Stocks turn higher after ECB comments
The ECB is considering yield band targets for a new bond-buying program. Orders for US durable goods jump, but the core number slides. Fed stimulus hopes fade. Autodesk plunges on disappointing results. Eli Lilly rallies on an Alzheimer's study.
Stocks turned higher after Reuters reported that the European Central Bank is considering setting yield band targets under a new bond-buying program. Also, in a letter released Friday Federal Reserve Chairman says there is scope for further action by the Fed.
The Dow Jones Industrial Average ($INDU) was up 75 points at 13,133. The S&P 500 ($INX) was up 7 points 1,409. The Nasdaq Composite ($COMPX) was up 15 points at 3,069.
Investors remained uncertain about the steps the Federal Reserve will take to stimulate the economy, if any, and Europe and its debt crisis continued to dominate the markets. Also in focus are U.S. durable goods orders, which jumped 4.2% in July, but the core figure continued to show weakness.
Asian markets closed considerably lower Friday, following U.S. market declines Thursday. The Dow ended Thursday's session 115 points lower at 13,057, pulled down further by Hewlett-Packard (HPQ), which slid on disappointing results.
Gold prices eased on Friday after a seven-session rally to 4 1/2-month highs, though gold traders are the most bullish in nine months on hopes of more stimulus, Bloomberg reported.
Orders for big-ticket U.S. goods jumped 4.2% in July, the Commerce Department said. Economists were expecting a jump of just 2.5%, according to briefing.com. Surging demand for airplanes and autos were behind the increase, although bookings weakened in many other sectors.
Excluding the volatile transportation equipment category, which shot up 14.1% last month because of large orders Boeing received, orders fell 0.4% and declined for the second month in a row. Orders for core capital goods excluding defense and transportation, a key barometer of U.S. business spending, dropped a sharp 3.4% last month. Those orders also fell 2.7% in June. Economists expected the category to rise 0.7%, Reuters reports.
To stimulate or not to stimulate
On Wednesday, the Federal Reserve released the minutes from its latest policy meetings, with many observers seeing signs that policy makers are in favor of another round of stimulus.
But hopes quickly faded Thursday when St. Louis Federal President James Bullard, a nonvoting member, told CNBC that recent U.S. economic data didn't warrant a huge policy response. By Friday, yet another nonvoting member, Chicago Fed President Charles Evans, opined in favor of Fed action.
In a letter to House Oversight Chairman Darrell Issa written Wednesday and released Friday, MarketWatch reports, Fed Chairman Bernanke said there is scope for further action by the Fed, language largely borrowed from the most recent minutes.
Continued eurozone concerns
The eurozone's struggle to prevent its own breakup continues to dominate markets. European stock markets were set to extend losses into a third straight trading day on Friday.
German Chancellor Angela Merkel met with Greek Prime Minister Antonis Samaras. Merkel said that Germany, as well as France, wants Greece to stay in the eurozone but that Athens must meet its reform targets, promising it would not prejudge Greece's performance but wait for a report due next month.
Samaras repeated that Greece isn't seeking more money but needs "breathing space" to implement measures while trying to restore growth.
Stocks to watch
Autodesk (ADSK) shares plunged after the company reported late Thursday that fiscal-second-quarter profit fell 9.3%, well below expectations, cutting outlook and saying it plans to reduce its staff in a restructuring effort. Shares were downgraded by various brokerages.
Eli Lilly (LLY) shares jumped after the pharmaceutical said its experimental Alzheimer's treatment slowed the decline of cognition in some patients even though it failed to meet the primary goals of two large studies.
Drugmaker Bristol-Myers Squibb (BMY) said it abandoned an experimental hepatitis C pill, which it had bought for $2.5 billion, earlier this year after one patient died and eight others were hospitalized while taking the drug in a study.
While in the U.S. the jury is deliberating on the patent case between Samsung Electronics and Apple (AAPL), a South Korean court delivered a split decision Friday, saying each infringed on some of the other's patents. Analysts say the court's decision offered little advantage for either company.
Supervalu (SVU) shares jumped after Bloomberg reported its advisers sought potential buyers to bid for the entire business, even as several suitors have inquired about individual parts of the U.S. grocery company.
TripAdvisor (TRIP) shares advanced after Citigroup raised its recommendation on the stock to "buy" from "neutral."
the massive "stimulus" of american manufacturing was ignored by the "leaders" of the country.
we imposed on ourselves endless regulations for the good of the nation. air quality, labor laws, holidays, OSHA. then we opened our borders to free trade which meant USA was 100% non competitive against other world countries with zero regulations or labor or OSHA style laws.
yet we continue to let manufacturing disappear. we don't even so much as impose a tarif to force other countries to upgrade from 3rd world status. if they meet our regulations, zero import tarif.
if we as a country feel child labor laws are meaningful, WHY do we allow products to come in from china, vietnam, india - where child labor laws do not exist - at zero tarif?
we as a nation essentially are saying we do not care about child labor, air quality, OSHA, etc anywhere in the world except here.
putting people to work also needs to include a completion of the goods and services cycle. "stimulus" of fluff jobs making things with no payback are a poor investment.
if stimulus was a project to produce say 30 water desalinization plants on each coast perhaps that would be functional stimulus. something done, something gained.
stimulus could be a water distribution system upgrade to insure dry areas always have water.
stimulus could be adding "people mover" systems to airports to help transportaion in conjested areas.
but we'll do nothing remotely progressive or remotely completing the typical goods and services cycle.
