Posts Tagged ‘marketing

18
Mar

Bernanke: Fed should oversee big and small banks

WASHINGTON (MarketWatch) - The Federal Reserve needs to supervise banks of all sizes so it can stay on top of the markets and the economy, the central bank’s chairman, Ben Bernanke, said in testimony prepared for a hearing on Wednesday.

“The Federal Reserve’s participation in the oversight of banks of all sizes significantly improves its ability to carry out its central banking functions, including making monetary policy, lending through the discount window, and fostering financial stability,” Bernanke said in testimony prepared for a House Financial Services Committee hearing about the Fed’s role in bank supervision.

A Look at the Fed’s Bank Examiners

WSJ’s Dennis Berman and colleague Evan Newmark take on the Fed — namely the Federal Reserve Bank of Philadelphia, which Berman recently visited in the hopes of better understanding the people securing the front lines of the broken financial system.

“Because of its wide range of expertise, the Federal Reserve is uniquely suited to supervise large, complex financial organizations and to address both safety and soundness risks and risks to the stability of the financial system as a whole.”

Bernanke continues to defend the Federal Reserve from Senate legislation that seeks to remove some of its authority to oversee banks paperless payday loans. The bank reform bill introduced by Senate Banking Committee Chairman Christopher Dodd, D-Conn., on Monday would remove the Fed’s oversight of smaller state-chartered banks, permitting it to only continue to oversee and conduct on-site exams for 35 largest banks with $50 billion or more in assets.

That wording, however, is an improvement from the Fed’s point of view, over the legislation Dodd introduced in November. That original bill would have removed all the Fed’s supervision authority over banks so it could concentrate only on monetary policy. The House bank reform bill approved in December retains the Fed’s authority to supervise banks and conduct monetary policy. Dodd plans to have senators on the banking committee vote on the bill next week. He hopes to have legislation approved by the full Senate by spring.

The Fed oversees roughly 5,000 bank holding companies and about 850 state-chartered banks.

Bernanke: Fed should oversee big and small banks

12
Mar

Financial Stocks: Regional banks gain, Citi stock pares gains

SAN FRANCISCO (MarketWatch) — U.S. regional bank shares added to weekly gains Thursday, while Citigroup shares moved higher as investors cheered Chief Executive Vikram Pandit’s relatively upbeat outlook.

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The gains in bank stocks helped the financial sector outperform the broader market. The Financial Select Sector SPDR Fund , an exchange-traded fund that tracks the financial stocks in the S&P 500 , rose 0.5% while the broader index added 0.2%.

Shares of Huntington Bancshares added 2.9%, Fifth Third Bancorp rose 2% and KeyCorp rose 2.8%.

Regional banks had rallied in the previous session after a report suggested Britain’s Barclays was hunting for a retail bank acquisition. Also, several bank executives were speaking at a Citi investment conference in New York City this week.

News Hub: Credit Markets Come Back to Life

Credit markets are showing signs of life after a year of lows and two years after the collapse of Bear Stearns auto loan. Grianne McCarthy tells the News Hub panel why U.S. companies are feeling more confident about the economy.

Citigroup shares climbed 4% to $4.12 after Pandit said that the banking giant should be able to cover future credit losses in its troubled local consumer lending business. There are “early signs of improvement” in the division, he said at the conference. See story on Citi CEO’s remarks

The stock came off its intra-day high of $4.16 after the CEO said the U.S. government may sell its 27% stake in the banking giant. See pulse on possible government sale of Citi stake

Citi shares have advanced 18% this week and 25% for the year-to-date, bolstered by reports Wednesday that a sale of trust preferred securities had gone well.

The SPDR KBW Bank ETF has benefited from the rally in Citi and other banks. That ETF is up about 19% for the year-to-date and is one of the best-performing ETFs in recent months. Read more about financial and bank ETFs

Earlier this week, the KBW Bank ETF hit a fresh 52-week high. On Thursday, it rose as high as $25.21. Its next hurdle is $25.44, which it last traded in November 2008.

Financial Stocks: Regional banks gain, Citi stock pares gains

19
Feb

Fed’s Move Prompts Drop in Asian Stocks, but Dollar Rises

HONG KONG — Stock markets in the Asia-Pacific region fell on Friday after the U.S. Federal Reserve increased the rate on loans made directly to banks, as the move reminded global investors that the era of cheap money was gradually drawing to a close.

The U.S. currency continued its recent rise against the euro, trading at around $1.35 by mid-morning in Asia, its strongest level against the European single currency in nice months.

