The stock market turned mostly higher Wednesday, following the lead of financial stocks as the heads of several big banks testified before the United States Congress about the financial crisis.
Stocks fluctuated for much of the morning but strengthened as the questioning of bank officials proceeded with little in the way of confrontation. Investors were being choosy, moving into consumer stocks in response to a higher profit forecast from Kraft Foods Inc. but selling energy stocks as the price of oil fell. Industries seen as safer in a weak economy, like health care and utilities, rose.
Executives including Goldman Sachs Group Inc. Chairman and CEO Lloyd Blankfein, JPMorgan Chase & Co. CEO James Dimon, Morgan Stanley Chairman John Mack and Bank of American Corp. CEO Brian Moynihan appeared before the Financial Crisis Inquiry Commission. It is the first meeting of the bipartisan, 10-member panel, which is investigating the near collapse of the financial system in the fall of 2008.
While the executives agreed that banks’ actions contributed to the crisis that paralyzed the credit markets and worsened the recession, investors did not hear anything from the hearings that would encourage them to flee financial stocks.
Still, there is growing public discord over big profits and bonuses at financial companies that has the White House considering a levy on banks to cover about $120 billion in taxpayer losses from the government’s industry bailout. Opponents say it could jeopardize a recovery by the nation’s biggest banks.
Scott Colyer, chief executive at Advisors Asset Management in Monument, Colo., is concerned that imposing a tax on banks would threaten his expectation for a strong economic rebound in 2010. “You don’t want to take money from a group that you’re trying to prop up,” he said.
The questions about banks underscored how many concerns investors are juggling. After a strong first week of the year in stocks, a disappointing profit report from Alcoa Inc. late Monday is causing concern that the robust earnings investors had been expecting for the final quarter of 2009 might not materialize.
In much of 2009, companies boosted earnings by laying off workers and slashing expenses. But cost-cutting cannot be relied upon forever so investors are looking for signs that increases in revenue will lift earnings.
The improved forecast from Kraft was welcome news but its increased projection matches what analysts had already been predicting. Intel Corp. is expected to post results Thursday, and JPMorgan Chase & Co. is scheduled to report on Friday.
In midday trading, the Dow Jones industrial average rose 40.66, or 0.4 percent, to 10,667.92. The broader Standard & Poor’s 500 index rose 5.33, or 0.5 percent, to 1,141.55, and the Nasdaq composite index rose 7.21, or 0.3 percent, to 2,289.52.
On Tuesday, the Dow fell 37 points, or 0.3 percent, while the S&P 500 index and the Nasdaq lost each lost about 1 percent on concern about China’s bank policies and Alcoa’s results.
Bond prices fell after jumping Tuesday, pushing yields higher. The yield on the benchmark 10-year Treasury note rose to 3.75 percent from 3.72 percent late Tuesday.
Crude oil fell $2.05 to $78.74 per barrel on the New York Mercantile Exchange. The drop in oil hurt energy companies, which also hurt stocks.
The dollar fell against most other major currencies, while gold fell.
Meanwhile, investors sold shares of Google Inc. after the Internet search company threatened to withdraw from China. The company said it will no longer censor its search results in the country after finding that computer hackers had led human-rights activists to reveal their e-mail accounts to outsiders. Google’s public complaints were a rare show of protest in the country and an about-face for the company that long said it would abide by Chinese laws that block some political and socially sensitive content. Google fell $8.97, or 1.5 percent, to $581.51, while Baidu rose $51.51, or 13.3 percent, to $438.00.
Farmer Cries Out Over Cattle Invasion
A farmer in Aluu Community in Ikwerre Local Government Area of Rivers State, Mr Nwo Nna, has cried out over cattle invasion of his farmland and crops.
Nna made this known in a chat with newsmen in Aluu recently.
He said that the most worrisome aspect of the development was the neglect by the herders of the Anti-Grazing Law passed by the Rivers State House of Assembly.
The farmer who discribed such as vexatious and provocative, appealed for intervention by relevant agencies in order to secure their future.
“I got to my farm on Saturday morning only to see my vegetables, cassava, yam and the entire farm devastated by cows”, he said.
He expressed regrets that his farm, which was not at the road had experienced such attack for the second time.
The farmer noted that it would have been a different ball game, if he had met the herders in his farm.
“The saving grace was that I did not meet them. They should be called to order to avoid problems”, he said.
