What’s the Story?

by CC May 17, 2012 9:14 am • Commentary


U.S. stock futures were little changed, following a four-day drop in the Standard & Poor’s 500 Index, amid a report that Moody’s Investors Service will downgrade Spanish banks.

JPMorgan Chase & Co. (JPM) declined 0.9 percent to pace losses in financial companies. Limited Brands Inc., owner of the Victoria’s Secret lingerie chain, slid 2 percent amid disappointing forecasts. Wal-Mart Stores Inc. (WMT), the largest retailer, rose 3.1 percent as earnings beat projections. Sears Holdings Corp. (SHLD), the retailer controlled by hedge fund manager Edward Lampert, added 8.1 percent after reporting a profit.

S&P 500 futures expiring in June lost less than 0.1 percent to 1,322.2 at 8:44 a.m. New York time. Dow Jones Industrial Average futures rose 9 points, or 0.1 percent, to 12,583.

Concern about Europe’s crisis drove the S&P 500 down 2.4 percent in four days. The euro fell to a four-month low today as Spain’s borrowing costs rose at an auction, stoking concern that the region’s financial contagion is spreading from Greece. Moody’s will probably announce rating downgrades for Spanish banks today, Expansion reported, citing people familiar with the situation it didn’t identify by name.


New claims for unemployment benefits were unchanged last week, according to government data on Thursday that will do little to ease concerns about a recent slowdown in jobs growth.

Initial claims for state unemployment benefits held steady at a seasonally adjusted 370,000, the Labor Department said.

The prior week’s figure was revised up to 370,000 from the previously reported 367,000.

Economists polled by Reuters had forecast claims falling to 365,000 last week. The four-week moving average for new claims, considered a better measure of labor market trends, fell 4,750 to 375,000.

The data comes on the heels of three straight months of slowing employment gains. Companies added 115,000 new jobs to their payrolls in April, the fewest in six months.


David Cameron, Britain’s prime minister, will on Thursday warn that the single European currency could unravel in a way that “carries huge risks for everyone” unless the eurozone’s 17 members move rapidly towards full fiscal and political union.

“The eurozone is at a crossroads,” Mr Cameron will tell a business audience in the north-west of England. “It either has to make up or it is looking at a potential break-up.


The world’s top 29 banks may need a total $556 billion to meet tougher new capital rules, cutting returns by a fifth and forcing them to curb investor payouts and raise customer charges, Fitch Ratings said on Thursday.

The credit rating agency studied 29 banks named by world leaders (G20) as being globally systemically important financial institutions and required to hold core capital buffers of up to 9.5 percent by the start of 2019.