kong.

"I don't think we should be in a mode where we are waiting to see what the next few data releases bring," Evans told a seminar at the Hong Kong Bankers Club. "We are well past the threshold for additional action; we should take that action now."

The U.S. central bank on August 1 kept U.S. monetary policy on hold, leaving interest rates at zero and reiterating the view that economic conditions will warrant keeping them there until at least late 2014.

Many policymakers thought more stimulus would be needed "fairly soon," the minutes of the meeting show, but wanted to watch the data for signs of improvement that would render moot the need for additional easing.

Evans, who will have a vote next year on the Fed's policy-setting panel, wants no part of that wait-and-see approach

END QUOTE

 

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