Economic and Financial Week in Review 1.8.11(2)

Economic and Financial Week in Review 1.8.11(2) - Economic...

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Page 1 of 6 Economic and Financial Week in Review EMPLOYMENT MILDLY ENCOURAGING* JANUARY 3 JANUARY 7, 2011 Ed. 4.01 WEEK: S&P +1.16% DOW +0.91% NASDAQ +1.90% YTD: 1.16% DOW +0.91% NASDAQ +1.90% The overall trend in employment continues to be somewhat positive. The U.S. unemployment rate fell from 9.8% to 9.4%. But the government’s monthly jobs report included a mixed bag of other data indicating the economy’s job creation engine is still not operating at full throttle. Construction spending and factory orders rose a bit more than expected, and manufacturing and service activity continued to expand at a healthy clip. DAILY ACTIVITY: MONDAY, JANUARY 3, 2011 S&P +1.13% DOW +0.81% NASDAQ +1.46% GOLD +0.10% ($1422) OIL +0.19% ($91.55) What a way to ring in the new year. Instead of a round of profit-taking to begin 2011, the markets climbed higher on good manufacturing news today and other solid economic news last week. Perhaps just as important, trading volume began to pick up today. Apple Inc.'s market cap rode the wave to top the $300 billion mark, cementing its place as the second-largest U.S. company, behind ExxonMobil. Bank of America agreed to pay $2.8 billion to Fannie Mae and Freddie Mac to settle claims that its Countrywide mortgage unit sold the government-sponsored mortgage companies bad loans. According to Fannie Mae, the amount covers 44% of the repurchase requests it has made to banks that sold what it claims are bad mortgage loans. Bank of America said it will take about a $3 billion provision in the fourth quarter to address the payment. New private investments in Facebook value the social-networking company at $50 billion, according to a report in The New York Times . Goldman Sachs invested $450 million, and Russian firm Digital Sky Technologies invested $50 million. Construction spending was up in November for the third straight month, according to the Commerce Department. Overall construction spending rose 0.4% month over month, with a 0.3% rise in private spending. Year over year, however, construction spending is down 6%. The cost to insurers from payments related to natural disasters jumped two-thirds from 2009, according to Munich Re. The German insurer estimates that total natural-disaster-related payments rose to $37 billion from $22 billion in 2009. Record-high temperatures caused a large number of weather-related catastrophes, according to the company, including heat waves in Russia and massive flooding in Pakistan.
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Page 2 of 6 TUESDAY, JANUARY 4, 2011 S&P -0.13% DOW +0.18% NASDAQ -0.38% GOLD -3.09% ($1378) OIL -2.37% ($89.38) The major stock indexes closed mixed in spite of falling commodity prices and a good report on factory orders. The Federal Reserve released the minutes of its latest meeting, which showed that the Reserve’s
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This note was uploaded on 02/06/2011 for the course ECON 218 taught by Professor Ryandecker during the Spring '11 term at University of Illinois at Urbana–Champaign.

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Economic and Financial Week in Review 1.8.11(2) - Economic...

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