Analysts are warning many investors about attempting to call a bottom, as yesterday’s stock rally has hopes up. Markets and exchange traded funds (ETFs) need more than one good day for a recovery.
Stocks are modestly higher as investors try to turn Wall Street’s best performance this year into a two-day advance, says Sars Lepro for the Associated Press. Although the financial stocks that led the rally are keeping their gains, analysts caution that the market is still under water. Investors bought stocks furiously Tuesday on news that Citigroup Inc. was operating at a profit for the first two months of 2009.
World markets are also enjoying the news regarding Citigroup (C) as Asian markets rallied along with European markets taking modest gains. Jeremiah Marquez for Associated Press reports that the relief was likely to be temporary as the economic slump continued to ravage Asia’s export-driven nations. The fact that Citigroup turned a profit does not help the fact that many large economies are still suffering a slowdown.
- SPDR Dow Jones EURO STOXX 50 (FEZ): down 30% year-to-date; up 3.6% for one week
UBS AG, Switzerland’s biggest bank, posted a loss of $18 billion for 2008, with more losses anticipated in the coming year. Elena Logutenkova for Bloomberg reports that costs to settle a U.S. tax investigation and additional writedowns on securities enlarged the full years’ loss.
UBS agreed on Feb. 18 to pay $780 million and disclose the names of about 300 secret account holders to avoid U.S. criminal prosecution on a charge that it helped wealthy Americans evade taxes.
- iShares MSCI Switzerland (EWL): down 25.7% year-to-date; up 4.2% for one week; UBS is 5.1%
Ford Motor Company (F) and the United Automobile Workers union are trying to save $500 million a year and bring its labor costs in line with what foreign competitors pay their workers in the United States. The deal, which UAWmembers ratified this week, immediately reduces its all-in hourly rate, including benefits, to $55, reports Nick Bunkly for The New York Times.
Currently, Ford’s labor costs amount to a little more than $60 an hour, including health care for retirees. The figure would continue to shrink as more workers take buyouts and when the new-vehicle market recovers, allowing increased production.
Phillip Waller for The International Herald Tribune reports that the British arm of Toyota (TM) is to cut UK staff pay and working hours by 10% to save money in the face of a sharp downturn in global demand. The “work share” agreement will take place at the two plants in Derby and Deeside and would begin on April 1, and continue throughout next year. Toyota is aiming at keeping employment sufficient throughout this hard period of time.
The Associated Press reports that President Barack Obama said he will accept a $410 billion spending package today, but insisted it must signal an “end to the old way of doing business.” The Federal funding earmarks were called “pork” by some, however, the president insists they are legitimate when done right. Plus, he said he’ll “work with Congress” to eliminate any earmarks the administration objects to.