The Week in Review for the week ending August 17, 2012
Last week official data confirmed what many investors had long suspected –– that the eurozone economy contracted in the second quarter. That fact was offset by surprisingly positive economic reports from the United Kingdom and a long string of upbeat data from the United States.
However, growth in Japan eased in the second quarter, and China appears to be in no rush to take steps to boost its own growth.
European stocks responded positively to German Chancellor Angela Merkel’s reassurance that Germany was committed to maintaining the euro.
Those comments overshadowed the latest Spanish bank report, which indicated that bad loans in Spain hit an all-time high in June.
The market’s more positive tone was reflected in rising yields of US government bonds, which tend to decline amid a rush to safety. The 10-year US Treasury yield reached 1.861% Thursday, its highest point since early May. The Standard & Poor’s 500 Stock Index continued its rally, approaching a four-year high, and major US stock benchmarks were all near their 2012 highs.
Amid this environment the DJIA was up 0.5%, the S&P 500 was up 0.9%, the Russell 2000 was up 2.3%, the Global Dow ex-US was up 0.6% and crude oil rose 3.4%.
The eurozone economy shrank in the second quarter, receding by an annualized -0.7%. While Germany’s economy grew 1.1%, it did not generate enough strength to counter persistent weakness in southern Europe, where economic activity in Italy, Spain and Greece contracted
-0.7%, -0.4% and -6.2%, respectively. France, the eurozone’s second-largest economy, stagnated for the third consecutive quarter, with activity declining -0.2% and unemployment rising above 10%.
The US economy received a boost of confidence as a series of reports consistently reinforced its progress. Homebuilder confidence rose to its highest level since February 2007, according to the National Association of Home Builders/Wells Fargo builder confidence index. Building permits, an indicator of future construction, reached their highest point in July since August 2008. However, US new-home construction fell 1.1% in July from June, according to the US Department of Commerce.
Retail sales rose 0.8% in July from June, following three months of declines. Consumer prices were little changed in July from June, and increased just 1.4% over the past 12 months.
Industrial production rose 0.6% in July, the fourth straight monthly increase. The Reuters/University of Michigan consumer sentiment index preliminary reading for August was a better-than-expected 73.6, a three-month high. The Conference Board’s index of leading indicators rose 0.4% to 95.8 in July, reversing a 0.4% decline in June.
A spate of positive data from the United Kingdom this week appeared to negate other recent signs of recession. UK retail sales rose more than expected in July, up 2.8% from a year earlier and 0.3% from the previous month. The Office for National Statistics reported a 46,000 decline in unemployment in June, with the unemployment rate falling to 8.0% from 8.1% in May. Consumer prices rose 2.6% in July from a year earlier.
The Japanese economy appeared to lose momentum in the second quarter. The country’s gross domestic product grew at an annualized 1.4% rate after expanding 5.5% in the first quarter, according to data from Japan’s Cabinet Office. Activity in the first quarter of 2012 had been boosted by government efforts to rebuild areas that had been affected by the March 2011 earthquake.
Greece avoided a default on debts owed to the European Central Bank by selling more than €4 billion of 13-week treasury bills, its largest debt sale in two years. However, the sale was described as more show than substance because the short-term bills were sold primarily to Greek banks, which used emergency funds from the Bank of Greece to buy them; the banks are expected to immediately pledge them as collateral for more such loans.
Wal-Mart posted a 5.7% increase in second-quarter earnings on growth in international sales as well as improved US same-store sales. Success at controlling expenses also helped it to overcome challenging economic times that have many of its customers living paycheck to paycheck.
Home Depot increased its second-quarter profits 12% despite just a 2.1% increase in same-store sales. The company was helped by productivity gains and higher profit margins. Both Home Depot and rival Lowe’s benefited from unseasonably warm weather early in the year that boosted first-quarter sales.
Network equipment maker Cisco combined strong revenue and lower operating expenses to produce a 56% leap in fiscal fourth-quarter earnings. The company marked its third consecutive quarter of rising earnings with a 75% increase in its quarterly dividend, to $0.14 per share. Cisco’s sales have been boosted by the need for more robust networks to support mobile and cloud computing. Cisco’s results are seen as an indication that telecommunications firms will boost spending in the second half of the year.
