US stocks plunge in volatile trade

NEW YORK: US stocks tumbled Friday, accelerating their losses after a flurry of mixed indicators sparked volatile trade in the last session of the month.

The Dow Jones Industrial Average shed 208.96 points (1.36 per cent) at 15,115.57.

The broad-based S&P 500 dived 23.67 (1.43 per cent) to 1,630.74, while the tech-rich Nasdaq Composite lost 35.39 (1.01 per cent) at 3,455.91.

The indices plunged more than 1.0 per cent in late trade as the "fear index" measuring market volatility finished at its highest level since mid-April.
The market was hammered by "a war between the differing readings on the US economic data," said Gregori Volokhine of Meeschaert New York.

The Commerce Department reported that consumer spending dropped by 0.2 per cent last month, the first monthly fall since May 2012 and a signal that growth slowed at the beginning of the second quarter.

Offsetting that was a jump in the Chicago area PMI index to 58.7, its highest since March 2012, and the University of Michigan consumer confidence barometer, which rose to a better-than-expected 83.7, the highest since July 2007.

Jon Ogg of 24/7 WallSt. said the Chicago PMI reading was not as strong as the headline number suggested, pointing to comments from those surveyed in the region.

"The commentary from the ISM Chicago appears to be far more cautious than the numbers might have led you to believe," Ogg said.

Among top-traded stocks, insurer AIG tanked 3.8 per cent, Amazon rose 0.9 per cent and Morgan Stanley edged up 0.3 per cent.

Facebook added to its 5.3 per cent gain Thursday, rising almost 3.0 per cent on the back of analyst upgrades.

A day after their bidding war for broadband carrier Clearwire heated up, Dish Networks fell 2.5 per cent while Sprint lost 0.5 per cent. Clearwire shares dropped 0.4 per cent.

Krispy Kreme Doughnuts soared 21.5 per cent to US$17.32 after reporting a 37 per cent jump in fiscal first quarter net income and revenue up 11.2 per cent. The donuts chain also raised its forecast for the full year.

Monsanto shares plunged 4.3 per cent to US$100.64 as the US agriculture giant faced a rising protest over its genetically engineered seeds after an unapproved modified wheat strain was found on an Oregon farm.

Computer chip maker Omnivision Technologies soared 19.2 per cent after it turned in a strong jump in profits for its fiscal fourth quarter, to US$8.9 million from US$2.7 million a year earlier, on a 54 per cent climb in revenues. -- AFP

but take a look at Vincent Tan"s Stcoks
http://www.btimes.com.my/Current_News/BTIMES/articles/Brjaya/Article/

Wall St Week Ahead: The market is oversold, but major signs say "sell"

Wall St Week Ahead: The market is oversold, but major signs say "sell"

NEW YORK (Reuters) - Normally a big decline would set up Wall Street for a technical rebound. But that may not be the case next week, even after the market posted its worst weekly loss for the year and the S&P fell for six straight sessions.
With the corporate earnings season drawing to an end and recent U.S. economic data raising doubts about the pace of growth, the S&P 500, which is down 7.3 percent so far in May, could decline further next week as concerns about the financial health of Europe persist.
"What has changed in the world since April' We went from hearing a constant refrain that the world is awash in money and markets must go higher to hearing nobody wants to take any risk. ... All in a week," said Peter Cecchini, global head of institutional equity derivatives at Cantor Fitzgerald & Co in New York.