He also sought for urgent intervention of the Rivers State Government, Myyetti Allah and other relevant authorities to warn the herders to keep off people’s farms in the interest of peace.
The farmer further explained that it was becoming a regular practice for herders to parade their cows along the roads, and such cows stray into farm lands and destroy people’s means of livelihood.
While declaring that Rivers people are hospitable, the farmer warned stranger elements, who do not have respect for the laws of the land as well as terrorise other people’s means of livelihood, to take their lawlessness elsewhere.
Other farmers who also responded called for the establishment of a system that monitors the activities of herders.
According to them, it will enable those who take their cows into farms to be identified and adequately sanctioned in the event of any invasion by the cows.
This, they said will bring a lasting peace and as well serve as a deterrent to others.
By: King Onunwor
EFCC Blames Frauds In Banking Sector On Insiders
The Economic and Financial Crimes Commission last Wednesday said most frauds in the banking sector were perpetrated by insider Information, Communication Technology employees.
Head, Cybercrime Section of the EFCC, Abbah Sambo, made the declaration at a national seminar on Banking and Allied Matters for judges in Abuja recently.
Sambo, who represented the EFCC Chairman, Mr Abdulrasheed Bawa, at the seminar, said that most banking sector frauds handled by the commission showed that bank employees aided the acts.
He also expressed regrets at the increasing rate of cybercrime in spite of efforts by the commission to tackle it.
Sambo observed that in years past, young people involved in cybercrime were not ICT savvy, but today, it was ICT graduates that are the champions in perpetrating the crime.
He attributed the increase in cybercrime to moral decadence and peer group influence.
“The rate at which young men are perpetrating cybercrime is seriously alarming.
“When we arrest these criminals, one major reason they give for going into the crime is peer influence.Their friends are into it and they want to run with guys that drive the best cars and have the best girls in town”, he said.
He hinted that most times when the criminals were arrested, a lot of assets on them, are registered in the names of their parents.
“Cars in the names of their mothers and houses in the names of their fathers. There is a fundamental issue relating to decay in moral coverage in the society,’’ he said.
Sambo said that the greatest challenge in fighting cybercrime was the knowledge gap, and noted that the criminals were getting more sophisticated.
According to him, the criminals had the ability to talk to one another seamlessly by sharing knowledge, unlike law enforcement agencies.
“A lot of the people trying to combat the crime in the field tend to lack the drive because they do not have adequate training,’’ he said.
He stressed the need for adequate sensitisation and engagement with youths, especially from secondary school level to let them know the ills of crime.
The two-day seminar was organised by the Chartered Institute of Bankers of Nigeria in collaboration with the National Judicial Institution.
SEC Frowns At Resurgence Of Ponzi Schemes
The Securities and Exchange Commission has frowned upon the resurgence of Ponzi schemes and illegal fund managers in the country’s financial sector.
The Director-General of SEC, Mr Lamido Yuguda, made the observation of the development at an enlightenment workshop with the staff of the Federal Ministry of Finance, Budget and National Planning on in Abuja over the week.
Yuguda said that the unlawful schemes had continued to enjoy massive patronage of the populace and remained a source of concern for regulators in the financial sector.
According to him, the commission was poised to continue to apply measures and seek the cooperation of relevant stakeholders toward combating the activities of these Ponzi schemes.
He expressed regrets that the upsurge of the schemes had undermined the reputation of the financial markets and dampened investors’ confidence, among other things.
“SEC firmly believes that the country’s capital market can attain its potential if market operators and participants contribute their respective quotas to the growth”, he said.
He also explained that SEC was committed to always ensure and maintain an environment that was enabled by the appropriate regulatory framework, timely and affordable access to market.
“The commission is also committed to zero tolerance for infractions, heightened investor confidence and awareness, innovative product development and good governance practice”, he said
“There is the need to restore investor confidence and improve the participation of retail investors in the market.
He further pointed out that the demography of investors in the country’s capital market showed that the young population do not participate in the capital market, and only a few Nigerians invested in the capital market.
The situation, he said, created a huge challenge to the market growth and the commission and added that it was striving to change the narratives by instilling a fair, transparent and orderly market.
The Minister of Finance, Budget and National Planning, Zainab Ahmed, represented by Mr Stephen Okon, Director Home Finance, urged investors to take advantage of the various initiatives in the market.
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