Oil and other commodities fell because they are sensitive to higher interest rates, which can tame economic growth. Crude oil prices were down 1 percent at around $78.20 per barrel.

Gold, which tends to sag when the dollar rises and inflation threats recede, eased to $1,107 an ounce.

The Fed’s move, announced after the close of trade in the United States was seen as the first significant step by the Fed to start exiting some of the extraordinary stimulus measures that were announced as the global financial crisis began to escalate in late 2008. It does not affect the benchmark fed funds rate — the rate at which banks lend to each other overnight that determines the cost of borrowing for normal consumers and businesses. That rate remains at a record low.

However, Thursday’s announcement by the Fed prompted investors to focus on an eventual rise in the fed funds rate as confidence in the U.S. economy’s gradual recovery takes hold.

“The move indicates confidence in market stability and economic recovery and will make it easier to raise the Fed funds rate target,” said Dariusz Kowalczyk, chief investment strategist at SJS Markets in Hong Kong in a note no faxing pay day loans.

The Nikkei 225 index in Tokyo eased 0.7 percent by late morning, with the Japanese Finance minister, Naoto Kan, saying the Fed’s move was unlikely to hurt the Japanese economy.

The benchmark Kospi index in Seoul fell 1 percent, and in Hong Kong the Hang Seng index dropped 2.0 percent.

In Singapore, the Straits Times index in Singapore was 0.5 percent lower in morning trade. In a sign that the Asian region is recovering more quickly than the United States and Europe, the Singapore authorities on Friday said they expected the country’s economy to expand by between 4.5 percent and 6.5 percent this year, more than previously forecast. Last year, Singapore’s economy shrank by 2 percent.

The stock market in Australia, whose economy has been powering ahead thanks in large part to voracious appetite for its natural resources from China, slipped 0.3 percent, amid indications that the central bank there will continue to raise interest rates as economic conditions improve.

The markets in mainland China, Taiwan and Vietnam are closed all week for the Lunar New Year holiday.

The Fed’s increase in its so-called discount rate was by a quarter of a percentage point, to 0.75 percent from 0.50 percent, and is effective Friday.

Fed’s Move Prompts Drop in Asian Stocks, but Dollar Rises

Hot News: Case Is Said to Link HSBC to U.S. Tax Evasion Inquiry

09
Feb

Feds Bullard: May see asset sales late 2010

WASHINGTON (Reuters) – The Federal Reserve could sell some assets later this year in an effort to whittle down its bloated balance sheet to avoid inflation, a senior Federal Reserve official said on Monday.

The Fed's purchases last year of longer-term Treasuries and other debt, undertaken to help revive the economy, were financed by adding cash to the financial system. But leaving large amounts of cash sloshing around as the economy strengthens risks fueling inflation.

"Maybe you get in the second half of 2010 or something like that, if things are going pretty well, maybe then you'd sell a little bit at that point and you'd try to see how the market reacts," St. Louis Federal Reserve Bank President James Bullard told Reuters in an interview.

The U.S. central bank should try to get its balance sheet, which has ballooned by more than $1 trillion, down to a normal size before the next recession strikes to ensure it has the ammunition it needs to counter a downturn, Bullard said.

After the Fed slashed interest rates to near zero in late 2008, it launched a buying spree that also included mortgage-backed securities and debt issued by housing finance agencies to provide further support for the economy.

SALES BEFORE RATE HIKES

Bullard, who is a voting member on the Fed's policy-setting panel this year, said his preference would be to begin selling some assets before raising interest rates, although he said not all Fed policymakers were likely to see it his way.

He said the idea would be not only to get the balance sheet back to a pre-crisis size, but to return it to holdings of mostly U.S. Treasury securities.

The St. Louis Fed chief has long been an advocate of more actively managing the Fed's assets — either by selling them or by leaving open the option of buying more if the economy stumbles anew. The consensus view at the Fed favors shuttering the purchase programs as planned and relying on rate hikes initially to tighten financial conditions.

However, with an economic recovery seemingly on track, Bullard made clear officials had begun to debate how best to normalize the Fed's balance sheet. Fed Chairman Ben Bernanke could shed more light on the central bank's plans in congressional testimony on Wednesday.

Bullard said markets would be disrupted if they came to believe the Fed was planning large-scale sales of mortgage-backed securities. However, he said the idea of gradual sales as a strategy is under discussion.

"Selling has more sympathy than you might think free credit report online. It's more a question of timing and speed," Bullard said.

