Market Wrap: IMF Gets Grim on Growth; Wells Fargo's Mortgage 'FHA'-il; More Easing in China


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October 9, 2012 5:34 PM EDT Send to a Friend
Market wrap-up for October 9th

End of the Day: S&P 500 down 14.4 to 1,441.48; Dow Jones down 110.1 to 13,473.53; Nasdaq down 47.3 to 3,065.02

The following is a brief summary of events moving markets today:
  • Maybe 2012 is a trough: According to the International Monetary Fund (IMF), risks are high that economies from around the globe could slip back into a recession and the next one might be even more complex than the recession of 2009.

    The IMF's World Economic Outlook said the the global economy will expand at just 3.3 percent in FY12 and 3.6 percent in FY13. The numbers are down 0.2 points for FY12 and 0.3 points for FY13 from prior expectations issued in July.

    Of note, the global economy grew 5.1 percent in FY10 and 3.8 percent in FY11.

  • Pump it up!: The People's Bank of China infused another 265 billion yuan ($42.14 billion) into China's economy via reverse repurchase agreements, the second time in two weeks that China's central bank pumped a load of cash into its banking system.

    During the week of September 25th, PBOC performed similar operations to the tun of 290 billion yuan.

    The moves underscore the trouble that China is facing as its economy moves from "rapid growth" to just "outstanding growth," hardly a spot China wants to find itself in.

  • Friends don't let friends drink and mortgage: Wells Fargo was sued by the U.S. today citing claims of reckless mortgage loans. The U.S. is looking for civil penalties and damages under the False Claims Act and the Financial Institutions Reform, Recovery and Enforcement Act of 1989 related to over a decade of activity under the Federal Housing Administration (FHA) program.

    The complaint alleges that Wells Fargo's activities cost the FHA million in claims on thousands of mortgages over the span.

    Shares of Wells ended the session down 1.96 percent.

  • Just like the groundhog seeing its shadow: Alcoa (NYSE: AA) started third-quarter 2012 earnings season with a better than expected result. Data from the company showed quarterly earnings of 3 cents per share on revs of $5.8 billion, versus expectations calling for a break even loss and $5.54 billion in sales.

    For more color on the results, click here.

  • Line in the sand?: More likely looking to refocus on his own company. According to a release after-hours, Netflix (Nasdaq: NFLX) CEO Reed Hastings will not seek reelection to Microsoft's (Nasdaq: MSFT) Board or Directors. Hastings served as lead independent director.

  • Taking this show on the road: Jack Welch, former General Electric (NYSE: GE) CEO and novelist, left his gig writing an article for both Reuters and Fortune following a recent Twitter comments that President Obama's administration is manipulating jobs data into the election. He and his wide, Suzy, will aim to write a piece for the WSJ instead.
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