Financial News 10/16/11 – 10/22/11

Economy

-Factories increased production in September rising 0.4% over August. 10/18
-China’s third quarter GDP rose 9.1%, however it was down from the second quarter’s 9.5%. 10/18
-Wholesale prices rose by 0.8% in September the biggest jump since April, however a measure that removes volatile food and energy prices was more tame. 10/19
-New home construction jumped in the U.S. in September to its highest point since April of 2010. 10/20
-Brazil dropped its benchmark interest rate for the second time in two months dropping it 0.5% to 11.5%. 10/20
-Inflation rose 0.3% in September and is up 3.9% for the trailing year, resulting in the first cost of living increase in two years for government benefits pegged to the CPI. Excluding food and energy the measure rose 0.1% and is up 2%. 10/20
-Existing home sales dipped in September 3%. 10/21
-The number of people applying for jobless benefits for the first time dipped by 6K to 403K last week. 10/21
-A fed report on leading economic indicators rose 0.2% in September. 10/21

Corporate

-Kinder Morgan announced it will purchase competitor El Paso Corp. for $21.1 billion in one of the largest mergers of the year. The deal will create a natural-gas pipeline giant, the largest in the country, and 4th largest in the world. 10/17
-Citigroups earnings rose 74% in the third quarter due to a changing in accounting and international growth. Wells Fargo posted an earnings gain but missed analysts forecasts. 10/18
-Apple sold 4 million of the new iPhone 4s smart phones, the most it has ever sold with an initial release. 10/18
-IBM profits gained 7% driven by emerging markets. 10/18
-Yahoo profit beat analysts’ expectations, but fell 26%. 10/19
-Intel had yet another record quarter for sales, its 6th in a row, and saw earnings rise 17%. It also raised its earnings forecast for the 4th quarter. 10/19/11
-Goldman reported a rare loss for the bank and was the 6th consecutive quarter of falling revenue. 10/19
-Bank of America had positive third quarter earnings, and saw it fall behind JP Morgan for the largest bank by assets. 10/19
-Apple, despite seeing profits rise by 54% didn’t meet analysts’ expectations as the firm did not sell as many iPhones as expected. 10/19
-Morgan Stanley had earnings of $2.15 billion in the third quarter, however the majority of the profit came from an accounting change. 10/20
-Microsoft third quarter earnings rose 6.1% helped by software sales. 10/21
-GE’s earnings rose 57% year over year, but saw shrinking profit margins. 10/22
-To date 70% of companies that have reported earnings have beaten estimates for the most recent quarter end. 10/22

Market

-European officials vowed to establish an all encompassing rescue plan by October 23rd in an attempt to settle the European debt crisis. The plan is expected to include a second bailout for Greece, and increase to the Euro-zone bailout fund, and an increased capital ratio for banks. The new Greek bailout is expected to be $151 billion. 10/17
-German officials cooled global markets with remarks that a full agreement to solve the Euro-zone debt issues is unlikely to be completed by the weekend. The Dow dropped 2.1%, Europe Fell 1.0%, and 10 yr Treasurys rose as the yield dropped to 2.159%. 10/18
-Markets returned to positive territory on reports there was more progress in Europe. The Dow was up 1.6$ the S&P 500 rose 2%. 10/19
-Spain’s debt rating was downgraded by Moody’s two levels. 10/19
-Concerns grew about the Euro-zone plan to stem the debt crisis as it was revealed that the bailout fund will not be used to guarantee bond issues. Governments issuing bonds would instead borrow from the bailout fund to guarantee a portion of the bond issue which would increase the debt of the country. 10/20.
-After disagreements between France and Germany leaders were forced to come to the conclusion that they would not be able to achieve a final solution for the continents debt woes over this weekend’s summit. 10/21
-The yen rose to a record high against the dollar. 10/22
-Stocks soared on strong corporate earnings and on hopes of progress in Europe. The Dow rose 2.3% and is up 1.4% for the week. Europe gained 2.5% and was slightly up for the week. Japan ended the week down 0.8% and the 10 year Treasury yield rose to 2.203%. 10/22

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