"You'd kind of want the situation to be back to normal in some kind of time frame before the next storm comes for the economy so that at that point you'd have a fresh set of tools and you can react at that point," he said. "There will be a lot more discussion going forward about how exactly to do this."

INFLATION EXPECTATIONS SEEN RISING

The Fed's unprecedented policy actions helped lift the U.S. economy out of its deepest downturn since the 1930s. After contracting for four straight quarters, the economy grew at a 2.2 percent annual rate in the third quarter of last year and a 5.7 percent pace in the final three months of the year.

Bullard said the economy should grow at an annual rate above 3 percent in the first half of this year, adding that unemployment may have peaked. The U.S. jobless rate dropped to 9.7 percent in January from 10 percent in December.

The Fed is scheduled to wrap up its purchases of $1.43 trillion in mortgage-related securities by the end of next month. The program was undertaken to lower mortgage rates and prop up the struggling housing market.

Bullard said he does not expect a substantial jump in mortgage rates when the program ends, as some fear.

"I think it will be seamless," he said.

Further emphasizing his concerns about preventing inflation, Bullard said inflation expectation are at or above the Fed's implicit target range. Central bankers lay great stress on holding inflation expectations in check because they believe doing so is key to keeping inflation at bay.

"If the data keep coming in as expected and the economy keeps improving, then those will continue to ratchet up unless the central bank sends some signals that, 'No, we intend to keep inflation close to target,'" he said.

Bullard said that if the rise in inflation expectations began to look troubling, the Fed could discard its pledge to hold interest rates exceptionally low for an extended period, even if unemployment remained high.

"We know that the expectations are very important to how these things evolve, and so if those started to get out of hand, we really have to come back in and send a signal to the market," he said. "It would trump everything."

Fed’s Bullard: May see asset sales late 2010

08
Feb

CIT names ex-Merrill CEO Thain as chairman, CEO

NEW YORK – CIT Group has chosen former Merrill Lynch CEO John Thain to lead the company as chairman and CEO as the commercial lender continues to restructure its business following a brief stay in bankruptcy protection last year.

CIT Group Inc., one of the nation’s largest lenders to small and mid-sized businesses, says Thain will take the helm immediately. He replaces acting interim CEO Peter J. Tobin, who will remain on CIT’s board.

Thain served as chairman and CEO of Merrill Lynch until its sale to Bank of America was completed in January 2009 bad credit payday advance. He resigned under pressure from the combined company after reports he rushed out billions in bonuses to Merrill employees in his final days as CEO, while the brokerage was suffering huge losses and just before Bank of America took it over.

CIT names ex-Merrill CEO Thain as chairman, CEO

28
Jan

Europe Markets: European shares higher after Fed comments

LONDON (MarketWatch) — European shares advanced on Thursday, with investors getting their first chance to react to the U.S. Federal Reserve’s more upbeat comments on the U.S. economy.

The pan-European Dow Jones Stoxx 600 index , which dropped on Wednesday for the fifth time in six sessions, advanced 1.2% to 250.18.

Miners and banks were among the best performers as recent fears about global economic trends appeared to recede, with Santander shares up 2.3% and Xstrata shares up 2.2%.

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On Wednesday after the European close, the Federal Reserve kept official interest rates unchanged. In its description of the economy, the Fed was slightly more upbeat. Read more on Fed.

“The U.S. Federal Reserve said that there was an improvement in U.S. business spending, adding that the “recovery is likely to be moderate for a time”– a significant change from its characterization of “weak growth” cited in previous statements,” said analysts at MF Global.

Of other regional equity markets, the U pay day loan lenders.K. FTSE 100 index rose 0.8% to 5,259.93, the German DAX index rose 1.1% to 5,705.17 and the French CAC-40 index climbed 1.1% to 3,799.60.

The move in Europe followed gains in Asian equity trading. U.S. stock futures were pointing to moderate gains on Wall Street.

Corporate news was also providing European investors with reasons to be upbeat.

Shares of Swedish fashion chain Hennes & Mauritz jumped 7.4% after its fourth-quarter net profit rose to 6.15 billion Swedish kronor ($844 million), from 5.09 billion kronor a year ago, beating analyst forecasts.

Revenue, excluding sales tax, rose 13% to 18.58 billion kronor, against 16.41 billion kronor in the year-ago period. H&M also said total sales for the month of December rose 15% and 3% on a comparable basis.

