Market Action
- US: Dow: 12976.63 (0.29%), S&P 500: 1361.24 (0.26%), NASDAQ: 2948.43 (0.53%)
- Europe: CAC: 3447.31 (-0.00%), DAX: 6809.46 (-0.51%), FTSE: 5937.89 (0.36%).
- Asia:China: 2409.55 (0.25%),Hong Kong: 21380.99 (-0.79%),India: 5483.30 (-0.40%),Japan: 9595.57 (0.43%)
- Metals: Gold: 1787.00 (0.89%), Silver: 35.55 (3.78%), Copper: 3.80 (-0.79%)
- Energy: Crude Oil: 106.85 (0.54%), Natural Gas: 2.60 (-1.51%)
- Commodities: Corn: 6.37 (-0.16%), Soya Bean: 12.75 (0.20%), Wheat: 6.40 (-0.74%)
- Currency: EUR/USD: 1.3335 (0.6459%), GBP/USD: 1.5709 (0.2578%), USD/JPY: 80.0650 (-0.2846%)
- 10 year US Treasury: 1.993% (-0.010)
Market News Update
U.S. Markets edge higher: U.S. stocks traded slightly higher Thursday, paring earlier losses, as investors digested better-than-expected news in the jobs sector. On the Dow, IBM (IBM), Travelers (TRV) and Disney (DIS) offset declines, the bulk of which came from Hewlett-Packard (HPQ). As PC sales swooned, HP’s profit fell by a dramatic 44% and sales sank 7% in its latest fiscal quarter, which ended on Jan. 31. The S&P 500 added 20 points, or 0.7%, and the NASDAQ composite edged up 4 points, or 0.3%. http://money.cnn.com/2012/02/23/markets/stocks/index.htm?iid=HP_LN
Weekly Jobless Claims at 4-Year Low: The number of Americans filing new claims for jobless benefits last week held at the lowest level since the early days of the 2007-2009 recession, signaling that the battered labor market is healing. Workers filed 351,000 initial claims for state unemployment benefits, the same as in the prior week, the Labor Department said on Thursday.
http://www.reuters.com/article/2012/02/23/us-usa-economy-idUSTRE7BM0AB20120223
Consumer confidence increases to the highest level since April 2008: Consumer confidence in theU.S. increased last week to the highest level since April 2008 as more Americans had a favorable view of their finances. The Bloomberg Consumer Comfort Index rose to minus 38.4 in the period ended Feb. 19, its fifth consecutive gain, from minus 39.8 the previous week. It marked the second straight week above minus 40, which is the level associated with recessions and their aftermath. Men, homeowners and households with annual incomes of more than $50,000 were the most optimistic in more than a year.
US home prices decline: U.S. home prices fell 2.4 percent in the fourth quarter from a year earlier, as sales were boosted by investors seeking lower-cost distressed properties. Prices dropped 0.1 percent from the prior three months on a seasonally adjusted basis, the Federal Housing Finance Agency said today in a report fromWashington. In December, prices retreated 0.8 percent from a year earlier, while increasing 0.7 percent from the previous month.
Oil rises to nine month high: Oil rose to the highest level in more than nine months as jobless claims held at a four-year low in theU.S. and German business confidence surpassed forecasts. Crude oil for April delivery gained 58 cents, or 0.5 percent, to $106.86 a barrel at12:53 p.m. on the New York Mercantile Exchange. Earlier, futures touched $107.09 a barrel, the highest price since May 5. Oil has risen 8.9 percent in the past year.
Company News Update
- IBM (IBM) alone accounted for 32.6 points of the Dow’s upswing, rallying 2.2% and acting a strong counterbalance to Hewlett-Packard (HPQ).
- Sears Holdings (SHLD) reported earnings that fell far short of forecasts, and said it planned to sell of some of its stores in an effort to raise $400 million to $500 million. The retailer — which also owns Kmart as well as theKenmore, Craftsman and Lands’ End brands — has been struggling for months.
- Target (TGT) reported better-than-expected fourth-quarter earnings, and said it expects profit growth of 3% to 8% this year.
- AT&T’s (T) board cut CEO Randall Stephenson’s 2011 pay by $2 million, as a direct response to the failed T-Mobile takeover bid.
- T-Mobile, owned by Germany’s Deutsche Telekom (DT), said “not carrying the iPhone led to a significant increase in contract deactivations in the fourth quarter of 2011.” The company lost 526,000 customers during the quarter, compared to adding 126,000 during the third quarter of 2011.