Full text

US market 16.3.2010

US MARKET
Mixed finish for stocks
Stocks ended mixed Monday, fighting back from big losses, as investors weighed Moody's warning about the United States' AAA rating and a proposed bank regulation bill ahead of Tuesday's Federal Reserve meeting. Stocks had tumbled through the early afternoon, but managed to trim losses by the close. The Dow Jones industrial average gained 0.2%
(+17.5 pts, close 10,642.5). The Nasdaq lost 0.2% (-5.5 pts, close 2,362.2) and the S&P 500 lost 0.1% (+0.5 pts, close 1,150.5). U.S. light crude oil for April delivery fell US$1.44 to US$79.80 a barrel on the New York Mercantile Exchange. (CNNmoney)
*******
Higher industrial production points to more investment
Industrial production unexpectedly rose in February, due in part to gains in demand for computers and semiconductors that signal the pickup in U.S. business investment is being sustained. Output climbed 0.1%, the eighth consecutive increase, as utility use and mining increased, figures from the Federal Reserve showed yesterday in Washington. Economists forecast industrial production would be unchanged after increasing 0.9% the prior month, according to the median of 60 projections in a Bloomberg News survey. Estimates in the survey ranged from gains of 0.5% to a 0.7% decline. (Bloomberg)
********
Manufacturing in New York expands for eighth month
Manufacturing in the New York region expanded in March for an eighth straight month, indicating factories are sustaining production and lifting the U.S. economy. The Federal Reserve Bank of New York’s general economic index fell to 22.9 this month, in line with the median forecast of economists surveyed by Bloomberg News, from 24.9 in February. Readings
above zero signal growth in the so-called Empire State Index that covers New York and parts of New Jersey and Connecticut. The report showed orders, sales and employment increased in March, a sign that manufacturing gains may last for months and help spur the rest of the economy. Factories added workers to payrolls in the first two months of 2010 after companies replenished inventories that were drawn down at a record pace last year. Economists forecast the New York Fed’s index would decrease to 22 according to the median of 40 projections in a Bloomberg News survey. Estimates ranged from 15 to 29. (Bloomberg)
*******
Homebuilder index declined to 15 in March
Confidence among U.S. homebuilders unexpectedly declined in March, a sign the housing recovery is having trouble gaining momentum. The National Association of Home Builders/Wells Fargo index of builder confidence dropped to 15 this month from 17 in February, the Washington-based group said yesterday. A reading below 50 means most respondents
view conditions as poor. The report showed traffic of prospective buyers dropped to a one-year low, indicating an extension of a tax credit for purchases is sparking little interest. Projections of record foreclosures this year, a lack of job growth and an end to Federal Reserve purchases of mortgage-backed debt are hurdles for the real estate market. The builder confidence index was forecast to hold at 17, according to the median forecast of 43 economists surveyed by Bloomberg News. Projections ranged from 15 to 19. The index, first published in January 1985, averaged 15 last year. (Bloomberg)
********

Europe: Employment in record decline
The number of people employed in the 16-nation Eurozone fell by a record 2.7m last year, as the economic crisis took itstoll, official figures showed. There were 347,000 fewer Eurozone employees in 4QCY09, according to the European Unionstatisticians Eurostat, a sign that the payroll losses were losing pace at least. Employment fell in the Eurozone fell by 1.8%
last year, after a rise of 0.9% in 2008. In the 27-nation EU as a whole, over 4.02m fewer people were in gainful employment. (AFP)

Stocks Falter Despite Giddy GDP --another down day for BURSA tomorrow?

Stocks Falter Despite Giddy GDP
By Melinda Peer 01/29/10 - 05:27 PM EST

NEW YORK (TheStreet) -- Stocks slumped on January's last trading day despite Friday's robust fourth-quarter GDP growth and a slew of strong earnings reports. The major averages put in their worst month since February 2009.
More on AMZN
DOWNStocks erased earlier gains made on a strong GDP report as U.S. indices finished the week -- and the month -- in the red.
The Dow Jones Industrial Average shed nearly 106 points this week, or 1% and finished the month 1% lower. The S&P 500 lost 18 points, or 1.6%, on the week and slumped 3.7% this month while the Nasdaq surrendered 58 points, or 2.6%, weekly and lost 5.5% in January.
On Friday, the Dow Jones Industrial Average lost 53 points, or 0.5%, to close at 10,067. The S&P 500 shed 11 points, or 1%, at 1074 and the Nasdaq finished down by 32 points, or 1.5%, at 2147.
"Despite earnings, markets have been taking their cues from overseas all week -- whether it's been concerns about China or Greece -- there's been a lot of questions about where growth is going to come from," said Mike Sokoll, director of Nasdaq OMX's market intelligence desk. "So even though we had a strong GDP number today, market gains didn't hold. I think perhaps people are wondering whether this is just stimulus juice and whether growth can hold up."

>>Microsoft Sees Lower IT Spending
The tech sector led the declines, with key tech stocks among the Dow's worst performers. Microsoft, Boeing(BA Quote) and Intel(INTC Quote) were the day's biggest duds, with Hewlett-Packard(HP Quote) and IBM(IBM Quote) not far behind.
"Tech has been one of the market's leading sectors, so they're a likely place to take profits," Sokoll added.
Shares of Microsoft(MSFT Quote), Sirius XM Radio(SIRI Quote), Qualcomm(QCOM Quote) and Intel were seeing heavy volume on the Nasdaq, with only Sirius trading in green territory.
An 8% decline in Microsoft's business sales appeared to spark fears that weak enterprise spending could flatten future technology growth.

