• A 7.3% plunge in the Japanese stock market Thursday spilled into the rest of the world, overshadowing moderately better economic data in Europe and a slight decline in jobless claims in the U.S. Bourses in Frankfurt, London, Paris and Milan slumped more than 2%.
• Cash piles up as U.S. CEOs play safe with slow-growth economy. The buildup of cash and marketable securities accelerated in the first quarter to a record $1.73 trillion.
• Johnson & Johnson says it plans to submit more than 10 new treatments to regulators for approval and 25 applications for additional uses of approved drugs by 2017. It says its pharmaceuticals segment has launched 11 new products since 2009. They made up 17% of total pharmaceutical sales last year, which is up from 9% in 2011.
• Hewlett-Packard raised its 2013 earnings outlook after quarterly results beat low expectations. HP earned $1.1 billion, down 32% from $1.6 billion last year. HP’s revenue totaled $27.6 billion, down 10% from $30.7 billion last year.
• Lenovo, the world’s second-biggest maker of personal computers, reported a 90% gain in fourth-quarter profit after increasing its market share and boosting smartphone sales. Lenovo is developing mobile devices such as smartphones and tablets as it seeks to lure customers from Apple and Samsung and weather a global slump in demand for PCs.
• Ford will close its two Australian auto plants, ending production in the country in 2016. Ford began making cars in Australia in 1925 and is the third largest auto manufacturer in the country.
• PepsiCo said it is tweaking its drink-pricing strategy in some parts of the United States, as it aims to wean consumers off the habit of buying soda only when it is on sale.
• Ralph Lauren reported a 35% increase in fourth-quarter profit as the luxury retailer benefited from lower cotton prices. Revenue rose a slim 1.2% to $1.64 billion. The company expects sales to improve for the full year.
• L Brands, which owns stores including Victoria’s Secret and Bath and Body Works, reported that its fiscal first-quarter net income increased 14% and nudged up its outlook for the year.
• Perry Ellis’ fiscal first-quarter net income climbed 17% thanks in part to the sale of some assets.
• Tesla paid off its U.S. Department of Energy loan nine years earlier than required, using money raised last week in a stock and debt offering. The automaker said on Wednesday that it wired $451.8 million to repay the full loan with interest.
• China’s civil aviation regulator formally approved Boeing’s Dreamliner for use in the country.

US ECONOMY & POLITICS

• The average 401(k) retirement balance for U.S. workers hit a record high of $80,900 in the first quarter, a growth spurt of 75% since the stock market’s nadir in March 2009, Fidelity Investments said. Most of the recovery is linked to a stock market rally that has lifted the broad S&P 500 Index 145% since the close of trading on March 9, 2009.
• The Federal Reserve’s monetary stimulus is helping the economy recover but the central bank needs to see further signs of traction before taking its foot off the gas pedal, Fed Chairman Ben Bernanke told Congress. But minutes from the Fed’s most recent meeting released on Wednesday showed the bar was still relatively high.
• The central bank is currently buying $45 billion in Treasury bonds and $40 billion in mortgage-backed debt each month to keep borrowing costs low and encourage investment, hiring and economic growth.
• The number of Americans applying for unemployment benefits fell 23,000 last week to 340,000, a level consistent with solid job growth. The four-week average ticked down just 500 to 339,500. More than 4.7 million Americans were receiving unemployment benefits the week that ended May 4, down 23% from nearly 6.2 million a year earlier. The United States still has 2.6 million fewer jobs than it did when the recession began in December 2007. 
• Sales of new U.S. homes rose 2.3% in April to an annualized pace of 454,000 homes from 444,000 in March. Sales in April were 29% higher than a year ago. Home prices climbed to record high levels. The median sales price for a new home was $271,600, up 14.9% from a year ago. In April, the inventory of new homes on the market rose 3.3% to 156,000 units, the highest since October 2011.
• Overdue student loans reached an all-time high as students struggle to find work after college. There are $1 trillion in outstanding student loans, the largest category of consumer debt besides mortgages. 
• The weekly Bloomberg Consumer Comfort Index advanced last week.

EUROPE & WORLD

• Asia shares slide, Nikkei down 7.3%, as Japan bond yields rise, China factories weaken.
• Yields on 10-year Japanese government bonds briefly topped 1% for the first time in a year on Thursday.
• Chinese factory activity shrank in May for the first time in seven months. China’s flash HSBC Purchasing Managers’ Index (PMI) entrenched fears recovery. It fell to 49.6 from 50.4 in April, slipping under the 50-point level demarcating expansion from contraction for the first since October. 
• The euro zone PMI suggested the bloc’s economy is likely to contract again in the second quarter. Markit’s flash Eurozone Services PMI rose in May to 47.5, a three-month high, from 47.0 in April. The PMI has now spent 16 straight months below the 50 mark that divides growth and contraction.
• Britain’s economy resumed growth in the first quarter. GDP rose 0.3% in the period.
• Germany survey shows export risks are companies’ biggest concern.

TODAY in HISTORY

• South Carolina became the 8th state in United States (1788)
• The first nursery school in the United States was established in New York City (1827)
• The Baltimore and Ohio Railroad began the first passenger service in the United States (1830)
• Iowa State College, located in Ames, IA, established the first veterinary school in the U.S. (1879)
• The New York Public Library, at the time the largest marble structure ever built in the United States, was dedicated by President Taft in New York City after 16 years of construction (1911)

 Sources: Reuters, Yahoo Finance, Google Finance, Bloomberg, CNN Money.

