U.S. economic news
Beige book shows modest recoveryThe U.S. Federal Reserve Board's "beige book" showed a modest pace for economic recovery. The report failed to quell speculation that policymakers will increase asset purchases to spur inflation and employment. Eight Federal Reserve banks reported some form of growth, according to the beige book survey, which is released two weeks before meetings of central bank policymakers.
Jobless claims fall
Initial unemployment claims fell 23,000 to 452,000 in the week ended October 16. While lower, the claims remain at a level that indicates businesses are doing little hiring.
Mortgage applications drop
The number of mortgage applications in the United States dropped by the most in four months. The drop was led by an 11% decline in refinancing, which fell as mortgage rates rose.
U.S. and global corporate news
Of the 129 companies in the Standard & Poor's 500 Stock Index that have reported results since October 7, 111 beat analysts' per-share earnings estimates, according to data compiled by Bloomberg. Analysts surveyed by Bloomberg predict 24% growth in third-quarter profits from a year earlier for S&P 500 companies.Morgan Stanley's, Goldman Sachs' profits drop; Wells Fargo beats estimates
Morgan Stanley's third-quarter earnings fell 67% from a year earlier as a steep drop in trading volumes weighed on results at Wall Street's second-largest investment bank. Revenue in the firm's international securities unit dropped 42% from a year earlier.
Goldman Sachs Group reported its third-quarter net income fell 40% from a year earlier, and net revenue declinded 28%, hurt mostly by a steep downturn in fixed-income and stock trading.
Wells Fargo reported record third-quarter profits that beat most analysts' estimates as credit conditions improved. Results included a 13% increase from its community banking division.
Global economic news
China raises ratesTo combat inflation, China unexpectedly raised interest rates for the first time since 2007 . China's move is part of an effort to dry up some of the liquidity made available to combat global recession.
U.K. government details spending cuts
The British government detailed sweeping spending cuts that are intended to help the country reduce its £155 billion budget deficit. Treasury chief George Osborne this week unveiled £81 billion in cuts over four years. It is hoped that by weaning the United Kingdom off robust public spending, lending costs can be kept low, giving a boost to the private sector.
German business confidence rises
German business confidence rose unexpectedly in October to the highest level in three and a half years. The positive sentiment suggests that growth may not slow as much as some economists had forecast. The Munich-based Ifo Institute said its business climate rose to 107.6 from 106.8 in September.
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The information included above as well as individual companies and/or securities mentioned should not be construed as investment advice, a recommendation to buy or sell, or as an indication of trading intent on behalf of any MFS product.
Securities discussed may or may not be holdings in any of the MFS funds. For a complete list of holdings for any MFS portfolio, please see the most recent annual, semiannual, or quarterly report. Full holdings are also available on the individual Fund Profile tab in the Products and Performance section on mfs.com.
Past performance is no guarantee of future results.
Sources: MFS research; The Wall Street Journal; The Wall Street Journal Online; Bloomberg News; Financial Times; boston.com.
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