Stock Markets Updates

The head of the IMF questioned on Monday any debate about when to roll back stimulus spending, saying the world economy had yet to weather the worst of a recession that claimed a record number of European jobs.

The 16-country euro zone lost a record 1.22 million jobs in the first quarter, official data showed. Employment during the first quarter fell 1.2 percent year-on-year, the deepest annual drop since measurements started in 1995.

Even if some form of economic recovery is not far off, analysts say unemployment will climb for many months to come.

Underlining the fragile state of the global economy, an influential economist said China would not see a rapid rebound and South Korea's finance minister said its economy was still sliding, although the pace had slowed.

But in southern Italy, Group of Eight finance ministers meeting at the weekend described their economies in the most positive terms since the collapse of U.S. bank Lehman Brothers nine months ago heightened the world's worst financial crisis since the Great Depression of the 1930s.

The latest jobless claims show the economy is on its way to a "jobless recovery" that could be troublesome for the markets, Art Cashin, director of floor operations at UBS, told CNBC.

Government data Thursday showed weeekly jobless claims dropping more than expectations to 601,000 but continuing claims of those unable to find a job remain high, causing concern among investors.

"Continuing claims continue to be a problem," Cashin said. "Anything over 600,000 is not pleasant for this economy, and it continues to look like if we get a recovery it will be a relatively jobless recovery and that'll be something we struggle with."

In the bigger picture, Cashin sees 960 as a key resistance level for the Standard & Poor's 500. If the market can beat that number investors would consider 1,000 "probably a lock."

"You're right at a springboard here," he said. "They haven't been able to penetrate certain moving averages and a couple of trend lines which are all bunched around 960. Punching through there might make 1,000 a reality."

Stocks opened slightly higher on Thursday after reports showed jobless claims fell by 24,000 last week to 601,000 and retail sales ticked higher in May. Bond yields will also be in focus today as the results of the government's 30-year Treasury auction are due out at 1pm ET. Experts weighed in on the above and more. Read and listen to what they had to say…

Bond Yield Surge Concerns

We don’t know what’s been driving the bond yields, but the rising will undermine certain aspects of the economy such as the housing market, warned Roger Nightingale of Pointon York. “It is hard to forecast a strong recovery in housing by output or prices unless we get a little bit of relief,” he said.

US Investor Confidence On the Rise

U.S. investor confidence is on the rise, said Clive Hyman of Hyman Capital Services. There’s been a jump in the stock market, and the automotive industry “is in the tank,” he said, "which is why they’re having to increase rates to drive the sales away." He said he is concerned that the U.S. government isn’t moving as quickly as it said it was going to.

Economy 'Pretty Good' in 2010

“Business is getting better [and the economy is] coming back to some normalcy,” said Mario Gabelli of GAMCO Investors. He said the U.S. economy will pick up slowly but surely — and 2010 and 2011 will be “pretty good.”

BOSTON - Microsoft Corp issued software to fix a record 31 security flaws in its programs, and Adobe Systems Inc warned that glitches in its products could let hackers take control of a user's PC.

Microsoft released patches on Tuesday that repair vulnerabilities in Windows, Office and Internet Explorer, as well as key pieces of software that businesses use in their data centers.

Adobe said in a security bulletin on its website that Reader and Acrobat users should update their software to the newest versions. Additional software is available if those releases are not compatible with a customer's PC.

The maker of design and document imaging software said it has yet to find any malicious software that exploits the vulnerabilities. It classified the risk as "critical," the highest level of risk on its scale evaluating the danger of such threats.

Adobe said the threat applies to users of Windows PCs as well as Apple Inc's Macintosh computers.

Once hackers learn of security vulnerabilities, they quickly develop malicious software to exploit them. Such programs can be used for cybercrimes such as identity theft, sending spam and taking control of computer systems.

Alerting hackers to the flaws presents a challenge for businesses as they need time to test the patches before installing them on their computer systems. They need to make sure that the new software does not interfere with existing programs because patches can sometimes cause systems to crash.

"Patching will be especially challenging for enterprises," Dave Marcus, a senior researcher with McAfee Inc, the world's No. 2 security software maker, said of the Microsoft patches.

It will be easier for consumers to address the threats as they can quickly download patches over the Internet, easily eliminating their exposure to attack. Such patches rarely cause stand-alone PCs to crash.

Wall Street and the banking industry think the financial crisis is over. The Obama administration isn’t so sure. And that tug of war is playing out in the future of the TARP funds and the lasting value of the recently completed stress tests. The financial industry wants the free market to be the deciding factor again, while the government is holding on to its interventionist ways.
"In 90 days you've gone from an attitude on Wall Street that the financial system is on the precipice to a feeling that happy days are here again," says veteran money manager James Awad, managing director at Zephyr Management. "This is all predicated on the consensus we are on the cusp of growth in the economy, which means the financial crisis is largely over and all we have to worry about is the degree of growth."

Though the Obama administration may not subscribe to that thinking, its policies have helped foster it.

"The stress tests were a great PR exercise, much better than they should have been," says Robert Brusca, chief economist at Fact & Opinion Economics, referring to the government program that examined how financial firms would hold up under worsening economic conditions and how much new capital they would need to cushion their balance sheets.

Fiat's shares rose more than 3 percent on Wednesday as a group led by the Italian car maker readied to buy Chrysler after the U.S. Supreme Court removed the final obstacle to the deal.

At 0716 GMT, the shares were up 3.7 percent at 7.71 euros, more than twice the rise in the DJ Stoxx auto sector.

In a statement, Fiat which is leading a group that includes a union-aligned trust as well as the U.S. and Canadian governments, said it expected to close the deal shortly.

A person familiar with Chrysler's plans told Reuters the deal would close by 1400 GMT.

In a victory for the U.S. administration driving the restructuring of bankrupt Chrysler, the Supreme Court denied a request from Indiana pension funds to delay the sale.

Citigroup on Wednesday began a long-delayed $58 billion stock swap that could leave the government with a 34 percent stake in the nation's third-largest bank.

Citigroup plans to swap common stock for as much as $33 billion of preferred shares, and convert as much as $25 billion of preferred shares held by the U.S. Treasury into common stock.

Citigroup said the swap could make it one of the world's best-capitalized banks, adding up to $61 billion of tangible common equity and $64 billion of Tier-1 common equity. It had planned to begin the swap in April.

The exchange offer could result in the issuance of more than 17 billion new common shares, diluting the holdings of existing investors by 76 percent. The public exchange offers expire July 24.