This information has been prepared from sources believed to be reliable, but no representation is being made as to its accuracy or completeness. The information provided should be used only as general information and is not intended to provide specific advice or recommendations for any individual. The economic forecasts set forth in the material may not develop as predicted. All indices, such as the S & P 500, are unmanaged and may not be invested into directly.

US FINANCIAL MARKET

• Apple CEO Tim Cook made no apology saving billions of dollars in U.S. taxes through Irish subsidiaries and told lawmakers that his company backs corporate tax reform.
• JPMorgan CEO Jamie Dimon clings to chairman title after shareholders voted down a proposal to strip Dimon of his chairmanship.
• Target cut its full-year profit forecast while turning in a weak first quarter with disappointing sales. Total sales rose 1% to $16.71 billion, while analysts expected $16.78 billion in revenue. Target earned $498 million, compared with a profit of $697 million a year earlier. Target has 24 Canadian stores and plans to have 124 stores in Canada by the end of the year.
• Lowe’s reported a weaker-than-expected quarterly profit. The results contrasted sharply with those of Home Depot and signaled that Lowe’s was still struggling to narrow the performance gap with the industry leader. Lowe’s sales fell 0.5% to $13.09 billion and earned $540 million.
• Toll Brothers posted a 46% rise in quarterly profit as the largest U.S. luxury homebuilder sold more homes at higher prices.
• Staples’ quarterly sales and earnings missed analysts’ estimates, hurt by a stronger dollar and weak sales in Europe and Australia. Sales fell 3.5% to $5.81 billion and earned $170.4 million.
• Merck has entered into a $5 billion share repurchase agreement with Goldman Sachs. Under the accelerated share repurchase agreement (ASR), Merck has agreed to repurchase about 99.5 million shares from Goldman Sachs based on current market prices.

US ECONOMY & POLITICS

• Federal Reserve Chairman Ben Bernanke testifies before the U.S. Congress today. He remains hampered by high unemployment and government spending cuts, and tightening policy too soon would endanger the recovery.
• Sales of previously owned U.S. homes rose in April to the highest level in more than three years. Purchases of existing houses increased 0.6% to an annual rate of 4.97 million, the most since November 2009. 

EUROPE & WORLD

• Japan’s exports rose less than expected in April due to weak demand from Europe and China. The 3.8% annual increase in exports in April was below the median estimate for a 5.9% rise. Exports to China rose 0.3%, while exports to the United States jumped 14.8%. Imports jumped 9.4% due to an increase in liquefied natural gas purchases. The trade shortfall widened to 879.9 billion yen ($8.6 billion), the most for the month of April since at least 1979, according to the government. 
• Oil pipelines are driving Canadian economy like 1880s railroads. Pipelines already carry 15% of Canadian exports in the form of crude, mostly to U.S. markets.
• U.K. retail sales unexpectedly fell in April, led by the biggest drop in food sales for almost two years and indicating continued weakness in consumer spending. Sales declined 1.3% from March.
• Britain’s underlying budget deficit widened in April. The shortfall excluding temporary support for banks was 10.2 billion pounds ($15.4 billion).
• Australian consumer confidence slumped by the most in 17 months as a government announcement the budget would remain in deficit overshadowed record low interest rates.

TODAY in HISTORY

• The first battle in the 30-year War of Roses took place at St. Albans (1455)
• The first life insurance policy in the United States was issued in Philadelphia (1761)
• Abraham Lincoln received patent number 6469 for his floating dry dock (1849)
• Harry S. Truman’s Doctrine brought aid to Greece and Turkey to combat the spread of Communism (1947)
• Richard Nixon arrived in Moscow, becoming the first U.S. president to visit the Soviet Union (1972)

Sources: Reuters, Yahoo Finance, Google Finance, Bloomberg, CNN Money.

This information has been prepared from sources believed to be reliable, but no representation is being made as to its accuracy or completeness. The information provided should be used only as general information and is not intended to provide specific advice or recommendations for any individual. The economic forecasts set forth in the material may not develop as predicted. All indices, such as the S & P 500, are unmanaged and may not be invested into directly.

Breaking News: President Barack Obama declared a major disaster area in Oklahoma after monster tornado. Authorities initially said as many as 51 people were dead, including 20 children.

US FINANCIAL MARKET

• A Senate panel says Apple is avoiding paying billions of dollars in U.S. taxes, but the world’s most valuable company says it is complying with the laws and pays “an extraordinary amount” in taxes to the U.S. government. Apple is holding overseas some $102 billion of its $145 billion in cash.
• Ireland said that it was not to blame for Apple’s low global tax payments and had no special rate deal with the company after the U.S. Senate said it paid little or no tax on tens of billions of dollars in profits stashed in Irish subsidiaries.
• JPMorgan appears to avert split in CEO/chair roles.
• Home Depot posted an 18% increase in its net income for the first quarter thanks to the ongoing housing recovery. Revenue rose 7% to $19.12 billion. Results topped Wall Street’s view. It boosted its full-year earnings and revenue forecasts.
• AutoZone’s third-quarter net income rose 7%, as acquisition costs fell and sales improved. It earned $265.6 million. Revenue increased 5% to $2.21 billion. Both edged out Wall Street expectations.
• Best Buy reported a loss in its fiscal first quarter as it sold its stake in Best Buy Europe and works on a turnaround plan that includes cutting costs and closing some stores. Its adjusted earnings beat Wall Street expectations, but revenue fell short as the company faced tough pricing competition during the quarter.
• The U.S. Air Force plans to start operational use of Lockheed Martin-built F-35 fighter jets in mid-2016.
• Vodafone has reported a 1.9 increase in annual profits despite a slowdown in much of its European operations. Vodafone will reinvest a $3.2 billion dividend from its healthy U.S. arm to counter weakness in southern Europe.
• Burberry’s profit hit by the end of its licensing deal with French perfume Interparfums , down 3% for the quarter.
• Standard & Poor’s lowered its credit rating on Dell by two notches to ‘BBB.’

