U.S. Stocks Rise, Despite Boston Bombing (Bloomberg)
U.S. equities rose this morning, despite the act of terror near the finish line of the Boston Marathon late yesterday afternoon that killed three people, maimed others and left dozens seriously injured. Investors carried on in this morning’s trading as the price of gold recovered a bit from its biggest slump in three decades and earnings from Coca-Cola Co. and Johnson & Johnson beat estimates. European stocks fell, while the yen and dollar weakened. The Standard & Poor’s 500 Index gained 0.6 percent at 10:41 a.m. in New York, rebounding from the biggest drop in five months. The Stoxx Europe 600 Index fell 0.7 percent. Japan’s currency dropped more than 1 percent against all 16 major counterparts, especially falling versus the New Zealand dollar and the Mexican peso. Treasury 10-year note yields rose four basis points to 1.72 percent to notch the first jump in the past four days. Gold climbed 2.4 percent, while palladium and platinum each soared more than 3 percent.
Commodities Rout Slowed but Not Finished (Reuters)
While gold and oil are showing signs of battling back from their pricing dips, the broader rout of commodities continues today. Most analysts are blaming the plunge on weaker-than-expected economic data out of both China and the United States. In addition, a recent survey in Europe found that confidence in Germany, that region’s largest economy, is waning. However, a tiny silver lining in those results is that fears of a complete collapse in confidence in the region’s economy due to recent fiscal crisis in Cyprus proved to be overblown. Commodities investors will have to decide for themselves if that lack of dire news is enough to prop up investments.
JCPenny Looking to Exchange Assets for Cash (Bloomberg)
Former retail titan JCPenny Co (JCP) is exploring a little out-of-the-gift-box thinking, as it tries to raise cash to revitalize its business. Working with its internal financial advisors, the company is considering how best to leverage one of its biggest, and most valuable assets, to gain much-needed cash for the business. That asset is the stores’ prime real estate. And the company’s not ruling anything out at this point, including selling off real estate and leasing it back, spinning it off as a separate entity that could then issue debt itself, or even just selling less-productive sites. These funds would be paired with the $850 million that new (and former) CEO Myron Ullman borrowed from the company’s existing revolving credit line. It’s unclear exactly how these borrowed funds, or those attained through real estate, will be used to correct JCP’s worst sales performance in two decades… Investors will surely wait to find out though.