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.

Global airlines are likely to lose $9 billion this year, the International Air Transport Association said on Monday, nearly double its estimate of just three months ago, as rising fuel prices and weak demand create an unprecedented crisis for the industry.

This is the most difficult situation the industry has faced," Giovanni Bisignani, IATA's director general and CEO, told the aviation body's annual meeting in the Malaysian capital.

IATA had predicted in March that 2009 losses for the airline industry would total $4.7 billion. It has also revised its estimate of 2008 losses to $10.4 billion from $8.5 billion.

In an effort to ride out the crisis, made worse by the recent outbreak of the H1N1 flu virus, airlines have been looking to cut costs everywhere they can.

Barclays is in talks to sell Barclays Global Investors (BGI), the British bank said on Monday, with U.S. fund manager BlackRock the frontrunner to land the asset manager, according to people familiar with the matter.

BlackRock and Bank of New York Mellon are both in talks to buy BGI in a deal that could be worth about $12 billion and might come early this week, the sources said, who asked not to be named as the talks are confidential.

The deal could see Barclays take a stake of up to 20 percent in the enlarged asset manager in a deal structured similarly to its planned sale of iShares, the sources said.

President Barack Obama promised Monday to deliver more than 600,000 jobs through his $787 billion stimulus plan this summer, with federal agencies pumping billions into public works projects, schools and summer youth programs.

Much better-than-expected jobs numbers drew little more than a collective yawn from Wall Street on Friday, and some market experts think that could actually be a good thing.After initially indicating a strong rally following the release of nonfarm payroll numbers, stocks quickly pared gains and traded in a tight range into the afternoon. That could be seen as a surprise, given the market's hypersensitive reactions to economic data points during the bear market of the past year.But the modest move higher also might be a sign that investors have raised their expectations of the market and are no longer worried about doomsday scenarios. That type of mentality is traditionally another ingredient toward the formation of a bull market, experts say

Stocks rose for a third straight week as investors got their game on for a recovery. Still, Friday's trading was choppy as investors cheered an early pop from the smaller-than-expected job loss in May but the market couldn't sustain the gains.

NEW YORK - Standard & Poor's lowered the rating for media company CBS Corp. to "BBB-" from "BBB" on Friday with a negative outlook.

The ratings service said that the downgrade stems from worries that CBS's work to decrease leverage by cutting costs and dividends have been "more than offset" by weakened revenue.

The ratings service said the outlook relates to the expectation that CBS's leverage will climb in 2009 and S&P's uncertainty about how fast this will decline.

LAS VEGAS - Casino operator Riviera Holdings Corp. said Friday it is voluntarily delisting its common stock, saying that it cannot meet required compliance standards by a required deadline.

Riviera said it received a deficiency letter from NYSE Amex LLC, dated Monday. The letter said Riviera did not meet listing standards because of losses that are so "substantial" and an impaired financial condition, that it remains questionable whether the company can continue operating.

WASHINGTON - Shares of Cascade Corp. sank Friday after two Wall Street analysts downgraded the company following a disappointing fiscal first-quarter report.

Shares of the Portland, Ore.-based company, which makes forklift attachments and other loading gear, fell $5.22, or 17.4 percent, to $24.85 in afternoon trading. The company's stock has traded between $12.81 and $53.76 over the last 52 weeks.

Rodman & Renshaw analyst Joe Giamichael lowered his rating from "Market Perform" to "Market Underperform."

"In response to the weak outlook for its products, management is taking aggressive measures to reduce costs and will continue to incur restructuring charges for the next several months as they rationalize operating facilities," said Giamichael in a note to clients.

Cascade anticipates full-year restructuring costs between $20 million and $25 million, said Giamichael. He lowered his earnings and revenue estimates for fiscal 2010 and 2011.

CJS Securities Arnold Ursaner downgraded the stock from "Market Perform" to "Market Underperform."

"While we remain confident that Cascade will survive this downturn and become a stronger company in the recovery, we think the next several quarters will have significant headwinds," said Ursaner in a note to clients.

On Thursday, the manufacturer recorded a loss of $1.12 per share for the quarter ended April 30. Revenue fell 49 percent to $76.3 million.