Sears Holdings reduced its second-quarter loss through cost cutting. However, sales fell more than expected. US same-store sales declined -3.7% overall for the quarter. Sears Canada’s same-store sales dropped -7.1%. A partial spinoff of Canadian stores would reduce Sears’ ownership stake to 51% from about 95%.
Deere & Company missed analysts’ earnings estimates for its fiscal third quarter. Although quarterly earnings rose 11%, higher expenses and slow international sales held back results. Deere lowered its sales and profit estimates for the fiscal year. The company noted that although farmers are affected by this summer’s drought in the US corn belt, they are in relatively good financial shape to handle it because of high crop prices in recent years.
The Week in Review for the week ending August 17, 2012
Last week official data confirmed what many investors had long suspected –– that the eurozone economy contracted in the second quarter. That fact was offset by surprisingly positive economic reports from the United Kingdom and a long string of upbeat data from the United States.
However, growth in Japan eased in the second quarter, and China appears to be in no rush to take steps to boost its own growth.
European stocks responded positively to German Chancellor Angela Merkel’s reassurance that Germany was committed to maintaining the euro.
Those comments overshadowed the latest Spanish bank report, which indicated that bad loans in Spain hit an all-time high in June.
The market’s more positive tone was reflected in rising yields of US government bonds, which tend to decline amid a rush to safety. The 10-year US Treasury yield reached 1.861% Thursday, its highest point since early May. The Standard & Poor’s 500 Stock Index continued its rally, approaching a four-year high, and major US stock benchmarks were all near their 2012 highs.
Amid this environment the DJIA was up 0.5%, the S&P 500 was up 0.9%, the Russell 2000 was up 2.3%, the Global Dow ex-US was up 0.6% and crude oil rose 3.4%.
The eurozone economy shrank in the second quarter, receding by an annualized -0.7%. While Germany’s economy grew 1.1%, it did not generate enough strength to counter persistent weakness in southern Europe, where economic activity in Italy, Spain and Greece contracted
-0.7%, -0.4% and -6.2%, respectively. France, the eurozone’s second-largest economy, stagnated for the third consecutive quarter, with activity declining -0.2% and unemployment rising above 10%.
The US economy received a boost of confidence as a series of reports consistently reinforced its progress. Homebuilder confidence rose to its highest level since February 2007, according to the National Association of Home Builders/Wells Fargo builder confidence index. Building permits, an indicator of future construction, reached their highest point in July since August 2008. However, US new-home construction fell 1.1% in July from June, according to the US Department of Commerce.
Retail sales rose 0.8% in July from June, following three months of declines. Consumer prices were little changed in July from June, and increased just 1.4% over the past 12 months.
Industrial production rose 0.6% in July, the fourth straight monthly increase. The Reuters/University of Michigan consumer sentiment index preliminary reading for August was a better-than-expected 73.6, a three-month high. The Conference Board’s index of leading indicators rose 0.4% to 95.8 in July, reversing a 0.4% decline in June.
A spate of positive data from the United Kingdom this week appeared to negate other recent signs of recession. UK retail sales rose more than expected in July, up 2.8% from a year earlier and 0.3% from the previous month. The Office for National Statistics reported a 46,000 decline in unemployment in June, with the unemployment rate falling to 8.0% from 8.1% in May. Consumer prices rose 2.6% in July from a year earlier.
The Japanese economy appeared to lose momentum in the second quarter. The country’s gross domestic product grew at an annualized 1.4% rate after expanding 5.5% in the first quarter, according to data from Japan’s Cabinet Office. Activity in the first quarter of 2012 had been boosted by government efforts to rebuild areas that had been affected by the March 2011 earthquake.
Greece avoided a default on debts owed to the European Central Bank by selling more than €4 billion of 13-week treasury bills, its largest debt sale in two years. However, the sale was described as more show than substance because the short-term bills were sold primarily to Greek banks, which used emergency funds from the Bank of Greece to buy them; the banks are expected to immediately pledge them as collateral for more such loans.