Shares of British Sky Broadcasting climbed 2.7% after its first-half net profit rose to 256 million pounds ($415.1 million), from 166 million pounds a year ago. Sales rose to 2.87 billion pounds, from 2.6 billion pounds last year, as strong growth in subscription revenue offset weakness in other categories.

Customer net additions were 172,000 in the second quarter, taking the total base to 9.7 million.

Europe Markets: European shares higher after Fed comments

17
Jan

Sponsor Takes the Next Step in Tennis

LAS VEGAS — Fernando Verdasco was straining against a leg-press machine as he raised 710 pounds, yet his strength and conditioning coach, Gil Reyes, was making the most noise. Reyes bellowed in two languages as Verdasco, a Spanish tennis star, raised the massive load 14 times before Reyes finally shouted at him to stop.

“He’s a beast,” Reyes said last month. “I stopped him because I didn’t want him to break down. If he totally maxed out today, there’s a good chance it would throw him off stride tomorrow or the next day.”

Reyes, an American who speaks in the tones and rhythms of an evangelist, was Andre Agassi’s trainer and protector for nearly 20 years. He is now a company man: one of three pillars of the unusual player-development program created and financed by Adidas.

The other pillars are Sven Groeneveld, a veteran Dutch coach who started the program in 2006, and Darren Cahill, an Australian coach who with Reyes helped Agassi keep scaling the heights into his mid-30s.

Groeneveld is based in Amsterdam, and Reyes and Cahill in Las Vegas, the program’s training base. Reyes still works out of his private gym decorated with Agassi’s eight Grand Slam singles trophies and 1996 Olympic gold medal. Agassi remains a frequent visitor and is also an occasional hitting partner and counselor for the players.

But the program’s scope is broader, with Groeneveld and Cahill traveling to tournaments worldwide to offer on-site assistance with Groeneveld’s assistant Mats Merkel.

The executive who devised and supervises the operation is Jim Latham, an American expatriate and former Duke tennis player who saw the program as a way to protect his company’s investment in increasingly young athletes who sometimes lacked structure and expert advice.

“It’s a compact, mobile tennis academy,” said Latham, the head of global sports marketing for tennis at Adidas.

It is also a delicate diplomatic mission in a cutthroat, territorial sport unaccustomed to coaches spreading the wealth of their knowledge democratically or to manufacturers striving to be more than suppliers of apparel and juicy contracts.

“It’s a given that we had to have elite-level coaches,” Latham said. “But the other given for me was that it had to be people who were great communicators, who could go into it with all these people and make them feel included, rather than ‘my way or the highway.’ ”

Manufacturers’ teams are the foundation of sports like Formula One auto racing. But the Adidas developmental team remains unique in tennis, and though it is not without detractors who question its part-time approach, it is playing an increasingly visible role in the sport and has been involved in some big hits as well as misses.

The hits include Ana Ivanovic’s victory at the 2008 French Open and rise to No. 1, and Verdasco’s surprise run to last year’s Australian Open semifinals and rise into the top 10. The team, Groeneveld in particular, also provided counsel and support to Caroline Wozniacki, a Danish teenager coached primarily by her father who broke into the top four last year after reaching the United States Open singles final.

The misses include players like Evgeny Korolev, Anna Chakvetadze, Marcos Baghdatis and Sania Mirza, whose rankings and singles careers have not prospered. Ivanovic also dropped out of the top 10 after a mediocre 2009 season but spent the off-season working primarily with Groeneveld.

National tennis federations have long been involved in developing talent and providing coaching at the professional level. Some private academies have done the same.

But no other company has yet plunged in, and what also makes Adidas’s program unusual is that it does not attempt to be full service, but rather a consultancy business card design.

Latham said Adidas had contracts with about 75 players, more than 40 of whom are in the singles draws at the Australian Open beginning Monday. Luminaries like Jo-Wilfried Tsonga and Justine Henin have not sought help, but Latham estimated that 30 to 35 players have had some contact like seeking a quick tip from Groeneveld or training in Las Vegas, which requires an invitation from Latham.

Working with multiple players reduces a coach’s vulnerability and dependency.

“These guys can give unsugarcoated advice,” Latham said of his team.

But the Adidas principals emphasized that their input should be supplemental and that they wanted top players to have full-time coaches.

“This is not about a threat, this is not about better than, or instead of, it’s a matter of one plus one maybe might equal three,” Latham said.

But Verdasco and Ivanovic thrived under the system when they were without full-time coaches. Patrick Mouratoglou, who owns a prominent academy in France, said that he tried to play a similar role to many players but that he felt it undermined their relationships with their personal coaches. He now focuses on one or two players.

