Spanish stocks dropped sharply early Friday morning after ratings agency Moody’s downgraded its credit score of 16 Spanish banks in the latest blow to the troubled financial sector.
The Ibex 35 index was off more than 2 points shortly after trading began Friday. Banks were among the biggest losers.
Moody’s acted late Thursday, citing banks’ load of non-performing loans amid a recession-plagued economy, their creditworthiness and the government’s sovereign debt problems, among other woes.
Those punished included Banco Santander, SA, the eurozone’s largest bank by market capitalization.
Shares in Bankia SA, a recently nationalized bank, took a roller coaster ride Thursday, ending up sharply lower on reports depositors pulled out a (EURO)1 billion in a week.
On the bond market the interest rate on 10-year bonds was unchanged at 6.25 percent.
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Avon shares plunged 14 percent in premarket trading Tuesday after Coty dropped its $10.7 billion takeover bid for the cosmetics company.
Coty Inc., a privately held rival, had raised its original offer last week by about 6.5 percent, but set a deadline of Monday for the company to accept the bid.
Avon asked for more time to consider the bid over the weekend, but it appears that Coty would have not of it. It slammed that door shut on the troubled company Monday and investors are following suite even before the markets open Tuesday in some heavy trading.
If the current prices hold, Avon shares will be worth less than when Coty made its original offer back in April. Shares fell $3.06 to $17.90.
The big question now is what comes next for Avon?
The company is embroiled in a bribery scandal that led to the ouster of its vice chairman in January personal business card. The investigation, which initially involved executives in Asia, has spread and late last year federal regulators began looking into the New York company’s dealings with financial analysts.
Earlier this month, under the leadership of recently arrived CEO, Sherilyn McCoy, Avon reported that its first-quarter profit tumbled 82 percent, even worse that Wall Street had feared.
That has become the norm. Profits have been shrinking for three years and Avon is suffering even in places it had seen as strongholds.
Avon Products Inc. holds its shareholders meeting in two weeks.
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JPMorgan Chase’s multi-billion dollar trading blunder dragged down bank stocks Friday, undermining investor confidence in other Wall Street finance firms.
JPMorgan (, Fortune 500) led the bank stock declines, with its stock dropping nearly 9%.
The bank revealed Thursday, after the close of markets, that it suffered trading losses of $2 billion since the start of April.
The problems affected other major bank stocks. Morgan Stanley (, Fortune 500), Citigroup (, Fortune 500) and Goldman Sachs (, Fortune 500) fell about 4%. Bank of America (, Fortune 500) declined less than 2% and Wells Fargo (, Fortune 500) managed to eke out modest gains, recovering from earlier losses.
JPMorgan suffers massive trading loss
"The problem is that there’s going to be a massive backlash," said Christopher Wheeler, bank analyst for Mediobanca in London.
Wheeler mentioned that the debacle was unfolding amid an ongoing debate over the Volcker Rule, which limits banks on investing with their money.
"The regulators are going to have a field day," he said guaranteed online personal loans.
Bank stocks were already under siege. The KBW () index of bank stocks has fallen 1.7% over the last five trading sessions, without even showing the impact of JPMorgan’s bad trade. On Friday, the index was down about 1%.
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The trade prompted an unusual impromptu teleconference with Chief Executive Jamie Dimon and analysts, at which he divulged that net losses could exceed $800 million by the end of the second quarter for the company’s corporate unit. Before that announcement, a net gain of $200 million was forecast for the unit.
Dimon told analysts that the losing trades were the result of "sloppiness" and "bad judgment," but he shrugged off a question about whether other banks were affected.
"Just because we’re stupid doesn’t mean everyone else was," said Dimon on the call.
(Corrects euro bond holdings in ninth paragraph in story that was published on May 4.)
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Time Warner Inc. said Wednesday that its first-quarter earnings fell 11 percent, but adjusted income beat Wall Street’s expectations on the strengths of the company’s television and movie studio businesses.
Time Warner had net income of $583 million in the first three months of the year, compared with $653 million a year earlier. Both translated to 59 cents a share because the company now has fewer shares outstanding.
Excluding one-time factors, including charges related to a decision to shut down a TV network in India, Time Warner had adjusted income of 67 cents a share. That’s better than the 64 cents expected by analysts surveyed by FactSet. The New York-based company’s adjusted income a year ago was 58 cents.
Revenue grew 4 percent to $7 billion, ahead of expectations of $6.82 billion.
Time Warner’s cable TV networks, which include CNN, TBS, TNT and HBO, saw revenue grow 3 percent to $3.6 billion. The company benefited from strong ad rates, better timing of the March Madness basketball games and higher fees collected from U cheap credit report.S. cable and satellite TV distributors to carry the channels. That was offset partly by a decrease in content revenue; last year’s quarter got a boost from licensing HBO’s “Sex and the City” to other cable outlets in the U.S.
At the Warner Bros. movie studio, a stronger slate at the box office contributed to a 7 percent revenue increase to $2.8 billion. Big performers included “Sherlock Holmes: A Game of Shadows” and “Journey 2: The Mysterious Island.” The division also benefited from higher licensing revenue of TV shows and the video-on-demand availability of a television series, but revenue from DVDs and other home entertainment sales fell.
Revenue at the Time Inc. magazine division fell 3 percent to $773 million. Advertising and subscription revenue both declined. Weak sales at newsstands worldwide were offset partly by higher sales of U.S. subscriptions.
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The U.S. economy expanded less than forecast in the first quarter as a smaller contribution from inventories overshadowed the biggest gain in consumer spending in more than a year.
Gross domestic product, the value of all goods and services produced in the U.S., rose at a 2.2 percent annual rate after a 3 percent pace, Commerce Department figures showed yesterday in Washington. The median projection of economists surveyed by Bloomberg News called for a 2.5 percent gain. Government spending fell for a sixth straight quarter.
Job creation and income gains propelled sales at car dealerships and retailers like Target Corp. (TGT), helping cushion the U.S. economy from weakness overseas. Further gains in consumer spending will depend on progress in reducing a jobless rate that has hovered above 8 percent since early 2009.
The Times of London is being sued over email hacking, a lawyer said Friday, an indication that the scandal over media misdeeds at Rupert Murdoch’s British newspapers continues to spread.
Lawyer Mark Lewis told The Associated Press that his firm had filed suit against the 227-year-old publication over its hacking of police blogger Richard Horton’s email account.
“We did lodge papers,” Lewis confirmed in an email, adding that the suit was filed on Tuesday.
The Times unmasked Horton as the detective behind the award-winning “NightJack” blog in a controversial 2009 piece which Horton unsuccessfully sued to try to suppress.
According to an account of the lawsuit published in Britain’s New Statesman magazine, Horton’s lawyer raised the possibility that the detective’s Hotmail account had been illegal accessed _ an allegation dismissed as “baseless” in 2009 by Times lawyer Alastair Brett pay day loans.
However, in public statements and in testimony before an official inquiry into media ethics, senior Times managers admitted that one of their reporters had accessed Horton’s account.
“‘Baseless’ was not the best word to use,” Brett told the inquiry last month.
Times publisher News International did not immediately return an email or a call Friday.
European Central Bank President Mario Draghi comments on inflation, monetary policy and the region
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