NEW YORK (AP) -- Stocks fell Wednesday after Federal Reserve Chairman Ben Bernanke chided investors who may have looked past long-standing concerns about inflation. The Dow Jones industrials fell nearly 100 points, the third straight session of declines.
A rise in oil prices to a six-month high and a weaker-than-expected rise in orders for large manufactured goods compounded investors' concerns Wednesday.
In Capitol Hill testimony, Bernanke said while core inflation slowed modestly in the second half of 2006, recent readings remain "uncomfortably high." He also said troubles among some mortgage lenders that cater to those with poor credit don't appear to have spread to the broader economy, though he added the situation requires further observation.
Stocks rallied last week after investors interpreted language from the Fed as opening the way to the possibility of a reduction in interest rates. But concerns about stubborn inflation could reverse investors' hopes for a reduction in rates, even as the economy continues to cool.
"I think what the Fed is trying to tell us is that it is between a rock and a hard place. And when you're between and a rock and a hard place you just can't move," said Drew Matus, senior economist at Lehman Brothers Holdings Inc.
The Dow industrials fell 96.93, or 0.78 percent, to 12,300.36. The Dow fell by as much as 140 points after the Fed released Bernanke's prepared remarks for his testimony.
Wednesday, March 28, 2007
Crude Awakening: Long-term, Prices Should Continue To Rise
The last time we looked at the oil chart was in a post about CanRoys. At the time, there were plenty of oil bears on CNBC predicting $20-30 oil, but I was pretty sure that $50 was going to hold.
Fast forward two months, oil’s back up to $63 a barrel. The talking heads would again have you believe that geopolitical tension is the sole cause while completely glossing over the fact that the rebound started long before this latest Iranian incident.
Fast forward two months, oil’s back up to $63 a barrel. The talking heads would again have you believe that geopolitical tension is the sole cause while completely glossing over the fact that the rebound started long before this latest Iranian incident.
Monday, March 26, 2007
US gold jumps 1 pct on technical buying, Iran woes
NEW YORK, March 26 (Reuters) - U.S. gold futures jumped 1 percent early on Monday, boosted by a combination of technical buying, rising energy prices and heightened geopolitical tensions after Iran vowed to continue its nuclear program.
At 10:38 a.m. EDT (1438 GMT), most-active gold futures for April deliveryon the COMEX division of the New York Mercantile Exchange were up $6.40, or 1 percent, at $663.70 an ounce, trading from $657.10 to $666.50.
One COMEX floor trader said that Monday's rally was largely helped by buying based on technical levels.
"Gold's just made $664. That's a technical breakout on charts," he said.
Oil climbed to $63 a barrel on Monday, setting a 2007 record, on growing tension between Iran and the West over Tehran's nuclear work and its capture last week of British servicemen. U.S. crudehit a three-month high of $63.30 a barrel before retreating to $62.93 by midmorning.
At 10:38 a.m. EDT (1438 GMT), most-active gold futures for April delivery
One COMEX floor trader said that Monday's rally was largely helped by buying based on technical levels.
"Gold's just made $664. That's a technical breakout on charts," he said.
Oil climbed to $63 a barrel on Monday, setting a 2007 record, on growing tension between Iran and the West over Tehran's nuclear work and its capture last week of British servicemen. U.S. crude
Citigroup May Reportedly Cut 15,000 Jobs
NEW YORK (AP) -- Citigroup Inc. expects to have completed its corporate cost review by mid-April, company officials said Monday, as published reports suggested the nation's largest bank was considering cutting about 15,000 jobs.
The Wall Street Journal said the job cuts -- which would amount to about 5 percent of Citigroup's worldwide work force -- were part of the New York-based bank's restructuring plan, which was disclosed late last year and is aimed at improving the bank's financial performance.
Citigroup's chairman and chief executive, Charles Prince, has come under heavy criticism from investors because its expenses have been growing faster than its revenue, reducing profits.
Prince, who currently is on a trip to India, told reporters in New Delhi that he would not comment on the Journal's report.