Wal-Mart posted a 5.7% increase in second-quarter earnings on growth in international sales as well as improved US same-store sales. Success at controlling expenses also helped it to overcome challenging economic times that have many of its customers living paycheck to paycheck.
Home Depot increased its second-quarter profits 12% despite just a 2.1% increase in same-store sales. The company was helped by productivity gains and higher profit margins. Both Home Depot and rival Lowe’s benefited from unseasonably warm weather early in the year that boosted first-quarter sales.
Network equipment maker Cisco combined strong revenue and lower operating expenses to produce a 56% leap in fiscal fourth-quarter earnings. The company marked its third consecutive quarter of rising earnings with a 75% increase in its quarterly dividend, to $0.14 per share. Cisco’s sales have been boosted by the need for more robust networks to support mobile and cloud computing. Cisco’s results are seen as an indication that telecommunications firms will boost spending in the second half of the year.
Sears Holdings reduced its second-quarter loss through cost cutting. However, sales fell more than expected. US same-store sales declined -3.7% overall for the quarter. Sears Canada’s same-store sales dropped -7.1%. A partial spinoff of Canadian stores would reduce Sears’ ownership stake to 51% from about 95%.
Deere & Company missed analysts’ earnings estimates for its fiscal third quarter. Although quarterly earnings rose 11%, higher expenses and slow international sales held back results. Deere lowered its sales and profit estimates for the fiscal year. The company noted that although farmers are affected by this summer’s drought in the US corn belt, they are in relatively good financial shape to handle it because of high crop prices in recent years.
The Week in Review for the week ending August 17, 2012
Last week official data confirmed what many investors had long suspected –– that the eurozone economy contracted in the second quarter. That fact was offset by surprisingly positive economic reports from the United Kingdom and a long string of upbeat data from the United States.
However, growth in Japan eased in the second quarter, and China appears to be in no rush to take steps to boost its own growth.
European stocks responded positively to German Chancellor Angela Merkel’s reassurance that Germany was committed to maintaining the euro.
Those comments overshadowed the latest Spanish bank report, which indicated that bad loans in Spain hit an all-time high in June.
The market’s more positive tone was reflected in rising yields of US government bonds, which tend to decline amid a rush to safety. The 10-year US Treasury yield reached 1.861% Thursday, its highest point since early May. The Standard & Poor’s 500 Stock Index continued its rally, approaching a four-year high, and major US stock benchmarks were all near their 2012 highs.
Amid this environment the DJIA was up 0.5%, the S&P 500 was up 0.9%, the Russell 2000 was up 2.3%, the Global Dow ex-US was up 0.6% and crude oil rose 3.4%.
The eurozone economy shrank in the second quarter, receding by an annualized -0.7%. While Germany’s economy grew 1.1%, it did not generate enough strength to counter persistent weakness in southern Europe, where economic activity in Italy, Spain and Greece contracted
-0.7%, -0.4% and -6.2%, respectively. France, the eurozone’s second-largest economy, stagnated for the third consecutive quarter, with activity declining -0.2% and unemployment rising above 10%.
The US economy received a boost of confidence as a series of reports consistently reinforced its progress. Homebuilder confidence rose to its highest level since February 2007, according to the National Association of Home Builders/Wells Fargo builder confidence index. Building permits, an indicator of future construction, reached their highest point in July since August 2008. However, US new-home construction fell 1.1% in July from June, according to the US Department of Commerce.
Retail sales rose 0.8% in July from June, following three months of declines. Consumer prices were little changed in July from June, and increased just 1.4% over the past 12 months.
Industrial production rose 0.6% in July, the fourth straight monthly increase. The Reuters/University of Michigan consumer sentiment index preliminary reading for August was a better-than-expected 73.6, a three-month high. The Conference Board’s index of leading indicators rose 0.4% to 95.8 in July, reversing a 0.4% decline in June.
