Amid jitters that high levels of unemployment may force a double dip recession, the IMF warned the slow US recovery would continue and that debt problems loomed.

The Obama administration is overestimating U.S. economic growth and needs to reduce its budget deficit far more aggressively, the International Monetary Fund said on Thursday in a report that targeted Social Security, the home mortgage interest deduction and other politically sensitive policies as ripe for cutting.

“The central challenge is to develop a credible fiscal strategy to ensure that public debt is put– and is seen to be put–on a sustainable path without putting the recovery in jeopardy,” an IMF report said.

And in its first-ever analysis of the U.S. financial sector, the agency warned that the recovery and seeming health of the banking industry may be illusory, threatened by an expected wave of defaults on commercial real estate loans and possibly in need of another large injection of capital. Small- and medium-size firms, clustered on the West Coast and in the South, are at particular risk from what may be a trillion dollars worth of bad loans for offices and other commercial buildings, IMF officials said in a briefing.

Though the economic recovery in the United States “has become increasingly well established . . . the risks are tilted to the downside,” said David Robinson, deputy director of the IMF’s Western Hemisphere department. Recent data “have increased those downside risks.”

The assessment is in line with growing concern among members of the U.S. Federal Reserve and elsewhere that the U.S. recovery is losing steam. The IMF said recent data–whether the slow advance of hiring, a laggard home market, or a weak stock market–are not enough in themselves to downgrade its forecasts for U.S. growth, which it predicts will be 3.3 percent this year and 2.9 percent next year.

But it also notes that those forecasts are lower than those used in the Obama administration’s plan to cut the U.S. budget deficit in half by 2013 and stabilize overall U.S. debt by 2015.

President Barack Obama has plowed nearly a trillion dollars into the economy to spur economic growth, exploding the US deficit to a level that many believe is unsustainable.

While the United States has already taken steps to freeze spending, the IMF said the Obama Administration may need to increase taxes to hit its deficit reduction targets.

US stock markets opened strongly on Tuesday, in the first session after an extended holiday weekend.

The Dow Jones Industrial Average rose 98.69 points (1.02 percent) to 9,785.55 in opening trades.

U.S. stock markets are rising on the back of gains in the European and Asian markets and bolstered by comments from the Australian central bank.

The tech-rich Nasdaq composite index surged 33.17 points (1.59 percent) to 2,124.96 and the S&P 500 index, a broader measure of the markets, advanced 11.53 points (1.13 percent) to 1,034.11.

Market sentiment was boosted after the Reserve Bank of Australia said late Monday that the global economy had continued to expand, with growth in Asia remaining strong and signs emerging from China that growth there was now developing at a more sustainable pace.

Top performers included Wal-Mart Stores which rose 2.5%, Bank of America which gained 2.4% and Caterpillar which climbed 2.3%.

Meanwhile, shares of BP rose 5.4% after the company ended speculation that it was looking for a “white knight” investor to ward off takeover bids by saying it would not issue new equity to raise money to cover the costs of the Gulf of Mexico oil spill.

Across the Atlantic, European stock markets were up: France’s CAC 40 soared 3.43%; Germany’s DAX climbed 2.7%; Britain’s FTSE 100 gained 2.7%; and the EURO STOXX 50 advanced 3.5%.

“US equity futures are pointing to a strong open as market participants get back to business after an extended holiday weekend,” said analysts at Briefing.com.

After a tough week for stocks, “bargain hunters are out in force today,” said Briefing.com’s David Campione.

Eyes also turned to the second quarter earnings season, which enter into full flow from next week.

New orders for factory products tumbled much more than expected in May, posting their sharpest drop since the depth of the recession and their first decline in nine months, a government report showed on Friday.

The Commerce Department said Friday that orders for manufactured goods decreased 1.4 percent in May. It was the biggest drop since March 2009.

Excluding the volatile transportation sector, orders fell 0.6 percent. That number fell 0.7 percent in April, the worst showing in 13 months. Overall orders in April grew 1.0 percent.