“I don’t doubt the quality or competence of Sven or any member of the team,” he said. “I just think the system is flawed. I stopped doing it. At first, you feel good because everyone loves you, and you give a bit to everyone, and everybody wants you on their court giving input. It’s a drug. If you need affection, it’s amazing. If you want results, it doesn’t work.”

Cahill said that he was sensitive to personal coaches’ concerns but that the benefits of exchanging thoughts and challenging preconceptions outweighed the negatives.

He had other options. Early last year, he trained on a trial basis with Roger Federer in Dubai. But Cahill, who has two children and increasingly strong ties to Las Vegas, said he was not prepared to handle the travel commitment Federer required. Instead, Cahill joined Adidas last March while continuing to do television commentary for ESPN and to work with Agassi’s foundation in Las Vegas.

Latham said the team’s existence has helped Adidas recruit several players, including Daniela Hantuchova, a 26-year-old Slovak who trained with Cahill and Reyes in the off-season. But Latham and Baghdatis failed to reach an agreement, and Baghdatis is no longer under contract.

Verdasco, 26, who won a warm-up event Saturday in Australia, is definitely still with the program: exchanging embraces and fist bumps with Reyes during intense training sessions. He is seeking a second home in Las Vegas to be closer to Reyes and his weights.

Reyes prefers to work one on one, so visitors are limited to three at a time. From the outside, his gym looks like a suburban home. It is in a gated community on a road named after Agassi, who built a house next door for his parents as well as a practice court. The carpeted weight room is filled with machines Reyes designed and built himself for Agassi because nothing tennis specific enough existed.

“If this is the future, I don’t really know,” Verdasco said of the Adidas program. “But of course it really helped me a lot, because I really found Gil that I have this strong connection with. Maybe if Adidas took another guy, maybe I wouldn’t have that same connection, and maybe I wouldn’t like it as much.”

Sponsor Takes the Next Step in Tennis

16
Jan

Stocks & Bonds: Dow Plunges 100 Points on JPMorgan’s News

Stock prices fell sharply on Friday, the worst day of trading this year, as worries over the strength of the American consumer eclipsed a round of mostly positive earnings reports.

On its surface, the news that JPMorgan Chase had doubled its 2009 profits from 2008 might seem reason for elation among investors. But on Friday, Wall Street traders took one look at the results and began to sell.

By the end of trading, the three major indexes were down about 1 percent, with the Dow Jones industrial average falling nearly 101 points. The dollar strengthened, and bond yields fell.

Traders saw promise and peril in JPMorgan Chase’s financial report. The bank said it earned $11.7 billion last year and that its profit quadrupled in the fourth quarter, beating expectations. But the firm’s chief executive noted that losses on consumer loans remained high and would remain an issue in 2010.

“It does continue to bring up old fears,” said James W. Paulsen, chief investment strategist for Wells Capital Management.

The Dow Jones industrial average declined 0.94 percent, or 100.90 points, to 10,609.65. The Standard & Poor’s 500-stock index fell 1.08 percent, or 12.43 points, to 1,136.03. The Nasdaq composite index dropped 1.24 percent, or 28.75 points, to 2,287.99.

For the week, the Dow industrials slipped 0.1 percent, the S.& P. 500 index lost 0.8 percent and the Nasdaq fell 1.3 percent.

All sectors posted losses, with shares of banks leading the retreat. JPMorgan Chase declined 2.26 percent, and Bank of America fell 3.33 percent. Many banks will report earnings next week.

Two weeks into the new year, Wall Street finds itself searching for direction. Over the next few weeks, companies will continue to announce fourth-quarter earnings, and the results are expected to be mostly positive.

Expectations this quarter, however, have shifted, and investors are looking for indications that businesses have moved beyond cost-cutting and have started to bring in revenue.

After the market closed on Thursday, Intel reported a 28 percent increase in revenue and the largest gross profit margin in its history. Overnight, its shares climbed, but they closed down 3 payday cash loans.17 percent on Friday.

That seemingly irrational behavior, selling even as a company exceeds expectations, brought an adage to the minds of several investors: “Buy the rumor, sell the news.”

“It is an interesting juxtaposition,” said Hank B. Smith, chief investment officer for Haverford Investments. “These all beat expectations, but by the time all the news is disseminated, there’s concern this may be the peak for profit margins for these companies.”

Mr. Smith said he did not believe the worries were valid. But he said Wall Street’s negative reaction to the cheery reports could indicate that investors were using the earnings season as a selling opportunity.

