On Wednesday November 24, 2010, 5:47 pm EST
Probe leads investors to
wonder: Is game rigged?
NEW YORK (AP) -- The Wall
Street insider trading investigation may lead everyday investors -- already
rattled by a stock market meltdown, a one-day "flash crash" and the
Madoff scandal -- to finally conclude that the game is rigged.
Even before news broke that
federal investigators were looking into whether hedge funds traded on inside
information, small-time investors were pulling their money out of stocks --
despite a remarkable run for the market since the spring of 2009.
Americans have pulled $60
billion out of U.S. stock funds this year, according to the Investment Company
Institute, a trade group. Meanwhile, investors have piled money into Treasuries
and bond funds that are considered safer investments, even if they don't return
as much money. And at the same time, banks like Wells Fargo have reported that
money is moving into checking and savings accounts.
First arrest made in new
insider trading crackdown
NEW YORK (AP) -- The first
strike in a new federal offensive to root out insider trading on Wall Street
came Wednesday with the arrest of a consulting firm executive who prosecutors
said tipped off a hedge fund manager about corporate earnings before they
became public.
The arrest of Don Ching
Trang Chu of Somerset, N.J., came when investigators realized he was heading to
Taiwan on Sunday. He made the trip frequently, but authorities were apparently
concerned that he was traveling ahead of what are expected to be multiple
arrests in the probe and after he had been interviewed by FBI agents on Sunday.
Three hedge funds with
offices in New York, Connecticut and Massachusetts were raided Monday in the
investigation, and on Tuesday, prominent mutual fund company Janus Capital
Group said it had been subpoenaed. There was no indication Chu had dealt with
those companies.
Thrift stores seek a share
of Black Friday blitz
NEW YORK (AP) -- Secondhand
stores are trying to muscle in on the Black Friday blitz this year.
Thrift and consignment
shops are betting that people who have bought more used things for themselves
since the Great Recession will buy used gifts this year. They're copying other
retailers with gift certificates, elaborate window displays and early-morning
specials.
For the first time, some
Salvation Army resale shops will be open at 6 a.m., touting 75 percent-off
early-bird specials on the traditional kickoff of holiday shopping.
Gloom, anger spreads as
European economies teeter
DUBLIN (AP) -- Anger and
fear about Europe's seemingly unstoppable debt crisis coursed through the
continent Wednesday. Striking workers shut down much of Portugal, Ireland
proposed its deepest budget cuts in history and seething Italian and British
students clashed with police over education cuts.
Amid it all, analysts were
deeply skeptical about the future -- saying even the desperate efforts of
governments, the European Union and the International Monetary might not be
enough to prevent countries from defaulting or banks from going under.
The Irish Stock Exchange
saw a bloodbath in bank stocks as investors pushed the panic button and bond
traders were betting that it would only be a matter of time before Portugal and
possibly Spain would be the next countries begging for outside help.
Economic data reveal a hint
of consumer merriness
WASHINGTON (AP) --
Americans are earning and spending more, companies are shedding fewer workers
and hopes are rising for the economy as the holiday shopping season starts.
Still, with businesses
spending less on manufactured goods and new-home sales near their lowest level
in 47 years, consumers alone might not be able to invigorate the economy and
drive down unemployment.
All told, government data
released the day before Thanksgiving suggest an improving economic picture. But
it is increasingly dependent on the consumer, even with U.S. companies having
reported record profits in the July-September quarter.
Stock sharply higher on
positive economic data
NEW YORK (AP) -- Stocks
ended Wednesday on a positive note after a batch of economic reports offered
hope that the U.S. economy was improving.
Incomes rose last month and
consumer spending climbed for a fifth month. That raised hopes that shoppers
will hit the malls in droves the day after Thanksgiving, the start of the
holiday shopping season.
At the same time, fewer
people claimed unemployment benefits last week, a sign that the labor market is
recovering.
Retailers hope holiday
shoppers ready to trade up
NEW YORK (AP) -- After two
Christmas seasons of pushing socks, pajamas and other basics as gifts,
retailers are betting that Americans are ready to give a little more this year.
The flashy sweater is
replacing the basic winter coat, jewelry is starting to sparkle again, and the
gift card for gasoline is being trumped by the gift card at the mall. Black
Friday displays are being loaded with fancier laptops, bigger TVs and deluxe
gym sets, though stores acknowledge shoppers will buy only if it's a good deal.
The cautious optimism comes
as more Americans are feeling more secure financially and spending a bit more
on nonessentials.
Disney's earnings leak
sprung from Goofy mistake
LOS ANGELES (AP) -- The
Walt Disney Co.'s early release of its earnings report this month came down to
a Dumbo move: The company made the information accessible through an
easy-to-guess Web address.
Disney didn't plan on
posting the link on its website until after the market closed. But a reporter
at Bloomberg News found it with simple Internet sleuthing and reported results
about a half-hour before the scheduled release, according to a person familiar
with Bloomberg's practices. The person was not authorized to speak publicly and
spoke on condition of anonymity.
SAP at a crossroads after
losing $1.3B verdict
SAN FRANCISCO (AP) -- On
the losing end of a $1.3 billion jury verdict for stealing a rival's
intellectual property, SAP AG is facing the difficult decision about whether to
double down -- by appealing -- or folding.
Either route is going to
cost the German company dearly, and will have implications for how other
technology companies approach copyrights.
A jury in U.S. District
Court for the Northern District of California on Tuesday found that SAP's
behavior in plundering software and documents from archenemy Oracle Corp.'s
secured websites was so egregious that it awarded Oracle nearly all of the
damages it was seeking.
If SAP appeals, it will
have to endure several more years of disastrous publicity, a jackpot for
Oracle.
By The Associated Press
The Dow Jones industrial
average surged 150.91, or 1.4 percent, to 11,187.28.
The Standard & Poor's
500 index gained 17.62, or 1.5 percent, to 1,198.35. The Nasdaq composite index
rose 48.17, or 1.9 percent, to 2,543.12.
Benchmark oil for January
delivery gained $2.61 or 3.2 percent, to $83.86 a barrel in afternoon trading
on the New York Mercantile Exchange.
Natural gas for December
delivery rose 0.3 cent to $4.267 per 1,000 cubic feet. Since the contract
expires Wednesday, many traders have moved to the January contract where the
price fell 2.7 cents to $4.388 per 1,000 cubic feet.
In other Nymex trading in
December contracts, heating oil added 7.59 cents to $2.3255 a gallon and
gasoline gained 7.94 cents to $2.2136 a gallon.
In London, Brent crude rose
$2.59 to $85.84 a barrel on the ICE Futures exchange.