Dow Hits Four-Year High
The Dow Jones Industrial Average rose to its highest level since December 2007 on better than expected manufacturing data, Bloomberg News reports. Leaders included JPMorgan Chase & Co.,Intel Corp. and Alcoa Inc., which all gained at least 1.8 percent.The Dow rose 0.5 percent – 65.69 points – to 13,279.32, while the S&P 500 Index gained 0.6 percent to 1,405.82 by close of market yesterday, according to Bloomberg, which reported that about 6.7 billion shares were traded on U.S. exchanges yesterday. So far this year, the S&P has gained 12 percent, but the index still trades at 14.3 times reported earnings – below the average price to earnings ratio of 16.4 since 1954. U.S. manufacturing, a forward looking indicator, rose in April at the fastest pace in 10 months, said Bloomberg, and corporate earnings have beaten projections for nearly three-fourths of S&P 500 companies reporting earnings results since April 10.
Facebook IPO Roadshow Scheduled for Monday
Tech blog AllThingsDigital and the Wall Street Journal are the first to report that the roadshow for Facebook Inc.’s initial public offering is scheduled to start Mon. May 7. A source familiar with the process said that company’s share could be begin trading on May 18. Founder and CEO Mark Zuckerberg is said to be involved in the roadshow. He had received criticism for his decision in March not to attend an analysts’ meeting. Facebook, the world’s latgest social network, is poised to raise at least $5 billion in what is being forecast as the largest Silicon Valley IPO ever.
Four Financial Service Firms Fined $9.1 Million for ETF Sales
Four financial firms face fines and restitution of $9.1 million over the sales of leveraged and inverse exchange-traded funds or ETFs, the Financial Industry Regulatory Authority announced yesterday. Citigroup Global Markets, Inc., Morgan Stanley & Co., LLC, UBS Financial Services and Wells Fargo Advisors, LLC, sold the ETFs without a “reasonable basis” for recommending the securities and without “reasonable supervision,” said the authority, also known as FINRA, in a statement. Registered representatives of the firms made unsuitable recommendations of leveraged and inverse ETFS to some customers with conservative investment objectives and risk profiles, said FINRA. Leveraged and inverse ETFs have certain risks not found in traditional ETFs, said FINRA, such as the risks associated with a daily reset, leverage and compounding. Wells Fargo was fined $2.1 million in fines and $641,489 in restitution; Citigroup, $2 million in fines and $146,431 in restitution; Morgan Stanley, $1.75 million in fines and $604,584 in restitution; and UBS, $1.5 million in fines and $431,488 in restitution. In settling these matters, said FINRA, the firms neither admitted nor denied the charges, but consented to the entry of FINRA's findings.
What Slowdown? Chinese Manufacturing Expands
China’s manufacturing activity has expanded for the fifth consecutive month, the BBC reports. The official Purchasing Manager’s Index (PMI) rose to 53.3 in April from 53.1 in March, easing concerns about a slowdown in the world’s second-largest economy. China, the BBC observes, relies heavily on its manufacturing and export sector for growth, and there have been concerns that slowdowns in the U.S. and European economies might hurt China’s economic growth.
Retailers Charge Lower Debit Card Fees
Interchange fees on debit card transactions have dropped 45 percent since the government imposed a cap on the amount big banks can charge, but smaller banks exempt from the rules have not reduced their fees, the Federal Reserve reported yesterday. Effective October 1, 2011, the federal government imposed a controversial 21 cent cap on debit card interchange fees, plus 0.05 percent times the value of the transaction and, if eligible, a 1-cent fraud prevention adjustment, according to the Fed. Since then the average interchange fee has dropped from 43 cents to 24 cents per transaction. The rules don’t apply to banks with less than $10 billion in assets. These smaller institutions continue to charge an average fee of 43 cents, said the Fed.
Samsung’s Galaxy S to Get the Call as Official Olympic Smartphone?
The third version of Samsung’s Galazy S smartphone is to be unveiled in England this week amid speculation that it will be named the official phone of the 2012 London Olympics, which Samsung is sponsoring, Financial Times reports. Juniper Research reported yesterday that Samsung bested Apple again in smartphone sales in the first quarter. The two companies are estimated to comprise 60 percent of the 139 million smartphones shipped worldwide, up from 46 percent in the previous quarter. While analysts are hung up over different estimates of Samsung sales, Juniper reports that Samsung “may now have established a firm lead” with 47 million units compared to Apple’s 35 million.