The Dow Jones Industrial Average (INDU) climbed above 13,000, capping its longest weekly advance since January, amid speculation the European Central Bank will buy bonds to help lower borrowing costs and preserve the euro.
Alcoa Inc. (AA) and Caterpillar (CAT) Inc. rose more than 3.1 percent to pace gains in the biggest companies. Merck & Co. (MRK) and Amgen Inc. (AMGN) added at least 4 percent, driving health-care shares higher, as earnings beat estimates. Expedia Inc. (EXPE) surged 20 percent as the online-travel company raised its dividend. Facebook Inc. (FB) fell 12 percent to a record low after its results.
About nine stocks rose for every two falling on U.S. exchanges at 4 p.m. New York time. The Standard & Poor’s 500 Index advanced 1.9 percent to 1,385.97. The Dow average rallied 187.73 points, or 1.5 percent, to 13,075.66. Both climbed to the highest levels since May and completed three straight weeks of gains. Volume for exchange-listed stocks in the U.S. was 7.9 billion shares, or 18 percent above the three-month average.
“They’ve got to buy bonds,” Michael Mullaney, who helps manage $9.5 billion as chief investment officer at Fiduciary Trust in Boston, said in a phone interview. “There’s been a lot of rhetoric as far as opening up the checkbook for whatever needs to be done to stabilize the euroland. It’s a giant deal if they actually do what they say they are prepared to do.”
American stocks joined a global rally after two central bank officials said ECB President Mario Draghi will hold talks with Bundesbank President Jens Weidmann in an effort to overcome the biggest stumbling block to a new raft of measures including bond purchases. German Chancellor Angela Merkel and French President Francois Hollande echoed yesterday’s pledge by Draghi that they will do everything to protect the euro.
By Rita Nazareth
Read More: Bloomberg
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Saturday, 28 July 2012
Thursday, 26 July 2012
U.S. Stocks Rise as ECB’s Draghi Vows to Defend Euro
U.S. stocks gained, snapping a four- day drop in the Standard & Poor’s 500 Index, as European Central Bank President Mario Draghi pledged to defend the euro while American jobless claims fell and durable-goods orders rose.
Sprint Nextel Corp. surged 16 percent as sales at the wireless carrier beat analysts’ estimates. Visa Inc. (V), the world’s largest payments network, rose 2.6 percent on better- than-estimated earnings. Zynga Inc. (ZNGA), the biggest developer of games played on Facebook Inc.’s social network, plunged 38 percent amid disappointing profit and revenue. Facebook slumped 5.3 percent before reporting its quarterly results.
The S&P 500 rose 1.7 percent to 1,360 at 9:40 a.m. New York time. The benchmark index for American equities lost 2.8 percent in the previous four days. The Dow Jones Industrial Average added 214.11 points, or 1.7 percent, to 12,890.16.
“We’re seeing another instance of central bankers trying to save the day with the threat of their printing machine,” Peter Boockvar, equity strategist at Miller Tabak & Co. in New York, wrote in a note today. “Whenever Draghi talks about ’policy transmission’ being hampered, it’s his Morse code for restarting their bond buying program.”
Global stocks rallied as Draghi suggested policy makers may intervene in bond markets as surging yields in Spain and Italy threaten the existence of the 17-nation currency bloc. The ECB mothballed its bond-buying program in March as it pushed governments to do more to control their deficits.
In the U.S., fewer people than forecast filed first-time claims for unemployment insurance payments last week. Orders for U.S. durable goods climbed more than projected in June as a surge in demand for aircraft and military hardware overshadowed a slump in business equipment spending.
By Rita Nazareth
Read More: Bloomberg
Sprint Nextel Corp. surged 16 percent as sales at the wireless carrier beat analysts’ estimates. Visa Inc. (V), the world’s largest payments network, rose 2.6 percent on better- than-estimated earnings. Zynga Inc. (ZNGA), the biggest developer of games played on Facebook Inc.’s social network, plunged 38 percent amid disappointing profit and revenue. Facebook slumped 5.3 percent before reporting its quarterly results.
