Bear Stearns Sales Worries Stock Market

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J.P. Morgan took over Bear Stearns in a deal that highlights just how trouble the financial sector really is. In two weeks, Bear Stearns lost over 98% of its’ market value, and JPM is picking up the pieces.

The news has hit Asian markets particularly hard. Bear Stearns serves as an example of what can, and has, gone wrong with U.S. credit markets. The deterioration has been rapid and severe.

The Federal Government fast-tracked JPM’s offer of $2 per share, or $236.2 million for Bear Stearns, in order to show the concern with which they are approaching the credit problem. They feared that a Bear Stearns bankruptcy would have severely tested the overall sentiment in the market.

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Gas Prices Are 9 Cents Higher In Past Two Weeks

People, on average, are paying 9 cents more per gallon of gas in the United States in the last two weeks.

Oil prices have shot up to as high as $106 per barrel in recent trading, and the effect is certainly trickling down to users at the pumps.

The Lundberg Survey looks at the prices at 7,000 stations in the country. According to them, gasoline costs $3.19 a gallon for regular grade gas, mid-grade was $3.31 and premium was $3.42.

Gas this year is UP 64 cents per gallon nationally over this time last year.

Of course, high fuel costs are one of the main reasons investors are so gloomy right now about national prospects for growth.

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Retailers Report Consumers Have Returned To Malls

Major retailers are reporting that February saw a return of consumers to the nation’s shopping malls. WalMart, in particular, announced a solid month.

Despite people being out there shopping, many of them are not spending on big ticket items. Of course people continue to purchase staples, but there is little sign anyone is splurging on higher ticket items. Businesses continue to worry that the beleaguered consumer may finally be down and out.

“This is giving a glimmer of hope to retailers,” said Ken Perkins, president of RetailMetrics LLC, a research company in Swampsott, Mass. “These numbers aren’t great, but it certainly reverses the downward slide in sales in the last six months.”

Since there is so little great news around, the small glimmer of hope will have to be enough to sustain retailers.

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Google Hits 52 Week Low

At one point today, Google traded at $435.78, which as low as the company has traded for in the last 52 weeks. The news that affected the company today was that top executive Sheryl Sandberg was leaving the company to join rival FaceBook. Investors didn’t care for that news.

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Mortgage Crisis To Continue

If you were worried that the mortgage crisis was coming to an end, fear not. Fed Chairman Ben Bernanke is embracing for a long one. Bernanke spoke to a group of mortgage industry professionals in Orlando, Florida. He urged them to do more to prevent a larger crisis.

“Reducing the rate of preventable foreclosures would promote economic stability for households, neighborhoods and the nation as a whole,” Bernanke said. “Although lenders and servicers have scaled up their efforts and adopted a wider variety of loss-mitigation techniques, more can, and should, be done.”

Bernanke mentioned a few proposals that are unlikely to sit well with the mortgage industry, including urging them to write-down equity, and to reduce the amount of loans.

“Principal reductions that restore some equity for the homeowner may be a relatively more effective means of avoiding delinquency and foreclosure,” he continued.

So far, the mortgage industry has not done much to instill confidence in their ability to recover from such a huge crisis.

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Brian Duperreault Named CEO Of Marsh & McClennan

Marsh & McClennan recently announced that they’ve named Brian Duperreault as their CEO. Marsh & McClennan is the world’s largest insurance brokerage. The company is trying to restore profit after a bid rigging scandal took place in 2004.

Mr. Duperreault replaces Michael Cherkasky.

While in office, Brian Duperreault says he wants to increase each unit’s profitability and that he’ll “always” be evaluating the company’s mix of assets. He is 60 years old and served as CEO to Ace LTD. from 1994-2004. He worked for more than 20 years at American International Group Inc. prior to Ace.

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House Approves Economic Stimulus Plan

The House hustled and approved the economic stimulus plan that promises to put tax rebates of $600 to $1,200 into people hand’s within months. It was a bipartisan show of speedy dealmaking, as politicians attempt to avert a recession during an election year.

The plan was approved by an overwhelming majority of 385-35.

President Bush had pushed the package hard, knowing full well it is one effort of his that would be met with little resistance.

When the bill goes to the Senate, you can expect many demands from Senators, according to Senate Majority Leader Harry Reid of Nevada. “I think that there’s 51 Democratic senators without exception who believe this package can be made better,” said the Senator.

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Debora Spar Hired

Debora Spar has been hired to be president of Barnard College. She previously was a professor at Harvard Business School and is the author of several books on reproductive technology.

Ms. Spar, 44, is also senior associate dean for faculty research and development at Harvard Business School. The announcement concludes a nine-month search to replace Judith Shapiro, who announced she’d be stepping down as president of the prestigious women’s college in April 2007. She is the latest in a string of high-profile hires as New York’s booming universities seek to boost their ranks (See Crain’s, Sept. 15, 2007).

Barnard’s new president is something of a media star. Ms. Spar’s sixth book, The Baby Business, published in 2006, explores the economic, political and social issues surrounding reproductive technology, and garnered her appearances on 60 Minutes, The Newshour with Jim Lehrer and ABC World News Tonight.

Debora Spar will be the 14th president of Barnard College.

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Stocks Rally On Rate Cut Dreams

Investor love rate cuts. Investors love rate cuts. Sorry, that was my attempt at insight into the minds of the Federal Reserve and investors. The Fed has continued to cut rates, and investors have continued to support the idea by continued purchase of equities.

“Anticipation of another Fed rate cut is the main magnet in the market today,” said Alfred E. Goldman, chief market strategist at A.G. Edwards & Sons Inc.

With the Federal Funds rate heading to 0, it’s not likely these continued cuts will excite people. Or will they? So far the market has generally rallied behind any rate lowering, regardless of the specifics.

Housing numbers were again released today that were abysmal. New home sales were down 4.7% in December, and 26.4% down from the prior year.

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Microsoft Beats Earning Estimates

It has always been great to be Microsoft, and current times are no different. The company announced earnings that outstripped analyst’s expectations, thanks to good news from the XBox 360 division. The company also had better than expected results in their business division.

Microsoft raised its outlook Thursday for the rest of its fiscal year, which ends in June, matching Wall Street’s forecast and sending shares up in after-hours trading.

The software maker’s quarterly earnings jumped 79 percent to $4.71 billion, or 50 cents per share, from $2.63 billion, or 26 cents per share in the second quarter a year earlier. Quarterly revenue climbed 31 percent to $16.37 billion from $12.5 billion.

The comparison isn’t entirely fair — last year, Microsoft deferred more than $1 billion in revenue due to delays in getting Windows Vista to consumers.

Wall Street had been looking for a profit of 46 cents per share on $15.95 billion in sales.

One area where the company is not performing well is with their web services. The company has been getting soundly thrashed by Google for years, and there doesn’t appear to be a change headed their way anytime soon. MSFT lost $245 million online in 2007.

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