US MARKET & NEWS 14.7.2009

Stocks surged Monday, with financial and consumer shares leading the advance, as investors welcomed an analyst’s improved outlook on Goldman Sachs one day ahead of its quarterly report. Stocks gained through the morning, after a shaky start. But the advance got an extra boost after influential banking analyst Meredith Whitney upgraded her view on Goldman
Sachs and said that Bank of America could provide value for investors. The Dow Jones industrial average gained 2.3%(+185.2 pts, close 8,331.7). The Nasdaq gained 2.1% (+37.2 pts, close 1,793.2) and the S&P 500 index gained 2.5% (+21.9pts, close 901.1). In currency trading, the dollar fell versus the euro and gained versus the yen. U.S. light crude oil for August
delivery fell 20 cents to settle at US$59.69 a barrel on the New York Mercantile Exchange. (CNNmoney)

* * * * *
The U.S. budget deficit topped US$1trn for the first nine months of the fiscal year and broke a monthly record for June as the recession subtracted from revenue and the government spent to rejuvenate the economy. The shortfall for the fiscal year that began Oct. 1 totalled US$1.1trn, the first time that the gap for the period surpassed US$1trn, Treasury figures showed
yesterday in Washington. The excess of spending over revenue for June was US$94.3bn, the first deficit for that month since 1991, according to data compiled by Bloomberg. Individual and corporate tax receipts are sliding even as the worst recession in five decades shows signs of easing because the jobless rate continues to rise -- reaching a 26-year high in June - and
companies have yet to see a sustained increase in demand. The shortfall is also widening as the government ramps up spending from the US$787bn stimulus program President Barack Obama signed into law in February. (Bloomberg)

* * * * *
Construction spending on offices, retail centres and hotels is likely to fall 16% this year and 12% in 2010, more than previously forecast, the American Institute of Architects said. Rising unemployment and reductions in business spending prompted the Washington-based institute to cut its outlook from January, when it predicted non-residential construction spending would drop 11% this year and 5% in 2010. “We’ve had a really rocky six months in the economy and in the construction sector,” Kermit Baker, the institute’s chief economist, said in a telephone interview. “People are seeing a real tough environment out there and not a lot of incentive to invest in projects.” Spending on office buildings is forecast to sag 22% this year and 17% in 2010, while retail construction probably will sink 28% this year and 13% in 2010, the architects group
said. (Bloomberg)