Investors’ Economic Confidence Boosts Stocks: Market Recap

U.S. stocks advanced on Friday, pushed upward by increasing investor optimism in the United States economy, which is showing signs of strength due to the central bank’s monetary stimulus. Stocks retreated Thursday after the Federal Reserve Bank of Philadelphia President Charles Plosser said he favors scaling back the central bank’s bond purchases as early as the next Federal Open Market Committee meeting, but the Standard & Poor’s 500 Index rose for a third straight day Friday.

DJIA: +0.24% to 15,118.50 S&P 500: +0.43% to 1,633.70 NASDAQ: +0.80% to 3,436.58
Gold: -$21.40 to $1,447.20 per ounce Oil: -$0.42 to $95.97 per ounce U.S. 10-Year: +0.086 to 1.897%

“We are now more than four years beyond the most intense phase of the financial crisis, but its legacy remains,” began Federal Reserve Chairman Ben Bernanke’s speech at the 49th Annual Conference on Bank Structure and Competition sponsored by the Federal Reserve Bank of Chicago. That legacy is the lingering and stubbornly high unemployment rate and a financial system that — despite experiencing a significant recovery over the past four years — continues to struggle with the economic and legal ramifications of the crisis.

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Central bankers are increasingly being asked to take on the role of Superman for the world’s economy. Amid fewer and fewer available options, their ability to ward off economic woes is under strain. Yet they are pressing on, as rates worldwide continue to be lowered, and as inflation around the globe is rather dormant, the impetus is to keep monetary policy lax. South Korea cut rates yesterday, marking the 511th global reduction in rates since July 2007. Similarly, the Reserve Bank of Australia cut rates to 2.75 percent, while countries including Japan and the US continued to press on with bond buybacks, expanding their monetary supply.

The United States federal government began a high-profile crackdown on secret offshore financial accounts in 2009, but despite this mandate, the average sentence in prosecuted cases has been about half as long as in other types of tax cases, according to a comparison of Internal Revenue Service data compiled by former U.S. Justice Department lawyer Jack Townsend. From his statistics, it seems that U.S. courts are dispensing much more lenient punishments to tax evaders hiding money offshore than to other tax cheats.

Here’s your Cheat Sheet to today’s top stock stories

The Golden State is not happy with JPMorgan Chase (NYSE:JPM). On Thursday, the state’s top law enforcement official accused the nation’s largest bank of practicing dubious law processes that would enable them to sue tens of thousands of California consumers and collect overdue credit card debt from them. California’s state attorney general, Kamala D. Harris, contends that, from January 2008 to April 2011, JPMorgan filed thousands of lawsuits each month to collect outstanding credit card debt.

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During a week in which Bank of America (NYSE:BAC) held an uneventful shareholder meeting and saw a suit over mortgages significantly narrowed, the company got more good news on lingering litigation over its Merrill Lynch acquisition. Much like it avoided trouble with the government after settling with plaintiffs out of court over AIG (NYSE:AIG), BofA could be off the hook with respect to its purchase of Merrill Lynch.

It might be an iPhone and Android neighborhood, but Nokia (NYSE:NOK) is letting everyone know it’s building a big house at the end of the block. The Finland-based phone manufacturer has teamed up with Verizon  (NYSE:VZ) to deliver a high-end Lumia at a low-end price when picking up a two-year wireless contract.

Although he praised Apple’s (NASDAQ:AAPL) many positive attributes, Greenlight Capital’s (NASDAQ:GLRE) David Einhorn still found the Cupertino-based tech company was one of the fund’s “biggest losers.” Einhorn pointed out in Greenlight’s first quarter 2013 letter to investors via ValueWalk that Apple shares decreased from $532 to $443 during the quarter. His current concern with Apple is the company’s “disappointing earnings and a diminished forecast.” Einhorn notes that Apple’s expected 2014 earnings per share was $64 in July 2012. Now its 2014 EPS is at $44.

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AT&T Inc. (NYSE:T) is launching a new attack in the prepaid battle, introducing its latest brand, Aio Wireless. The hope is that the addition of a new prepaid venture will help AT&T revive its success, competing with larger carrier, Verizon Wireless (NYSE:VZ), who has been making significant gains in the contract industry, and smaller carriers, T-Mobile US Inc. (DT) and Sprint Nextel (NYSE:S), who have seen growth in prepaid customers, The Wall Street Journal reports.

The world’s biggest hamburger chain is rolling back one of their biggest hamburgers, the Angus Third Pounder. Customers’ waistlines did not help draw the phase-out, but rather, their wallets did. McDonald’s Corp. (NYSE:MCD) announced Thursday that it would be removing Angus burgers from its U.S. menus, as reported by Reuters. The drop of the $4 sandwich, originally introduced in 2009, does not come as a surprise. With last summer’s drought and U.S. beef prices hitting an all-time high, McDonald’s has had to develop strategies to combat these rising costs.

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