Manufacturers are seeing a pause in demand after the industry helped the world’s largest economy emerge from the worst recession since the 1930s. Today’s figures underscore the Federal Reserve’s concerns that the European debt crisis poses a risk to a self-sustaining U.S. recovery.

“Manufacturing has been the star of the economy this year so any signs that conditions are turning would cause some concern,” Joel Naroff, president of Naroff Economic Advisors Inc. in Holland, Pennsylvania, said before the report. “The demand for products is slowing.”

Orders for big-ticket durable goods were down 0.3 percent, after a 2.0 percent increase in April. Electronics and commercial aircraft were among the weakest performers.

Demand for those goods expected to last less than three months were down 2.1 percent. Lower gas prices were partly to blame. But there were significant losses for makers of clothing, drinks and tobacco, and chemical products.

The dismal numbers followed a disappointing jobs report released earlier Friday. Employers cut 125,000 jobs, the most since October, the Labor Department said. That was dragged down by the loss of 225,000 temporary census jobs. Businesses added a net total of 83,000 jobs, better than May but not speed the recovery.

Manufacturing has been a rare bright spot, helping lead the country out of recession with increased hiring and productivity.

However, economists fear joblessness and less demand for exports could sap the sector’s strength in the coming months.

Sales and inventories “are very much in sync,” Samuel Allen, chief executive officer of Deere & Co., said in a June 23 interview in reference to the manufacturer’s agricultural business. “We do believe the recovery is underway,” he said. “We do believe it is moving slowly.”

Existing home sales slipped in May and missed estimates but sustained a strong pace as homebuyers who qualified for the expired tax credit moved to close deals ahead of the June 30 deadline.

The National Association of Realtors reported that existing home sales dipped 2.2% last month to a seasonally adjusted annual rate of 5.66 million units, down from the upwardly revised rate of 5.79 million in April. Sales year-over-year were up 19.2%.

The average analyst forecast saw sales rising to 6.10 million units as homebuyers rushed to close contracts under a federal tax incentive program.

The Realtors group said that sales remained at elevated levels in May on buyer response to the tax credit, characterized by stabilizing home prices and historically low mortgage interest rates.

Although homebuyers had to sign contracts by the end of April to qualify for a tax credit up to $8,000, they have until the end of June to close deals. Existing home sales data is based on transaction closings, so figures still reflect strong interest in the credit.

So the tax credit, stabilizing home prices and low mortgage rates kept sales at elevated levels last month, said Lawrence Yun, NAR chief economist.

“We are witnessing the ongoing effects of the homebuyer tax credit, which we’ll also see in June real estate closings,” Yun said.

The Senate could pass an amendment to push the closing deadline back to Sept. 30 as part of a controversial job and tax bill.

Price and inventory: The NAR report showed that the median price of homes sold in May was $179,600, up 2.7% from a year ago. Just under a third of homes sold during the month were distressed properties.

Total housing inventory fell 3.4% to 3.89 million existing homes for sale. That represents a 8.3-month supply at the current sales pace, down from a 8.4-month supply in April. A six month of supply is considered normal.

Sales by property and region: Sales of single-family homes declined 1.6% in May compared to the prior month, while condominium and co-op sales sank nearly 7%.

The Northeast fared the worst last month, with sales plunging 18.3% to an annual level of 890,000 units in May. That’s still 12.7% higher than a year earlier.

Resales in the Midwest were unchanged in May from the previous month at an annual pace of 1.33 million units. They rose by a modest 0.5% in the South and 4.9% in the West

Rockland Trust in Hanover has launched its first two mutual funds .The Trust seeks alternative revenue sources beyond its traditional offerings, the Patriot Ledger reports.

Rockland Trust is also pleased to announce the establishment of Bright Rock Capital Management, LLC (Bright Rock) a wholly owned subsidiary dedicated to institutional investment management. Beginning today, Bright Rock’s institutional investment management products and services are available to the global institutional market.

