Morning Business Memo:
Forget Facebook. The stock market still belongs to Apple, the world's most valuable company. Apple shares rose nearly 6 percent yesterday as stocks rallied after weeks of losses because of the debt crisis in Europe. Apple's bounce was the firm's second-largest gain this year, as analysts said they expect iPhone business to continue to do well. The Standard and Poor's 500 had its best day in a month and the Nasdaq index had its strongest gain this year.
All this came despite an 11 percent drop for Facebook shares on its second day of trading after the IPO. Facebook is facing criticism for issuing too many shares at too high a price. "If they had issued 5 percent of Facebook shares instead of 15 percent, I think the stock would be at $45 right now and everyone would be happy," says analyst Michael Pachter of Wedbush Securities. The social networking firm is now under a harsh new spotlight after going public.
A new warning about the eurozone, responsible for so much investor angst in recent weeks. The Organization for Economic Cooperation and Development warned today the eurozone risks falling into a "severe recession." The OECD is calling on Europe's central bank to act fast to stop the slowdown spilling into the global economy. The report forecasts a longer and deeper contraction in the eurozone than predicted in November, with the eurozone economy expected to shrink in 2012, and only manage a feeble recovery in 2013.
Dalian Wanda Group is not exactly a household name, but it's on the verge of becoming a high stakes player in Hollywood. The Chinese real estate and manufacturing firm says it will spend $2.6 billion to buy AMC Entertainment Holdings - the second-largest US cinema chain. The Wall Street Journal says "the deal would create one of the world's largest cinema owners and mark the largest acquisition of a US corporation by a Chinese buyer on record."
The head of the Commodity Futures Trading Commission says an investigation has begun into JP Morgan's big trading loss. Chairman Gary Gensler says the probe is "related to credit derivatives products as traded by the chief investment officer of JPMorgan Chase." Under the 2010 Dodd-Frank law, the CFTC gained powers to monitor trading in indexes of derivatives.
Richard Davies Business Correspondent ABC NEWS Radio twitter.com/daviesabc