US ECONOMY & POLITICS

• After a three-year delay following “unexpected production” issues, the Federal Reserve Board has announced that the new $100 bill, a piece of legal tender in development for more than a decade, will enter circulation this fall.

EUROPE & WORLD

• British inflation rate fell to 2.4% in April from 2.8% in March.
• Credit downgrades, recession and President Francois Hollande’s gaping budget shortfall have done little to prevent French bonds from outshining gold.

TODAY in HISTORY

• The first bicycles in the United States were called swift walkers and were seen for the first time on the streets of New York City (1819)
• Clara Barton founded what became the American Red Cross (1881)
• The first hydrogen bomb to be dropped by air exploded over the Bikini Atoll in the Pacific (1956)

Sources: Reuters, Yahoo Finance, Google Finance, Bloomberg, CNN Money.

This information has been prepared from sources believed to be reliable, but no representation is being made as to its accuracy or completeness. The information provided should be used only as general information and is not intended to provide specific advice or recommendations for any individual. The economic forecasts set forth in the material may not develop as predicted. All indices, such as the S & P 500, are unmanaged and may not be invested into directly.

US FINANCIAL MARKET

• It’s the narcissist rally. Corporate America is buying back record amounts of its own stock. S&P 500 companies have plenty of cash to keep buying — a record $1 trillion, not counting money set aside in reserves as required by regulators. This year, big U.S. companies have given the go-ahead for $286 billion of buybacks, up 88% from the same period last year. If the pace continues for the rest of the year, the tally will exceed the record set in 2007.
• Yahoo is buying online blogging forum Tumblr for $1.1 billion and promises to not ‘screw it up’ as CEO Marissa Mayer tries to rejuvenate an Internet icon that had fallen behind the times.
• Microsoft is set to make a splash this week with the eagerly awaited unveiling of its new Xbox game console, eight years after the last version, as it seeks a larger share of the $65 billion a year global computer gaming industry.
• GE will receive $6.5 billion in dividends from its finance arm this year as the conglomerate works on reducing the size of its GE Capital financial arm. GE Capital plans to pay $4.5 billion in special dividends to its parent company in 2013. It made a first-quarter earnings-dividend payment of $447 million in April. GE plans to return $18 billion in cash to shareholders this year, including $10 billion in buybacks.
• Target opened a new San Francisco office to track down technology companies that can help the second-largest U.S. retailer grow its online commerce business. Many retailers are pouring money into new technology to help them catch up with Amazon.com.
• Wal-Mart’s e-commerce offices, south of San Francisco, have churned out a slew of new online and mobile technology in recent years and these efforts might be showing early signs of success. First-quarter e-commerce sales jumped 30% from a year earlier, Wal-Mart reported earlier this week.
• United Airlines is preparing to fly a 787 Dreamliner in just a few short hours for the first time in four months. One of six Dreamliners operated by the world’s largest airline company is scheduled to take flight around 11 a.m. for a trip from Houston to Chicago. 
• Silver slumped 28% this year, the lowest since September 2010. Gold tumbled 19% this year.

US ECONOMY & POLITICS

• The National Assn. for Business Economics (NABE) estimated that the nation’s economic output would grow 2.4% this year, the same as the group projected in February. That’s up from 1.7% growth in 2012. And the organization said growth should pick up to 3% in 2014. Consumer spending is looking stronger as the housing and labor market recovers.
• Shrinking deficit reduces pressure for budget deal. CBO said that Obama’s plan would lead to a $669 billion deficit for fiscal 2013 that ends September 30 and a $675 billion deficit for fiscal 2014 year, higher than those forecast by the CBO this week but $1.1 trillion lower than what it estimates over the coming decade.
• Because Obama’s budget increases revenues by $974 billion over the next decade, largely by raising taxes and limiting deductions for the wealthy, it would result in a $5.2 trillion cumulative deficit over the fiscal 2014-2023 period. That compares with CBO’s own $6.3 trillion cumulative deficit estimate based on current law.
• The Fed chairman Bernanke said that “pessimists may be paying too little attention to the strength of the underlying economic and social forces that generate innovation in the modern world … Both humanity’s capacity to innovate and the incentives to innovate are greater today than at any other time in history.”

EUROPE & WORLD

• China’s housing inflation accelerated to its fastest pace in April in two years, driven by a jump in prices in Beijing and Shanghai. Average new home prices rose 4.9% last month from a year ago. China’s new-home prices rose last month in 68 of 70 cities. China’s policy makers are trying to avoid property bubbles and make homes more affordable while bolstering an economy that lost steam in the first quarter.
• China needs at least 50 trillion yuan ($8.1 trillion) in new investment by 2020 to accommodate a burgeoning population of city-dwellers, according to the president of China Development Bank. China must urgently find special financing channels to support the urbanization process because local governments can’t afford the spending, the bank’s president wrote. 
• Vietnam still faces “great risk” of macroeconomic instability. The economy expanded 5.03% last year, the slowest pace since 1999. The IMF last month cut this year’s forecast to 5.2% from 5.8%. 
• U.K. treasury says independent Scotland couldn’t aid banks. Scotland would have banks with assets worth 1,254% of GDP, higher than Cyprus and Iceland before their financial crises.

TODAY in HISTORY

• Christopher Columbus died in Spain (1506)
• North Carolina voted to secede from the Union (1861)
• Amelia Earhart took off from Newfoundland to become the first woman to fly solo across the Atlantic (1932)

Sources: Reuters, Yahoo Finance, Google Finance, Bloomberg, CNN Money.