The S&P 500 rose 1.7 percent to 1,360 at 9:40 a.m. New York time. The benchmark index for American equities lost 2.8 percent in the previous four days. The Dow Jones Industrial Average added 214.11 points, or 1.7 percent, to 12,890.16.
“We’re seeing another instance of central bankers trying to save the day with the threat of their printing machine,” Peter Boockvar, equity strategist at Miller Tabak & Co. in New York, wrote in a note today. “Whenever Draghi talks about ’policy transmission’ being hampered, it’s his Morse code for restarting their bond buying program.”
Global stocks rallied as Draghi suggested policy makers may intervene in bond markets as surging yields in Spain and Italy threaten the existence of the 17-nation currency bloc. The ECB mothballed its bond-buying program in March as it pushed governments to do more to control their deficits.
In the U.S., fewer people than forecast filed first-time claims for unemployment insurance payments last week. Orders for U.S. durable goods climbed more than projected in June as a surge in demand for aircraft and military hardware overshadowed a slump in business equipment spending.
By Rita Nazareth
Read More: Bloomberg
Wednesday, 25 July 2012
S&P 500 Falls Amid Housing Data as Apple Tumbles
The Standard & Poor’s 500 Index (SPX) declined a fourth straight day amid disappointing results at Apple (AAPL) Inc. and an unexpected decline in new home sales.
A gauge of homebuilders in S&P indexes slid 1.7 percent. Apple sank 4.7 percent as iPhone sales missed forecasts. Netflix Inc. (NFLX), the largest video-subscription service, tumbled 23 percent after raising doubts on user growth. Caterpillar Inc., the world’s largest maker of construction and mining equipment, and Boeing (BA) Co., a planemaker, gained at least 2 percent.
The S&P 500 slid 0.3 percent to 1,335.03 at 11:28 a.m. New York time. The benchmark gauge has lost 3 percent in four days. The Dow Jones Industrial Average rose 44.69 points, or 0.4 percent, to 12,662.01. The Nasdaq Composite Index lost 0.5 percent to 2,850.13. Trading in S&P 500 companies was up 20 percent from the 30-day average at this time of day.
“There’s a huge amount of uncertainty out there,” said Rob McIver, co-portfolio manager at Jensen Investment Management in Lake Oswego, Oregon. His firm manages $5.5 billion. “It’s a somewhat anemic U.S. recovery. You have the eurozone blowing up again. And you see that starting to be reflected in corporate results. It’s certainly a difficult environment for investors.”
The S&P 500 erased earlier gains as data showed demand for new U.S. homes unexpectedly dropped in June from a two-year high, indicating the housing recovery will be uneven. Earnings at 71 percent of the 196 S&P 500 companies which reported second-quarter results have beaten analysts’ estimates, according to data compiled by Bloomberg.
By Rita Nazareth
Read More: Bloomberg
A gauge of homebuilders in S&P indexes slid 1.7 percent. Apple sank 4.7 percent as iPhone sales missed forecasts. Netflix Inc. (NFLX), the largest video-subscription service, tumbled 23 percent after raising doubts on user growth. Caterpillar Inc., the world’s largest maker of construction and mining equipment, and Boeing (BA) Co., a planemaker, gained at least 2 percent.
The S&P 500 slid 0.3 percent to 1,335.03 at 11:28 a.m. New York time. The benchmark gauge has lost 3 percent in four days. The Dow Jones Industrial Average rose 44.69 points, or 0.4 percent, to 12,662.01. The Nasdaq Composite Index lost 0.5 percent to 2,850.13. Trading in S&P 500 companies was up 20 percent from the 30-day average at this time of day.
“There’s a huge amount of uncertainty out there,” said Rob McIver, co-portfolio manager at Jensen Investment Management in Lake Oswego, Oregon. His firm manages $5.5 billion. “It’s a somewhat anemic U.S. recovery. You have the eurozone blowing up again. And you see that starting to be reflected in corporate results. It’s certainly a difficult environment for investors.”
The S&P 500 erased earlier gains as data showed demand for new U.S. homes unexpectedly dropped in June from a two-year high, indicating the housing recovery will be uneven. Earnings at 71 percent of the 196 S&P 500 companies which reported second-quarter results have beaten analysts’ estimates, according to data compiled by Bloomberg.