A spate of positive data from the United Kingdom this week appeared to negate other recent signs of recession. UK retail sales rose more than expected in July, up 2.8% from a year earlier and 0.3% from the previous month. The Office for National Statistics reported a 46,000 decline in unemployment in June, with the unemployment rate falling to 8.0% from 8.1% in May. Consumer prices rose 2.6% in July from a year earlier.
The Japanese economy appeared to lose momentum in the second quarter. The country’s gross domestic product grew at an annualized 1.4% rate after expanding 5.5% in the first quarter, according to data from Japan’s Cabinet Office. Activity in the first quarter of 2012 had been boosted by government efforts to rebuild areas that had been affected by the March 2011 earthquake.
Greece avoided a default on debts owed to the European Central Bank by selling more than €4 billion of 13-week treasury bills, its largest debt sale in two years. However, the sale was described as more show than substance because the short-term bills were sold primarily to Greek banks, which used emergency funds from the Bank of Greece to buy them; the banks are expected to immediately pledge them as collateral for more such loans.
Wal-Mart posted a 5.7% increase in second-quarter earnings on growth in international sales as well as improved US same-store sales. Success at controlling expenses also helped it to overcome challenging economic times that have many of its customers living paycheck to paycheck.
Home Depot increased its second-quarter profits 12% despite just a 2.1% increase in same-store sales. The company was helped by productivity gains and higher profit margins. Both Home Depot and rival Lowe’s benefited from unseasonably warm weather early in the year that boosted first-quarter sales.
Network equipment maker Cisco combined strong revenue and lower operating expenses to produce a 56% leap in fiscal fourth-quarter earnings. The company marked its third consecutive quarter of rising earnings with a 75% increase in its quarterly dividend, to $0.14 per share. Cisco’s sales have been boosted by the need for more robust networks to support mobile and cloud computing. Cisco’s results are seen as an indication that telecommunications firms will boost spending in the second half of the year.
Sears Holdings reduced its second-quarter loss through cost cutting. However, sales fell more than expected. US same-store sales declined -3.7% overall for the quarter. Sears Canada’s same-store sales dropped -7.1%. A partial spinoff of Canadian stores would reduce Sears’ ownership stake to 51% from about 95%.
Deere & Company missed analysts’ earnings estimates for its fiscal third quarter. Although quarterly earnings rose 11%, higher expenses and slow international sales held back results. Deere lowered its sales and profit estimates for the fiscal year. The company noted that although farmers are affected by this summer’s drought in the US corn belt, they are in relatively good financial shape to handle it because of high crop prices in recent years.
The Week in Review for the week ending August 17, 2012
Last week official data confirmed what many investors had long suspected –– that the eurozone economy contracted in the second quarter. That fact was offset by surprisingly positive economic reports from the United Kingdom and a long string of upbeat data from the United States.
However, growth in Japan eased in the second quarter, and China appears to be in no rush to take steps to boost its own growth.
European stocks responded positively to German Chancellor Angela Merkel’s reassurance that Germany was committed to maintaining the euro.
Those comments overshadowed the latest Spanish bank report, which indicated that bad loans in Spain hit an all-time high in June.
The market’s more positive tone was reflected in rising yields of US government bonds, which tend to decline amid a rush to safety. The 10-year US Treasury yield reached 1.861% Thursday, its highest point since early May. The Standard & Poor’s 500 Stock Index continued its rally, approaching a four-year high, and major US stock benchmarks were all near their 2012 highs.
Amid this environment the DJIA was up 0.5%, the S&P 500 was up 0.9%, the Russell 2000 was up 2.3%, the Global Dow ex-US was up 0.6% and crude oil rose 3.4%.
The eurozone economy shrank in the second quarter, receding by an annualized -0.7%. While Germany’s economy grew 1.1%, it did not generate enough strength to counter persistent weakness in southern Europe, where economic activity in Italy, Spain and Greece contracted
-0.7%, -0.4% and -6.2%, respectively. France, the eurozone’s second-largest economy, stagnated for the third consecutive quarter, with activity declining -0.2% and unemployment rising above 10%.
