News & Financial Advice

Wall Street closed in the red Tuesday, dragged down by financial stocks after new information of concern to the health of European banks and the new solvency rules which will be submitted soon.

Closed Monday for Labor Day holiday in the U.S., the New York markets were therefore transferred to profit taking after last week registered their best performance in two months.

The Dow Jones closed down 107.24 points, or 1.03%, to 10,340.69 points.The Standard & Poor's 500 dropped 12.67 points (-1.15%) to 1091.84 points and the Nasdaq Composite fell 24.86 points (-1.11%) to 2208.89 points.

According to a Wall Street Journal, "stress tests" conducted in the spring to assess the resilience of European banks have underestimated the positions in these potentially risky sovereign debt.

Even if the information is not really new in the eyes of industry experts, it sealed the atmosphere in New York as the European markets.

Meanwhile, the Basel Committee, responsible for finalizing the new solvency rules for banks, has not issued statement after its meeting Tuesday and should reach decisions that cash loans Sunday.

The S & P financial sector lost 2.37% and the KBW bank index yielded 3.17%.Among the most significant declines, JP Morgan Chase & Co dropped 2.27% and 2.15% Bank of America.

"It is more like the consolidation movement that sales of conviction," said Maier, however Tarlow, a trader on the floor of the New York Stock Exchange for Raven Securities.

"We believe that the market is on a buying trend right now and unless there are repeated declines in large volumes, we will maintain this view."

Trading volumes are in fact remained relatively low after Labor Day.

For Bruce Zaro, chief strategist for Delta Global Advisors Technical, markets should remain volatile and move in narrow ranges until the U.S. election in early November midterm.Once that deadline has passed, Wall Street could leave much more forward, "he added.

On the upside Tuesday, Oracle jumped 5.87% after the announcement of the entry to its Board of Directors Mark Hurd arrived last month from the Directorate General of Hewlett-Packard after allegations of sexual harassment . The way HP has lost 1.04%.

Lindt & Sprungli has increased its net profit in the first half but remains cautious for the year 2010 because of the volatile commodity prices and foreign exchange.

Net income was posted at 24.8 million francs (18.8 million euros) in the first half, almost tenfold from 2.7 million achieved a year earlier, said Tuesday the Swiss chocolate.

Analysts polled by Reuters on average expected 20.4 million.

"Despite the excellent results of the first half of 2010, Lindt & Sprungli sticks to what it was made public in March 2010, the company said in a statement, citing an economic environment not yet fully consolidated and conditions still volatile.

It confirms expected this year organic growth of 5% to 7% and operating profit (EBIT) of 300 to 340 million francs.

The EBIT after exceptionals jumped by 40.7% in the first half, to 33.9 million francs, against 26.8 million expected by the market. Turnover increased 7.9% to 1056.6 million (against 1.043 million expected), after 979 million in the first half of 2009.

In value terms, the group notes that most of the chocolate market grew moderately in the first half, while in terms of volumes, it continues to see a certain stagnation.

Ericsson, the world leader in mobile network equipment, reported second-quarter results below analysts' expectations, the Swedish group, suggesting a difficult market including the continued reluctance of operators to invest.

The telecom equipment market begins to show signs of life but the level of customer spending is still very far from what it was before the crisis.

Ericsson, which has made tens of billions of crowns in savings to cope with falling demand, said that reducing costs would continue to be his priority as business conditions remain difficult.

In the second quarter, operating profit excluding joint ventures and excluding restructuring charges, stood at 5.3 billion kronor (564 million euros) against 6.1 billion a year ago and an average forecast of analysts of 5 8000000000.

Revenues fell 8% to 48 billion crowns, while analysts had forecast on 50500000000.

On Thursday, Nokia Siemens Network (NSN), one of his main rivals, posted a decline of 5% of its turnover in the period.

Like NSN, Ericsson said its sales had been affected by supply shortages of certain components.

"We believe (the break) weighed negatively to height of three to four billion kronor on sales for the quarter," the company said in a statement.

Ericsson's gross margin, 39%, came out at a level well above expectations, the group has benefited from the effect of cost reductions and a "mix" positive activities.

Wall Street opened up after the publication of a series of better than forecast, reassuring investors who feared a slowdown in U.S. economic recovery.

A few minutes after the start of trading, the DJIA gained 0.22% to 10,252.59 points, the Standard & Poor's 500 index 0.44% to 1087.88 points and the Nasdaq Composite 0.35% to 2230.22 points.

The title Apple earned $ 262 4% after reporting a result well above expectations, boosted by higher sales of its Mac computers.

Prices are also supported by banking stocks Morgan Stanley and Wells Fargo have both published results better than expected, reassuring investors concerned about the health of the U.S. banking sector.

Both titles and took respectively 7.06% and 4.36% in early trade.

Manutan announced Friday that its sales had increased 9.3% in third quarter 2009-2010 to 132.9 million euros, the group has enjoyed an upturn in all regions of Europe where it is present.