>>>>>W.W.II got us out of the great depression by putting tens of millions of Americans to work building war machines to defeat Hitler's Germany<<<<<<
American incomes declined more in the three-year expansion that started in June 2009 than during the longest recession since the Great Depression, according an analysis of U.S. Census Bureau data by Sentier Research LLC.
Median household income fell 4.8 percent on an inflation- adjusted basis since the recession ended in June 2009, more than the 2.6 percent drop during the 18-month contraction, the research firm’s Gordon Green and John Coder wrote in a report today. Household income is 7.2 percent below the December 2007 level, the former Census Bureau economic statisticians wrote.
“Almost every group is worse off than it was three years ago, and some groups had very large declines in income,” Green, who previously directed work on the Census Bureau’s income and poverty statistics program, said in a phone interview today. “We’re in an unprecedented period of economic stagnation.”
The Fed can't do anything for the economy. They are done. Real interest rates are close to negative . Of course, they could go negative, but without demand (economic growth), it is pointless.
The next couple of months will tell the story. The economy may go into recesson if it goes off the fiscal cliff (expiration of Bush tax cuts, sequestration, and end of payroll tax cuts). Estimations predict around a 1-2% decrese in GDP!
Mitt we need you. Only you can save us from the current fools in the WH!
Gee people look at Egypt -- 5,000 years ago they built the pyramids and today they are a back waters nation.
WHY because they are not using their people to do anything useful.
IT'S NOT THE MONEY PEOPLE
Pre-weekend sell off, Labor Day party planned in the Hamptons, gotta sell shares to pay for
the celebrity endorsements, screw the middle class
I think and this is just my opinion that we need desperately to get Mr. OBama out of office. The economy has gone downhill to the extremes and he is for everything that is immoral and all for the votes. I hope acorn is out of business otherwise we will have a lot of illegal voting going on as before in the other election.
I have heard rumors that they are behind the scenes happenings that are trying to get the US into a world group to run the countries. I think and this is my thoughts only that it will lead to a one world government , which will be one of the signs headed to the end times .
Scary, but it is happening all around us.
There is no uncertainty in the stock market basically Japan,Europe and the US economies are on the Death Spiral of Lost Jobs and an ever weaker and weaker economy.
This path of self destruction will continue until the western economic system totally collapses.
Sure Bernanke and the Central bank of Japan and Europe can prints as much fake monies as they want it will not solve the basic problems of unemployment and lack of production out of the western nations which is causing their decline.
Monies as Bernanke is finding out is meaningless without a strong work force focused on producing goods. Sure this sounds Marxist but the guy was right. He merely observed what was going on homes stood empty as they were foreclosed on, factories shutdown and not producing goods and farm land not being farmed, all the while families and kids were straving homeless in the streets without jobs.
Gee people it is obvious that only the labor of workers produces wealth and if you have half your population on welfare like we do and 5 percent on the population taking in 95 percent of the wealth that means times are going to be pretty hard for most people.
W.W. II did not get us out of the great depression by merely being a war to be fought.
W.W.II got us out of the great depression by putting tens of millions of Americans to work building war machines to defeat Hitler's Germany. It was the fact that in 1942 men were in assembly lines building things and getting paid vs 1932 when they were in soup lines all day waiting on a bowl of soup that got us out of the great depression.
Bernanke printing fake monies and handing to the same greedy Wall Street bankers who got us in this mess has not solved the problem because the super rich already have way too much money and do not know how best to use the money.
BERNANKE PUT PEOPLE BACK TO WORK USE YOUR MONEY PRINTING PRESS TO BUILD MANUFACTURING PLANTS AND HIRE PEOPLE SO THEY WILL HAVE MONEY TO PAY TAXES AND BUY THINGS.
Heck you could lose trillions of dollars building the factories it's all just fake monies afterall the important point is to get people working and doing something useful.
A person on welfare is a huge negative to the GDP. I person making solar panels is a huge plus for the economy and might just save the planet.
BERNANKE GIVE A COUPLE OF TRILLION DOLLARS AND I WILL TURN THIS COUNTRY AROUND SO FAST that you will then get the Noble Prize for saving the US economy in less than a year.
If Obama really cared about this country he would resign immediately. We now owe over 16 trillion dollars. He has created such a mess in 3 1/2 years it will be nearly impossible to get us on the right track.
Would also require Biden to resign also, he actually is worse than Obama if that is possible.
Circus will be closing due to to many dead animals....
Now we have the lovely scenero where the FED members are publicly disagreeing with each other. We can get a pro-stimulus snippet in the morning and an anti-stimulus snippet released about 3:00 every day. Clearly there is no obviously "correct" course to take regarding more stimulus if these highly placed men cannot agree. Therefore they can say whatever the hell they want, whenever they want, and there are no repercussions. Those closest to the guys doing the talking will clean up.
Picture a scenerio where O'bama declared war on China every morning and retracted the statement every afternoon. All his friends could short in the morning and buy back before the afternoon retraction. He couldn't do that but these bankers can! They are not accountable to anyone but their bottom lines!
IT"S ALL RIGGED.
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All hail the bull market, which ended the week with a big rally. But it also is starting to look a little like 1987, which suffered an epic blow-out.
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