Energy Independence, a Downgrade, and Court Dates:Afternoon Buzzers
Markets opened flat Monday afternoon, following minor gains made at the close of the markets on Friday. The major indices dropped between 2.1 and 2.6 percent on election week, and now that the dust from the presidential race is settling the fast-approaching fiscal cliff and the economic stability of the eurozone are front and center.
Starbucks (NASDAQ:SBUX), Google (NASDAQ:GOOG), and Amazon (NASDAQ:AMZN) are set to appear before the Public Accounts Committee in the United Kingdom. The three American companies have reportedly been abusing loopholes and dodging taxes, paying only an effective tax rate of only a few percent on billions in revenue.
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Microsoft (NASDAQ:MSFT) and Google will head to court this week for the latest — and perhaps last — battle in an ongoing patent war. Microsoft is alleging that Google’s Motorola division tried to unjustly charge Microsoft more for the use of standards essential patents than other companies.
On a different note, Microsoft CEO Steve Ballmer has said that sales of the Surface tablet “are starting off modestly.”
The United States government won’t be charging any individuals in its ongoing legal thriller with JPMorgan Chase (NYSE:JPM). While the bank is expected to face massive fines and additional regulatory pressure because of the allegedly fraudulent behavior of Bear Stearns when it sold mortgage-backed securities.
After posting poor third-quarter results last week, J. C. Penney (NYSE:JCP) is down over 9.40 percent in the this afternoon after getting hit with a ratings cut from Credit Suisse, which moved “Perform” listing to “Underperform.”
The cost of a large liquefied-natural gas project in Papua New Guinea operated by Exxon Mobil (NYSE:XOM) has jumped $3.3 billion to $19 billion, largely thanks to unfavorable exchange rates, landowner and worker disputes, and above-average rainfall. Despite the setbacks, the project is still expected to begin shipping gas in 2014.
According to the International Energy Agency, the U.S. will become a net-exporter of natural gas by 2012, and will become nearly energy independent by 2035. While increasing demand for energy in developed countries will be offset by new efficiencies, Asia is expected to claim a much more significant share of oil and gas.
The economic condition in Japan could join the list of top concerns for U.S. investors. Reports indicate that after fighting for growth over the last year, the world’s third-largest economy posted a 0.9 percent drop in third-quarter GDP. According to some economists, this data confirms that Japan has entered a recession.