Asian markets were mixed and European shares firmed for a seventh consecutive day, after a lackluster day of trading in the U.S. Markets were mixed, amid a. The Dow rose 4 points to 10,409; the S&P 500 dropped a fraction of a point to 1,114; and the NASDAQ was unchanged at 2305.
President Obama met with BP's Chairman Carl-Henric Svanberg and said that the oil giant would fund a $20 billion fund to compensate victims of the Gulf oil spill. President Obama noted that the amount was not a cap. (Under current law liability, claims related to economic losses arising from an oil spill are limited to $75 million, which is not nearly enough to address this disaster.) In addition to the $20 billion, BP will establish a $100 million fund specifically targeted to unemployed oil-rig workers in the region. Some experts believe that the cost of the clean up could be more than $60 billion. The fund will be administered by Kenneth R. Feinberg, who oversaw the fund for victims of 9-11 and is currently the administration's "pay czar."
Separately, BP announced that it would cut its dividend for the rest of the year. Normally a suspension of a dividend would negatively impact the price of the stock, but in the case of BP, investors were relieved that some plan of action is in place and the stock rose. For all investors, the idea that a single company can fall nearly 50% and investors can lose a dividend stream, is a reminder that owning single company stocks can be risky.
Stock futures are pointing higher ahead of a busy day.
Weekly jobless numbers will be released with economists looking for 450,000 claims, after a few rough reports. We'll also get inflation data when the CPI is released. Analysts believe that inflation will not be a problem for the economy, providing the Federal Reserve with ample opportunity to keep interest rates at 0-0.25% for perhaps the rest of the year.
BP CEO Tony Hayward will testify before the House Energy and Commerce Subcommittee on Oversight and Investigation on the company's role in the lead up and the aftermath of the rig disaster and subsequent oil spill.
The reconciliation process between the House and Senate financial regulatory reform bills will continue, as lawmakers try to hammer out a deal before the 4th of July weekend.
Jill Schlesinger is the Editor-at-Large for CBS MoneyWatch.com. Prior to the launch of MoneyWatch, she was the Chief Investment Officer for an independent investment advisory firm. In her infancy, she was an options trader on the Commodities Exchange of New York.