Archive for the ‘Stock Market News’ Category
In an attempt to steady the stock market in an election year, Congress revealed a plan to deliver $150 billion to businesses and consumers via an economic stimulus package yesterday. Bottom line: most individuals will get a $600 tax credit based on 2007 tax information ($1,200 joint) as well as an additional $300 per child.
Boosting Businesses & Housing
In addition, as part of the plan businesses now can write off half of their cost of capital purchases as well as deduct up to $250,000 for expenses (vs. the prior limit of $125,000). Also, in an attempt to revive a floundering housing market, the limit on government sponsored mortgages would be raised to over $600,000 from the current $417,000.
The Dow Jones Industrials lost over 460 points this morning, only to recover in the wake of the Fed’s announcement to cut rates a full 75 basis points. Currently, markets have regained ground but are still in negative territory.
The Federal Reserve announced a 75 basis point cut in the federal funds rate to 3.5% this morning. Per the Fed, the move is an attempt to counter a weakening economic outlook, a further tightening of credit markets, and a continued decline in the housing market. However, the Fed will continue to monitor inflation carefully.
Tags: federal reserve, interest rates, rate cuts
Unfortunately, the US economy continues to look like it is on the verge of a recession. The US Commerce Department announced today that new home construction fell a staggering 25% in 2007 vs. the prior year. Unfortunately, we haven’t seen a dip that severe since the dark days of 1980 (when new construction fell 26%). With unemployment at around 5% in December and continued problems with credit liquidity, the stock market could be in for some serious pain moving forward.
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New Residential Construction - Jan. 17th, 2008 Press Release
Tags: Economic Indicators, stock market
The Wall Street Journal announced today that Bank of America (NYSE: BAC) will indeed purchase troubled lender Countrywide Financial (NYSE: CFC) for $4 billion in stock. CFC shareholders will receive around 0.1822 shares of BAC for each share of CFC they own (which is actually a discount to yesterday’s closing price). The deal is expected to close in Q3 of this year.
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