“It would be healthy for the market to consolidate and pull back,” Mr. Smith said. “It’s very normal to have a correction — defined as 10 percent or more — in a bull market.”

After an energetic rebound in the stock market last year, equities are expected to rise modestly through 2010. The Dow is approaching a psychologically important milestone — 11,000 points, a level not seen since before the financial crisis — and the S.& P.’s 500-stock index is nearing 1,150 points.

Economic data released on Friday provided little relief from investors’ concerns over profits. A report said manufacturing activity fell slightly in December, and a barometer of consumer sentiment released by the University of Michigan rose slightly this month but fell short of expectations.

Still, there were signs that the near-zero interest rates may remain in place for some time, a boon for stocks. A Labor Department report suggested inflation was largely in check, with consumer prices increasing just 0.1 percent in December.

Interest rates were lower Friday. The Treasury’s 10-year note rose 15/32, to 97 16/32, and the yield fell to 3.68 percent from 3. 74 percent late Thursday.

United States markets are closed on Monday for Martin Luther King’s Birthday.

Stocks & Bonds: Dow Plunges 100 Points on JPMorgan’s News

Hot News: London Markets: Man Group underperforms in mildly higher FTSE 100

15
Jan

Waning volatility favors Gap, Ford stocks: analyst

SAN FRANCISCO (MarketWatch) — A calmer environment for stock trading, illustrated by the VIX near mid-2008 lows, should benefit stocks distinguished by potential earnings strength and price momentum — a varied group including Gap Inc., Ford Motor Co. and Goldman Sachs, say analysts at Bank of America Merrill-Lynch.

Stock Market Volatility Suggests Higher Prices

Key measures of stock market volatility, such as the Vix and VStoxx, indicate that stocks are likely to climb. But a consensus view of a 10% rise could be wrong.

The Chicago Board Options Exchange Volatility Index , which uses options contracts based on the S&P 500 index to measure market expectations of near-term volatility, has fallen 18.6% since the start of the year to 17.65. Earlier this week it breached the 17 level, a first since May 2008.

The decline in the index, often dubbed Wall Street’s fear gauge, reflects a steep rise in investor confidence as stocks rebounded from multiyear lows hit in March 2008, battered by the credit crisis and U.S. recession.

U.S. stocks, as measured by the S&P 500, have gained 36% in the past year and have surged 72% off their March lows. The VIX, meanwhile, has fallen 64% in the past year.

Cyclical sectors — or industries seen as benefiting from the early stages of an economic recovery — have led the way. Of the S&P 500’s 10 industry groups, tech, materials and consumer discretionary sectors have gained the most in the past year.

The drop in the VIX “has been associated with the outperformance of pro-economy types of sectors and the lagging behavior of healthcare, staples and more defensive stocks,” said Myles Zyblock, chief institutional strategist at RBC Capital Markets.

He thinks that trend has more room to run.

But further declines in the VIX could lay the groundwork for a different type of stock-picking strategy.

Focus on fundamentals

B. of A. quantitative strategist Savita Subramanian wrote Wednesday that “the likeliest direction for the VIX is a continued decline over the next 12 months” and suggested this extended drop will favor investing strategies that select stocks attractive in terms of their price momentum and their prices compared to past earnings no teletrack payday loans.

A focus on more fundamental measures contrasts with last year, when the dramatic drop in the VIX favored stocks seen as riskier, such as those with small sizes, and those that carried high betas. A high beta indicates a stock tends to make wilder swings than the broader market.

To pick the best stocks for a period of low volatility, B. of A. analysts screened stocks using strategies that seemed to work best in the 2004 to 2006 period.

These included those that were in the top quartile of the S&P 500 based on price momentum, which essentially shows how much these stocks have started to rise; whether Wall Street stock analysts were increasing their earnings estimates for the companies; and valuation based on earnings and cash flow yield. They also had to be rated “buy” by B. of A. stock analysts.

The list includes a handful of consumer oriented stocks — including Gap , Priceline.com , and Ford Motor Co. — as well as miner Freeport McMoRan , brokerage Goldman Sachs Group Inc. , paper company MeadWestvaco and energy company Anadarko Petroleum Corp. .

Shares in Gap have gained 72% over the last 12 months. Priceline has surged 202%; Ford Motor shares have ballooned 420% and Goldman Sachs shares have gained 123%.

The S&P 500, in contrast, has gained 36%.