This information has been prepared from sources believed to be reliable, but no representation is being made as to its accuracy or completeness. The information provided should be used only as general information and is not intended to provide specific advice or recommendations for any individual. The economic forecasts set forth in the material may not develop as predicted. All indices, such as the S & P 500, are unmanaged and may not be invested into directly.

US FINANCIAL MARKET

• Apple mobile devices approved for use on U.S. military networks. The Pentagon cleared Apple devices for use on its networks, setting the stage for the maker of iPhones and iPads to compete with Samsung and BlackBerry for military sales.
• Amazon will be called back to the British parliament to clarify how its activities in the UK justify its low corporate income tax bill.  
• Dell reported a 79% slide in profit as personal computer sales continued to shrink. Net income fell to $130 million from $635 million a year earlier. Revenue fell to $14.1 billion.
• McDonald’s is trying to revive U.S. same-store sales, which dropped 1.2% in the first quarter. The Angus burger is going away, and it may not be the only McDonald’s dish on the chopping block.
• Bill Gates is once again the world’s richest person. He recaptured the title from Mexican investor Carlos Slim yesterday, after Microsoft shares surged to 52 week high.  It is the first time Gates has held the mantle since 2007. His fortune is valued at $72.7 billion, up 16% year-to-date.
• Gold, down 17% since January, is poised to lose 20% in a year as inflation fails to accelerate and with the worst risks to the global economy waning, Credit Suisse said. Gold will trade at $1,100 an ounce in a year and below $1,000 in five years, according to Ric Deverell, head of commodities research at the bank.  “The need to buy gold for wealth preservation fell down and the probability of inflation on a one- to three-year horizon is significantly diminished.”

US ECONOMY & POLITICS

• April leading indicators index in U.S. rises more than forecast. The Conference Board’s gauge of the outlook for the next three to six months climbed 0.6% in April after falling a revised 0.2% in March.
  • The Conference Board’s index of coincident indicators, a gauge of current economic activity, rose 0.1% in April after rising a revised 0.2% in the prior month. The coincident index tracks payrolls, incomes, sales, and production, which are the same measures the NBER uses to determine the beginning and end of U.S. recessions.
  • The gauge of lagging indicators also rose 0.1% after advancing a revised 0.2% in March.
• The Thomson Reuters/University of Michigan’s consumer sentiment index rose to 83.7 from 76.4 in April. It was the highest level in nearly six yearsas Americans felt better about their financial and economic prospects.
  • The barometer of current economic conditions jumped to 97.5 from 89.9, the highest since October 2007, while the gauge of consumer expectations gained to 74.8 from 67.8.
• Unemployment rates fell in 40 states in April.  19 states had rates significantly lower than the U.S. average last month, the Bureau of Labor Statistics said. Nevada had the highest unemployment rate in April, 9.6%. North Dakota again had the lowest rate at 3.3%. Other states with high unemployment rates were Illinois, 9.3%; Mississippi, 9.1%, and California, 9.0%.

EUROPE & WORLD

• Japan PM Abe said he will increase private investment and infrastructure exports as he seeks to overcome deflation and build on an economic expansion fueled by rising consumer spending. Abe said he aims to get annual private investment back to 70 trillion yen ($682 billion), the level before the 2008 financial crisis, through deregulation, taxes, spending, and equipment leasing deals.
• European car sales end losing streak of 18 straight months of falling sales.
• Greece’s deep, six-year recession is likely to end in 2014, but unemployment will remain above 20% for another three years, the European Commission said Friday in a report.
• Russia’s economy grew at the weakest pace since 2009 in the first quarter. GDP rose 1.6% from a year earlier. Russian economy is the world’s largest energy exporter.
• Canada’s annual inflation rate fell in April to its slowest in more than three years. The consumer price index (CPI) rose 0.4% in April from a year ago compared with a 1% gain the prior month.
• Spain posted its first monthly trade surplus on record in March as imports slumped.
• Moody’s lifted Turkey’s government bond ratings by one step to Baa3, the lowest investment grade, from Ba1. It was Turkey’s first investment-grade rating from Moody’s Investors Service in two decades. The move puts Turkey’s credit rating at the same level as Spain, Colombia and India. The outlook was set at stable. The other rating agency, Fitch, had raised the nation to investment grade in November. Turkey’s central bank reduced interest rates by a larger-than-expected 50 basis points yesterday. Turkey Bond Yields Drop to Record low.

TODAY in HISTORY

• The New York Stock Exchange was established when a group of 24 brokers and merchants met by a tree on what is now Wall Street and signed the Buttonwood Agreement (1792)
• The first Kentucky Derby was held at Churchill Downs, in Louisville, Kentucky (1875)
• The Supreme Court ruled unanimously against segregation in schools in Brown v. Board of Education (1954) 

Sources: Reuters, Yahoo Finance, Google Finance, Bloomberg, CNN Money.

This information has been prepared from sources believed to be reliable, but no representation is being made as to its accuracy or completeness. The information provided should be used only as general information and is not intended to provide specific advice or recommendations for any individual. The economic forecasts set forth in the material may not develop as predicted. All indices, such as the S & P 500, are unmanaged and may not be invested into directly.

