Asian shares are tumbling following the U.S. sell-off on Tuesday. The Dow Jones industrial average had its biggest loss (-265 points, -2.49%) in six weeks yesterday. The Nasdaq was off 3%. The bad day on Wall Street followed news that the Federal Reserve plans to buy more Treasury Bonds and a widening trade deficit. Take a look:
AP Economy Survey Projects Weaker Growth in Coming Months
A new AP Economy Survey is projecting weaker growth in both the 2nd and 3rd quaters of this year. The AP forecasts a 2nd quarter GDP of 2.8%. The AP Economy Survey indicates that employment and consumer spending will continue to struggle. The majority of economists still believe the economy will recover, but most economists have scaled back growth forecasts. Take a look:
Piper Jaffray Analyst Gene Munster Thinks Apple, Inc. Growth is Sustainable
Apple Inc.'s third-quarter was up 78% ($3.51 a share). Apple's iPhone is facing growing compeition from Android phones. The company's recently launched iPad is also expected to face growing competition from a number of different tables that rival tech firms will launch in time for the holiday shopping season. Despite this Piper Jaffray analyst Gene Munster sill expects Apple's growth to be sustainable. Gene Munster says they estimate Apple will do $75 billion in revenue next year. He thinks there is a lot of room for Apple to grow still in the phone and computer markets. You can watch Bloomberg's video interview with Gene Munster here.
Goldman Sachs Dodges Bullet With $550 Million Settlement Fine
The Wall Street Journalreports that the SEC was split in its Goldman Sachs decision. Goldman Sachs will pay a $550 million fine, but they won't have to admit to fraud, in a settlement with the SEC.
Thursday's settlement-in which Goldman agreed to pay a $550 million fine, but didn't have to admit it committed fraud—capped one of the most closely watched cases in the SEC's 76-year history. The agency had charged Goldman with intentionally duping clients by selling a mortgage-security product that secretly was designed by another Goldman client betting that the housing market would crash.
Suzanne McGee, author of the book, Chasing Goldman Sachs, told Betty Liu on Bloomberg Television that Goldman Sachs dodged a bullet. $550 million sounds like a large amount, but it isn't very big for Goldman Sachs, which makes $13 billion a year. Some analysts also think Goldman Sachs could make $550 million in a week.
Rebecca Jarvis discussed the Goldman Sachs settlement on CBS News. Take a look:
The stock market fell today as the May jobs report showed that the private sector is still not adding very many jobs. The weak jobs news, combined with news that Hungary's economy is struggling, sent stocks downward. The Dow fell over 300 points and dipped under 10,000. Take a look:
Washington Officials Look Into Last Week's Sudden Stock Plunge
The stock market had one of its best rallies in the past couple years on Monday. The really help ease concerns about last week's bizarre blip. Investors hope the 1,000 point freefall never happens again. Washington officials are looking into the matter . The AP says Washington officials will be meeting this week with executives from the New York Stock Exchange and NASDAQ. The exact cause of the sudden downturn is still unknown.
Citigroup: Greece Debt Could Trigger 20% Correction
Marketwatch reports that Citigroup sees a 20% correction possible because of the financial crisis in Greece.
Citigroup got things off to a bearish start with a prediction that fears of sovereign debt contagion over Greece could trigger a near-term correction of up to 20%.
They said that while there have been financial crises with international implications in the recent past -- Northern Europe in 1992, Southeast Asia and South Korea in 1997 -- the Greek crisis is "graver than these were."
A 20% correction from the Dow's recent peak around 11,200 would be around 8,960. A 20% correction from today's close of 10,380 would be around 8,300.
The Dow dropped nearly 1,000 points today before rebounding. Business Weekreports that 998.50 point drop was the biggest since 1987. Percentage wise the drop was 9.2%.
"It's panic selling," said Burt White, chief investment officer at LPL Financial in Boston, which oversees $379 billion. "There's concern that the European situation might cool down global growth and freeze the credit markets."
The Dow lost as much as 998.5 points, or 9.2 percent, before paring its loss to 383.17 points at 3:17 p.m. in New York. The Standard & Poor’s 500 Index fell as much as 8.6 percent, its biggest plunge since December 2008, before trimming its decline to 3.6 percent.
The big drop was so huge it looks like some sort of computerized sell-off. The Dow is still over 300 points down - 2.8% according to Google Finance. The Nasdaq is nearly 3% down for the day.
Senior White House economic adviser Paul Volcker said Feds should consider a Value Added Tax. This would be a tax in addition to other taxes. It would also make things a nightmare for retailers and businesses when they have to collect money for products and services. Take a look:
The DOW continues to make up new ground. It is edging every closer to the 11,000 market. This is still well off its high but a strong climb from the low numbers in 2008. Tim Speiss of Eisner LLC says people who pulled out of stocks last March and never re-entered the market may regret their decision. He admits the possibility of a double-dip recession still exists, but he doesn't think it will happen. Take a look:
Oil has been trading between the $70 and $80 a barrel mark. That level will create much higher gas prices for drivers this summer, which could impact the economy. The big concern as Fox News reports is that oil prices could spike if there is a major conflict with Iran. On the positive side, it is difficult for Iran to cut off the oil supply by blocking the Strait of Hormuz, because it shoots itself in the foot financially by doing so. Take a look:
Despite some inmprovement in the economy (but not in the job market) the Federal Reserve is not ready to start raising interest rates. The Fed plans to keep interest rates at their current very low levels (0 to .25%) for an "extended period" of time. Take a look:
The stock market got off to a great start Monday with a rally on the first day of trading. There were gains in the Dow, Nasdaq and S&P. The Dow was up 155.91 points, or 1.5%, to 10,583.96. Some say this single day bodes well for the entire year. We will see if the January barometer hold true throughout 2010.
CBS Newsreports that the National Debt has passed the statutory Debt Limit.
The latest calculation of the National Debt as posted by the Treasury Department has - at least numerically - exceeded the statutory Debt Limit approved by Congress last February as part of the Recovery Act stimulus bill.
The ceiling was set at $12.104 trillion dollars. The latest posting by Treasury shows the National Debt at nearly $12.135 trillion.
No doubt the government will soon raise the spending limit. You can always find the latest National Debt number here, here and here.
The wine trade is faced with a massive oversupply of champagne due to overproduction and less demand than usual. ITN's Ben King explains. It is somewhat similar to the problem that hit luxury goods, shoes and services. Ben King says the oversupply should push prices down somewhat but premium champagne sellers fear discounting could hurt their brands. Take a look:
The Wall Street Journal 
CBS News 