SevenToTen - Blogging About Everything

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Oil hit another record high but has since pulled back. The dollar showed some strength and corporate earnings were pretty good.

Boeing blew away earnings estimates. Ford posted a surprise profit. And even though investors were disappointed by Microsoft’s quarterly forecast, they issued a healthy outlook for its next fiscal year. The worst of the credit crunch may finally be behind us.

No more major bombshells from financial institutions, a sign that the Fed’s six rate cuts since last September and massive injections of liquidity into the banking system may be working.

In fact, Merrill Lynch indicated yesterday that it would pay its dividend this quarter, relieving investors who were anticipating a cut. There seems to be cause for optimism about the markets. The Dow is active again and the bond market is not acting as if it is in recession anymore.

Bonds have fallen in recent weeks, raising the yields. Bond prices and yields move in opposite directions and lower yields are usually associated as a sign of economic weakness. And for consumers, even though it’s still a painful time because of rising food and gas prices, the first of the government’s tax rebate has hit mailboxes.

Of course, it still is a rough economic environment. The surging price of food threatens to disrupt U.S. consumer spending patterns and the global economy. That’s where the Federal Reserve will hopefully step in. Many fear that more rate cuts could lead to a further weakening of the dollar, which in turn, could fuel more speculation in the commodities markets and drive food and gas prices even higher.

So higher interest rates, not more cuts, might be exactly what this market and economy needs. Hopefully, the Fed will send a strong signal to investors Wednesday that it is getting ready to sit tight.

Stocks futures rose as investors eyed a possible $22 billion deal for chewing gum giant Wrigley, an investor’s $170 million bid for more shares of Ford, and turned their focus to this week’s Federal Reserve meeting.

Investors are expecting the Fed to lower rates yet again at the end of its two-day meeting on Wednesday. Many economists expect the central bank will hold rates steady after that cut in a bid to keep inflation in check.

A slew of high-profile economic reports will come out this week - Tuesday (consumer confidence report), Thursday (Inflation issues for personal and income spending report) and Friday (government’s monthly jobs report).

Oil prices hit another record trading high near $120 a barrel after a refinery strike in the U.K. Shares of automaker Ford soared in pre-market trading after billionaire investor Kirk Kerkorian’s Tracinda Corp. said it would make a bid for 20 million shares valued at $170 million. The $8.50 a share offer represents a 13.3% premium to Friday’s close. Kerkorian, who already owns 4.7% of Ford, is looking to control more than 5% of the company.

Verizon posted first-quarter earnings results that met Wall Street’s expectations. Sales were up 5.5%, but shares were flat in pre-market trading.

In major deal news, Mars and Warren Buffett’s Berkshire Hathaway are near a deal to buy chewing gum giant Wm. Wrigley Jr. for more than $22 billion. Microsoft’s deadline for Yahoo to respond to its takeover passed on Saturday, which means the three-month battle for Yahoo may soon turn hostile.

Also over the weekend, Continental Airlines said it would not pursue a merger with another carrier. Media conglomerate Walt Disney could be hurt by a controversial photo of 15-year old singing and acting superstar Miley Cyrus which appears in an upcoming June issue of Vanity Fair.

The photo which shows her posing topless, although with her chest covered by a bedsheet, was seen as too racy for the wholesome “Hannah Montana” franchise, which produced $1 billion in sales for Disney last year. Disney shares were up nearly 1% in early trading in Frankfurt despite the news of the photo over the weekend.

In global trade, Asian markets headed mostly higher. European shares also rose in early trading.

Microsoft Corp. Chief Executive Steve Ballmer said Wednesday that his company’s $44 billion offer for Yahoo Inc. reflects Yahoo’s worth and the software maker has no plan to raise it.

“We know what Yahoo’s worth. $44 billion is a lot of money,” Ballmer said at a conference in Milan.

Ballmer said Microsoft is “prepared to move forward alone without Yahoo” if the bid doesn’t succeed. The cash and stock bid — valued at $44.6 billion, or $31 per share, when it was first made — is now worth about $43 billion, or $29.88 per share.

Without specifying a precise price, Internet pioneer Yahoo has maintained it is worth more to Microsoft even though its shares had fallen below $20 before the bid.

Seven out of 10 seriously delinquent subprime mortgage borrowers are still not getting the help they need to keep their homes, according to a report released Tuesday by state officials working to stem the foreclosure crisis.

