Midday Market Update: Wall Street Processes Jobs, Housing News
May 28th 2009 at 10:00am by Tom Lydon
A range of news this morning – General Motors, unemployment data, housing numbers and more – have the markets and exchange traded funds (ETFs) wavering from positive to negative territory.
General Motors (GM), which is on the verge of filing for bankruptcy, said that a committee of bondholders had agreed to a new and improved deal to erase the automaker’s unsecured debt in exchange for company stock, say Tom Krisher and Kimberly S. Johnson for the Associated Press.
GM offered bondholders 10% of the stock in a newly formed GM, with warrants to buy up to another 15% if the bondholders agree to support selling the company’s assets to a new company under bankruptcy court protection.
Manufacturing orders in the United States rose in April, reports Jack Healy for The New York Times. The 1.9% increase in orders for durable goods was larger than expected, but not enough to make up for the 2.1% drop in March.
Meanwhile, OPEC met today in Vienna, Austria, and decided to keep its production levels as they are, the Associated Press says. The decision didn’t come as any surprise, and the move was made based on optimism that the United States would finally emerge from a recession.
- United States Oil (USO): up 4.5% year-to-date
In good news, the number of workers making unemployment claims fell last week – a sign that companies may be cutting fewer workers, reports Christopher S. Rugaber for the Associated Press. The 623,000 figure was below analysts’ estimates of 635,000.
Finally, a record 12% of homeowners are behind on their payments or are in foreclosure, says the Associated Press. This is in contrast to earlier news about home sales being back on the rise and prices continuing to decline in major cities. While President Barack Obama’s loan modification and refinancing plan might stem some foreclosures, it may not be enough to change the overall crisis.
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