Stocks Look Soft, But Weekly Streak Continues
American International Group (NYSE:AIG) is selling part of its stake in Asian insurer AIA Group to raise $6 billion as it continues to repay the massive $180 billion government bailout that prevented the company's collapse during the 2008 financial crisis.
AIG currently owns 33% of AIA and the sale will cut its stake to less than 20%.
Shares of AIA were halted in Hong Kong on the news. Meanwhile, AIG shares, while not moving in the premarket, closed 1% higher on Friday.
The American taxpayer still owns three quarters of AIG.
Speaking of taxpayers, General Motors (NYSE:GM) says it will stop making its pricey plug-in Volt hybrid for five weeks (March19 – April 23), in hopes of reducing inventory to meet lower-than-expected demand. GM sold 7,671 Volts last year, below its original goal of 10,000.
The car sells for around $40,000 and qualifies for a $7,500 federal tax credit, but many other vehicles that also get high gas mileage, including the GM Cruze, sell at half the price.
About 1,300 employees will be out of work at the Michigan plant that makes the Volt.
BP (NYSE:BP) is paying out $7.8 billion to businesses and individuals affected by the massive oil spill in the Gulf of Mexico nearly two years ago. The settlement also provides a system for monitoring health concerns and compensating victims whose illnesses are found to have a link to the disaster. While final court approval of the medical expenses could take months, the process is a step in the right direction.
BP is yet to face its biggest opponent: the U.S. government, and at least five other states suing the oil giant. BP shares are up 1% in the premarket Monday.
As for markets overall, stocks are looking at a lower open this Monday morning. Stocks were also lower on Friday, but for all of last week, the S&P 500 and the Nasdaq ended higher, bringing their winning streak to four straight weeks. It’s important to note a 3% decline last week in the Russell 2000; it’s a composite of small-cap stocks and its selloff suggests a narrowing of leadership in this year’s bull market.
Investors are also focusing on two domestic economic reports on tap: the ISM non-manufacturing data and factory orders are due out. Friday brings the all-important federal jobs report for February.