The US economy received a boost of confidence as a series of reports consistently reinforced its progress. Homebuilder confidence rose to its highest level since February 2007, according to the National Association of Home Builders/Wells Fargo builder confidence index. Building permits, an indicator of future construction, reached their highest point in July since August 2008. However, US new-home construction fell 1.1% in July from June, according to the US Department of Commerce.
Retail sales rose 0.8% in July from June, following three months of declines. Consumer prices were little changed in July from June, and increased just 1.4% over the past 12 months.
Industrial production rose 0.6% in July, the fourth straight monthly increase. The Reuters/University of Michigan consumer sentiment index preliminary reading for August was a better-than-expected 73.6, a three-month high. The Conference Board’s index of leading indicators rose 0.4% to 95.8 in July, reversing a 0.4% decline in June.
A spate of positive data from the United Kingdom this week appeared to negate other recent signs of recession. UK retail sales rose more than expected in July, up 2.8% from a year earlier and 0.3% from the previous month. The Office for National Statistics reported a 46,000 decline in unemployment in June, with the unemployment rate falling to 8.0% from 8.1% in May. Consumer prices rose 2.6% in July from a year earlier.
The Japanese economy appeared to lose momentum in the second quarter. The country’s gross domestic product grew at an annualized 1.4% rate after expanding 5.5% in the first quarter, according to data from Japan’s Cabinet Office. Activity in the first quarter of 2012 had been boosted by government efforts to rebuild areas that had been affected by the March 2011 earthquake.
Greece avoided a default on debts owed to the European Central Bank by selling more than €4 billion of 13-week treasury bills, its largest debt sale in two years. However, the sale was described as more show than substance because the short-term bills were sold primarily to Greek banks, which used emergency funds from the Bank of Greece to buy them; the banks are expected to immediately pledge them as collateral for more such loans.
Wal-Mart posted a 5.7% increase in second-quarter earnings on growth in international sales as well as improved US same-store sales. Success at controlling expenses also helped it to overcome challenging economic times that have many of its customers living paycheck to paycheck.
Home Depot increased its second-quarter profits 12% despite just a 2.1% increase in same-store sales. The company was helped by productivity gains and higher profit margins. Both Home Depot and rival Lowe’s benefited from unseasonably warm weather early in the year that boosted first-quarter sales.
Network equipment maker Cisco combined strong revenue and lower operating expenses to produce a 56% leap in fiscal fourth-quarter earnings. The company marked its third consecutive quarter of rising earnings with a 75% increase in its quarterly dividend, to $0.14 per share. Cisco’s sales have been boosted by the need for more robust networks to support mobile and cloud computing. Cisco’s results are seen as an indication that telecommunications firms will boost spending in the second half of the year.
Sears Holdings reduced its second-quarter loss through cost cutting. However, sales fell more than expected. US same-store sales declined -3.7% overall for the quarter. Sears Canada’s same-store sales dropped -7.1%. A partial spinoff of Canadian stores would reduce Sears’ ownership stake to 51% from about 95%.
Deere & Company missed analysts’ earnings estimates for its fiscal third quarter. Although quarterly earnings rose 11%, higher expenses and slow international sales held back results. Deere lowered its sales and profit estimates for the fiscal year. The company noted that although farmers are affected by this summer’s drought in the US corn belt, they are in relatively good financial shape to handle it because of high crop prices in recent years.
The Week in Review for the week ending August 17, 2012
Last week official data confirmed what many investors had long suspected –– that the eurozone economy contracted in the second quarter. That fact was offset by surprisingly positive economic reports from the United Kingdom and a long string of upbeat data from the United States.
However, growth in Japan eased in the second quarter, and China appears to be in no rush to take steps to boost its own growth.
European stocks responded positively to German Chancellor Angela Merkel’s reassurance that Germany was committed to maintaining the euro.
Those comments overshadowed the latest Spanish bank report, which indicated that bad loans in Spain hit an all-time high in June.
The market’s more positive tone was reflected in rising yields of US government bonds, which tend to decline amid a rush to safety. The 10-year US Treasury yield reached 1.861% Thursday, its highest point since early May. The Standard & Poor’s 500 Stock Index continued its rally, approaching a four-year high, and major US stock benchmarks were all near their 2012 highs.