US FINANCIAL MARKET 

• Google is rolling out another wave of products and services that will test how much more people want computers to control their lives and enhance their perceptions of reality. In Google’s sixth annual conference for software developers, the company made announcements included new features for online games, maps and search, a new music-streaming service and enhancements to its Google Plus social network, including tools for editing and sharing photos. Google added 41 new features to Google Plus in effort to rival Facebook.
• Cisco posted a higher than expected quarterly profit and said current-quarter revenue could increase.
• Germany’s Daimler pulled the covers off its new flagship Mercedes-Benz S-Class luxury saloon on Wednesday.
• Tesla plans to sell as much as $830 million in shares and debt to be first to repay its federal loan awarded under a program that fueled political controversy.
• Two drugs from Bristol-Myers Squibb shrank tumors in as many as half of patients with advanced melanoma, according to early research that may pave the way for cocktails that trigger the immune system to destroy cancer.
• Standard & Poor’s Ratings Services cut a major rating for Warren Buffett’s Berkshire Hathaway, by one notch to “AA” from “AA+.” S&P says the move better reflects Berkshire Hathaway Inc.’s dependence on its core insurance operations for most of its dividend income. Significantly, it noted that “management succession at BRK is also an offsetting factor.” Berkshire has picked a successor for the 82-year-old Buffett, but has not made the name of the person public.
• General Electric and Boeing have alerted airlines about a potential problem with engines on Boeing’s long-range 777 jumbo jets that caused the engines to shut in mid-flight twice this year. The problem affects about 118 so-called transfer gear boxes made between September and March. The part, made by Italian company Avio SpA, are on about 26 in service 777-300ER jets and another 44 aircraft in production, GE said. There are more than 1,150 of the GE90-115B engines in service and the gearbox has been a reliable part for more than 15 years. GE is sending replacement parts to airlines.
• A federal judge in Kansas City, Kansas, ordered Dow Chemical to pay $1.2 billion in a price-fixing case involving chemicals used to make foam products in cars, furniture and packaging, according to court documents.
• Wal-Mart, the world’s largest retailer, reported that its first-quarter profit edged up slightly, but the company struggled with a sales slump in its namesake business. The company offered a profit outlook that came below analysts’ projections. Wal-Mart earned $3.78 billion in the quarter. Sales rose 1% to $113.43 billion. The results also fell short of Wall Street expectations.
• Kohl’s expects sales to pick up in the current quarter, and the retailer reported a better-than-expected first-quarter profit, helped by cost-cutting.
• A study by consultancy Bain & Co. shows that Global luxury goods sales are slowing in 2013.  Sales of luxury apparel, accessories, jewelry, cosmetics and art are expected to grow just 4% to 5% in 2013. In 2012, luxury goods sales grew by 10% to 212 billion euros ($272 billion).  
• International investors are the most bullish they’ve been on the U.S. and Japanese markets in more than 3-1/2 years as both countries’ economies are seen as improving, according to the latest Bloomberg Global Poll (see the chart below).

US ECONOMY & POLITICS

• The U.S. economy showed worrisome signs as jobless claims rose sharply last week while ground-breaking at home construction sites tumbled in April and a gauge of underlying inflation pointed to weak demand.
• The consumer price index fell 0.4% in April from March. The main reason the index fell was that gas prices plunged 8.1%. For the 12 months that ended in April, overall prices rose 1.1% — the smallest year-over-year increase in 2½ years.
  • Excluding volatile energy and food costs, “core” prices ticked up 0.1% last month. Core prices have risen only 1.7% in the past 12 months. That’s just below the Federal Reserve’s 2% inflation target.
• US jobless claims rose 32,000 last week to a seasonally adjusted 360,000. The four-week average rose just 1,250 to 339,250. The number of people receiving benefits fell 30,000 to 4.8 million in the week ended April 27. That’s down from 6.3 million a year ago. 
• The Philadelphia Fed manufacturing index fell to -5.2 (vs. consensus +2.0) in May, from +1.3 in April. The details of the report were broadly consistent with the weaker-than-expected headline number.
• US housing starts dropped 16.5% in April, but building permits surged to 5-year high. The Commerce Department said Thursday that builders started construction at a seasonally adjusted annual rate of 853,000, a drop from the March pace of 1.02 million. 
• Applications for building permits rose 14.3% to a rate of 1.02 million, the most since June 2008. Permits for single-family homes, which comprise about two thirds of the total, rose 3% to a 617,000-unit rate, the highest since May 2008.
• New construction of single-family homes declined 2.1% in April to an annual rate of 610,000. Multi-family construction, which is volatile, plunged 39% to a rate of 243,000. That drop more than reversed a 26% surge in March.
• New-home sales rose 1.5% in March to a seasonally adjusted annual rate of 417,000. That’s still below the 700,000 pace considered healthy. But sales are 18.5% higher than a year ago.

EUROPE & WORLD

• Japan’s economy expanded at a rapid clip at the start of the year. Japan’s economy grew by a stronger-than-expected 3.5% in annual terms last quarter, giving Prime Minister Shinzo Abe a boost as his government tackles reforms needed to ensure a sustained recovery from two decades of malaise. It was unclear how much of the increase could be attributed to Abe’s policy given the fact that household purchases are being made now to beat sales tax increases in 2014 and 2015. Private consumption, which accounts for roughly 60% of the economy, rose 0.9% and contributed 2.3 percentage points to the jump.
• China threatened to retaliate if the EU formally opens an investigation into alleged anti-competitive behavior by Chinese mobile telecom equipment companies. European Trade Commissioner Karel De Gucht said on Wednesday he and fellow commissioners had agreed in principle to open an anti-dumping and anti-subsidy case against China, but would first seek to negotiate a solution with Chinese authorities.
• Foreign direct investment in China lagged behind analysts’ estimates in April, highlighting concern at the growth outlook for the world’s second-biggest economy after an unexpected slowdown last quarter.
• China’s commerce ministry signaled concern that weakness in the yen is limiting Japanese demand for exports just as a stronger yuan weighs on Chinese manufacturers’ global sales.
• Turkey’s central bank cut its three main interest rates by more than economists expected, as it seeks to restrain capital inflows that strengthen the currency and hurt exporters. The lira fell to a 10-month low.

