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With our investment news briefs, Money Morningprovides investors with a quick overview of the most important investing news stories from all around the world.
Survey: Americans Still View Manufacturing as Backbone of Economy; Mortgage Rates Highest Since November; Initial Jobless Claims Drop; Highest Treasury Yields in Two Years Draws Investors; Palm CEO Swap Sends Stock Soaring; Yahoo Hires New CFO
- An index released yesterday indicates that Americans continue to view manufacturing as the most important industry for a strong national economy, even though not many consider it their number one career choice. The survey, conducted by Deloitte & Touche LLP and The Manufacturing Institute, shows that 71% of respondents view manufacturing as a national priority, and 81% say it has a significant impact on their standard of living. "The public's ranking of manufacturing as the top industry of importance to our economy, as well as its belief that U.S. manufacturers can compete globally, is very telling," Craig Giffi, Deloitte vice chairman and U.S. Consumer & Industrial Products industry leader, said in a statement. " ."
- Interest rates on 30-year mortgages rose to the highest level since November, foiling the Federal Reserve's plan to lower borrowing costs and spur a housing rebound. The average 30-year rate jumped to 5.59% from 5.29% a week earlier, McLean, Va.-based Freddie Mac (NYSE: FRE), said in a statement. That brings the 4-week increase to 15.02%, only the 10th period where rates rose by more than 10% since 1972, according to Bespoke Investment Group. Rising rates may deepen the U.S. housing slump by discouraging people who want to refinance or purchase a house. "The economy doesn't need higher mortgage rates because that will depress the level of home sales, cut off refinancing, and keep consumer spending sluggish," Patrick Newport, an economist with Lexington, Massachusetts-based IHS Global Insight told Bloomberg News.
- U.S retail sales rose for the first time in three months in May, suggesting the recession may be losing its bite, Reutersreported. The Commerce Department said yesterday (Thursday) that sales at U.S. retailers rose 0.5% last month, lifted by strong gasoline and building material receipts, after falling by 0.2% in April. "It looks like we are turning the corner." said Zach Pandl, an economist at Nomura Securities International in New York.
- The highest yields on 30-year Treasury bonds in almost two years attracted investors as record government spending and debt sales raised concerns excess liquidity will lead to inflation. The bonds drew a yield of 4.72% at the $11 billion auction, the highest since August 2007. The benchmark 10-year note earlier reached 4% for the first time since October on concern the budget deficit and a falling dollar will prompt investors to reduce holdings of U.S. debt. "At 4.7%, 30-year Treasuries are compelling," Nils Overdahl, an analyst at New Century Advisors in Bethesda, Md. told Bloomberg News. "You are really picking up a lot."
- Palm Inc. (Nasdaq: PALM) stock rallied more than 12% yesterday (Thursday) after news that it appointed former Apple Inc. (Nasdaq: AAPL) executive Jon Rubenstein as its chief executive officer (CEO), closing at $13.43. Rubenstein was senior vice president of Apple's iPod division when the popular media player launched in 2001, serving until 2006 when he became chairman at Palm. Outgoing CEO Ed Colligan, who has been with Palm since its inception in 1992, will take some time off and then join private equity firm Elevation Partners, which owns a 25% stake in Palm. The CEO swap comes just days after Palm launched its Pre smartphone, gunning for Apple's popular iPhone.
- Yahoo! Inc. (Nasdaq: YHOO) has appointed former General Electric Co. (NYSE: GE) executive Tim Morse as its new chief financial officer (CFO). Morse, who served as CFO and general manager for GE Plastics, will begin his employment with Yahoo on June 17 and assume the role of CFO on July 1. Yahoo was down 13 cents in trading yesterday (Thursday), closing at $16.19.