In Thursday’s trading, major stock indexes rose to new 15-month highs, though most sectors struggled for direction as investors awaited the after-hours release of Intel Corp. .

The Dow Jones Industrial Average closed up 30 points, or 0.3%, to 10,711. The Nasdaq Composite gained 9 points, or 0.4%, to 2,317. The S&P 500 added 3 points, or 0.2%, to 1,148.

Waning volatility favors Gap, Ford stocks: analyst

Hot News: Techs lead Wall St higher; Intel up after results

09
Jan

Wall St rises to new highs on recovery hopes

NEW YORK (Reuters) – U.S. stocks rose on Friday after trading in the red most of the day as investors concluded weak December jobs data wouldn't interrupt a trend of steady economic recovery.

The S&P 500 and the Dow hit new 15-month highs while the Nasdaq climbed to its highest level in 16 months.

The economy unexpectedly shed 85,000 jobs in December, but analysts said this was not inconsistent with a slowly recovering economy as the pace of monthly jobs losses have declined sharply since the height of the recession.

In addition, November's payrolls report was revised to a gain in jobs, bolstering that view.

"I don't think that we should expect that we're going to go up in a straight line," said Linda Duessel, market strategist at Federated Investors in Pittsburgh. "Last month of course was revised up. This one will probably get revised at least in a more positive direction."

The Dow Jones industrial average (.DJI) rose 11.33 points, or 0.11 percent, at 10,618.19. The Standard & Poor's 500 Index (.SPX) climbed 3.29 points, or 0.29 percent, at 1,144.98. The Nasdaq Composite Index (.IXIC) added 17.12 points, or 0.74 percent, at 2,317.17.

Analysts polled by Reuters had expected no non-farm job losses in December from the previous month. A weaker report is also supportive of the view that Federal Reserve will keep interest rates low for a prolonged period, which is favorable for stocks.

Losses were also curbed after shipping company United Parcel Service Inc (UPS.N) boosted its fourth-quarter outlook and said it will cut 1,800 jobs. Its shares rose nearly 5 percent and lifted hopes of strong corporate earnings when Alcoa Inc (AA.N) kicks off the reporting season on Monday.

The first week of the year got off to a positive start. For the week the Dow rose 1.8 percent, the S&P added 2.7 percent, while the Nasdaq rose 2 percent.

The news from UPS also helped shares in rival Fedex Corp (FDX.N), which rose 2.5 percent to $84.99, and boosted the Dow Jones Transportation average ( allstate insurance.DJT) 1.8 percent.

Both UPS and FedEx are economic bellwethers because they reflect trends in business and consumer spending.

Biotechnology companies were among top gainers on the Nasdaq.

Teva Pharmaceutical Industries Ltd (TEVA.TA) (TEVA.O) gained 4.4 percent to $59.34 a day after the world's largest generic drugmaker set a revenue target for 2015 of $31 billion, more than double its current annual amount.

Genzyme Corp (GENZ.O) advanced for a second day after a source said billionaire investor Carl Icahn was considering a proxy battle at the biotech company. [ID:nN07196523] Genzyme was up 5.2 percent to $53.81 after a 4.4 percent advance on Thursday.

Also helping the Nasdaq, Morgan Stanley started the healthcare services sector with an 'attractive' view. Part of that call included an 'overweight' rating for Express Scripts (ESRX.O), which rose 3.4 percent to $91.65.

Investors will now turn their attention to reports on fourth-quarter earnings, which starts with Alcoa after the bell on Monday.

Since the start of the year, analysts have revised up their earnings estimates for seven out of ten S&P sectors. Healthcare, financials, and consumer staples are the only three sectors to see declines, according to Bespoke Investment Group.

Alcoa's shares rose 2.5 percent to $17.02.

Volume was light on the New York Stock Exchange, with slightly less than 1 billion shares changing hands, compared with last year's estimated daily average of 2.18 billion. On the Nasdaq, about 2.16 billion shares traded, above last year's daily average of 1.63 billion.

Advancing stocks outnumbered declining ones on the NYSE by a ratio of about 3 to 2, while advancing stocks beat decliners on the Nasdaq by about 7 to 4.

(Reporting by Edward Krudy; Editing by Kenneth Barry)

Wall St rises to new highs on recovery hopes

Hot News: German bank card glitch resolved: retailers

08
Jan

Mixed Data in Britain Prompts Bank to Keep Rates Unchanged

PARIS — The Bank of England held steady on interest rates and monetary stimulus Thursday amid mixed signals on the economic recovery in Britain, while separate data showed the moderate rebound in the euro area progressing.