Rockland Trust and Bright Rock Capital Management combined assets under management currently exceed $1.3 billion, and include investment management products across the United States equity and fixed income markets. In launching Bright Rock, Rockland Trust has affirmed its focus on providing institutional investors with access to best of breed products managed by the firm. Supported by the $4.5 billion Rockland Trust infrastructure and resources, Bright Rock’s investment management team averages 25 years of experience and maintains a strong and growing track record in several investment styles, including Mid Cap Growth, Small Cap Growth, and Quality Large Cap.

“Consistent with the Rockland Trust commitment to excellence on behalf of our clients, we have established Bright Rock to ensure that our clients receive the full focus and attention of the organization, specific to their areas of need. In Bright Rock, we see an opportunity to provide institutional investors with direct access to industry leading and highly focused investment management capabilities across the US equity markets and beyond,” noted David Smith, CFA, the firm’s Chief Investment Officer.

“With a team of dedicated investment professionals, deep infrastructure, and a commitment to service our customers, we believe that Bright Rock has many advantages in today’s marketplace. Our dedication to deep, fundamental research and analysis is core to our philosophy, and is the essence of Bright Rock’s value proposition to the market,” noted Doug Butler, CFA, CFP and Director of Research for the firm.

Meanwhile, the Ledger reports that the funds have already attracted significant interest. The large-cap fund has about $55 million in assets, and the midcap fund has about $25 million, the Ledger notes.

Rockland Trust in Hanover has launched its first two mutual funds .The Trus seeks alternative revenue sources beyond its traditional offerings, the Patriot Ledger reports.

The Ledger reports that the funds have already attracted significant interest. The large-cap fund has about $55 million in assets, and the midcap fund has about $25 million, the Ledger notes.

David Smith, Rockland Trust’s chief investment officer, said the bank launched the funds last month as a way to generate revenue outside of its traditional market.

“The goal is going to be to deliver the strong investment management services, that we deliver locally to clients, outside of Rockland Trust’s geographic footprint,” Smith said.

“There’s a significant market outside the Rockland Trust geographic footprint.”

The mutual funds also will help the bank become less reliant on interest-rate revenue from loans, Smith said.

Scott Rothstein learned Wednesday, just months after his Ponzi scheme imploded, that he will spend the next 50 years of his life in prison.

“I am truly and deeply sorry for what I have done. I don’t expect your forgiveness. I don’t,” Rothstein said in court according to the Sun-Sentinel. “I am ashamed and embarrassed.”

He apologized to investors he stole from, to his law firm colleagues, to his firm’s clients, to the court system, fellow lawyers, to charities.

Mccollrothst In his sentencing, Cohn called Rothstein’s investment scam a “tsunami” that he created through his law firm, his political connections, his charities and ultimately, by forging the signatures of judges in a legal case between auto magnate Ed Morse and an interior decorator.

Rothstein was sentenced Wednesday morning by U.S. District Judge James Cohn in a Fort Lauderdale courtroom.

The Sun-Sentinel said Rothstein “appeared visibly and dramatically changed by his six months in federal custody, much thinner with closely shorn gray hair and a goatee.”

Rothstein, who turns 48 on Thursday, oversaw a $1.2 billion Ponzi scheme that collapsed last fall. He was arrested Dec. 1, 2009 after the scheme was exposed. Rothstein’s plan was built on supposedly lucrative investments in faked confidential settlements.

Rothstein asked for mercy in a letter written to the judge in advance of the sentence. Rothstein said he contemplated suicide before returning to the United States to face the federal charges.

The prison sentence, 10 years more than prosecutors recommended, caps the swift downfall of Rothstein, whose now-defunct law firm Rothstein Rosenfeldt Adler was once considered a growing force in South Florida legal circles.

