US MARKET & NEWS 17.7.2009 the worst is over?

Stocks rallied Thursday, finding momentum in a choppy session, as investors welcomed JPMorgan Chase's better-than expected profit report and geared up reports from tech leaders after the close. After the close, Google reported higher quarterly earnings that topped estimates. IBM reported higher quarterly earnings that topped estimates on lower revenue that missed analysts’ forecasts. The Dow Jones industrial average gained 1.1% (+95.6 pts, close 8,711.8). The Nasdaq gained 1.2% (+22.1 pts, close 1,885.0) and the S&P 500 index gained 0.9% (+8.1 pts, close 940.7). In currency trading, the dollar gained versus the euro and fell versus the yen. U.S. light crude oil for August delivery rose 48 cents to settle at US$62.02 a barrel on the New York Mercantile Exchange. (CNNmoney)

* * * * *
The number of Americans filing claims for unemployment benefits fell last week to the lowest level since January, depressed by shifts in the timing of auto plant shutdowns. Initial jobless claims dropped by 47,000 to 522,000, lower than forecast, in the week ended July 11, from a revised 569,000 the prior week, the Labour Department said yesterday in
Washington. The number of people collecting unemployment insurance plunged by a record 642,000, also reflecting seasonal issues surrounding the closures at carmakers. A Labour analyst said the distortions may play havoc with claims data for another couple of weeks. General Motors Co. and Chrysler Group LLC accelerated shutdowns this year heading into bankruptcy, months before the traditional July closings. Through the gyrations, job losses may subside amid signs the housing and manufacturing slumps are easing. (Bloomberg)

* * * * *

U.S. foreclosure filings hit a record in the first half, a sign that job losses and falling property prices deepened the housing recession, according to RealtyTrac Inc. More than 1.5m properties received a default or auction notice or were seized by banks in the six months through June, the Irvine, California-based seller of default data said yesterday in a statement. That’s a 15%
y-o-y increase. One in 84 U.S. households received a filing. Home prices in 20 major U.S. metropolitan areas dropped 18.1% y-o-y in April, according to the S&P/Case-Shiller index. The unemployment rate rose to 9.5% in June, the highest since 1983, bringing the total number of lost jobs to about 6.5m since the recession started in December 2007, the Labour Department
said. Defaults by subprime borrowers with poor credit histories spurred the housing recession and spread to prime borrowers as home prices and sales declined. One in eight Americans is now late on a payment or already in foreclosure, the Washington-based mortgage group said. (Bloomberg)

* * * * *
The worst U.S. recession in at least five decades may be over at year’s end, said Nouriel Roubini, the New York University economist who predicted the financial crisis. “In many ways the worst is behind us in terms of economic and financial conditions,” Roubini said, cautioning that “the recession might continue through the end of the year.” He said his comments yesterday on the recession ending by year-end were consistent with views he “expressed previously” and that he continues to see a “shallow, below-par and below-trend recovery.” “We should continue with fiscal stimulus and we might need a second one,” Roubini said. There’s still a “meaningful amount of weakness” in labour markets, industrial production and housing, he said. A second stimulus package of as much as US$250bn may be needed sometime early next year, particularly if unemployment goes “well above 10% by the end of the year,” he said. (Bloomberg)

* * * * *
A split among Federal Reserve officials widened last month: Depending on who is doing the forecasting, economic growth will either remain stalled next year or will accelerate to the fastest rate since 1999. Minutes from the Fed’s June meeting show central bankers are less certain than they were in April over how the economy will emerge from the worst recession in a half century. Policy makers have differing assessments of how quickly credit markets will heal, and how effective a US$78bn fiscal stimulus and US$1trn expansion of the Fed’s balance sheet will be, according to the Federal Open Market Committee’s minutes released Wednesday. Central bankers left the benchmark lending rate in a range of zero to 0.25% last month and said the policy rate was likely to remain “exceptionally low” for an “extended period.” The range of projections forn2010 growth showed a gap of 3.2 percentage points, up from a 2.5 percentage-point divide in April. The lowest forecast suggests the economy will grow just 0.8% from 4Q09 to 4Q10; the highest projects 4% growth. (Bloomberg)
* * * * *
Global