TODAY in HISTORY

• The first Academy Awards were given on this night. The term, Oscars, was not used to describe the statuettes given to actors and actresses until 1931 (1929)
• Japanese climber Junko Tabei became the first woman to summit Mount Everest (1975)
• Michael ‘Air’ Jordan was named Rookie of the Year in the National Basketball Association (1985)
• Queen Elizabeth II became the first British monarch to address the United States Congress (1991)

Sources: Reuters, Yahoo Finance, Google Finance, Bloomberg, CNN Money.

This information has been prepared from sources believed to be reliable, but no representation is being made as to its accuracy or completeness. The information provided should be used only as general information and is not intended to provide specific advice or recommendations for any individual. The economic forecasts set forth in the material may not develop as predicted. All indices, such as the S & P 500, are unmanaged and may not be invested into directly.

US FINANCIAL MARKET

• Macy’s reported a 20% increase in first-quarter profit. It is raising its dividend to 25 cents from the current 20 cents. It also announced an additional $1.5 billion in stock buybacks. 
• Deere’s second-quarter net income rose almost 3% as it raised prices and the farm economy continued to be strong. The company reported better-than-expected second-quarter earnings and maintained its full-year profit prediction. But Deere said that bad weather and weak economies will hinder sales growth this year.
• Amazon.co.uk reported a small corporate income tax bill because all sales to British customers are routed through a Luxembourg affiliate, Amazon EU Sarl, which employs around 500 staff. Amazon’s UK unit paid $3.7 million of taxes on its 2012 income, despite group UK sales of $6.5 billion.
• AT&T expects much better results in its wireless business in the second quarter after a weak start to the year, CEO Randall Stephenson said.
• Northrop Grumman increased its quarterly cash dividend by 6 cents, or 11%, to 61 cents.
• HSBC has announced it is seeking a further $2 billion-$3 billion in cost savings as it continues to trim its global empire — a move that analysts say could come at the cost of additional jobs.
• International demand for U.S. stocks, bonds and other financial assets weakened for a second straight month in March as a stronger economic outlook emboldened investors to take other risks.

US ECONOMY & POLITICS

• Weak domestic and global demand is hurting the nation’s factories.
• Industrial production fell 0.5% in April (vs. consensus -0.2%), partly due to a 3.7% drop in utilities output which the Fed attributed to a reversal of March’s unseasonably cold weather.
• U.S. factories cut back sharply on production in April, as auto companies cranked out fewer cars and most other industries reduced output. The Fed said that manufacturing output dropped 0.4% in April from March. It was the third decline in four months and the biggest since October.
• Industry capacity utilization, a measure of how fully firms are deploying their resources, dropped sharply to 77.8% from 78.3% in March.
• U.S. wholesale prices fell 0.7% in Aprilfrom March. It was the second straight monthly decline and the steepest since February 2010. The index declined largely because gas prices dropped 6% and the price of home heating oil fell by the most in almost four years. Food prices also declined 0.8%, the most since May 2011. 
  • Excluding the volatile food and energy categories, core prices ticked up 0.1% in April. 
• The budget deficit for the current year is projected to come in well below what was estimated just a few months ago. The Congressional Budget Office study released Tuesday cites higher tax revenues and better-than-expected payments from government-controlled mortgage giants Fannie Mae and Freddie Mac as the key reasons for this year’s improved outlook. The budget office now predicts a 2013 budget deficit of $642 billion, more than $200 billion below its February estimate. 
• This year’s shortfall would register at 4% of the economy, far less than the 10.1% experienced in 2009 when the government ran a record $1.4 trillion deficit.
• The Justice Department is investigating the IRS for targeting tea party groups for extra scrutiny when they applied for tax exempt status.
• Manufacturing in the New York region unexpectedly shrank in May as factories received fewer orders and sales stagnated. The Empire manufacturing index printed at a weaker-than-expected -1.4 in May (vs. consensus +4.0). The underlying composition of the report was also generally weaker, although slightly less so than the headline decline.
• Confidence among U.S. homebuilders improved in May for the first time in five months as buyers rush to take advantage of near record-low mortgage rates. The National Association of Home Builders/Wells Fargo index of builder confidence rose to 44 from a revised 41 in April.

EUROPE & WORLD

• Canadian factory sales fell for the third time in four months in March, an unexpected decline led by lower energy prices and chemical orders.
• German economy barely expands while France contracts. Eurozone recession extends into 6th quarter. see Euro area GDP below:

 TODAY in HISTORY

• The U.S. Department of Agriculture was created by an act of Congress (1862)
• The Standard Oil Company, headed by John D. Rockefeller, was ordered dissolved by the Supreme Court, under the Sherman Antitrust Act (1911)
• The first air mail route in the U.S. was established between New York and Washington, DC, with a stop at Philadelphia (1918)
• On a Boeing Air Transport flight between Oakland and Chicago, Ellen Church became the first airline stewardess (1930)

Sources: Reuters, Yahoo Finance, Google Finance, Bloomberg, CNN Money.

This information has been prepared from sources believed to be reliable, but no representation is being made as to its accuracy or completeness. The information provided should be used only as general information and is not intended to provide specific advice or recommendations for any individual. The economic forecasts set forth in the material may not develop as predicted. All indices, such as the S & P 500, are unmanaged and may not be invested into directly.