By Rita Nazareth
Read More: Bloomberg
Monday, 23 July 2012
U.S. Stocks Decline on Concern Europe Crisis Is Worsening
U.S. stocks declined, following a two-week advance in the Standard & Poor’s 500 Index, amid concern Europe’s debt crisis is deepening and after a Chinese central-bank adviser said economic growth may slow further.
Morgan Stanley (MS) and Bank of America Corp. (BAC) dropped at least 1.5 percent, following a tumble in European lenders, as Spanish bond yields surged on expectations regional governments may ask for aid. Freeport-McMoRan (FCX) Copper & Gold Inc. slid 3.7 percent, pacing losses in commodity producers, amid concern about lower Chinese demand. McDonald’s Corp. (MCD), the world’s largest restaurant chain, fell 3.5 percent as profit trailed estimates.
The S&P 500 lost 1.8 percent to 1,338.22 at 9:46 a.m. New York time. The Dow Jones Industrial Average fell 234.24 points, or 1.8 percent, to 12,588.33. Trading in S&P 500 companies was up 36 percent from the 30-day average at this time of day.
“Nothing is really fixed in Europe,” said John Manley, chief equity strategist for Wells Fargo Advantage Funds in New York. His firm oversees $201 billion. “The Spanish situation is chronic. And it’s not just Spain. This isn’t over.”
Stocks joined a global slump before the arrival in Athens tomorrow of Greece’s troika of international creditors -- the European Commission, the European Central Bank and the International Monetary Fund. In Spain, Catalonia joined a list of regions that may tap aid from the central government. Spain’s 10-year yields surged above 7.5 percent for the first time.
Song Guoqing, an academic member of the People’s Bank of China monetary policy committee, predicted the nation’s expansion may cool to 7.4 percent this quarter. He also warned that a decline in producer prices in tandem with consumer inflation may hurt investment returns of industrial companies.
By Rita Nazareth
Read More: Bloomberg
Morgan Stanley (MS) and Bank of America Corp. (BAC) dropped at least 1.5 percent, following a tumble in European lenders, as Spanish bond yields surged on expectations regional governments may ask for aid. Freeport-McMoRan (FCX) Copper & Gold Inc. slid 3.7 percent, pacing losses in commodity producers, amid concern about lower Chinese demand. McDonald’s Corp. (MCD), the world’s largest restaurant chain, fell 3.5 percent as profit trailed estimates.
The S&P 500 lost 1.8 percent to 1,338.22 at 9:46 a.m. New York time. The Dow Jones Industrial Average fell 234.24 points, or 1.8 percent, to 12,588.33. Trading in S&P 500 companies was up 36 percent from the 30-day average at this time of day.
“Nothing is really fixed in Europe,” said John Manley, chief equity strategist for Wells Fargo Advantage Funds in New York. His firm oversees $201 billion. “The Spanish situation is chronic. And it’s not just Spain. This isn’t over.”
Stocks joined a global slump before the arrival in Athens tomorrow of Greece’s troika of international creditors -- the European Commission, the European Central Bank and the International Monetary Fund. In Spain, Catalonia joined a list of regions that may tap aid from the central government. Spain’s 10-year yields surged above 7.5 percent for the first time.
Song Guoqing, an academic member of the People’s Bank of China monetary policy committee, predicted the nation’s expansion may cool to 7.4 percent this quarter. He also warned that a decline in producer prices in tandem with consumer inflation may hurt investment returns of industrial companies.
By Rita Nazareth
Read More: Bloomberg
Tuesday, 17 July 2012
Bernanke Predicts Slow Progress on Unemployment
Federal Reserve Chairman Ben S. Bernanke said progress in reducing unemployment is likely to be “frustratingly slow” and repeated the Fed is ready to take further action to boost the recovery.
“The U.S. economy has continued to recover, but economic activity appears to have decelerated somewhat during the first half of this year,” Bernanke said today in testimony for delivery to the Senate Banking Committee in Washington. The Fed is “prepared to take further action as appropriate to promote a stronger economic recovery,” he said.