NEW YORK - Big-screen theater operator Imax Corp. said Friday it raised $70.1 million from the public offering of 9.8 million shares at $7.15 apiece.

It has granted its underwriter, Roth Capital Partners LLC, the option to purchase an additional 1.47 million common shares.

The company said it plans to use the proceeds to pay down debt, including a portion of senior notes with an interest rate of 9.625 percent due December 2010, as well as for general corporate purposes.

TORONTO - The head of Ford Canada says the company wants to negotiate a competitive new labor deal with the Canadian Auto Workers union.

CEO David Mondragon said Friday that Ford Canada needs to bring its labor costs in line with its competitors in Canada and the United States.

Pattern bargaining in the past meant Ford Motor Co., General Motors Corp. and Chrysler would agree on very similar deals with their Canadian workers.

But both Chrysler and GM were able to get significant new concessions from the CAW in recent negotiations before filing for bankruptcy protection.

Ford has not requested government bailout money and has avoided a bankruptcy filing.

Initial bids for Qwest Communications' long-distance business are below the $2 billion to $3 billion the telecommunications company sought, the Wall Street Journal reported Thursday.

Asian stocks rose Friday as hopes for a global economic recovery drove up appetite for riskier assets, but traders were cautious ahead of U.S. monthly job data. Resource shares were among the leading gainers after oil prices surged to a seven-month high on hopes that the global recession had bottomed out.
U.S. nonfarm payrolls data due later in the day are expected to show U.S. employers cut 520,000 jobs in May, lower than 539,000 in April, but the unemployment rate is forecast to rise to 9.2 percent from 8.9 percent in April. A much worse-than-expected report could dampen expectations that the worst is over for the global economy, hopes that have pushed stock markets from Seoul to London sharply higher since early March.

European shares rose on Friday, led by miners, banks and oil producers, as U.S. jobless data came in below expectations, boosting sentiment.
The FTSEurofirst 300 index of top European companies closed unofficially up 0.7 percent at 872.79 points, for a weekly gain of 1.2 percent.BHP rose 6.8 percent, while peers Anglo American and Xstrata put on 6 and 2.8 percent, respectively.

MELBOURNE (Reuters) -- Miner Rio Tinto scrapped a planned $19.5 billion tie-up with China's Chinalco struck at the height of a global financial crisis, turning instead to an iron ore joint venture with rival BHP Billiton and a share sale to slash its debts.

The collapse of the Chinalco deal, put together in February in a bid to halve Rio's $38 billion of debt, leaves the world's biggest steel making nation vulnerable to just two suppliers -- a Rio/BHP combination and Brazil's Vale -- controlling 70% of global iron ore trade.

Shares in Rio jumped as much as 13% to a 7-month high, while BHP rose 10%, as investors welcomed an alternative route to resolving Rio's big debt burden.

NEW YORK (CNNMoney.com) -- Bankrupt automaker General Motors Corp. announced Friday that it will sell its Saturn unit to car dealership operator Penske Automotive Group.

Penske is owned by former race car driver Roger Penske, who owns NASCAR and IndyCar racing teams.

The deal gives Penske the rights to the 19-year old brand including its five different models. GM would continue production of only the three highest-selling models, including the Aura sedan, and the Vue and Outlook cross-over SUVs, for the next two years. The Saturn Sky and Astra models will be discontinued.

NEW YORK (Reuters) -- The dollar gained against the yen and euro Friday after data showed the United States shed fewer jobs than expected last month, boosting hopes of an economic recovery and raising risk tolerance.The euro inithe euro initially rallied on the news but quickly gave up gains as investors digested the jobs number and stop-loss orders were breached in the euro's sharp rise.

Crude futures surged to a 6-month high after a better than expected jobs report for the U.S. - the world's largest consumer of oil - but then retreats.

NEW YORK (CNNMoney.com) -- Oil prices topped $70 a barrel Friday morning - the highest level in six months - as investors took the government's latest employment report as an indication of the improving health of the U.S. economy.

Job losses slowed dramatically in May, according to the latest government reading on the labor market. May's job losses were the fewest since last September.

Prices surged to $70.32 a barrel immediately following the report, but nose dived later in the session.