Amid this environment the DJIA was up 0.5%, the S&P 500 was up 0.9%, the Russell 2000 was up 2.3%, the Global Dow ex-US was up 0.6% and crude oil rose 3.4%.
The eurozone economy shrank in the second quarter, receding by an annualized -0.7%. While Germany’s economy grew 1.1%, it did not generate enough strength to counter persistent weakness in southern Europe, where economic activity in Italy, Spain and Greece contracted
-0.7%, -0.4% and -6.2%, respectively. France, the eurozone’s second-largest economy, stagnated for the third consecutive quarter, with activity declining -0.2% and unemployment rising above 10%.
The US economy received a boost of confidence as a series of reports consistently reinforced its progress. Homebuilder confidence rose to its highest level since February 2007, according to the National Association of Home Builders/Wells Fargo builder confidence index. Building permits, an indicator of future construction, reached their highest point in July since August 2008. However, US new-home construction fell 1.1% in July from June, according to the US Department of Commerce.
Retail sales rose 0.8% in July from June, following three months of declines. Consumer prices were little changed in July from June, and increased just 1.4% over the past 12 months.
Industrial production rose 0.6% in July, the fourth straight monthly increase. The Reuters/University of Michigan consumer sentiment index preliminary reading for August was a better-than-expected 73.6, a three-month high. The Conference Board’s index of leading indicators rose 0.4% to 95.8 in July, reversing a 0.4% decline in June.
A spate of positive data from the United Kingdom this week appeared to negate other recent signs of recession. UK retail sales rose more than expected in July, up 2.8% from a year earlier and 0.3% from the previous month. The Office for National Statistics reported a 46,000 decline in unemployment in June, with the unemployment rate falling to 8.0% from 8.1% in May. Consumer prices rose 2.6% in July from a year earlier.
The Japanese economy appeared to lose momentum in the second quarter. The country’s gross domestic product grew at an annualized 1.4% rate after expanding 5.5% in the first quarter, according to data from Japan’s Cabinet Office. Activity in the first quarter of 2012 had been boosted by government efforts to rebuild areas that had been affected by the March 2011 earthquake.
Greece avoided a default on debts owed to the European Central Bank by selling more than €4 billion of 13-week treasury bills, its largest debt sale in two years. However, the sale was described as more show than substance because the short-term bills were sold primarily to Greek banks, which used emergency funds from the Bank of Greece to buy them; the banks are expected to immediately pledge them as collateral for more such loans.
Wal-Mart posted a 5.7% increase in second-quarter earnings on growth in international sales as well as improved US same-store sales. Success at controlling expenses also helped it to overcome challenging economic times that have many of its customers living paycheck to paycheck.
Home Depot increased its second-quarter profits 12% despite just a 2.1% increase in same-store sales. The company was helped by productivity gains and higher profit margins. Both Home Depot and rival Lowe’s benefited from unseasonably warm weather early in the year that boosted first-quarter sales.
Network equipment maker Cisco combined strong revenue and lower operating expenses to produce a 56% leap in fiscal fourth-quarter earnings. The company marked its third consecutive quarter of rising earnings with a 75% increase in its quarterly dividend, to $0.14 per share. Cisco’s sales have been boosted by the need for more robust networks to support mobile and cloud computing. Cisco’s results are seen as an indication that telecommunications firms will boost spending in the second half of the year.
Sears Holdings reduced its second-quarter loss through cost cutting. However, sales fell more than expected. US same-store sales declined -3.7% overall for the quarter. Sears Canada’s same-store sales dropped -7.1%. A partial spinoff of Canadian stores would reduce Sears’ ownership stake to 51% from about 95%.
Deere & Company missed analysts’ earnings estimates for its fiscal third quarter. Although quarterly earnings rose 11%, higher expenses and slow international sales held back results. Deere lowered its sales and profit estimates for the fiscal year. The company noted that although farmers are affected by this summer’s drought in the US corn belt, they are in relatively good financial shape to handle it because of high crop prices in recent years.