Archive for April, 2009

Exxon bumps Wal-Mart off top of Fortune 500 (Reuters)

Sunday, April 19th, 2009 | Finance News

NEW YORK (Reuters) –
Energy giant Exxon Mobil Corp (XOM.N) beat discount retailer Wal-Mart Stores Inc (WMT.N) to regain the top of Fortune magazine's list of the 500 biggest publicly traded companies, based on revenue.

The widely watched Fortune 500 list, released Sunday, showed that the world's largest listed oil company regained the top spot, raking in $442.9 billion of revenue in 2008, despite the decline of energy prices late last year.

Exxon also was the most profitable, earning $45.2 billion last year.

That performance displaced Bentonville, Arkansas-based Wal-Mart, which fell to runner-up after topping the list six of the past seven years. The retailer's revenue climbed 7 percent to $405.6 billion as recession-weary consumers tried to stretch their dollar.

In what was one of the worst years ever for stock markets, most companies saw revenue and earnings tumble. Overall, earnings of the Fortune 500 fell 85 percent to $99 billion last year. That, the magazine said, was the biggest one-year drop since it began compiling its list 55 years ago.

Energy companies, buoyed by soaring prices earlier in 2008, dominated the top ranks. Chevron Corp (CVX.N) again came in third at $263.2 billion in revenue, up 25 percent, while ConocoPhillips (COP.N) climbed one notch to fourth with $230.8 billion of revenue.

General Electric Co (GE.N), the industrial conglomerate weighed down by its financial arm's woes, still managed to rise one slot to fifth place.

As expected, money-losing financial services companies were the hardest hit last year. Citigroup Inc (C.N) and Bank of America Corp (BAC.N) fell out of the top 10, while Lehman Brothers, Washington Mutual and Wachovia Corp were among 38 companies dropping off the list completely.

(Reporting by Joseph A. Giannone; Editing by Jan Paschal)

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U.S. economy still under strain: Obama (Reuters)

Sunday, April 19th, 2009 | Finance News

WASHINGTON (Reuters) –
President Barack Obama said on Sunday that the U.S. economy remained under strain and his top economic adviser tempered hopes for a speedy recovery that have driven the stock market to successive gains.

"We're not out of the woods. This is still a difficult time for the economy. Credit is still contracted," Obama told a news conference in Port of Spain, Trinidad and Tobago, where he was attending the Fifth Summit of the Americas.

Data continue to show the country's severe recession is inflicting severe pain, with over 5 million jobs lost since it began in late 2007. But there have been scattered indications that the pace of economic decline is slowing.

Global stocks closed Friday higher for a sixth straight week and oil prices rose above $50 a barrel on the upbeat mood of consumers and improved quarterly earnings reported by some of the country's biggest banks.

"We've seen some more mixed statistics after a period when there was no positive statistics to be found," White House Director of the National Economic Council Lawrence Summers told NBC's "Meet the Press."

"But it is a long road and it is going to take time. It is going to take creating jobs again ... it is going to take supporting the financial system," he said.

STRESS TESTS

A key challenge for the U.S. economy is to restore confidence that its banks are now sufficiently capitalized after huge losses from the collapse of the housing market.

Obama's economic team is conducting stress tests of the top 19 U.S. firms and will issue guidelines on the process on April 24, with results due on May 4.

Obama said the tests would show that some firms need more help than others.

"Different banks are in different situations. They're going to need different levels of assistance from taxpayers," Obama said, and he vowed that taxpayer money would not be wasted.

"We try to use as light a touch as we can. But I am not going to simply put taxpayer money into a black hole, where you are not going to see results," he said.

TALKING UP RECOVERY

A succession of public officials have voiced confidence that the economy was turning the corner in recent days. Summers said there was nothing wrong in talking about the recovery ahead, but emphasized the economy still faces challenges.

"No one is in any position to declare any kind of victory here. But the fact that no one can declare victory doesn't mean we shouldn't take note of developments as they unfold."

"There are still substantial risks ... there are downside contingencies that we have got to prepare for," Summers said.

Government action to protect the financial sector has also included massive injections of taxpayer money to shore up the capital position of its biggest banks, drawing harsh criticism from the public for bailing out rich bankers.

Some firms, including powerhouse Goldman Sachs, have since said they want to give the money back. Summers welcomed this in principle, but said that it must not be done if it meant putting bank balance sheets back under pressure or constricting the flow of new credit to the economy.

"Regulatory authorities are very open to being paid back. But it has to be done in a way that is consistent with the stability of the financial institutions, and it has to be consistent with maintaining the flow of credit," he said.

(Additional reporting by Paul Simao and Ayesha Rascoe in Washington, Editing by Jackie Frank)

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No taxpayer money for any bank “black hole”: Obama (Reuters)

Sunday, April 19th, 2009 | Finance News

PORT OF SPAIN (Reuters) –
U.S. President Barack Obama said on Sunday that stress tests for the country's top banks would show some need more public help than others, but he vowed not to pour taxpayer money into a "black hole."

"Different banks are in different situations. They're going to need different levels of assistance from taxpayers," Obama told a news conference in Port of Spain, Trinidad and Tobago, where he was attending the Fifth Summit of the Americas.

The country's top 19 banks are being subjected to a battery of tests to work out how much more stressed their capital and finances would be if the economy got much worse. Guidelines about the process are due on April 24, with results on May 4.

"If taxpayer money is involved, I've got a responsibility to ensure some transparency and accountability in the operations of those businesses.

"We try to use as light a touch as we can. But I am not going to simply put taxpayer money into a black hole, where you are not going to see results," Obama said.

Scattered U.S. indicators signal that the pace of economic deterioration may be slowing and the country's severe recession nearing an end, but Obama said that conditions remain tough.

"We're not out of the woods. This is still a difficult time for the economy. Credit is still contracted," he said.

(Reporting by Alister Bull; Editing by Eric Beech)

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