US TUMBLES & other news from EUROPE

Stocks trimmed losses by the close Thursday, but remained deep in the red, with techs falling after cautious outlooks from Qualcomm and Motorola. Ongoing worries about the labour market also gave investors a reason to retreat. Stock declines were broad based, with 24 of 30 Dow components falling. Weaker-than-expected economic readings on durable goods orders
and unemployment were also in play, overshadowing President Obama's push for jobs. Ford Motor's first annual profit in 4 years and other positive profit news were mostly ignored. Later in the day, Fed Chairman Ben Bernanke was confirmed for a second term after heavy lobbying by Democrats and the Obama administration. The Dow Jones industrial average lost 1.1% (-
115.7 pts, close 10,120.5). The Nasdaq lost 1.9% (-42.4 pts, close 2,179.0) and the S&P 500 lost 1.2% (-13.0 pts, close 1,084.5). U.S. light crude oil for February delivery fell 23 cents to settle at US$73.44 a barrel on the New York Mercantile Exchange. (CNNmoney)
* * * * *
Orders for capital goods rose in December, and more Americans than anticipated filed claims for unemployment benefits last week, indicating business investment is making a comeback while the job market stagnates. Bookings for durable goods excluding transportation equipment climbed 0.9% last month, exceeding the median forecast of economists surveyed by Bloomberg News, figures from the Commerce Department showed yesterday in Washington. Orders for durable goods excluding transportation equipment were projected to rise 0.5%, according to the survey median. Forecasts ranged from a 0.5% decline to a 3.1% increase. Total orders increased 0.3%, less than anticipated and suppressed by an unexpected 38% plunge in demand for civilian aircraft. Initial jobless applications fell to 470,000 in the week ended Jan. 23 from 478,000 the
prior week, the Labour Department said. Initial jobless claims were forecast to decline to 450,000 from a previously reported 482,000 the week before, according to the median estimate of 42 economists surveyed by Bloomberg. Estimates ranged from 400,000 to 480,000. (Bloomberg)
* * * * *
Ben S. Bernanke won Senate approval for a second term as Federal Reserve chairman, as supporters who credited his actions to stem the financial crisis and recession overcame opponents saying he failed to prevent them. The Senate voted 70 to 30 to confirm the 56-year-old former Princeton University professor, the narrowest margin since the chamber started
confirming Fed chiefs in 1978. Opponents said Bernanke failed to head off the worst financial crisis since the Great Depressionand then put taxpayer money at risk by participating in rescues of firms including American International Group Inc. and Citigroup Inc. Supporters, including some who criticized his record on bank supervision, credited Bernanke with averting a
deeper recession by slashing interest rates and pumping US$1trn into the economy. (Bloomberg)
* * * * *
German unemployment rose for the first time in seven months as a weakening economic recovery and the coldest January in 23 years forced companies to cut jobs. The number of people out of work this month climbed a seasonally adjusted 6,000 to 3.43m, the first increase since June, the Nuremberg-based Federal Labour Agency said yesterday. Economists
forecast an increase of 15,000, according to the median of 28 estimates in a Bloomberg News survey. The jobless rate rose to 8.2% from 8.1%. Rising joblessness in Germany underscores the stumbling rally in Europe’s biggest economy after it emerged from recession in 2Q09. While the export outlook is improving, investor and consumer confidence declined in January, and the
recovery remains “fragile,” Economy Minister Rainer Bruederle said Wednesday. January is set to be the coldest recorded since 1987, disrupting construction and transport, the German Weather Service said. Canals all over Germany have been frozen, interrupting shipments of steel, coal and grain. (Bloomberg)
* * * * *
European confidence in the economic outlook improved for a 10th month in January as reviving global demand helped stoke exports and bolstered earnings across the 16-nation euro region. An index of executive and consumer sentiment increased to 95.7 from a revised 94.1 in December, the European Commission in Brussels said yesterday. Economists expected confidence to rise to 92.3 from a previously reported December reading of 91.3, the median of 29 forecasts in a
Bloomberg News survey showed. Signalling a revival in production, capacity utilization rose for a second quarter, yesterday’s report showed. The index, compiled every three months, increased to 72.4 from 71. The euro region may grow 1% this year, the International Monetary Fund said on Jan. 26. (Bloomberg)

US & EUROPE NEWS----BAD!