The British central bank’s monetary policy committee voted unanimously to leave the benchmark interest rate at 0.5 percent and to keep its program for asset purchases, enacted as an unorthodox means of stimulating demand, at £200 billion, or $319 billion. The bank had expanded the asset-purchasing plan in November for a third time but chose to leave it unchanged last month.

The bank said in a statement that it expects the asset purchases “to take another month to complete,” and that “the scale of the program will be kept under review.”

Analysts had expected the central bank to remain cautious and wait another month before making any policy shift.

By contrast, some other countries have already started to scale back emergency stimulus packages.

The central bank of Switzerland said in December that it would stop buying corporate bonds. The European Central Bank has also announced plans to scale back its extraordinary fund auctions, while the Federal Reserve is expected to begin draining liquidity from the U.S. financial system this year.

In Britain, most of the central bank purchases have been British government bonds, or gilts. The bank is expected to complete the last of these purchases before its meeting next month, by which time it will have new data available, including fourth-quarter G.D.P. numbers.

Those numbers are expected by economists to show that the economy returned to positive growth, having entered recession in the spring of 2008 no faxing payday loan.

Britain has lagged its rivals in coming out of recession. The economies of France, Germany and the United States all started growing again during the third quarter of last year.

Meanwhile, in a report released Thursday, the European Commission said economic sentiment in the 16 countries using the euro improved in December, with both consumer and industrial confidence rising modestly.

The European Commission’s economic sentiment indicator rose to 91.3 in December from 88.8 in November. This was above the consensus forecast of 90. Economists said the numbers were consistent with an ongoing but moderate recovery.

German industrial orders were up 0.2 percent on the month in November, the Economy Ministry said. That followed a 1.9 percent decline in October.

Consumer-related data from the region, however, were softer.

Another release showed that retail sales in the region fell by 1.2 percent in November following a 0.2 percent rise in October.

The recent economic data from Britain have also been mixed.

British house prices rose 1 percent in December, ending the year 1.1 percent higher than at the end of 2008, according to the mortgage lender Halifax.

The Society of Motor Manufacturers said Thursday new car sales in Britain rose last month 39 percent from a year earlier as government incentives bolstered demand.

At the same time, consumer confidence fell in December, the Nationwide mortgage lender said Wednesday.

Mixed Data in Britain Prompts Bank to Keep Rates Unchanged

Hot News: Wall Street trades mixed as investors await key employment data

04
Jan

Wall St rises on higher oil, data on tap

NEW YORK (Reuters) – U.S. stock index futures pointed to a higher open on Monday on a jump in crude oil prices and ahead of data expected to show expansion in the manufacturing sector.

On the first trading day of the year, investors are awaiting November construction spending data and the Institute for Supply Management's manufacturing index for December, which analysts forecast will rise from the prior month.

"An improvement in the datapoints will be another confirmation of the evidence that we've been getting stronger," said Edward Riley, chief executive of Riley Asset Management in Boston.

"Also, people tend to put more weight on data that comes out in the beginning of the year, so this could have an out-sized influence on trading."

Russia had halted supplies to Belarussian refineries after failing to resolve an oil pricing dispute, according to traders, but on Monday, the Belarus state oil firm said Russian oil was flowing normally to European Union customers via Belarus. February crude futures gained 2.1 percent to a two-month high.

Also helping commodities was a weak U.S. dollar, which fell 0.5 percent against a basket of currencies (.DXY).

S&P 500 futures rose 7.3 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract paydayloans. Dow Jones industrial average futures added 67 points and Nasdaq 100 futures gained 20.50 points.

Shares of Chesapeake Energy Corp (CHK.N) gained 5.7 percent to $27.35 in premarket trading after Total SA (TOTF.PA) agreed to pay $2.25 billion for a 25 percent stake in Chesapeake's Barnett Shale gas fields.

U.S. Federal Reserve Chairman Ben Bernanke said Sunday that vigorous financial regulations would have been the best way to restrain the housing bubble that helped cause the deep recession, but said policymakers can no longer rule out monetary policy to curb the buildup of risk.

Overseas markets traded higher, with both European and Japanese shares hitting 15-month highs.

U.S. markets were closed Friday for New Year's Day. On Thursday, stocks fell, with the three major indexes down about 1 percent. For 2009, the Dow gained 19 percent, the S&P rose 24 percent, and the Nasdaq added 44 percent.

(Editing by Jeffrey Benkoe).

Wall St rises on higher oil, data on tap