US FINANCIAL MARKET

• Verizon Wireless said that it would pay its parents Verizon Communications and Vodafone Group a dividend of $7 billion in June.
• GE is investing more money in its appliance and lighting businesses that make dishwashers, refrigerators and light bulbs. 
• Billionaire hedge fund investor Daniel Loeb called on Sony to spin off its lucrative entertainment arm. Loeb had accumulated a little more than 6% of Sony’s shares – a stake worth $1.1 billion – making it the largest stakeholder.
• Visa Europe has offered to cap its inter-bank credit card fees at 0.3% of transaction value for four years, the same level as the rival MasterCard network, to end an EU competition investigation and stave off a possible fine. Visa Europe owned and operated by more than 3,700 European member banks.
• A Georgia man reportedly believes he has found the secret formula to Coca-Cola and he’s hoping to sell the find for as much as $15 million. Cliff Kluge recently found the 1943 recipe in a box of letters and papers he recently purchased during a “treasure hunt” at an estate. The recipe closely matches the purported original formula for Coca-Cola published online two years ago.

US ECONOMY & POLITICS

• Import prices fell in April due to a drop in oil costs. Import prices slipped 0.5% last month, the biggest decline since December. Stripping out petroleum, import prices dipped 0.1%.
• Small Business Optimism Index rose 2.6 points to 92.1, the highest reading since October.

EUROPE & WORLD

• Pimco’s El-Erian said the world economy is undergoing a “stable disequilibrium” that could end in financial turmoil, greater social tensions and beggar-thy-neighbor national policies.  El-Erian also believes that U.S. economic growth will not be “much greater” than 2% while global inflation will likely pick up over the next three to five years.
• German inflation drops to near 3-year low. Consumer prices rose 1.2% in April.
• German investor confidence rose less than economists forecast in May.
• Israel’s inflation rate dropped to a six-year low of 0.8% in April from 1.3% in March.
• Indian inflation eased to a 41-month low in April, giving the central bank room to extend monetary easing and support growth in Asia’s third-biggest economy. The wholesale-price index rose 4.89% from a year earlier.

TODAY in HISTORY

• The Lewis and Clark expedition set out from St. Louis (1804)
• The Olympic Games were held in the United States for the first time, in St. Louis, Missouri (1904)
• British rule in Palestine came to an end as The Jewish National Council proclaimed the State of Israel. Within hours, Israel was under attack from Arab forces (1948)
• Skylab, the United States’ first space station, was launched into orbit (1973)
• Frank Sinatra died at the age of 82 (1998)

Sources: Reuters, Yahoo Finance, Google Finance, Bloomberg, CNN Money.

This information has been prepared from sources believed to be reliable, but no representation is being made as to its accuracy or completeness. The information provided should be used only as general information and is not intended to provide specific advice or recommendations for any individual. The economic forecasts set forth in the material may not develop as predicted. All indices, such as the S & P 500, are unmanaged and may not be invested into directly.

US FINANCIAL MARKET

• Samsung said today that it has made a breakthrough in the development of “5G” technology, which will ultimately be several hundred times faster than current 4G networks. Samsung said it does not expect the commercialization of the technology until at least 2020.
• With the Dow and the S&P 500 setting another string of record closing highs this week, the old Wall Street adage “Sell in May and Go Away” is starting to look weak. Closing out the second week of May, the S&P 500 index is up 2.3% for the month. For the year, the benchmark S&P 500 is up a stunning 14.9%.
• A dual-track system, including survey-based lending rates along with transaction-linked indices, is likely to replace scandal-hit Libor as soon as next year, the Financial Times reported.
• Virgin America posts 2012 loss, sees profits ahead and eyes possible share offering next year.
• Amtrak unveils new locomotives to replace aging fleet on Northeast Corridor. New locomotives are built by Siemens. The locomotives cost $466 million and are covered by a loan from the Department of Transportation.

US ECONOMY & POLITICS

• US Retail Sales edged up 0.1% in April. The April gain was stronger when taking out the effect of lower gas prices, which reduced sales at gas stations 4.7% — the largest decline since December 2008. When excluding gas station sales, retail spending rose 0.7%. Core sales growth was widespread by category, with gains in apparel (+1.2%), general merchandise (+1.0%), non-store retailers which includes online sales (+1.4%), and electronics (+0.8%).
• Business inventories―including manufacturing, wholesale, and retail inventories―were unchanged in March.
• The United States posted its biggest monthly budget surplus in five years in April. The Federal budget balance jumped to a surplus of $112.9 billion in April, essentially in line with consensus expectations. April is normally a strong month for receipts due to the seasonal surge in individual income tax payments associated with the tax filing deadline. However, April’s surplus was the largest since 2008, and highlights the continued improvement in the budget outlook seen in recent quarters. The government has received $1.6 trillion in taxes so far this year, a record high for this time period and 16% above last year’s level for April.

EUROPE & WORLD

• Finance leaders from the Group of Seven — the U.S., Germany, France, Italy, Japan, Canada and the U.K. – leading industrial economies say Japan’s stimulus policies are directed at boosting its economy out of a two-decade period of stagnation, not an attempt to drive down its currency to make Japan’s exports more competitive.
• China’s factory output growth was surprisingly feeble in April and fixed-asset investment slowed, rekindling concerns that a nascent recovery is stalling and adding to pressure on policymakers to take action to stimulate the economy. Annual industrial output grew 9.3% last month.

TODAY in HISTORY

• The United States formally declared war on Mexico after several days of fighting (1846)
• Winston Churchill gave his first speech as prime minister: “I have nothing to offer but blood, toil, tears and sweat” (1940)

Sources: Reuters, Yahoo Finance, Google Finance, Bloomberg, CNN Money.