Stocks tumbled Thursday after the Obama administration announced a proposal to increase regulation of the nation's biggest financial firms, including limiting the size and scope of their trading operations. Stocks had fallen through the morning as lingering worries about China's lending practices hit commodities and the broader market. Reports showing a rise in jobless
claims and a drop in manufacturing activity added to the pressure, overshadowing Goldman Sachs' better-than-expected profit report. But declines accelerated as investors geared up for and then dissected the White House's afternoon announcement. The Dow Jones industrial average lost 2.0% (-213.3 pts, close 10,389.9). The Nasdaq lost 1.1% (-25.6 pts, close 2,265.7) and the S&P 500 lost 1.9% (-21.6 pts, close 1,116.5). U.S. light crude oil for February delivery fell US$1.66 to settle at US$76.08 a barrel on the New York Mercantile Exchange. (CNNmoney)
* * * * *
More Americans than anticipated filed claims for unemployment benefits last week, reflecting a backlog of applications from the year-end holidays. Initial jobless claims rose by 36,000 to 482,000 in the week ended Jan. 16, the highest level in two months, from 446,000 the prior week, Labour Department figures showed yesterday in Washington. The jump was due to an “administrative” accumulation from late December and early Januaryholidays, and did not reflect “economic” reasons, a Labour Department spokesman said. Initial jobless claims were forecast to decline to 440,000 from 444,000 the week before, according to the median estimate of 40 economists surveyed by Bloomberg. Estimates ranged from 430,000 to 457,000. Continuing claims fell by 18,000 to 4.6m in the week ended Jan. 9. The continuing claims figure does not include the number of Americans receiving extended benefits under federal programs. (Bloomberg)
* * * * *
Bundesbank President Axel Weber said it’s unlikely that the German economy, Europe’s largest, stagnated in 4Q09, striking a more optimistic tone than the country’s statistics office. “It’s not likely that economic growth in Germany was flat in the fourth quarter,” he told reporters in Berlin yesterday. At the same time, “I can’t rule out flat growth in Germany in the first
quarter.” The German economy was probably unchanged in terms of growth in 4Q09, the Federal Statistics Office said on Jan. 13, capping the worst year for the country since World War II. Gross domestic product fell 5% in 2009, a sharper decline than economists had estimated, after expanding 1.3% in 2008. The Bundesbank said last month that the outlook has “brightened
perceptibly,” predicting 1.6% German growth this year and 1.2% in 2011. Still, unemployment is set to rise and the strong euro may hurt Germany’s export industry. (Bloomberg)
* * * * *
Expansion in Europe’s service and manufacturing industries unexpectedly slowed in January, adding to signs the pace of the economy’s recovery may weaken. A composite index based on a survey of purchasing managers in both industries in the 16-nation euro region fell to 53.6 from 54.2 in December, London-based Markit Economics said yesterday in an initial estimate. Economists expected an increase to 54.4, according to the median of 15 estimates in a Bloomberg survey. A reading above 50 indicates expansion. The euro-region economy may lose momentum as the effect of government stimulus measures tapers off and rising unemployment erodes consumers’ willingness to spend. An index of services dropped to 52.3 in January from 53.6 in the previous month, Markit said. A gauge of manufacturing increased to 52 from 51.6 in December. (Bloomberg)
* * * * *

Dubai gets $10B from Abu Dhabi to cover debt---GOOD NEWS?!

DUBAI, United Arab Emirates (AP): Dubai's government says it has received $10 billion in emergency funds from oil-rich neighbor Abu Dhabi that will go toward paying debts owed by its struggling Dubai World conglomerate.
Some $4.1 billion of the money will be used to pay off a pile of debt from Dubai World's Nakheel property division that comes due Monday.
Dubai's ability to repay those funds had been seen as a key test of the debt-laden emirate's creditworthiness.
The UAE central bank, based in the federation's capital Abu Dhabi, also says it is prepared to provide support to local banks.

US GOOD NEWS 2.12.2009

Stocks rallied Tuesday as worries about Dubai's debt problems eased, gold hit a record above US$1,200 and GE andComcast moved closer to a deal on NBC Universal. Investors also kept an eye on auto sales, which were down from Octoberbut mostly higher from a year ago, and the day's better-than-expected economic readings on construction spending andpending home sales. The Dow Jones industrial average added 1.2% (+126.74 pts, close 10,471.58), closing at the highestpoint since Oct. 2, 2008. The S&P 500 index gained 1.2% (+13.23 pts, close 1,108.86), and closed just short of a 14-monthhigh. The Nasdaq composite rose 1.5% (+31.21 pts, close 2,175.81), and remained short of a 14-month high hit a week ago.U.S. light crude oil for January delivery rose US$1.47 to US$78.75 a barrel on the New York Mercantile Exchange.(CNNMoney)