In response to questions, Bernanke said the central bank’s easing tools include further purchases of assets, including mortgage-backed securities, reducing the interest rate that the Fed pays on reserves that banks keep with the Fed and altering the communications on the outlook for interest rates.
Bernanke said growth is slowing as business investment cools in response to the European crisis and the prospect of fiscal tightening in the U.S. At the same time, households are restraining spending as unemployment remains elevated and credit is hard to get.
Bernanke and his colleagues on the Federal Open Market Committee are considering whether the economy will need additional stimulus to reduce a jobless rate stuck above 8 percent since February 2009. Minutes of their June meeting show that a few participants believed the Fed will need to do more, while several others said new easing would be warranted if growth slows, risks intensify or inflation seems likely to fall persistently below the Fed’s 2 percent target.
By Joshua Zumbrun and Craig Torres
Read More: Bloomberg
“The U.S. economy has continued to recover, but economic activity appears to have decelerated somewhat during the first half of this year,” Bernanke said today in testimony for delivery to the Senate Banking Committee in Washington. The Fed is “prepared to take further action as appropriate to promote a stronger economic recovery,” he said.
In response to questions, Bernanke said the central bank’s easing tools include further purchases of assets, including mortgage-backed securities, reducing the interest rate that the Fed pays on reserves that banks keep with the Fed and altering the communications on the outlook for interest rates.
Bernanke said growth is slowing as business investment cools in response to the European crisis and the prospect of fiscal tightening in the U.S. At the same time, households are restraining spending as unemployment remains elevated and credit is hard to get.
Bernanke and his colleagues on the Federal Open Market Committee are considering whether the economy will need additional stimulus to reduce a jobless rate stuck above 8 percent since February 2009. Minutes of their June meeting show that a few participants believed the Fed will need to do more, while several others said new easing would be warranted if growth slows, risks intensify or inflation seems likely to fall persistently below the Fed’s 2 percent target.
By Joshua Zumbrun and Craig Torres
Read More: Bloomberg
U.S. Stocks Advance Ahead of Bernanke’s Testimony
U.S. stocks rose, rebounding from yesterday’s drop, amid bets Federal Reserve Chairman Ben S. Bernanke will hint at more stimulus during testimony to Congress.
The Standard & Poor’s 500 Index (SPX) gained 0.4 percent to 1,358.84 as of 9:30 a.m. in New York. The U.S. equity benchmark lost 0.2 percent yesterday. The Dow Jones Industrial Average added 30.35 points, or 0.2 percent, to 12,757.56 today.
“The market is looking for the Fed chairman to be fairly definitive,” Jim Russell, the Cincinnati-based chief equity strategist at U.S. Bank Wealth Management, which oversees about $103 billion, said in a phone interview. “Certainly the CPI numbers give the Fed ample room to be even more accommodative than what they’ve done before. They have room to be aggressive.”
Bernanke will deliver his semi-annual report on the economy and monetary policy before Congress today and tomorrow. Data yesterday showing a contraction in June retail sales kindled speculation the Fed will introduce more measures to support the world’s largest economy. The cost of living in the U.S. was little changed in June, a sign inflation may stay subdued.
No change in the consumer-price index followed a 0.3 percent drop in May, a Labor Department report showed today in Washington. The measure matched the median forecast of economists in a Bloomberg News survey. The so-called core measure that excludes volatile food and fuel costs rose 0.2 percent for a fourth month.
By Inyoung Hwang
Read More: Bloomberg
The Standard & Poor’s 500 Index (SPX) gained 0.4 percent to 1,358.84 as of 9:30 a.m. in New York. The U.S. equity benchmark lost 0.2 percent yesterday. The Dow Jones Industrial Average added 30.35 points, or 0.2 percent, to 12,757.56 today.
“The market is looking for the Fed chairman to be fairly definitive,” Jim Russell, the Cincinnati-based chief equity strategist at U.S. Bank Wealth Management, which oversees about $103 billion, said in a phone interview. “Certainly the CPI numbers give the Fed ample room to be even more accommodative than what they’ve done before. They have room to be aggressive.”