His taste in fancy Italian sports cars, an 87-foot custom yacht, glittering watches and big cigars made him seem larger-than-life, and turned him into a darling of politicians and sports stars. But, Rothstein told the judge in a letter, it was all a facade to feed his own “ego and greed.”

“I did all I could to increase my power, to keep the myth alive, to feed the beast I had created, and to try to keep myself above the law,” Rothstein wrote.

Rothstein pleaded guilty Jan. 27.

The government has seized Rothstein’s assets and is in the process of selling them to pay restitution to victims. There is also an ongoing legal wrestling match over ownership of some of the assets and bank accounts linked to the scam and Rothstein’s law firm.

The British financial watchdog Financial Services Authority has fined J.P. Morgan’s London arm about $49 million for mishandling clients’ funds, the largest penalty ever delt by the FSA. J.P. Morgan was fined for mixing client money with the firm’s own funds.

The Financial Services Authority said JPMorgan did not “adequately protect” client money held by its futures and options business. The error, which occurred after the merger of JPMorgan and Chase and remained undetected for nearly seven years, put the client funds at risk had the firm become insolvent, the regulator said.

“JPMorgan Securities committed a serious breach of our client rules by failing to segregate billions of dollars of its clients’ money for nearly seven years,” the F.S.A. director of enforcement and financial crime, Margaret Cole, said in a statement. “The penalty reflects the amount of client money involved in this breach.” JPMorgan representatives were not immediately available for comment.

J.P. Morgan kept together funds worth between $1.9 billion and $23 billion from 2002 to 2009, reports the New York Times. The regulator says the fine is meant to “send out a strong message to firms of all sizes that they must ensure client money is segregated,” and says it has more such cases forthcoming.

Mixing company money with clients’ is a “cardinal sin” according to Reuters’ Breaking Views editor Michael Prest. “Clients money is not banks money. A golden rule in banking, and high up on the regulators list that you separate, unless the client says otherwise.

“This seems to be more widespread than people think,” says Prest, who says the FSA is investigating upwards of four or five more firms. “The thing here is that for a lot of people, segregating funds was expensive business, and they didn’t care–there was so much money to be made up until 2007, and people were willing to cut corners. They trusted their prime brokers.”

J.P. Morgan qualified for a 30 percent discount on the fine for working with the F.S.A. during the investigation and agreeing to settle at an early stage, the F.S.A. said. The investment bank reported the issue first and no clients suffered losses.

The Bank of Canada Tuesday became the first Group of Seven monetary authority to raise interest rates since the credit crisis, but said any further increases would have to be weighed carefully against domestic and global economic developments.

The increase follows “robust” economic growth in Canada in the first quarter of 6.1 percent, led by housing and consumer spending. But the hike was less than analysts had expected.

The Bank of Canada said it remained cautious about “the possibility of renewed weakness in Europe” and an “increasingly uneven” global economic recovery.

The bank raised its benchmark overnight rate by 0.25 percentage point to 0.50%. The rate had been at a record low 0.25% since April 2009.

“Given the considerable uncertainty surrounding the outlook, any further reduction of monetary stimulus would have to be weighed carefully against domestic and global economic developments,” the bank said in its interest-rate statement.

The widely expected rate hike is the bank’s first since July 2007 and the first under the watch of Governor Mark Carney, who took over the top job in February 2008. The bank also re-established normal functioning of the overnight market, including reverting to a 0.50 percentage point operating band for the rate.

The Canadian dollar was little changed immediately after the rate decision was published at 9:00 a.m. EDT. The U.S. dollar was quoted at C$1.0490 from C$1.0492 just before the release.

The bank said the euro-zone debt woes are likely to result in higher borrowing costs and more rapid tightening of fiscal policy in some countries. The bank pointed out that it had identified this as a key downside risk in the April Monetary Policy Report.

“Thus far, the spill-over into Canada from events in Europe has been limited to a modest fall in commodity prices and some tightening of financial conditions,” the bank said.

