Daily Market Commentary for July 28, 2011
Number of people who filed for jobless benefits fell below 400,000. (read more at Millennium-Traders.Com) http://www.millennium-traders.com/news/newscommentary.aspx
National Association of Realtors reported the number of Americans signing contracts to purchase homes climbed for a second month in June however; they also reported a growing number of would-be buyers has been canceling contracts ahead of closings.
As the U.S. government faces potential default in less than a week, markets worldwide are growing increasingly nervous. The House of Representatives is preparing for a critical vote to cut spending and raise the nationâ€™s debt ceiling today. House Speaker John Boehner's newly revised plan is expected for vote, late in the day. The Speakers revamped plan cuts spending by $917 billion over 10 years, more than a corresponding $900 billion hike in the debt ceiling. The Republican plan slashes funds for student loans, pares disability insurance payments and wrings money from Medicare and Medicaid but, does not raise taxes. President Barack Obama vowed to veto an earlier version of the Boehner bill. President Obama and Senate Democrats want an immediate hike of $2.7 trillion in the governmentâ€™s borrowing limit, enough to put off another debt-ceiling debate until after the 2012 presidential election. According to the Congressional Budget Office, Senate Democrats are waiting to see what happens with the House vote before proceeding to a vote on their own plan, which would cut $2.2 trillion in spending. Senate Majority Leader Harry Reid said he will tweak the bill and make more cuts. Failure by either chamber to pass a plan will leave Washington and the markets worldwide, hanging with just days to go before the Treasury runs out of money to pay veteransâ€™ benefits, interest and principal on Treasury debt as well as, payments to government contractors. The Treasury could however, pick and choose who would be paid after the August 2 deadline. The Treasury Department reports that the $14.3 trillion U.S. debt ceiling must be raised before August 2 or the U.S. government will not be able to pay its obligations.
BorgWarner (NYSE: BWA) shares surged higher by 12% into mid-day trading after the company reported their best performance in more than two years .
Metabolix (NasdaqGM: MBLX) shares were up 17% into mid-day trading after company reported they have entered into a development deal with South Korea's DJ CheilJedang for the development of renewable C4 chemicals.
Imax Corporation (NYSE: IMAX) shares were sharply lower into mid-day trading, by 13%. The company reported disappointing Q2 earnings due to a lackluster film release slate and greater costs.
Cliffs Natural Resources (NYSE: CLF) shares were lower by 3% into mid-day trading after company reported Q2 earnings that fell short of Wall Street's estimates.
Mead Johnson Nutrition (NYSE: MJN) shares jumped by 7% into mid-day trading after company released a positive Q2 earnings report and raised its 2011 financial forecast.
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