Bernanke will deliver his semi-annual report on the economy and monetary policy before Congress today and tomorrow. Data yesterday showing a contraction in June retail sales kindled speculation the Fed will introduce more measures to support the world’s largest economy. The cost of living in the U.S. was little changed in June, a sign inflation may stay subdued.
No change in the consumer-price index followed a 0.3 percent drop in May, a Labor Department report showed today in Washington. The measure matched the median forecast of economists in a Bloomberg News survey. The so-called core measure that excludes volatile food and fuel costs rose 0.2 percent for a fourth month.
By Inyoung Hwang
Read More: Bloomberg
Friday, 13 July 2012
U.S. Stocks Rise as JPMorgan Jumps Amid China Speculation
U.S. stocks rose, snapping the longest losing streak since May for the Standard & Poor’s 500 Index, amid speculation China will boost stimulus measures and as JPMorgan Chase & Co. (JPM) rallied after reporting its results.
JPMorgan surged 4.4 percent to lead gains in the Dow Jones Industrial Average after Chief Executive Jamie Dimon said the bank will still likely have record earnings this year even after reporting a $4.4 billion trading loss from its chief investment office in the second quarter. Wells Fargo & Co. (WFC) climbed 2.7 percent after reporting a 17 percent rise in profit. Phillips 66 rallied 3.1 percent after Warren Buffett said Berkshire Hathaway Inc. has invested in the refiner.
The S&P 500 gained 1.2 percent to 1,350.07 at 11:13 a.m. New York time, trimming it weekly loss to 0.3 percent. The index fell for six consecutive days, losing 2.9 percent amid concern over corporate earnings. The Dow added 147.17 points, or 1.2 percent, to 12,720.44. Trading in S&P 500 companies was down 12 percent from the 30-day average at this time of day.
“Six straight days down, the market is looking for something better,” Tom Wirth, who helps manage $1.6 billion as senior investment officer for Chemung Canal Trust Co., based in Elmira, New York, said in a telephone interview. “You started with China and JPMorgan added to it. The confidence is that the trading loss is 95 percent of the way behind us. The company is on the upswing.”
Equities retreated yesterday as concern about a slowdown in the global economic recovery and American corporate earnings overshadowed a rally in Procter & Gamble Co. and homebuilders. Four out of the six S&P 500 companies that reported results this week beat analysts’ earnings estimates while one missed, data compiled by Bloomberg show. Overall, profits probably decreased 1.8 percent in the second quarter, the first drop in almost three years, according to a Bloomberg survey of analysts.
By Lu Wang and Nikolaj Gammeltoft
Read More: Bloomberg
JPMorgan surged 4.4 percent to lead gains in the Dow Jones Industrial Average after Chief Executive Jamie Dimon said the bank will still likely have record earnings this year even after reporting a $4.4 billion trading loss from its chief investment office in the second quarter. Wells Fargo & Co. (WFC) climbed 2.7 percent after reporting a 17 percent rise in profit. Phillips 66 rallied 3.1 percent after Warren Buffett said Berkshire Hathaway Inc. has invested in the refiner.
The S&P 500 gained 1.2 percent to 1,350.07 at 11:13 a.m. New York time, trimming it weekly loss to 0.3 percent. The index fell for six consecutive days, losing 2.9 percent amid concern over corporate earnings. The Dow added 147.17 points, or 1.2 percent, to 12,720.44. Trading in S&P 500 companies was down 12 percent from the 30-day average at this time of day.
“Six straight days down, the market is looking for something better,” Tom Wirth, who helps manage $1.6 billion as senior investment officer for Chemung Canal Trust Co., based in Elmira, New York, said in a telephone interview. “You started with China and JPMorgan added to it. The confidence is that the trading loss is 95 percent of the way behind us. The company is on the upswing.”
Equities retreated yesterday as concern about a slowdown in the global economic recovery and American corporate earnings overshadowed a rally in Procter & Gamble Co. and homebuilders. Four out of the six S&P 500 companies that reported results this week beat analysts’ earnings estimates while one missed, data compiled by Bloomberg show. Overall, profits probably decreased 1.8 percent in the second quarter, the first drop in almost three years, according to a Bloomberg survey of analysts.