“We’re still way behind,” said Iowa Attorney General Tom Miller, who helped form the State Foreclosure Prevention Working Group, a coalition formed last year by 11 state attorneys general and bank regulators.

The coalition is working with lenders and companies that service mortgages to try to keep people from losing their homes. It drew its statistics from 13 of the 20 major servicer companies, which handle about 58% of all subprime loans.

More than 1 million of those loans, or nearly 25% of the total, were delinquent as of Jan. 31. And foreclosure proceedings have begun on 300,000 of them - an 8% increase since October.

Mortgage servicing companies, which manage accounts and process payments, play a key role in efforts to help delinquent borrowers work out affordable mortgages. Workouts can take the form of simple repayment plans or more comprehensive loan modifications that involve reductions in balances or interest rates.

Many subprime loans are adjustable rate mortgages, meaning their interest rates jump after an introductory period. Borrowers who had not fallen behind on their payments before their rates reset can benefit from a simple freeze of their rates. Many subprime borrowers took out loans they could not really afford - making workouts more complicated.

The report showed that 28.5% of subprime adjustable rate mortgages that won’t reset until spring 2009 are already delinquent. About 21% of these same loans were delinquent in October.

Motorola continues to struggle as they posted a first-quarter continuing operations loss of $194 million, or 9 cents a share, compared with a year-ago loss of $218 million. Excluding costs tied to recent job cuts, Motorola lost 5 cents a share, 2 cents better than the Wall Street analyst estimate.

But if the company’s bottom-line performance was slightly better than expected, the rest of its report wasn’t terribly upbeat. Motorola posted sales of $7.45 billion, down 21% from a year ago. Sales in the hard-hit handset unit slumped 39% from a year ago, as Motorola sold 27 million handsets for the quarter.

The drastic decline at that operation prompted Motorola to agree earlier this year to split off its handset and broadband businesses in a new company, as well as to give some board seats to dissident investor Carl Icahn, who has been criticizing Motorola for more than a year and who has called repeatedly for a splitup.

Motorola is also bleeding cash, posting an operating cash outflow of $343 million in the first quarter. The company said it expects to lose 2 to 4 cents a share for the second quarter, excluding costs related to job cuts.

Analysts were looking for a penny-a-share loss. Shares of Motorola, which have lost more than half their value over the past year during the handset unit’s implosion, dropped 35 cents in early trading Thursday to $9.20.

Ford Motor Co. surprised Wall Street with a $100 million profit in the first quarter as strong results from Europe and South America helped offset the impact of a slumping U.S. economy that cut car and truck sales in its main market.

The company also said Thursday its latest round of early retirement and buyout offers netted 4,200 hourly workers, fewer than Ford had targeted.

Ford says it earned 5 cents per share compared to a loss of 15 cents a share in the same period last year.
Excluding special items, the company said it made $525 million after taxes, or 20 cents per share. That beat Wall Street’s expectations. The profit came despite a $45 million pretax loss in Ford’s core North American automotive market.

It was Ford’s first profitable quarter since the second quarter of 2007 when it made $750 million. Ford reported a full-year loss of $2.7 billion last year, and it cautioned that the rest of this year will be tough. Ford also lowered its industrywide U.S. vehicle sales forecast for the full year.

Citigroup delivered another quarter of devastating results, losing more than $5 billion due to troubles in its fixed-income business and higher consumer credit costs, adding it would cut an additional 9,000 jobs.

The New York-based company also recorded more than $15 billion in writedowns, with the lion’s share coming from subprime-related direct exposures. But investors cheered the news, sending shares of Citigroup more than 6% in early trading, as the results were not as bad as some had feared.

Citi, however, did surprise analysts by delivering better-than-expected top line growth. The company said revenue rose sharply to $13.22 billion from the previous quarter, still it remained at just about half of what it was a year ago.

At the same time, Friday’s results paled in comparison to the eye-popping $9.83 billion quarterly loss the company suffered three months ago - the worst ever recorded in the 196-year history of the firm and its predecessors.

Citigroup CEO Vikram Pandit said he was not happy about the results, but noted that he believed that efforts to cut costs, sell non-core businesses and beef up risk management would pay off.

“I think you will see we are taking all the action you’d want us to take to maximize the value of this franchise,” said Pandit.

