Afternoon Roundup: Today's Top Stories
At The Motley Fool, we know our readers like to be informed. We have scouted out today's most relevant news items and brought them to you all in one page. We hope you this midday edition informative and useful.
Charges to hold your cash
Bank of New York Mellon Corp. (NYS: BK) announced it will start charging its costumers a fee for holding large sums of cash. The move represents two particular trends in the economy: a new phase in the long-running financial crisis and investors hoarding cash because of uncertainty. The bank, which handles funds for financial institutions and corporations, will begin assessing the fee next week. The decision will not affect individual savers.
Experts are not surprised since banks have been unable to invest deposits considering the very low interest rates imposed by the Federal Reserve. While competitors have not followed the same steps, this remains a possibility. Read more atThe Wall Street Journal.
P&G posts surprise profit
Procter & Gamble (NYS: PG) reported a bigger-than-expected rise in quarterly profit after cost cuts and price increases helped offset expensive materials and low consumer confidence. The biggest consumer-products company had a profit increase of 15% for the fourth quarter. The net income climbed to $2.51 billion up from $2.19 billion.
A lot of the profit came from emerging markets, where the company sells some of its cheapest products. Some prime products cost P&G nearly $1 billion while sales in the U.S. are threatened by high unemployment. Read more atBloomberg.
Fannie Mae in need of more
Mortgage finance giant Fannie Mae announced it would ask for $5.1 billion more from taxpayers as the company continues creating loss. The mortgage provider also posted a net loss of $5.2 billion for the second quarter. Since the treasury seized the company in 2008, it has had around $104 billion in government capital injections but has also paid out $14.7 billion in dividends. This quarter, Fannie Mae paid back $2.3 billion in dividends.
The future outlook is just as bleak. Company executives expect credit-related expenses to remain elevated throughout 2011. Read more atReuters.
Stock market in a rollercoaster
After a day of panic and a steep decline, the stock market showed a better face the morning after. Better-than- expected employment numbers helped the market gain some confidence. The unemployment rate dipped to 9.1%, and nonfarm pay rolls rose by 117,000.
But the goodness didn't last long. The Dow Jones industrial average went down by 94.87 points while the S&P 500 fell by 1.07%. The Nasdaq composite was also down by 1.54%. The fall was mainly because of continuing weak numbers in the overall economy. Investment banks have also been lowering their outlook, with ING (NYS: ING) cutting its earnings forecast down to 1.8% from 2.3% this year and 2.6% from 2.8% next year. Read more atThe New York Times.
LinkedIn surprises skeptics
In its first earnings report since it launched its IPO, LinkedIn (NYS: LNKD) shocked many when it posted a 5.1% increase in profit. The profit amounted to $4.5 million, up from $4.3 million a year earlier. The company reported a record number of members, unique visitors, and page views. It saw a 107% growth in its main revenue driver, which is hiring tools that employers pay for to attract potential employees. Revenue from premium subscription rose by 60%, and its online add business increased by 111%.
LinkedIn, which had an impressive first day of trading, has become the guinea pig of online companies' business models. Like LinkedIn, social Web companies like Pandora (NYS: P) and Zillow (NAS: Z) went to the stock market over the past months and have gained fair amounts of both fans and critics. LinkedIn's path will be crucial in determining how overvalued this social media market could really be. Read more atThe Wall Street Journal.
So there you have it, the top financial stories for this afternoon. Check Fool.com throughout the day for commentary on these and other stories. Also, follow us on Twitter, on Facebook, or through our email digests.
At the time this article was published Michelle Zayedowns no shares of any companies mentioned in the story.Motley Fool newsletter serviceshave recommended buying shares of Procter & Gamble. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.
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