"We are going to announce the results of our strategic structural review on or before our earnings announcement on April 16," he said.
Earlier, Citigroup spokesman Michael J. Hanretta declined comment on the report, also saying results of the cost-cutting study would be made available "on or before earnings on April 16."
The review is being led by Chief Operating Officer Robert Druskin. The newspaper said Druskin would report his recommendations internally by the end of the week. It cited unidentified people familiar with the matter.
The newspaper said the cuts could result in a charge of more than $1 billion against earnings.
Citigroup shares fell 18 cents to close at $51.54 on the New York Stock Exchange.
The Wall Street Journal said the job cuts -- which would amount to about 5 percent of Citigroup's worldwide work force -- were part of the New York-based bank's restructuring plan, which was disclosed late last year and is aimed at improving the bank's financial performance.
Citigroup's chairman and chief executive, Charles Prince, has come under heavy criticism from investors because its expenses have been growing faster than its revenue, reducing profits.
Prince, who currently is on a trip to India, told reporters in New Delhi that he would not comment on the Journal's report.
"We are going to announce the results of our strategic structural review on or before our earnings announcement on April 16," he said.
Earlier, Citigroup spokesman Michael J. Hanretta declined comment on the report, also saying results of the cost-cutting study would be made available "on or before earnings on April 16."
The review is being led by Chief Operating Officer Robert Druskin. The newspaper said Druskin would report his recommendations internally by the end of the week. It cited unidentified people familiar with the matter.
The newspaper said the cuts could result in a charge of more than $1 billion against earnings.
Citigroup shares fell 18 cents to close at $51.54 on the New York Stock Exchange.
Sales of New Homes Fall Sharply
WASHINGTON (AP) -- Sales of new homes fell for a second consecutive month in February, dimming hopes for a rebound soon in the troubled housing market and raising fears about the health of the overall economy.
The Commerce Department reported Monday that sales of single-family homes dropped 3.9 percent last month to a seasonally adjusted annual rate of 848,000 units, the slowest pace in nearly seven years.
The decline followed a 15.8 percent plunge in January, the biggest one-month decline in 13 years.
The weakness in sales was accompanied by a drop in prices with the median price of a new home falling to $250,000 in February, down 0.3 percent from a year ago.
The report was far weaker than Wall Street had been expecting and raised concerns that rising mortgage delinquencies and foreclosures, especially in the subprime market, would further depress housing activity in the months ahead as nervous lenders tighten their standards.
The Dow Jones industrial average fell 11.94 points Monday to close at 12,469.07 as investors reacted to the disappointing home sales report.
Concerns about financial difficulties facing many lenders in the subprime market, designed for borrowers with weak credit ratings, contributed to a 416-point plunge in the Dow average on Feb. 27.
"Lending standards apparently are tightening not only in the subprime market but in other components of mortgage lending as well and this is creating tremendous uncertainties regarding the near-term outlook for home sales and housing production," said David Seiders, chief economist for the National Association of Home Builders.
The Commerce Department reported Monday that sales of single-family homes dropped 3.9 percent last month to a seasonally adjusted annual rate of 848,000 units, the slowest pace in nearly seven years.
The decline followed a 15.8 percent plunge in January, the biggest one-month decline in 13 years.
The weakness in sales was accompanied by a drop in prices with the median price of a new home falling to $250,000 in February, down 0.3 percent from a year ago.
The report was far weaker than Wall Street had been expecting and raised concerns that rising mortgage delinquencies and foreclosures, especially in the subprime market, would further depress housing activity in the months ahead as nervous lenders tighten their standards.
The Dow Jones industrial average fell 11.94 points Monday to close at 12,469.07 as investors reacted to the disappointing home sales report.
Concerns about financial difficulties facing many lenders in the subprime market, designed for borrowers with weak credit ratings, contributed to a 416-point plunge in the Dow average on Feb. 27.
"Lending standards apparently are tightening not only in the subprime market but in other components of mortgage lending as well and this is creating tremendous uncertainties regarding the near-term outlook for home sales and housing production," said David Seiders, chief economist for the National Association of Home Builders.
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