There have been various developments over the past several weeks which investors may consider relevant in allocating their resources or evaluating alternatives that are available to them. Some of the more significant developments include, but are not limited to, the following:
- The Dow Jones Industrial Average opened the week at 8799 and, on Monday, plunged 187 points.
- On Tuesday, the Dow Jones Industrial Average dropped 107 points.
- On Wednesday, the Dow Jones Industrial Average fell 7 points.
- On Thursday, the Dow Jones Industrial Average jumped 58 points.
- On Friday, the Dow Jones Industrial Average fell another 16 points and closed the week at 8540.
- Extended Stay Hotels, the operator of a chain of 680 hotels in the mid-priced market, filed for bankruptcy.
- Retailer Eddie Bauer filed for bankruptcy. According to reports, it expects to sell most of its assets to a private equity firm.
- The Original Equipment Suppliers Association predicted widespread bankruptcy filings by struggling auto parts suppliers after the government denied their request for additional federal loan guarantees.
- MySpace is eliminating approximately 30% of its workforce.
- May’s unemployment statistics remained dismal. Unemployment increased in 48 states. Michigan continues to have the largest percentage of workers unemployed at 14.1%. Unemployment rates are greater than 10% in 13 states.
- S&P cut the credit ratings of 22 U.S. banks. Among the banks downgraded were Wells Fargo, PNC Financial, Capital One, Regions, BB&T, U.S. Bancorp., and Synovus.
- Moody’s Investors Services cut the credit rating on $9.6 billion of debt issued by the state of Ohio.
- Moody’s Investor Services announced that it may cut California’s credit rating further. California already has the lowest credit rating among the states.
- Some states are considering substantial cuts to academic grants and scholarships for thousands of low- and middle-income college students. This could have a significant impact on colleges which are already facing tough times as endowments and charitable contributions are reportedly off by as much as 25% for many institutions.
- Manufacturing reports from the New York region of the country show that both sales and inventory are declining and suggest that economic recovery is still months away.
- Industrial production in the U.S. fell 1.1% in May. The recession continues to hurt demand for a wide range of manufactured goods.
- Employers are facing a 9% increase in health care costs in 2010 according to Pricewaterhouse-Coopers.
- President Obama’s financial regulatory reform plan seeks to reduce reliance on credit-ratings agencies. Moody’s, Standard &Poor’s and Fitch are the agencies that would be most affected by this plan.
- A recent study by Pricewaterhouse-Coopers concludes that consumer spending on cable, satellite and phone video services should remain strong over the next four years. The recession is expected to bolster spending in these areas as consumers stay home more often and seek more alternatives for home entertainment.
- USA Today reports that the current recession is having perhaps its most significant impact on the “baby boomer” generation. Many baby boomers have suffered devastating losses on their investments and homes. Moreover, many have been impacted by the country’s record unemployment. As a result, baby boomers are now expected to work longer, retire later, and spend less once they retire.
- Steve Jobs, the mastermind behind Apple Computer, recently had a liver transplant.
Page Perry’s Market Monitor is published periodically to give investors an overview of certain recent developments impacting the economy and/or the investment markets.