Of the first nine months of the year offset, net sales rose 0.2% on a constant basis and 18.7%, taking into particular account the integration of Local Businesses Camif, acquired in March last.

"The end of the first nine months of activity marks the return to growth in aggregate group," commented Manutan in a statement, without giving targets for the current year.

The Italian group Fiat said on Friday it would invest 700 million euros to produce the Panda Pomigliano, near Naples, while the range of small cars was previously produced in Poland.

The decision to relocate production in Italy of the best-selling small car in Europe was a time appear uncertain because only 62% of factory workers in Naples had voted in favor.

Fiat has finally decided to pursue his project after meeting with various unions have accepted this decision with the exception of Fiom, who said he would act in court for infringement of the rights of employees under the new conditions.

The government of Silvio Berlusconi welcomed the announcement of Fiat.

Fiat's investment in Naples – the group plans to invest about 8 billion euros worldwide by 2011 – is expected to boost employment in Italy and contribute to economic growth.

Action Fiat was up 1.4% to 8.84 euros in late afternoon.

The European Commission has condemned the French Bolloré to pay a fine of 21 million euros for price fixing in the market for carbonless paper.

The Commission fined Bolloré fined 22.68 million euros in December 2001 but the company had appealed to the European Court of Justice annulled the decision in September 2009 for procedural issues.

"The Commission has re-adopted the decision by correcting the procedural error that led to the cancellation of the 2001 decision," the EU executive said in a statement.

It has reduced the original amount of the fine to reflect the cooperation of Bolloré.

The Nobel Prize in Economics Paul Krugman attacked in an interview published Monday in Germany's unofficial candidate to head the European Central Bank, saying that naming Axel Weber present a "substantial risk (…)" for the euro. Asked by the newspaper Handelsblatt in an appointment of the current president of the Bundesbank to take over from Jean-Claude Trichet, Mr. Krugman replied: "The risk for the euro area would be considerable."

Economist criticizes Dr. Weber, one of the favorites to head the ECB, interested only in the fight against inflation even if it means endangering growth. "The risk of contagion (problems) from Greece to Spain and Portugal to Italy would be much greater with a president so conservative for the ECB," he saidKrugman, recognizing not personally know the owner of the Bundesbank.

Weber is concerned about inflation even when there is not, "he joked, adding:" If you are looking for someone who wants a 0% inflation even when the unemployment rate is 13 %, Weber is your man. " "The ECB must become much more flexible and aggressive. His conservative politics is primarily due to the sensitivity of Germany", he also analyzed.

Unlike the American Fed, the ECB has a clear mandate to preserve price stability, and not to support growth. Mr. Krugman also criticizes implicitly the direction of German economic policy, now focused on fiscal restraint. "This is not the time to be worried about the deficit", said the Nobel Prize, in line with recent remarks by U.S. President Barack Obama.

The U.S. agency mortgage refinance Fannie Mae, which had a significant stake in the subprime crisis, said Monday in a loss of 11.5 billion dollars in the first quarter, and asked the federal Treasury to grant further 8.4 billion dollars by the end of June to offset its deficit. "Our first quarter results are due primarily to costs associated with credit, which remain high due to weaknesses in the economy and market américainde residential property," said Fannie Mae said in a statement.

The additional $ 8.4 billion requested to be added for an additional $ 15.3 billion already disbursed by the Treasury on March 31, intended to fill the deficit in December 31, 2009."Given the current trends in housing and financial markets, we continue to expect net deficits in the future, and therefore we will obtain additional funding from Treasury," the company said.

This aid, granted in exchange for preference shares held by U.S. taxpayers also costs for Fannie Mae, who had to pay first quarter dividend of $ 1.5 billion to the federal government, widening its quarterly loss Group share 13.1 billion.

The credit losses increased from the fourth quarter 2009 and first quarter 2010, from 4.1 to 5.1 billion, "reflecting the increased number of defaults, partially offset by a slight reduction in the magnitude of these losses, "the company said.

The rate of seizures has increased in the first quarter, Fannie Mae said: macroeconomic conditions and "the protracted decline in prices of residential property at the national level continue to lead to an increasing proportion of our loans go from being of default than before.

And given the minimum time for them to sell foreclosed properties (unfinished evictions, repairs, legal deadlines to allow property owners to eventually settle their debts to stay home ..), the body just to put on the market properties seizures, delaying the cash flow.

Last week, the other major parastatal mortgage refinancing, Freddie Mac, had published a quarterly loss of 7.980 billion and $ 10.6 billion requested additional assistance from Treasury.

In late March, U.S. Treasury Secretary Timothy Geithner had estimated that the reform Freddie Mac and Fannie Mae should expect "a period of greater stability in financial markets." The Treasury had announced in late December that it would close until end 2012 loss of Freddie Mac and Fannie Mae.

The two bodies were placed under the supervision of the U.S. government in September 2008, at the height of the crisis, when they threatened to collapse under the weight of their debt. Since then, the state has pumped hundreds of billions of dollars to keep them afloat.