Three days before the end of QE2 and the bulls were out on Wall Street devouring stocks before the program that devalues the dollar comes to an end on Thursday.
The Greek soap opera saga goes on and on yet another day.
A rarity-a professional sports team filing for bankrupcy. That's what happened today to one of baseball's legendary franchises, the Los Angeles Dodgers.
Today's leading financial stories are:
1) Euro debt news lifts stocks after last week's loss-From AP
Signs that a widespread European debt crisis could be averted helped send stocks up Monday.
French banks agreed to accept slower repayment of Greece's debt, giving Greece more time to meet its other financial obligations. French banks hold $21.3 billion in Greek government debt. Greek lawmakers also began debate more budget-cutting measures. Greece's parliament needs to pass the new austerity plan this week before the country can receive a $17 billion installment from a rescue package arranged last year.
The U.S. government, meanwhile, said that spending by consumers decreased in May, after adjusting for inflation. April's figures were also revised downward, revealing the first decline since January 2010.
Consumer spending accounts for 70 percent of economic activity.
Gas prices nearing $4 per gallon in late April and early May curtailed spending on retail goods such as televisions and clothes. Since then, gas prices have fallen to a national average of $3.57 per gallon. Oil prices have declined steeply over the last few weeks, which should eventually translate into even lower pump prices. Analysts say lower gas prices could help boost consumer spending in other areas in the coming months.
The Dow Jones industrial average rose 108.98 points, or 0.9 percent, to close at 12,043.56. The Standard & Poor's 500 index rose 11.65, or 0.9 percent, to 1,280.10. The Nasdaq composite index rose 35.39, or 1.3 percent, to 2,688.28.
2) Greek Debt Talks Widen-From The Wall Street Journal
Talks about how to get private investors to contribute toward a new bailout for Greece widened Monday to include a possible buyback of Greek government bonds—but people at a meeting in Rome discussing the issue said there were no guarantees the ideas wouldn't lead to a default by the heavily indebted nation.
The Rome meeting was the first gathering of Greece's official and private creditors, together with Greek government officials, since the country's debt crisis began more than 18 months ago. Greece was promised €110 billion ($156.08 billion) in aid last year from the International Monetary Fund and European Union, the first of three bailouts to euro-zone nations. But that money won't be enough to finance it until mid-2013 as originally planned.
The efforts to get a meaningful private-sector contribution to a fresh bailout, as demanded by Germany and other euro-zone governments, face a tight deadline.
Finance ministers from the rest of the 17-nation euro zone are to discuss a new Greek rescue on Sunday—assuming the Greek parliament agrees to a package of austerity measures this week. Governments are trying to reduce the amount they need to lend to Greece by seeking a framework of how to prevent investors in Greek government bonds just cashing bonds as they come due.
People familiar with the discussions said the meeting's main focus was provided by an "umbrella proposal" by French banks to reinvest 50% of Greek government bonds that mature in the next three years into new 30-year bonds. A further 20% would be set aside to provide guarantees of ultimate repayment—and holders of the bonds would expect to benefit from higher returns if Greece's economy performs well.
3) Dodgers file for bankruptcy — and arrange for $150-million loan-From The Los Angeles Times
The Dodgers filed for bankruptcy protection on Monday, a move that owner Frank McCourt said would stabilize the financial future of the team. The move also could extend the battle for ownership of the Dodgers well beyond this season.
McCourt has obtained $150 million in interim financing, according to the court filing in Delaware. If the bankruptcy court approves that financing Tuesday, McCourt would meet Thursday's payroll deadline and could remain in control of the club throughout the bankruptcy proceedings, with the intention of negotiating a television rights deal within 180 days that would satisfy the court by paying off all creditors in full.
Major League Baseball is expected to challenge McCourt's move at Tuesday's hearing in Delaware, where McCourt will seek approval of about $40 million in funding to pay current and deferred salary obligations.
"The action taken today by Mr. McCourt does nothing but inflict further harm to this historic franchise," Commissioner Bud Selig said in a statement.
Under the MLB constitution, the act of filing for bankruptcy enables the commissioner to strip McCourt of ownership. But bankruptcy court proceedings generally override MLB rules. If McCourt secures a favorable decision, he could keep the team and attempt to secure a lucrative, long-term television contract that would allow him to pay his bills.
Quote of the Day from Dave Ramsey.com:
What we plant in the soil of contemplation, we shall reap in the harvest of action. — Meister Eckhart
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