By Lu Wang and Nikolaj Gammeltoft
Read More: Bloomberg
Thursday, 12 July 2012
Jobless Claims in U.S. Plunge on Fewer Auto Shutdowns
Fewer Americans than forecast filed first-time claims for unemployment insurance payments last week, reflecting the volatility of applications during the annual auto-plant retooling period.
Applications for jobless benefits decreased by 26,000 in the week ended July 7 to 350,000, the fewest since March 2008, Labor Department figures showed today. Economists forecast 372,000 claims, according to the median estimate in a Bloomberg News survey. Last week’s distortion is likely to unwind slowly over coming weeks, a Labor Department spokesman said as the data was released to the press.
Automakers including Chrysler Group LLC, Ford Motor Co. (F) and Nissan Motor Co. are keeping more plants than normal open during this time of year to fulfill demand and replenish inventories. For that reason, it may take time to determine if the labor market is making any progress.
“You can never take claims at face value because of the July shutdowns,” said Jonathan Basile, an economist at Credit Suisse in New York, who projected the number of applications would drop to 355,000. “We are in a period of uncertainty. This makes for a situation where businesses will hold off on taking risks regarding investment and payrolls.”
Prices of imported goods decreased more than forecast in June as declining energy costs curbed inflation, another Labor Department report showed. The 2.7 percent plunge in the import- price index was the biggest since December 2008 and followed a 1.2 percent drop in May. Prices excluding fuel fell 0.3 percent, the most in almost two years.
By Michelle Jamrisko and Shobhana Chandra
Read More: Bloomberg
Applications for jobless benefits decreased by 26,000 in the week ended July 7 to 350,000, the fewest since March 2008, Labor Department figures showed today. Economists forecast 372,000 claims, according to the median estimate in a Bloomberg News survey. Last week’s distortion is likely to unwind slowly over coming weeks, a Labor Department spokesman said as the data was released to the press.
Automakers including Chrysler Group LLC, Ford Motor Co. (F) and Nissan Motor Co. are keeping more plants than normal open during this time of year to fulfill demand and replenish inventories. For that reason, it may take time to determine if the labor market is making any progress.
“You can never take claims at face value because of the July shutdowns,” said Jonathan Basile, an economist at Credit Suisse in New York, who projected the number of applications would drop to 355,000. “We are in a period of uncertainty. This makes for a situation where businesses will hold off on taking risks regarding investment and payrolls.”
Prices of imported goods decreased more than forecast in June as declining energy costs curbed inflation, another Labor Department report showed. The 2.7 percent plunge in the import- price index was the biggest since December 2008 and followed a 1.2 percent drop in May. Prices excluding fuel fell 0.3 percent, the most in almost two years.
By Michelle Jamrisko and Shobhana Chandra
Read More: Bloomberg
Tuesday, 10 July 2012
European Stocks Climb as U.K. Manufacturing Tops Forecast
European stocks rose for the first time in a week as manufacturing in U.K. and Italy unexpectedly gained and euro-area governments moved to support Spanish banks. U.S. index futures advanced while Asian shares dropped.
ASML Holding NV (ASML) rallied 8.9 percent as Intel Corp. (INTC) agreed to invest as much as $4.1 billion in the maker of semiconductor equipment. Barclays Plc (BARC) added 2.1 percent after Chairman Marcus Agius said the bank’s former chief executive officer will forgo bonuses. Ipsen SA (IPN) plunged 10 percent after U.S. regulators put two of its clinical trials on hold.
The Stoxx Europe 600 Index (SXXP) climbed 1 percent to 256.07 at 12:34 p.m. in London. The gauge has risen for five straight weeks, the longest winning streak since January, as the region’s policy makers eased repayment rules for Spanish banks and relaxed conditions for possible aid to Italy. Standard & Poor’s 500 Index futures increased 0.3 percent today, while the MSCI Asia Pacific Index slipped 0.1 percent.
“The data out of both Italy and U.K. have been better than expected,” said Markus Huber, head of German sales at ETX Trading in London. “The market has been starved of any kind of good news, so this is welcome.”
