U.S. Stocks Rise as Retailer Rally Offsets Debt Concern (Bloomberg)
A rally in retail and transportation stocks overshadowed worries about the debt ceiling and caused U.S. stocks to rise. With precious little time before the country cannot pay its bills, President Barack Obama warned Republicans in Congress not to use the need for a debt-limit increase to force through new spending cuts. Many Republicans in Congress say a boost in borrowing authority must be linked to spending cuts. The Treasury Department has been using emergency measures since the end of December to prevent a breach of the $16.4 trillion debt limit. In a letter yesterday to House Speaker John Boehner, Treasury Secretary Timothy Geithner said the department expects to exhaust those measures “between mid-February and early March.”
Fitch May Downgrade U.S. Credit Rating (Associated Press)
Fitch Ratings warned today that the United States could lose its top credit rating if it does not raise its debt ceiling soon. If Congress does not raise the limit — a measure of how much debt the country is allowed to have — by March 1, the United States could default. Many fear Congressional debate could descend into petty political squabbling like it did the last time this issue was discussed in the summer of 2011. The U.S. Treasury Department warned then that it had nearly reached a point where it would be unable “to meet our commitments securely.”
Facebook Rolls Out Social Search Feature (CNBC)
Facebook unveiled a new social search feature today which allows users to search their friends’ content on the site. Due to the news, Facebook’s stock took a hit, while rival Google’s stock got a bump. Yelp’s stock also fell on the announcement. “I think what you have here is a natural sell the news reaction, however, the stock has been one of the better performers of all the Internet names in the last couple of months,” said Jordan Rohan, managing director and senior analyst for Stifel Nicolaus. “And I think as people realize that there are infrastructure achievements that may need to roll out first before the businesses can be built on the back of those, that’s what matters.”