- Procter & Gamble (PG) CEO Robert McDonald said the company plans to cut 4,100 jobs during fiscal year 2013, in an attempt to drive down its costs by $10 billion by fiscal year 2016.
- MetroPCS Communications Inc. (PCS) rallied 12 percent to $11.56. The pay-as-you-goU.S. wireless carrier reported fourth-quarter profit that beat analysts’ estimates.
- Safeway Inc. (SWY) declined 8.1 percent, the most in the S&P 500, to $20.84. The grocer’s fourth-quarter sales excluding fuel at stores open at least one year increased 1.5 percent, trailing the average 2 percent gain expected by analysts.
- Kohl’s Corp. (KSS) fell 4.4 percent to $49.90. TheU.S. department-store chain projected full-year earnings that trailed analysts’ estimates.
- Solar shares fell after Germany, the world’s biggest market for solar power, plans record reductions in subsidies for the industry as part of a program to rein in a boom in installations. First Solar Inc. (FSLR) declined 6.3 percent to $37.90. Trina Solar Ltd. (TSL) tumbled 9.4 percent to $8.85.
- Google Inc. (GOOG), which wonU.S. approval for its acquisition of Motorola Mobility Holdings Inc. (MMI), is close to naming Dennis Woodside to run the business when the deal closes, three people familiar with the matter said.
- Nissan Motor said on Wednesday it would recall about 250,000 Juke, Infiniti M, March and other models globally to fix a mechanical glitch in the fuel rail of direct injection engines that could lead to a fuel leak in extreme cases.
- Vivus Inc. (VVUS) doubled in trading after the company’s pill Qnexa won the backing of a regulatory panel, moving the drug a step closer to gainingU.S. approval as the first new obesity treatment in 13 years.
- United Continental (UAL) raised the majority of its domestic fares by $2 to $5 one-way earlier this week, and JPMorgan (JPM) analysts say they view that as a sign demand is starting to pick up.
Hedge Fund News Update
- Fifty eight new funds were launched in Asiain 2011 raising US$4.43 billion, the highest figure since the financial crisis, according to a survey by industry publication AsiaHedge. In 2007, Asian hedge funds attracted $7.8 billion. Most of the new funds were set up in Hong Kong, followed by Singapore.
- Disgruntled investors have filed lawsuits against Paulson & Co and Harbinger Capital Partners over deals that contributed to large losses. Other investors could join in if a class action is filed. Paulson & Co and Harbinger Capital Partners, which made billions for investors betting against US sub prime mortgages in 2007 and 2008, are being sued by investors unhappy with recent investments that resulted in significant losses for their funds.
- Hong Kong’s securities regulator won the right to independently seek civil remedies from suspected rule breakers after a court reversed the striking out of its case against hedge fund Tiger Asia Management LLC. Court of Appeal Judge Robert Tang wrote in a ruling handed down yesterday that such a power “provides much needed ammunition to the commission to protect investors.”
- The Commodities Futures Trading Commission (CFTC) has significantly changed how hedge funds will be able to participate in commodities. Earlier this month the Commission rescinded several exemptions provided to private funds that operate commodity pools. By removing these exemptions, funds that operate commodity pools will now be required to register with the CFTC as Commodity Pool Operators (CPOs) and may be required to take certification examinations. The rules also include foreign investment advisers that have US clients.
- DE Shaw, one of the world’s most prominent hedge fund managers, has been fined by the US Commodities and Futures Trading Commission for violating position limits in two sensitive food futures markets. The hedge fund exceeded monthly trading allowances – designed to curb speculative activity that may cause damaging movements in prices – in corn and soya futures in 2010, the CFTC said in an order issued on Wednesday.
- Banking giant JP Morgan Chase’s hedge fund investment arm has made changes to its pooled stable value fund to insure that it will remain open to new investors.
JP Morgan Asset Management will be dropping its 12-month put option, according to a company statement. - Republican presidential candidate front-runner Mitt Romney has secured further donations from hedge fund managers, according to reports this week. Bruce Kovner, co-founder of Caxton Associates, is believed to have donated $500,000 while David Tepper of Appaloosa Management is said to have given $375,000 to Restore Our Future, aUS political action committee backing Romney.
- U.S.banks pushed regulators to widen proposed restrictions on trading and hedge-fund ownership by foreign firms, then encouraged governments around the world to complain about the rule’s reach. The two-pronged lobbying strategy resulted in foreign officials joining U.S. lenders to push back against the Volcker rule, named after former Federal Reserve Chairman Paul A. Volcker and incorporated in the 2010 Dodd-Frank Act.