Crude is trading up 16 cents at $68.97 a barrel, after falling as low as $67.54 a gallon.

NEW YORK (Reuters) - U.S. stocks rose in choppy trading on Friday as investors grappled with conflicting monthly jobs data, with the Dow industrials boosted after Wal-Mart said it was buying back more of its shares.

Government data showed employers cut fewer jobs than expected in May, but the unemployment rate jumped to 9.4 percent, the highest since July 1983, from 8.9 percent in April.

The Dow Jones industrial average gained 52.84 points, or 0.60 percent, to 8,803.08. The Standard & Poor's 500 Index rose 2.36 points, or 0.25 percent, to 944.82. The Nasdaq Composite Index added 1.84 points, or 0.10 percent, to 1,851.86.

Nonfarm employers cut payrolls by 345,000 last month, well below the 525,000-drop expected. And, the previous month was revised to show fewer jobs were lost than initially reported. The unemployment rate, however, jumped to 9.4 percent, the highest since August 1983 and higher than the 9.2 percent expected.

"Forget the unemployment rate—it lags," wrote Robert Brusca, an economists at Fact and Opinion Economics, in a morning note to clients. "Jobs are doing what they do at end recessions and in early recoveries ... Job gains by the fourth quarter—believe it," he said.

The news initially gave stocks a boost but that faded within the first hour of trading and stocks took a dive.

Traders "are very concerned how nonfarm payrolls can be down and unemployment high," said Mark McLain, managing director of trading at Ladenburg Thalmann. Plus, the last couple of days, there's been a sentiment change in the market, McLain explained, as traders take a step back after running up amid dismal economic data.

Still to come: April consumer-credit figures are due out at 3 pm ET, with $6 billion decline expected. These figures could be scrutinized more than usual, given the focus on tight credit markets.

the U.S. economy is showing signs of stabilizing from a recession that started in December 2007, it’s “way too early” to say the contraction is over, said the head of the group that officially makes the call.

Intel said Thursday it will buy software maker WindRiver System for $884 million in an all-cash deal that will help the world's largest computer chip maker expand beyond the PC market.

Intel said the purchase will benefit its processor and software offerings for embedded systems and mobile devices, which run the gamut from smart phones to networking equipment.

Australia's central bank sees scope to ease monetary policy further, but believes the domestic economy is well placed for expansion toward the end of this year, central bank chief Glenn Stevens said on Thursday.

But Stevens, speaking at a conference, added a cautious note, forecasting weaker consumer spending over the next few months, as government stimulus waned and unemployment grew, and as business investment continued its rapid decline.

If investors in New York and London are seeing the first delicate signs of a recovery, their counterparts in developing countries say they are witnessing a full-on spring.

Auto and mortgage lender GMAC on Wednesday priced a $4.5 billion two-part note sale, its first debt issue backed by the Federal Deposit Insurance Corp.
GMAC originally launched the deal at $4.25 billion, but later increased the size due to high demand for bonds issued under the government's Temporary Liquidity Guarantee Program

Renewed strength in the dollar caused the oil market to retreat on Wednesday — and analysts say oil investors should continue watching the currency’s movement as an indicator on Thursday.
Oil prices lowered as the dollar rallied on news that Asia will continue to buy U.S. Treasurys regardless of the U.S. credit rating. Oil prices had touched 7-month highs earlier in the week.

With weakness in the dollar expected to continue, investors are rethinking their plans across virtually the entire spectrum of asset classes.
As would be expected with a declining US currency, commodities are soaring, both in the materials themselves and the companies dependent on them.

Retail sales results are largely falling short of analysts' estimates in May as consumers continue to stick to the essentials.
The news is all the more disappointing because April sales had seeded hopes for a rebound in the sector.

Still, it should be noted that retailers are facing tough comparisons with last year's results, which were helped by the benefit of stimulus checks last year.

Discounter Wal-Mart Stores says it will add more than 22,000 jobs in its U.S. namesake stores in 2009.

The forecast points to lower growth compared with last year, as the world's biggest retailer opens fewer of its U.S. Wal-Mart discount stores to focus on expansions and renovations.

