Financial markets surged after European Central Bank President Mario Draghi said the bank will do "whatever it takes" to prevent the eurozone from breaking up. The statement signals that the ECB is prepared to intervene in bond markets to reduce borrowing costs in Spain and Italy. 

Geithner says criminal prosecution awaits those who rigged Libor

The U.S. government, investigating major banks, will aggressively pursue criminal prosecution of those who manipulated the London Interbank Offered Rate, Treasury Secretary Timothy Geithner told the Senate banking committee. Sen. Tim Johnson, D-S.D., wanted assurance that people who manipulated Libor will be prosecuted. "Absolutely," Geithner said. 

Survey: Financial advisers' favorite ETF provider is Vanguard

In a survey by Cogent Research, 60% of financial advisers with more than $5 million in assets under management said their "most favored" provider of exchange-traded funds is Vanguard. 

Analysis: Good times for refineries won't last long

With crude-oil prices falling and refined products still expensive at the pump, refiners are making a lot of money, but the bonanza is destined to end fairly quickly, according to The Economist. Demand for fuel in the developed world has peaked and is falling. "The respite that cheaper crude has given the refiners is unlikely to last, and more losses and closures are likely," the magazine notes.

Market Activity

ECB assurance on eurozone drives up Asian-Pacific markets

Asian-Pacific share markets gained Friday after European Central Bank President Mario Draghi promised to do anything necessary to keep the eurozone intact. South Korea's Kospi climbed 2.6%. Hong Kong's Hang Seng Index advanced 2%. Japan's Nikkei 225 and Australia's S&P/ASX 200 each rose 1.5%. Taiwan's Taiex added 2.2%. China's Shanghai Composite inched up 0.1%. India's Sensex was up 1.8% .

Facebook shares slide amid sharp drop in revenue growth

Facebook's stock price fell to a record low after the social network reported a severe decline in revenue growth and failed to suggest that the situation will improve. Shares dropped below $24 in frantic after-hours trading; the stock was $38 when Facebook went public in May. 

Amazon posts 96% profit decline and 29% sales growth for Q2

Amazon's profit fell 96% in the second quarter compared with Q2 of 2011 because of heavy spending aimed at expansion. Sales increased 29%. 

Economics


More distressed-home sales are expected in year's second half

Many areas of the U.S. are likely to see more sales of distressed homes this year. During the first half of 2012, foreclosure filings increased in nearly 60% of big cities, according to RealtyTrac. Homes in metro areas with at least 200,000 people that received a foreclosure notice increased 1.5% compared with the second half of 2011, the firm said.

Reduced orders indicate businesses are losing confidence

Businesses reduced orders for most types of durable manufactured goods last month, signaling lower confidence in the U.S. economy. Overall, orders increased 1.6% between May and June, but aircraft orders, traditionally volatile, accounted for most of the gain. With aircraft and transportation items excluded, orders decreased 1.1%. 

Initial unemployment claims decline in U.S.

The U.S. Labor Department said first-time jobless claims decreased 35,000 last week, to 353,000. Economists polled by Bloomberg expected 380,000 claims.

China posts third month of declining industrial profit

Profit of China's industrial companies decreased in June for the third consecutive month, the National Bureau of Statistics said. In the first half of this year, earnings declined 2.2% compared with the same period last year. 

Geopolitical/Regulatory


Breaking up big banks isn't the right answer, Dodd says

If the Dodd-Frank Act doesn't fix what's wrong with the U.S. financial system, the solution is to improve the law, not break up big banks, former Sen. Christopher Dodd said. "If the legislation doesn't work and doesn't do the job well, you change it," he said. "This isn't the Ten Commandments."

U.S. charges in Libor scandal reportedly extend past Barclays

Traders from several banks, beyond Barclays, are expected to be charged by U.S. prosecutors amid allegations of manipulation of the London Interbank Offered Rate, a source said. Prosecutors reportedly are giving most attention to executives who supervised the situation, rather than lower-ranking workers who merely were following instructions.

Banking-union plan will be ready in September, Barroso says

European Commission President Jose Manuel Barroso said intensive work is under way on a eurozone banking union, and a proposal should be ready in early September. The European Central Bank would be the primary supervisor, he said. 

Peregrine's 20-year fraud signals regulatory incompetence

Despite regular audits, Peregrine Financial Group was able to conceal fraud for 20 years. Problems at MF Global Holdings weren't detected until the firm was on the verge of collapse. The U.S. Commodity Futures Trading Commission, which failed prevent either failure, is the principal regulator for the enormous and risky swaps market. 

Financial Products

ProShares launches 2 ETFs focused on Australian dollar

ProShares introduced two leveraged exchange-traded funds offering long and short exposure to the Australian dollar. The ProShares Ultra Australian Dollar ETF delivers 200% of the performance of the Australian dollar against the U.S. dollar. The ProShares Ultra Short Australian Dollar ETF provides 200% of the inverse of the Australian dollar against the U.S. dollar.

Ethics

Madoff trustee seeks approval to release more funds to victims

Irving Picard, the trustee liquidating the business of convicted swindler Bernard Madoff, asked a U.S. judge for permission to release an additional $1.5 billion to $2.4 billion to Madoff's victims. Picard estimated that he has recovered $9.1 billion, but legal disputes prevented him from distributing more than $1.1 billion. 

Nomura's plan for global expansion is undercut by scandal

The loss of two key executives caught up in an insider trading scandal could be a major setback for Nomura Holdings. Japan's biggest investment bank had been working to develop a global presence. The departures come when outside investors and many within the firm are expressing dissatisfaction with Nomura's performance.