U.S. Stocks Tumble as Treasuries Rally on Budget Concerns (Bloomberg)
U.S. stocks slid today, sending the Dow Jones Industrial Average to its biggest drop in a year. In addition, oil sank and Treasuries surged their highest level in five months. These changes occurred in the first trading day after President Barack Obama’s re-election. His re-election also sets up a budget showdown with the Republican-controlled House. “It’s a rush to safe haven,” said James Paulsen, the chief investment strategist at Minneapolis-based Wells Capital Management, which oversees about $325 billion. “We’re selling off further on rising fears about what a fiscal cliff negotiation is going to mean here. People bring all their worst fears in. At the end of the day, you have the fiscal cliff, Europe and you see a risk-off trade.”
Merkel wants Ambitious Overhaul of Euro Zone in 2-3 Years (Reuters)
German Chancellor Angela Merkel called on fellow European leaders on Wednesday to agree to an ambitious, concrete plan for closer fiscal and economic integration next month that can then be put in place during the next two to three years. “I will work to ensure that we agree on an ambitious roadmap in December for renewing our economic and monetary union,” Merkel said. “It should include concrete measures that we can implement over the coming two to three years.” Despite her push for a “deeper” union, Merkel made clear that she did not want a two-speed Europe, dividing members of the currency bloc from those EU members which do not use the euro.
Whole Foods Lifts Dividend as Sales and Profit Grow (Marketwatch)
Whole Foods Market Inc.’s fiscal fourth-quarter earnings grew 49% as the natural-foods supermarket posted stronger same-store sales and margins. The company’s board approved a 43% quarterly dividend increase, pushing the payout to 20 cents from 14 cents a share. One way Whole Foods has boosted margins has been by building new stores that are smaller and in neighborhoods with lower rent, where it faces less high-end grocery competition. The company currently has 342 stores and sees potential for a total of about 1,000 in the United States. In the latest quarter, same-store sales rose 8.5%, marking its 14th consecutive quarter of growth.