The European Central Bank left its benchmark interest rate unchanged at a record low of 1.0 percent on Thursday, as expected.
Markets are now awaiting President Jean-Claude Trichet's news conference at 1:30 pm London time, when he will explain the decision and give specifics on the bank's plans to buy up around 60 billion euros' ($85 billion) worth of covered bonds.

With the Obama administration working toward a sweeping package of regulatory reforms for the financial sector, Congressional Republicans are preparing their own offensive in the coming week.

General Motors will sell most of its Opel unit and other European assets to Canada's Magna International in a deal German Chancellor Angela Merkel said Saturday would protect the assets from GM's likely bankruptcy.

A U.S. Court of Appeals agreed on Tuesday to hear a challenge to Chrysler's sale of most of its assets to a group led by Italian automaker Fiat, in a move that could potentially delay the deal.

A severe euro zone factory recession eased in May and there were signs that companies were ready to pick up production even if job losses will keep mounting, a key survey showed on Monday.

Bank of Japan policy board member Hidetoshi Kamezaki on Wednesday warned that huge bond issuance to fund government stimulus measures taken across the globe could push up interest
rates. Global bond yields have climbed over the past few weeks partly on concerns about the financial markets' ability to digest a huge wave of debt issuance to pay for government stimulus packages.

But analysts say the yield rise is unlikely to spur the Bank of Japan to further action.

"I think he had mainly U.S. markets in mind," said Naomi Hasegawa, senior strategist at Mitsubishi UFJ Securities. "I doubt the BOJ will do something now even if the 10-year bond yield rises a bit from current levels around 1.5 percent."

General Motors has reached a preliminary agreement for the sale of its Hummer brand of large sport utility vehicles and pickup trucks to a machinery company in western China with ambitions to become a carmaker, a person familiar with the Chinese government approval process said Tuesday.

More commonly known by their acronym, REITs are funds that provide investors with a broad range of investment opportunities while delivering substantial tax breaks to the corporations that set up the vehicles.

Wildly popular in the earlier part of the decade during the real estate boom, REITs nosedived in 2006 and 2007 as the market fell correspondingly.

But recent developments over the past several weeks have sharp-eyed investors again examining REITs as a way to profit from a looming rebound in the industry.

US employers and recruiters have largely given up expectations for an increase in hiring this year, and more are cutting starting salaries, according to a semi-annual survey by Dice Holdings.Dice's survey found 10 percent of employers expect a hiring recovery in the second half of this year, down from 33 percent who said so in November. Thirty-one percent said layoffs were likely over the next six months, down only slightly from 34 percent six months ago.

Singapore's Temasek Holdings and Hong Kong tycoon Richard Li's Pacific Century Group may join an investor group in talks to buy American International Group's asset management unit, a source familiar with the matter said on Tuesday.
Franklin Resources and Crestview Partners are in exclusive talks for the business, and the two Asian investors are considering taking part in that consortium, the source said.

The asset management business, which rests with AIG Investments, had drawn interest from both private equity and strategic buyers, sources have said previously. Initial bids for the unit had come in around $500 million.

AIG also agreed to sell two New York buildings, including its downtown Manhattan headquarters, another source familiar with the matter said.

China Investment Corp, the country's sovereign wealth fund, said it is buying into a $2.2 billion common stock offering by Morgan Stanley because it is confident in the Wall Street bank's prospects.

CIC is buying 44.7 million shares of the 80.2 million shares being offered for $1.2 billion, raising its stake in Morgan Stanley back to about 9.86 percent.

That was the size of the original stake CIC took in Morgan Stanley in 2007 for $5.6 billion. It was subsequently diluted to about 7.68 percent when Morgan Stanley sold stock to Mitsubishi UFJ Financial Group last October.

Australia's central bank kept the key cash rate at a record low of 3.0 percent on Tuesday and emphasized that easing inflation meant there was scope to cut further if needed.

The decision by the Reserve Bank of Australia (RBA) was widely expected given gains in global financial markets and signs of economic stabilization at home. Indeed, trade data out on Tuesday suggested Australia just might have dodged recession last quarter, one of the few countries to be so lucky.

Australia's economy expanded last quarter as the best trade performance in 48 years helped offset a slump in business and housing investment, putting it among the very few developed nations to have avoided a recession.