Royal Dutch Shell, the Anglo-Dutch oil and gas producer, said Friday that it had struck a deal to buy most of the assets of East Resources for $4.7 billion in cash, moving into the coveted sector of natural gas contained in shale deposits.

As part of the deal, Shell will obtain new positions in “high potential” U.S. shale gas acreage, in the Marcellus and Eagle Ford plays, according to a statement today.

Shell is catching up with Exxon Mobil Corp. and BP Plc in snapping up unconventional gas reserves in anticipation prices for the cleaner-burning fuel will recover as governments curb carbon dioxide emissions. The Marcellus Shale, which stretches into New York, may hold 262 trillion cubic feet of recoverable gas, making it the biggest known deposit of the heating and power-plant fuel, the U.S. Energy Department estimates.

“The opportunity now is to consolidate our tight gas portfolio, divest from non-core positions across North America, and to invest for profitable growth,” said Peter Voser, chief executive of Shell, calling the East Resources assets “the premier shale gas play in the Northeast U.S.”

Shell is getting 1.05 million acres of so-called tight gas properties in North America, in the northeastern states and the Rockies, which will make up most of the 1.3 million gas acres it is acquiring on the continent this year, and which it expects will produce 16 trillion cubic feet of gas in total.

“The U.S. tight gas resource base has allowed it to become self-sufficient in natural gas supply long-term,” said Jason Kenney, oil and gas analyst at ING in Edinburgh. “A couple of years ago that wasn’t the case. The technological boundaries have been pushed back.”

The Shell announcement comes in the wake of the BP oil leak in the Gulf of Mexico, and as the oil and gas industry is subject to increasing scrutiny.

U.S. stocks thudded lower at Tuesday’s start, taking the Dow Jones Industrial Average below 10,000 for the first time since February. Investors sold assets at large as worries escalated about Europe’s debt trouble and rising tensions in Korea. The Dow Jones Industrial Average fell 218.48 points, or 2.1%, to 9,848.09. The S&P 500 Index (SPX 1,052, -22.03, -2.05%) declined 23.35 points, or 2.2%, to 1,050.3. The Nasdaq Composite shed 52.09 points, or 2.4%, to 2,161.46.

Dow Jones Industrial started trading with a significant minus. The negative trend is due to horrible news from outside the United States and depressing reports of the local scale. Investors were not ready for such an eventuality. Bears went into the new attack, the index continues to lose its point by point. U.S. indexes lost more than 2% at the opening followed by other markets, which react to the challenges of the European banking sector and the threat of North Korea against the South.

Dow Jones fell by 2.16% to 9 848.88 points, Standard & Poor’s 500–by 2.22% to 1 049,82, Nasdaq Composite–on 2,38% to 2 160.97. After Spain had resorted to saving a local bank, global investors are worried about the stability of the global financial system. This was reflected in respect to the shares of major banks and representatives of U.S. industry. Quotes Bank of America Corp lost 3.7%, the aluminum giant Alcoa Inc – 4,4%. Rejection players risky instruments deteriorated after today’s meltdown of Asian sites, which responded to the warning the leader of DPRK Kim Il What ready to strike at South Korea, only if she would attack first. “We are seeing another round of getting rid of risk strategy”, – said an analyst with market shares of Jefferies & Co Arthur Hogan.

European markets also slumped as concerns mounted over the rising interbank lending rates. The three-month U.S. dollar London interbank offered rate climbed to a 10-month high, rising to 0.53625% from 0.50969% Monday. The Stoxx Europe 600 and Frankfurt’s DAX were each down more than 2.5% in afternoon trade. The Athens Stock Exchange was trading at fresh one-year lows.

“The volatility in the markets are mind-numbing to the average investor. For long-term investors who are trying to save retirement funds, it’s nerve-wracking for them,” said Andrew Neale, portfolio manager at Fogel Neale Partners. “The strength in the dollar is probably going to put some brakes on U.S. economic growth obviously because it makes U.S. exports more expensive.”