The Dow turned lower Friday as investors continued to digest earnings reports from top-tier companies. An economic report showing an unexpected rise in new housing starts and building permits helped stoke some enthusiasm. Wall Street will attempt to make it a perfect week for the bulls—with the Dow, the S&P 500 and the Nasdaq rising in all four trading days so far this week. Read and listen to what the experts had to say...
US Market Rally Likely to Continue
"The market is really responding favorably and positively to the earnings reports that we've seen right now," said Ben Lichtenstein of Tradersaudio.com. "This rally seems to have a little bit more weight to it, and possibly could have some more follow through." He said he's looking at the Dow rising to 9,000 and the S&P to 955.
Counterpoint: Current Rally Not to Be Trusted
Unemployment is not a lagging indicator but rather a leading one, Nicu Harajchi, CEO of N1 Asset Management said Friday. As a result, the U.S. economic contraction is still intact, he added. He said it will be a pessimistic, slow recovery—current rally will be brief and a long-term bear market is expected.
Dollar to Remain Defensive
The dollar is going to remain on the defensiveuntil we hear a shift in corporate earnings from the U.S., Daragh Mayer from Calyon said Friday. "We'll see the dollar on the defensive as part of this renewed risk appetite coming on board," he added.
Banks Might Need More Capital: IMF
The IMF warned banks may need to raise more capital if the economic situation declines and loan defaults rise. “I don’t think we’re out of this yet and we’re fairly negative on the outlook for next year,” said Anthony Scott from Charles Stanley. “Stock markets do very well, but there’s a feeling that we’ve gotten ahead of ourselves.”
Dinallo’s Economic Outlook
“People have to understand that although the markets may be picking up, but there is a serious drag on the economywhen it comes to credit cards, for example. It’s a looming rock over the economy,” said Eric Dinallo, superintendent of New York State Insurance Department
Paulson & Bernanke Stopped 'Catastrophe'
Addressing Henry Paulson's testimony re the Bank of America/Merrill deal, Rob Nichols of Financial Services Forum said, “The hearing ignored a lot of what went right...Secretary Paulson and Chairman Bernanke did some very positive things that helped avert a financial catastrophe.”
The Layoff Alternative
Many employers are cutting costs by cutting jobs. But an initiative called “shared work program” offers a unique alternative to large-scale layoffs. Patricia Smith, New York State Department of Labor commissioner, said instead of cutting staff, an employer can reduce employee’s hours while unemployment benefit can be collected for the hours not worked. Watch to learn how the program works.
CNBC's Companies in the News:
- CIT Shares Rebound As Lender Scambles to Avoid Bankruptcy
- Citi Earns $4.3 Billion, Beating Estimates; Shares Rise
- General Electric Revenue Falls Short, Shares Slip
(GE is the parent company of CNBC and CNBC.com.)
Bank of America
- Bank of America Profit Falls, but Beats Estimates