Investment News Briefs
With our investment news briefs, Money Morning provides investors with a quick overview of the most important investing news stories from all around the world.
Dodd Introduces Financial Overhaul Bill; Ex-Bear Stearns Managers Innocent of Fraud; Job Openings Still Scarce; AMEX: Credit Card Spending Up in Oct.; EU Objects to Oracle; Oil Falls As Hurricane Ida is Downgraded; Apple Cell Phone Profits Pass Nokia’s; JPMorgan to Hire 1,200 Mortgage Salespeople
- U.S. Senate Banking Committee Chairman Christopher Dodd, D-CT, unveiled a new bill that calls for the creation of three new government agencies to regulate over-the-counter derivatives and crack down on hedge funds in an ambitious regulatory overhaul. One agency that would be created under the bill would be a Consumer Financial Protection Agency (CFPA) that would regulate mortgages, credit cards and other financial products. “The financial crisis exposed a financial regulatory structure … unable to prevent threats to our economic security,” Dodd said.
- Two former hedge fund managers at The Bear Stearns Cos., Ralph Cioffi and Matthew Tannin were found not guilty of misleading investors who lost $1.6 billion in the first test of the federal effort to obtain convictions tied to the subprime mortgage crisis and recession. A 12-person jury deliberated for less than a day before reaching the verdict, which saved the managers from serving as many as 20 years in prison if convicted. The acquittal could set the stage for any future prosecutions related to the crisis. “Any time the government undertakes a major prosecution in a new area, the outcome certainly influences its thinking about the prosecutability of other potential defendants,” Jacob Frenkel, a former U.S. Securities and Exchange Commission lawyer told Bloomberg News. “Acquittals force prosecutors to rethink their theories and charges.”
- There’s an average of about 6.1 unemployed workers for each job opening in the United States, the Labor Department said. That’s down slightly from 6.2 in October and a sharp increase from just 1.7 workers per opening when the recession started in December 2007. Still, some sectors are showing small signs of life in hiring, such as information technology and sales professionals, government reports and job search Web sites show. “We’ve seen a real spike in the hiring of contract recruiters,” Phil Haynes, managing director of AllianceQ, an employers’ association that includes companies such as Starbucks Corp. (Nasdaq: SBUX), Bank of America Corp. (NYSE: BAC) and Intuit Inc. (Nasdaq: INTU) told The Associated Press. “The recruiters come before the jobs.”
- Annualized billings on credit cards grew 3% from September to October, American Express Co. (NYSE: AXP) said. When adjusted for foreign-exchange rates, the billings fell 1%. That was an improvement over a decline of slightly more than 5% in September and almost 10% in August. “The trends in spending are encouraging, and there are signs that the recession may be approaching an end,” Chief Executive Officer Kenneth Chenault said at a financial services conference organized by Bank of America-Merrill Lynch (NYSE: BAC). Shares of the lender hit their 52-week high of $39.86 before settling at $39.68, up 1.61%.
- Antitrust regulators in the European Union formally objected to Sun Microsystems Inc.’s (Nasdaq: JAVA) proposed $7.4 sale to Oracle Corp. (Nasdaq: ORCL). The “statement of objections” from the European Commission was expected, as it has shown concern that Oracle will be too strong a presence in the database market. The deal has already been given the green light by the U.S. Justice Department.
- Contracts for light, sweet crude for December delivery yesterday (Tuesday) fell 38 cents to settle at $79.05 per barrel on the New York Mercantile Exchange (NYMEX) after Hurricane Ida passed several oilrigs in the Gulf of Mexico without incident. The hurricane has now been downgraded to a tropical storm.
- Apple Inc. (Nasdaq: AAPL) overtook Nokia Inc. (NYSE ADR: NOK) in the third quarter as the having the highest operating profit among cell phone makers, market research firm Strategy Analytics said yesterday (Tuesday). Stategy Analytics estimated Apple’s profit on its popular iPhone stood at $1.6 billion versus Nokia’s $1.1 billion. Nokia still dominates with a worldwide market share of 40%, but has just a 10% share in the United States. “We believe the United States, where Nokia now trails Apple in marketshare, is the key to Nokia’s recovery in 2010,” analyst Neil Mawston told Reuters.
- JPMorgan Chase & Co. (NYSE: JPM) said it will hire 1,200 mortgage loan officers by the end of next year as the company pursues new mortgage business and refinancing opportunities. The new sales staff will work at bank branches in 23 states including California, Florida and Texas. “We have made a number of strategic investments in our organization,” said Dave Lowman, head of home lending at Chase. “We have invested in new systems, aggressively grown our capacity and now are looking to increase our sales force. With our vast branch network and growing customer base, the opportunity for Chase loan officers is tremendous.”