Since Pandit’s ascension to the CEO post in December, management has made great strides in shaping up what some critics have called the company’s bloated corporate structure.

On Thursday, Citi announced it would sell its commercial lending and leasing business to General Electric for an undisclosed amount. The company has also announced other major moves including the sale of Diners Club International and its stake in Brazilian credit card company Redecard SA.

Citigroup’s results wrap up what has been a particularly tough week of results for the nation’s largest financial firms. Merrill Lynch recorded a loss of $1.96 billion, after about $6.6 billion in new writedowns. The company also said it planned to cut about 3,000 more jobs.

Wachovia Corp. surprised Wall Street Monday with a first-quarter loss of $350 million, while Washington Mutual reported a loss of $1.1 billion, or $1.40 a share, on Tuesday. JPMorgan Chase topped Wall Street expectations after reporting earnings of $2.4 billion. Still the results were just half of what they were a year ago.

Here is another way to make money online - signup for YouTube partner program. Just fill out the online application and wait a few hours for approval. You need to have an AdSense account so they you can login to your Adsense for the account you are going to get paid through.

There are a few rules to comply in their terms and conditions. Copyright issues are top on the list. You must upload original content, especially for this partner program. You will earn a share of the revenue that is generated from ad impressions occurring when these videos are viewed.

But according to Shoemoney, he has a lot of friends who are top YouTube users and they are earning peanuts here. For amateurs like us, the money is even more pitiful.

Stock trading is a popular method of making big money, some claim it is even safer than putting it in the bank. The merit of this argument will be for another post.

Basically, you can classify your stock portfolio into two categories: growth or cash flow. I dabble a bit in the stock market but I have no qualifications so don’t think of me as a financial expert, There are simply too many factors for my mind to absorb, like past earnings, net assets, economy, currency, demand, supply, chairman’s outlook, management, etc.

With the internet, stock trading is more convenient and once you get the hang of it, you will be addicted. Among the online stock trading programs, One Financial is worth a look as they promise a great user experience and friendly 24-hour customer support via chat, phone or email.

They specialize in Contract for Difference (CFD) and let you trade on an extensive list of energy commodities. Registration is easy and when you log-in to their platform, you can access all the major forex crosses, international indices, ETFs and soft commodities with the lowest margins and tightest spreads.

One Financial boasts of the fastest execution and most user-friendly platform in the market. Get free charting, news, analytics, and stock quotes. There is an analyzer who evaluates the status of the future share price and if the results are favorable, customers are tipped on the particular share to invest.

The site is not for sophisticated users only, cfd for beginners is encouraged. You can open your demo CFD account that will be valid for 14 days to start dealing and getting an intimate understanding the market. After that, you can open a live CFD account if you are confident.

People are now investing in CFD and huge returns can be expected. But do not disregard the pitfalls. Correct and timely information from cfd providers determine your profit margin. You must be really disciplined in your investment strategy - placing strategic limit calls is also important to prevent excessive losses. Being greedy will lead you to financial ruin in a blink of an eye.

Google’s fabulous quarter earnings eased slowdown fears. Fans enjoyed the biggest one-day Google stock rise — up $89.72, or 20%, to $539.26 — in the past two years as the Net search giant blew past earnings targets by avoiding a big drop in U.S. paid click traffic during the first quarter of 2008.

Wall Street had been a little pessimistic going into the earnings report Thursday, after ComScore (SCOR) surveys showed a third straight month of negligible advertising traffic growth related to domestic searches. The reports helped confirm suspicions that the drag of decreased consumer spending was starting to spread beyond retail and housing to the tech sector.

But the fears of a revenue slump at Google were overestimated as the company saw strong international paid click sales, and the effects of higher prices. Google reported 20% growth in overall paid click revenue over year-ago levels, which was down from the 30% pace in the prior quarter, but well above the 1.8% U.S. rate ComScore reported for March. ComScore flagged the U.S. slowdown but did not capture the bigger picture, namely Google’s expansion overseas, which accounted for 51% of total sales, up from 47% a year ago.

Analysts who had braced for a slowdown going into the earnings report quickly turned bullish after Google’s earnings were released.

One element of Google’s big performance may reflect well on rival Yahoo. Though Google gained market share in the first quarter at Yahoo’s expense, the health of the sector seems to be intact. This should give Yahoo some added sway in its standoff with Microsoft over the $42 billion proposed merger.