This information has been prepared from sources believed to be reliable, but no representation is being made as to its accuracy or completeness. The information provided should be used only as general information and is not intended to provide specific advice or recommendations for any individual. The economic forecasts set forth in the material may not develop as predicted. All indices, such as the S & P 500, are unmanaged and may not be invested into directly.

US FINANCIAL MARKET

• AT&T is launching a prepaid cell phone service — Aio Wireless. The new subsidiary will offer nationwide wireless service to value-conscious customers interested in unlimited talk, text and data plans without an annual contract. The company will offer three rate plans ranging from $35 to $70 a month.
• Yum Brands, the largest foreign fast-food chain in China, is strengthening its media strategy in the country in a bid to win back customer loyalty after a series of food scares that decimated sales this year.
• Japanese consumer electronics giant Panasonic reported a near-record net loss of 754 billion yen ($7.5 billion) for the fiscal year through March due to restructuring costs and slumping sales, but predicted a return to the black this year as it prunes unprofitable businesses.
• Nissan’s fiscal fourth quarter profit jumped 46% on stronger sales and a favorable exchange rate that offset declines in China over a bitter territorial dispute.
• California’s attorney general sued one of the nation’s largest banks Thursday, alleging that JPMorgan Chase used illegal tactics in its efforts to collect debts from more than 100,000 credit card holders.
• Activist investor Carl Icahn and Southeastern Asset Management, two of Dell’s biggest shareholders, have proposed an alternative to a $24.4 billion buyout deal led by founder Michael Dell.
• Boeing has succeeded in getting its factories to churn out 787 Dreamliners at a faster pace this week. Boeing is working to speed up the assembly line to produce 10 Dreamliners a month by year-end.
• Boeing could keep building its Super Hornet fighter jets, F/A-18 and EA-18 through 2020, the company said, given prospects for over 200 foreign sales and what it sees as up to 150 more sales to the U.S. Navy.
• Boeing and Airbus have both struggled to bring home new customers for their largest planes. Turkish Airlines, which will more than double its fleet by the start of next decade, said it’s delaying a possible order for jumbo jets for at least two years as it focuses on expanding its network with smaller airliners.

US ECONOMY & POLITICS

• Fed’s Bernanke says shadow banking system still poses risks. The Fed has broadened its oversight beyond banks and now monitors a wide-range of financial institutions that could hasten another financial crisis, Chairman Ben Bernanke said.
• New Mexico — the nation’s fifth largest state — is in the worst shape of any state, and conditions have only intensified over the past seven days. The latest map from federal forecasters shows exceptional drought has spread from a quarter of New Mexico to nearly 40% in just one week. At this time last year, less than one-tenth of the state was affected by what is considered the worst category of drought.

EUROPE & WORLD

• The IMF officials say they are watching carefully for signs that massive flows of cash unleashed in world markets by unprecedented monetary easing might lead to asset bubbles, or to overheating in some emerging markets.
• Global central bankers are poised to ease monetary policy even further after a wave of interest-rate cuts from India to Poland. South Korea’s rate cut yesterday was the 511th reduction worldwide since June 2007.
• Today, Vietnam said it would also cut interest rates to boost economic growth, joining nations from Sri Lanka to Australia in easing monetary policy. Vietnam’s economy expanded 5.03% last year, the slowest pace since 1999.
• On Friday, the Japanese yen fell to its lowest level against the U.S. dollar in over four years, passing 100 yen to the dollar. The move lifted Japanese stocks to their highest level in more than five years. The weaker yen is a boon to Japan’s major auto and electronics exporters.  The value of the yen is down by more than 20% against the dollar since October 2012.
• German exports rose 0.5% in March. The increase wasn’t enough to cancel out a 1.2% decrease in February, but it was the third rise in four months.
• U.K. construction output fell to its lowest level in more than 14 years in the first quarter as work on new building projects declined across the industry. Output measured by volume dropped 2.4% from the previous three months to its lowest since the fourth quarter of 1998.
• Mexico’s industrial production fell three times more than analysts forecast in March, reinforcing expectations that the central bank will cut interest rates for the second time since 2009 later this year. Output slid 4.9% from a year earlier, the biggest decline since the end of the 2009 recession.
• Canadian employment rose in line with economist forecasts in April. Employment rose by 12,500 and the jobless rate was unchanged at 7.2%.
• Hong Kong’s economy grew a less-than-estimated 0.2% in the first three months of this year, as China’s expansion cooled.
• The death toll from a garment factory building that collapsed more than two weeks ago outside the Bangladeshi capital soared past 1,000 on Friday.

TODAY in HISTORY

• The United States’ first transcontinental railroad was completed with a ceremony in Promontory Summit, Utah (1869)
• The first woman nominated to be President of the United States was Victoria Claflin Woodhull (1872)
• J. Edgar Hoover became director of the FBI (1924)
• The Hotel Statler in Boston, MA. became the first hotel to install radio headsets in each of its 1,300 rooms (1927)
• Winston Churchill succeeded Neville Chamberlain as British prime minister (1940)
• Around the world in 80 days … uh, make that 84 days. That’s how long it took the U.S. nuclear-powered submarine Triton to circumnavigate the globe (1960)
• The Rolling Stones produced their very first recordings (1963)

Sources: Reuters, Yahoo Finance, Google Finance, Bloomberg, CNN Money.

This information has been prepared from sources believed to be reliable, but no representation is being made as to its accuracy or completeness. The information provided should be used only as general information and is not intended to provide specific advice or recommendations for any individual. The economic forecasts set forth in the material may not develop as predicted. All indices, such as the S & P 500, are unmanaged and may not be invested into directly.