U.K. factory output rose 1.2 percent in May from the previous month, the Office for National Statistics said today in London. The median forecast of 26 economists in a Bloomberg survey was for a decline of 0.1 percent. Overall industrial output increased 1 percent.
By Namitha Jagadeesh
Read More: Bloomberg
ASML Holding NV (ASML) rallied 8.9 percent as Intel Corp. (INTC) agreed to invest as much as $4.1 billion in the maker of semiconductor equipment. Barclays Plc (BARC) added 2.1 percent after Chairman Marcus Agius said the bank’s former chief executive officer will forgo bonuses. Ipsen SA (IPN) plunged 10 percent after U.S. regulators put two of its clinical trials on hold.
The Stoxx Europe 600 Index (SXXP) climbed 1 percent to 256.07 at 12:34 p.m. in London. The gauge has risen for five straight weeks, the longest winning streak since January, as the region’s policy makers eased repayment rules for Spanish banks and relaxed conditions for possible aid to Italy. Standard & Poor’s 500 Index futures increased 0.3 percent today, while the MSCI Asia Pacific Index slipped 0.1 percent.
“The data out of both Italy and U.K. have been better than expected,” said Markus Huber, head of German sales at ETX Trading in London. “The market has been starved of any kind of good news, so this is welcome.”
U.K. factory output rose 1.2 percent in May from the previous month, the Office for National Statistics said today in London. The median forecast of 26 economists in a Bloomberg survey was for a decline of 0.1 percent. Overall industrial output increased 1 percent.
By Namitha Jagadeesh
Read More: Bloomberg
Friday, 6 July 2012
Payrolls in U.S. Rose 80,000 in June; Jobless Rate 8.2%
Employers in the U.S. hired fewer workers than forecast in June, showing the labor market is making scant progress toward reducing joblessness.
Payrolls rose 80,000 last month after a 77,000 increase in May, Labor Department figures showed today in Washington. Economists projected a 100,000 gain, according to the median estimate in a Bloomberg News survey. The unemployment rate held at 8.2 percent. Private employment, which excludes government agencies, increased 84,000 in June, the weakest in 10 months.
Stocks fell on concern hiring has shifted into a lower gear, restricting consumer spending and leaving the economy more vulnerable to a global slowdown. The figures underscore concern among some Fed policy makers that growth isn’t fast enough to lower unemployment stuck above 8 percent since February 2009.
“The job market is soft,” said David Resler, chief economic adviser at Nomura Securities International Inc., who correctly forecast the payrolls gain. “I’d characterize our reaction as much the same way the Fed will react -- not surprised but disappointed. It’s just not the kind of growth we need to see at this stage in the business cycle.”
The Standard & Poor’s 500 Index fell 0.9 percent to 1,356.01 at 9:39 a.m. in New York. The yield on the benchmark 10-year Treasury note dropped to 1.56 percent from 1.60 percent late yesterday.
By Alex Kowalski
Read More: Bloomberg
Payrolls rose 80,000 last month after a 77,000 increase in May, Labor Department figures showed today in Washington. Economists projected a 100,000 gain, according to the median estimate in a Bloomberg News survey. The unemployment rate held at 8.2 percent. Private employment, which excludes government agencies, increased 84,000 in June, the weakest in 10 months.
Stocks fell on concern hiring has shifted into a lower gear, restricting consumer spending and leaving the economy more vulnerable to a global slowdown. The figures underscore concern among some Fed policy makers that growth isn’t fast enough to lower unemployment stuck above 8 percent since February 2009.
“The job market is soft,” said David Resler, chief economic adviser at Nomura Securities International Inc., who correctly forecast the payrolls gain. “I’d characterize our reaction as much the same way the Fed will react -- not surprised but disappointed. It’s just not the kind of growth we need to see at this stage in the business cycle.”
The Standard & Poor’s 500 Index fell 0.9 percent to 1,356.01 at 9:39 a.m. in New York. The yield on the benchmark 10-year Treasury note dropped to 1.56 percent from 1.60 percent late yesterday.
