In global news, the International Monetary Fund, or IMF, began discussing contingency plans for a rescue loan to Spanish banks in the event the country fails to find the funds need to bail out failed bank Bankia, according to Dow Jones Newswires. Spanish officials later dismissed the report, fueling the late day loss. A three-year rescue loan for Spain could be as much as €300 billion, one person said, although any bailout could involve smaller, shorter-term loans. An issue in any bailout of Spain, which could end up being bigger than those already agreed to for Greece, Ireland and Portugal, would be the size of the contributions made by the IMF and the EU and where those funds would come from. Spain needs €19 billion to rescue Bankia, but its own bank bailout fund has only about €9 billion left.
Also Thursday, the Commerce Department lowered its estimate for first-quarter economic growth to 1.9% from 2.2%, in line with economists’ expectation that the U.S. economy slowed more than initially thought during the period. The price index for personal consumption increased 2.4%, as previously estimated.
As this blogger predicted on Tuesday, Facebook (FB) found its bottom at $28 and rallied late in the day, finishing up 5.11% at $29.60. However, Facebook remains well below its $38 IPO price. Joy Global (Joy) skid -5.1% as it lowered its full year projections for the international market, citing loss in European and Chinese demand. Ciena (CIEN) rallied as one of today’s top gainers finishing at $13.55, up 14.06%.
Looking forward, tomorrow will be a major day for the macro economy as the unemployment rate and nonfarm payroll values are released in the morning. Additionally, personal spending and private payroll numbers will also be available. Analysts expect the Nonfarm payroll numbers to be at 150K and the unemployment rate to be 8.1%, mirroring last month’s value.
Thomas Doherty is a student at Villanova University majoring in Finance and Economics. All questions and comments can be sent to Thomas@KeeneOnTheMarket.com
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