* * * * *

U.S. manufacturing expanded in November for a fourth consecutive month, propelled by gains in orders and exports thatsignal growth will be sustained. The Institute for Supply Management’s manufacturing index fell to 53.6, lower than forecast,from October’s three-year high of 55.7, according to the Tempe, Arizona-based group. Readings above 50 signal expansion.Stocks extended gains, sparked by a report showing factory output in China rose at the fastest pace in five years, liftingearnings prospects at U.S. exporters including Caterpillar Inc. Growing demand from overseas and lean inventories may keepAmerican assembly lines running into 2010, when government stimulus efforts begin to wane. (Bloomberg)

* * * * *

U.S. construction spending was unchanged in October after declining five straight months as rising office and retailvacancies deterred the building of commercial projects. Spending in September, previously reported as an increase, fell 1.6%,according to Commerce Department data released in Washington. Construction spending declined on office buildings andcommercial projects, while homebuilding increased. Construction will be hard-pressed to contribute to the economic recoverywith commercial property vacancy rates rising and builders limiting starts of new homes to help deplete inventories. Privateresidential construction spending rose 4.4% after a 2% decrease in September. Compared with a year earlier, it was down24%. Non-residential construction, including public projects, declined 1.5%. It was down 11% from 12 months before. Publicconstruction decreased 0.4% in October, led by declines in housing, transportation and utility projects. (Bloomberg)

DUBAI'S related news

Stocks tumbled Friday afternoon as fears about the fallout from Dubai's debt problems rattled Wall Street in a thinlytraded half-day session following Thanksgiving. The Dow Jones Industrial average fell 1.5%, (-155 pts, close: 10,309.92), after closing Wednesday at a 13-month high. The S&P 500 (SPX) lost 1.7% (-19 pts, close: 1,091.49). The Nasdaq composite lost 1.7% (-37 pts, close: 2,138.44). All financial markets were closed Thursday for Thanksgiving, and the stock market closed at 1 p.m. Friday. Trading volume was very light with many Wall Street pros taking a five-day weekend. U.S. light crude oil for January delivery fell US$1.91 to US$76.05 a barrel on the New York Mercantile Exchange. (CNNmoney)

* * * *
The Dubai government shocked global investors late Wednesday by saying it needed at least a six-month defermenton the $60bn in debt owed by Dubai World and Nakheel. Dubai World is the government-owned holding company forDubai, the most populous of the seven Emirates that make up the United Arab Emirates. Nakheel is its real estate arm. Dubai'sconstruction boom has helped transform the Emirate into one of the world's financial centres, as well as a tourist hot spot. ButDubai has not been immune to the real estate collapse that has hit the rest of the world, with values plummeting even as priceyprojects continue to get underway. (CNNmoney)

* * * * *

The United Arab Emirates’ central bank eased credit for lenders and said it “stands behind” the country’s local andforeign banks as they face losses from Dubai World’s possible default. Banks will be able to borrow money from the centralbank for half a percentage point above the three-month local benchmark interest rate, the Abu Dhabi-based regulator said inan e-mailed statement yesterday. Dubai World, a state-owned holding company struggling with US$59bn of debt and otherliabilities, said Nov. 25 it would seek a standstill agreement with creditors and an extension of loan maturities until at least May30, 2010. (Bloomberg)*

*******

Malaysian construction companies are not likely to be hit by the debt crisis affecting Dubai, said industry players.Dubai has been struggling to ease fears of a massive debt default after it moved to delay repayments at twoflagship firms, which has shook confidence in the Middle East as a centre for investment. Master BuildersAssociation Malaysia president Ng Kee Leen said most of the Malaysian construction companies had either pulled out or were at the tail-end of completing their construction projects there. (StarBiz)

Plenty of good news for US and UK, so can it last till the year end?

