S&P Suffers Biggest Decline of 2012
The Standard & Poor’s 500 Index suffered its biggest decline of 2012 on Tuesday after a report demonstrated that the European economy contracted in the fourth quarter, Bloomberg News reports. Concern over the Greek debt crisis also fueled the drop. The financial and industrial sectors had the biggest losses, with Caterpillar Inc. and Bank of America Corp. stock each falling 3.2 percent. All 10 industry groups were down for a total loss of 1.5 percent in the index, which closed at 1,343.36 – the lowest it’s been since Dec. 8, 2011. The Dow Jones Industrial Average fell 1.6 percent to 12,759.15. Trading was 12 percent above the three-month average as 7.5 billion shares changed hands on U.S. exchanges.
Move Over, Madoff. Texas Ponzi Schemer Convicted
Billionaire Texas banker Allen Stanford, in custody since his arrest in June 2009 arrest, faces decades in prison after being convicted of stealing $7 billion in customer money to fund his jet-set lifestyle, Financial Times reports. Stanford was convicted on 13 of 14 counts. The jury returned their verdict on the fifth day of deliberations after a six-week trial in Houston. Stanford was knighted in 2006 and in 2008 was added to Forbes magazine’s list of the richest Americans. He has since been stropped of his knighthood. It took the Securities and Exchange Commission more than a decade before it launched a thorough investigation into Stanford’s affairs.
Lehman Brothers Emerges from Bankruptcy
Four years after its collapse, Lehman Brothers, once the fourth largest investment bank in the U.S., exited from bankruptcy protection, the BBC reports. The company is now free to sell its remaining assets and distribute the proceeds to creditors. The company will start giving about $65 billion to creditors in April. At its peak, the bank employed more than 25,000 people. It suffered billions of dollars of losses in the sub-prime mortgage market.
Refinancing Costs Reduced for Some Mortgages
The Obama administration yesterday announced plans to lower refinancing costs for some mortgages insured by the Federal Housing Administration, The New York Times reports. President Obama likened the program changes to a tax cut that “will put more money into people’s’ pockets” during a press conference yesterday. The fee reductions will be available to borrowers with loans originated on or before May 31, 2009. The borrowers must have an existing FHA-backed loan that will be refinanced into another FHA loan, and must also be current on their payments. The rules would allow no more than $500 to be taken as cash out of the loan. The process will not require borrowers to verify their income or get a new appraisal of their home. That’s a significant break for homeowners who owe more than their property is currently worth.
Commodities Fall as Economies Slow
The Standard & Poor’s GSCI Spot Index, which tracks 24 commodities, dropped 1.5 percent to 692.61 on Tuesday, its biggest decline of 2012. Coffee, lead and zinc were the biggest losers in the decline, an indication that demand for raw materials is weakening due to a recession in Europe and slowing economic growth worldwide. The UBS Bloomberg CMCI index of 26 prices fell 1.6 percent of 1,611.433. Coffee futures hit a 16-month low, while sugar futures fell the most in three weeks.
Netflix to Rival HBO?
Reuters reports that Netflix is in talks with “some of the largest U.S. cable companies” to discuss adding its online movie streaming service to their offerings. Cable operators and networks have long worried that customers would drop their more expensive cable TV package for Netflix’s old TV shows and movies offered through its Web streaming service for $7.99 a month. Netflix faces competition from Comcast Corp, which last month launched its own online video service to subscribers. Waiting in the wings is Verizon Communications’ joint venture with Redbox as well as plans still in development at Google, In., Apple Inc., and Amazon.com