With our investment news briefs, Money Morning provides investors with a quick overview of the most important investing news stories from all around the world.
Tech Bulls Boost Markets; Crude Tops $60 a Barrel; Bing Takes Bite Out of Yahoo, But Not Google; Weatherization Funds Cause Concern About Fraud; Paulson Defends BofA/Merrill Deal; U.S. Weighs in On China's Spy Game; Microsoft Stores: Next to An Apple Store Near You
Tech stocks spurred a rally among U.S. markets yesterday (Wednesday), as by Intel Corp.'s (Nasdaq: INTC) earnings exceeding of Wall Street expectations. All three major indices rose: The Dow Jones Industrial Average was up 3.07% to close at 8,616.21, the Standard & Poor's 500 was up 2.96%, closing at 932.68, while the tech-laden Nasdaq Composite was up 3.51%, closing at 1,862.90. "There's no doubt that the catalyst started with the report from Intel," Chemung Canal Trust Co. Senior Investment Officer Tom Wirth told Bloomberg News. "It seems obvious to me that there's more optimism, that we've seen the bottom and things are getting progressively better."
Crude oil futures on the New York Mercantile Exchange (NYMEX) rallied $2.02, or 3.37%, to $61.54 a barrel yesterday (Wednesday) after Energy Department figures showed a smaller-than-expected increase in oil and diesel inventories. "There's no demand number that you can point to ... it's just that (distillate) inventories didn't build as much as expected," Standard Chartered PLC commodities trader Morgan Downey told The Wall Street Journal.
The newly launched Bing search engine from Microsoft Corp. (Nasdaq: MSFT) couldn't touch the stranglehold Google Inc. (Nasdaq: GOOG) has on the market. Bing recorded just a 0.4% gain in its market share to settle at 8.4% last month. The gain came at the expense of second-place Yahoo! Inc. (Nasdaq: YHOO), which saw its market share fall to 19.6% in June, down from May's 20.1%, The Washington Post reported, citing data from Comscore Inc. (Nasdaq: SCOR). Google's share, meanwhile, held steady at 65%. Bing was launched in early Juneto much buzz from tech pundits and Wall Street analysts.
States will get a $4.7 billion boost in federal stimulus funds to weatherize drafty homes, dwarfing the $447 million originally planned by Congress this year and the $227 million spent last year. The increase is so huge it has raised fears of waste and fraud, and set off a scramble to find workers and houses for them to repair. President Barack Obama said the program would lower utility bills for cash-strapped families, create new construction jobs and make the United States more energy efficient. "You're getting a three-fer," President Obama said. "That's exactly the kind of program we should be funding." Some worry that states won't be able to keep track of the copious amounts of money. Council for Citizens Against Government Waste spokeswoman Leslie Paige said the program is open to fraud because of the way oversight is divided: The government passes the money to states, the states pass it to community action agencies and the agencies pass it to contractors who work with customers. "It's such a Rube Goldberg operation it should be setting off alarm bells," she told The Associated Press.
Former U.S. Treasury Secretary Henry Paulson will tell the House Oversight and Government Reform Panel in Washington today (Thursday) he acted appropriately in warning Bank of America (NYSE: BAC) Chief Executive Officer Kenneth Lewis that top executives could be ousted if they abandoned merger plans with Merrill Lynch, Reuters reported. "It would be unthinkable for Bank of America to take this destructive action for which there was no reasonable legal basis and which would show a lack of judgment," Paulson said in his prepared testimony. Some lawmakers are criticizing what they say was government heavy-handedness in pressuring the taxpayer-funded Bank of America to go through with the deal after escalating losses at Merrill came to light.
U.S. Commerce Secretary Gary Locke has weighed in China's detainment of Australian and Chinese Rio Tinto PLCemployees accused of espionage, saying multinational companies in that nation "need to have assurances and confidence" that their workers will be treated fairly, adding he will raise the case in a meeting with Chinese Premier Wen Jiabao today (Thursday), The Wall Street Journal reported. The workers are accused of bribery to obtain state secrets relating to iron-ore price talks, but Australia has yet to be officially advised of the allegations, The Journal said.
Microsoft Corp. (Nasdaq: MSFT), which in February said it would open branded retail stores in the United States., will place them "next to existing Apple Inc. (Nasdaq: AAPL) stores this fall," ZDNet reported, citing a statement from Microsoft's Chief Operating Officer Kevin Turner. Microsoft has been mum on details of what exactly the stores will sell, but it is said they will be "more showcases than actual retail outlets," anonymous sources within the company told ZDNet.