Wall Street’s “Fabulous Fab” is heading to trial today and the case brings back memories of reckless trading that help lead to the mortgage mess and collapse of the housing market. Former Goldman Sachs trader Fabrice Tourre is accused in a civil trial of cheating investors who bought mortgage-backed securities. The Securities and Exchange Commission is accusing Tourre of knowingly selling investments that he expected would go bad. Goldman Sachs settled charges brought against it, paying $550 million. The giant financial firm faces private litigation related to a package of mortgage-based securities sold to investors in 2007. The SEC is seeking unspecified damages against Tourre, saying he failed to tell investors a billionaire-led company helped pick the assets for the securities they invested in even as the firm bet against them. Tourre’s lawyers say he’s “done nothing wrong.”
Retail sales, housing reports and second-quarter profit numbers from some of America’s best-known corporations are likely to drive Wall Street stocks this week. The Dow and S&P 500 open at record highs this morning after the second-strongest week for stock averages this year. The Dow Jones Index is up nearly 18 percent since January 1.
Gas costs are rising in many states with the recent price increase for Brent crude oil. The latest quote – just under $106 a barrel – is up nearly 10 percent in the past two weeks. It was pushed higher by drops in US crude inventories, a rise in US demand for gas with the summer driving season, and tensions in Egypt. But few analysts expect oil to get much more expensive. US oil production is up more than 15 percent compared with a year ago, and with slower growth in China and some other emerging economies global demand for oil could moderate.
Apple has gone on a hiring spree as it deals with design problems for the iWatch. The Financial Times says Apple wants to bring in “fresh expertise” with concerns about a delayed launch for the company’s first major new product since the death of Steve Jobs. According to unnamed sources, Apple has started “aggressively” hiring new employees for the iWatch. The newspaper reported Apple has encountered engineering difficulties that it hasn’t been able to overcome on its own.
China’s economic growth has slowed further in the latest quarter as trade weakened and Beijing clamped down on a credit boom. The government reported Monday the economy grew by 7.5 percent over a year earlier in the three months ending in June, down from 7.7 percent in the previous quarter. Global demand for China’s goods has weakened and regulators are trying to rein in a rapid increase in bank lending that they worry could race out of control. Growth in Chinese industrial production and investment also slowed in the latest quarter.
Richard Davies Business Correspondent ABC News Radio abcnews.com Twitter: daviesabc