Obama Warns Congress in Debt Limit Debate

President Barack Obama again urged Congress to increase the debt ceiling, saying that inaction could roil financial markets.

“If Congressional Republicans refuse to pay America’s bills on time...investors around the world will ask if the United States of America is in fact a safe bet — markets could go haywire, interest rates would spike,” he said during the final news conference of his first term. It could even “tip us into recession.”

Obama called the last fight over the debt limit in the summer of 2011 a “fiasco” that hurt the economy and actually raised the deficit. He added that a vote to increase the debt ceiling did not authorize more spending.

The president tried to separate the debt limit from the debate over deficit reduction. Obama said he was “happy to have a conversation” with Republicans about reducing the deficit, and that he thought a reasonable goal would be about $1.5 trillion in deficit cuts.

“What I will not do is to have that negotiation with a gun at the head of the American people,” Obama said.

“There is a pretty straightforward way of doing this: And that is to set the debt ceiling aside, we pay our bills, and then we have a vigorous debate about how we are going to do further deficit reduction in a balanced way,” he added.

Analysts are concerned that the White House and congressional Republicans are locked into positions on the debt ceiling that limit the changes of compromise.

Congressional Republicans say they want to match every dollar that the debt ceiling is raised with a dollar in spending cuts.

House Speaker John Boehner said in response to Obama the American people “do not support raising the debt ceiling without reducing government spending at the same time.”

Obama repeated he would not negotiate over the debt ceiling or agree to any such ratio.

During the press event, Obama remarked that he would not support a one-month or three-month extension of the debt limit.

The United States had been scheduled to hit the debt ceiling late last year, but the Treasury Department began using extraordinary accounting measures to delay the default.

The Bipartisan Policy Center has projected that these measures would only delay hitting the $16.4 trillion debt ceiling until sometime between Feb. 15 and March 1.

Another looming issue is that legislation keeping the government running is set to expire in late March.

Many House Republicans have also said they are willing to shut down the government to force Obama to agree to cut spending.

Obama said that shutting down the government would hurt the economy.

In his statement, Boehner said that the House will pass legislation “that controls spending, meets our nation’s obligations and keeps the government running and we will insist that the Democratic majority in Washington do the same.”

Facebook Plans Mystery Press Conference

Apple long ago turned the mystery press conference into a piece of transcendent performance art. Now Facebook is following its lead.

Today at 1pm EST at its Menlo Park campus, Facebook will host assembled media for a product launch. The company has been cryptic at best about what they will unveil, but neither shaky premises nor rank speculation will stop the media from raising expectations to new heights. In their hopeless longing for a big story, the media are already at it. “It might just be a product launch,” wrote the Los Angeles Times, “but we plan to treat it like a rocket launch.”

Houston, we have a problem.

Or, more accurately, we might have a problem. If the product is truly great, all hype will be forgiven. But if the media bust their capillaries for a dud, traders will pay the price. As a result, investors need to prepare for any contingency by figuring out what to expect ahead of a "mystery" press conference.

By way of hints, all Facebook said on their invitation was: “Come and see what we’re building.” That’s as brisk and broad a stroke as words will allow, but Facebook does not seem to be promising the world.

“I think the real take away is that Facebook actually now cares if people are paying attention, it cares to build anticipation,” said Yahoo! Finance Sr. columnist Michael Santoli. “There was a lot of talk around its IPO last year that they didn’t cater to public expectations, didn’t really care what Wall Street thought, and I think we’re seeing the stock run up here in a very aggressive way probably in response to that sentiment, as much as whatever is going to be announced tomorrow.”

Some are claiming this next “big” thing will be a Facebook phone, with others positing that the company will unveil enhanced search functions. In terms of the phone, Mark Zuckerberg, chairman and CEO of Facebook, has called that prospect the "wrong strategy." But others – including The Wall Street Journal – say the mogul doth protest too much and Zuckerberg is actively working with handset makers.

Facebook is obviously not talking, so anyone who can tell you for certain whether the product is going to be phone or feature is suffering from premature prognostication.

Facebook used to hold regular pressers, but they’ve gone to the mattresses since their disastrous public offering in May. Obviously this means we’re working at a bit of a disadvantage in gauging market reaction. But here’s what we know: Zuckerberg was famously aloof and off-putting during the IPO presentations. That hardly bodes well.

When Facebook introduced Skype video chat in June of 2011, you could hardly roust members of the media from their slumber. It was mostly framed as a reaction to Google’s foray into social media, with its Google+ unveiling. Back in October of 2010, Facebook introduced their “Groups” privacy settings at a press conference. That was another snoozer. In fact, it seems that, when it comes to press conferences, Facebook is as metaphysically far from Apple as possible.

Apple Drags on S&P as Dell Jumps on New Report

The S&P 500 and Nasdaq ended lower on yesterday as worries over demand for Apple products drove down its shares and as investors braced for earnings disappointments.

In contrast, Dell's stock jumped 13 percent to about a five-month high at $12.29, offsetting some of the tech-sector weakness, after Bloomberg reported the No. 3 personal computer maker is in talks with private equity firms to go private.

Tech heavyweight Apple lost 3.6 percent to $501.75 and was the biggest weight on both the S&P 500 and Nasdaq 100 indexes after reports that the company has cut orders for LCD screens and other parts for the iPhone 5 this quarter due to weak demand. The stock earlier hit a session low of $498.51, the first dip below $500 since February 16.

"With Apple, it seems as if the sentiment has shifted from this being the one stock that everybody wanted to own to people beginning to look at it as a company (whose) business is slowing down somewhat," said Eric Kuby, chief investment officer of North Star Investment Management Corp in Chicago.

Adding to investor unease, fourth-quarter earnings kick into high gear this week. Analyst estimates for the quarter have fallen sharply since October, with S&P 500 earnings growth now seen up just 1.9 percent from a year ago, Thomson Reuters data showed.

The Dow Jones industrial average was up 18.89 points, or 0.14 percent, at 13,507.32. The Standard & Poor's 500 Index was down 1.37 points, or 0.09 percent, at 1,470.68. The Nasdaq Composite Index was down 8.13 points, or 0.26 percent, at 3,117.50.

Apple suppliers also lost ground, with Cirrus Logic (CRUS.O) off 9.4 percent at $28.62 and Qualcomm (QCOM.O) down 1 percent at $64.24.

The Dow fared better than the other two indexes, helped in part by Hewlett-Packard shares, which rose 4.9 percent to $16.95. The stock, which was up early in the session after JPMorgan upgraded its rating on the stock and raised its price target to $21 from $15, added to gains after the Dell report.

Appliance and electronics retailer Hhgregg slumped 5.7 percent to $7.44 after the company cut its same-store sales forecast for the full year.

Earnings reports are due this week from Goldman Sachs, Bank of America, Intel, and General Electric, among other companies. Third-quarter reports ended with a gain of just 0.1 percent, the worst for an S&P 500 profit period in three years, according to Thomson Reuters data.