By Alex Kowalski
Read More: Bloomberg
Thursday, 5 July 2012
ECB Cuts Main Rate to Record Low, Deposit Rate to Zero
The European Central Bank cut interest rates to a record low and said it won’t pay anything on overnight deposits as the sovereign debt crisis threatens to drive the euro region into recession.
Some “downside risks to the euro-area economic outlook have materialized,” ECB President Mario Draghi said at a press conference in Frankfurt after lowering the main refinancing rate and the deposit rate by 25 basis points to 0.75 percent and zero respectively. “Economic growth in the euro area continues to remain weak with heightened uncertainty weighing on both confidence and sentiment,” Draghi said.
With Europe’s debt crisis curbing growth across the continent and damping the global outlook, the ECB was under pressure to ease monetary conditions, even though Draghi last month voiced misgivings about the effectiveness of a rate reduction. While today’s moves may not stimulate demand, they will lower borrowing costs for struggling banks and could build on the confidence boost euro-area governments delivered last week when they took steps toward a deeper economic union.
By Jeff Black and Jana Randow
Read More: Bloomberg
Some “downside risks to the euro-area economic outlook have materialized,” ECB President Mario Draghi said at a press conference in Frankfurt after lowering the main refinancing rate and the deposit rate by 25 basis points to 0.75 percent and zero respectively. “Economic growth in the euro area continues to remain weak with heightened uncertainty weighing on both confidence and sentiment,” Draghi said.
With Europe’s debt crisis curbing growth across the continent and damping the global outlook, the ECB was under pressure to ease monetary conditions, even though Draghi last month voiced misgivings about the effectiveness of a rate reduction. While today’s moves may not stimulate demand, they will lower borrowing costs for struggling banks and could build on the confidence boost euro-area governments delivered last week when they took steps toward a deeper economic union.
By Jeff Black and Jana Randow
Read More: Bloomberg
Sunday, 1 July 2012
China’s Manufacturing Growth Weakens as New Orders Drop
China’s manufacturing expanded at the weakest pace this year as new orders and export demand dropped, showing the government has yet to arrest an economic slowdown.
The Purchasing Managers’ Index fell to 50.2 in June from 50.4 in May, the Beijing-based National Bureau of Statistics and China Federation of Logistics and Purchasing said. That compares with the 49.9 median estimate in a Bloomberg News survey of 24 economists. A reading above 50 indicates expansion.
Today’s data increase the odds Premier Wen Jiabao will introduce more stimulus to stem a deceleration in the world’s second-biggest economy that may have extended into a sixth quarter. The central bank will fine-tune economic policies in a “timely and appropriate” manner, central bank Governor Zhou Xiaochuan said on June 29.
“Although the PMI is slightly better than consensus, the underlying trend still indicates a deterioration in economic activity,” said Shen Jianguang, Hong Kong-based chief Asia economist for Mizuho Securities Asia Ltd. “Further monetary easing is warranted, with two interest-rate cuts and reserve ratio cuts in the second half increasingly likely.”
The People’s Bank of China lowered interest rates last month for the first time in more than three years and reduced the amount of cash banks must set aside as reserves three times starting in November.
By Zheng Lifei
Read More: Bloomberg
The Purchasing Managers’ Index fell to 50.2 in June from 50.4 in May, the Beijing-based National Bureau of Statistics and China Federation of Logistics and Purchasing said. That compares with the 49.9 median estimate in a Bloomberg News survey of 24 economists. A reading above 50 indicates expansion.
Today’s data increase the odds Premier Wen Jiabao will introduce more stimulus to stem a deceleration in the world’s second-biggest economy that may have extended into a sixth quarter. The central bank will fine-tune economic policies in a “timely and appropriate” manner, central bank Governor Zhou Xiaochuan said on June 29.
“Although the PMI is slightly better than consensus, the underlying trend still indicates a deterioration in economic activity,” said Shen Jianguang, Hong Kong-based chief Asia economist for Mizuho Securities Asia Ltd. “Further monetary easing is warranted, with two interest-rate cuts and reserve ratio cuts in the second half increasingly likely.”
The People’s Bank of China lowered interest rates last month for the first time in more than three years and reduced the amount of cash banks must set aside as reserves three times starting in November.
By Zheng Lifei
Read More: Bloomberg
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