After seesawing through the session, stocks staged a rally to end higher Monday, with financial, technology andcommodity shares leading the charge. Stocks rallied in the morning after a key manufacturing index spiked to its highest levelin three and a-half years in October. An upbeat reading on pending home sales and Ford Motor's big profit report also added tothe morning bounce, giving investors a reason to jump back into stocks after last week's sell-off. But the morning rally turnedsour in the afternoon as weakness in financial, tech and transportation shares spearheaded a broader retreat. By the last hour,short-term investors used the selling as an opportunity to jump back in and scoop up a variety of shares. The Dow Jonesindustrial average gained 0.8% (+76.7 pts, close 9,789.4). The Nasdaq gained 0.2% (+4.1 pts, close 2,049.2) and the S&P 500gained 0.7% (+6.7 pts, close 1,042.9). U.S. light crude oil for December delivery gained US$1.13 to settle at US$78.13 a barrelon the New York Mercantile Exchange. (CNNmoney)

* * * * *

Manufacturing in the U.S. expanded faster than anticipated in October, easing concern the economic recovery will be cutshort once government aid wanes. The Institute for Supply Management’s factory index rose to 55.7, a three-year high andexceeding every estimate of the 70 economists surveyed by Bloomberg News, data from the Tempe, Arizona-based group showed yesterday. Stocks rose as the data showed the world’s largest economy may be gaining momentum after growing lastquarter at the fastest pace in two years. More than US$2trn in global stimulus and a cheaper dollar may also lift salesoverseas, ensuring assembly lines keep humming into 2010 as factories rebuild depleted stockpiles. (Bloomberg)

* * * * *

The number of contracts to buy previously owned homes in the U.S. rose in September for an eighth straight month asAmericans rushed to meet a deadline for a home-buyer tax credit. The index of signed purchase agreements, or pending homesales, rose 6.1% after a 6.4% gain in August, the National Association of Realtors said in Washington. Compared with a yearearlier, pending sales rose 19.8%, without adjusting for seasonal variations. Foreclosure-driven price declines and lowmortgage rates have also pushed sales up this year. Home sales may cool in coming months unless the credit is extendedunder a deal worked out by Senate Democrats. (Bloomberg)

* * * * *

Spending on U.S. construction unexpectedly rose in September as residential builders rushed to finish projects inanticipation of a possible end to the first-time home-buyers tax credit. The 0.8% increase, the biggest since September 2008,followed a revised 0.1% drop in August that was previously reported as a 0.8% gain, Commerce Department figures yesterdayshowed. Spending on residential and government projects climbed, while outlays on private commercial construction slumpedfor a fifth consecutive month. Low borrowing costs, price declines and the government’s US$8,000 tax credit for first-timebuyers stabilized sales and spurred the biggest increase in residential construction in 26 years in the third quarter. Lawmakersare working on extending the credit, which may help support construction even as commercial real estate falters. (Bloomberg)

* * * * *

President Barack Obama said the U.S. economy has pulled “back from the brink” and the government must now “getserious” about reducing debt and helping spur job growth. Addressing a panel of economists and business and labour leaders,the president said the government and private industry must take “bold, innovative action” to bring the unemployment ratedown and lay the foundation for future growth. This was the second time the full board has met to brief the president on ways tocreate jobs and encourage economic growth. Obama formed the advisory panel in February to provide an “independent voiceon economic issues.” Yesterday’s meeting focused on creating jobs through innovation. Obama said if “entrepreneurship” and“dynamism” are encouraged by the government “there’s no reason why we’re not going to be able to not only create jobs, butthe kind of sustainable economic growth that everybody is looking for.” (Bloomberg)

* * * * *

Europe’s manufacturing industry expanded for the first time in 17 months in October, adding to evidence the region ispulling out of the worst recession in more than six decades. An index of manufacturing in the 16-nation euro area rose to 50.7from 49.3 in September, London-based Markit Economics said yesterday, confirming an Oct. 23 estimate for the gauge, whichis based on a survey of purchasing managers. The last time the index was above 50, indicating expansion, was in May 2008.Euro-area confidence in the economic outlook is at the highest since Lehman Brothers Holdings Inc. collapsed, and theInternational Monetary Fund last month forecast that the global economy will expand next year at a faster pace than previouslyprojected. (Bloomberg)

* * * * *

U.K. manufacturing unexpectedly expanded in October at the fastest pace in two years, a sign factory production isrecovering from the economy’s longest contraction on record. A gauge based on a survey of companies rose to 53.7 from 49.9in September, the Chartered Institute of Purchasing and Supply and Markit Economics said yesterday in London. Economistspredicted 50, the median of 30 forecasts in a Bloomberg News survey showed. Readings above 50 indicate expansion.Yesterday’s figures will make the Bank of England’s task tougher as it gauges this week whether the economy needs furtherstimulus. While surveys of manufacturers and services companies have indicated the economy is recovering from the worstrecession since World War II, a report two weeks ago showed it unexpectedly contracted in the third quarter. (Bloomberg)

* * * * *

U.K. house prices rose for a third month in October as increased demand for homes and a lack of properties for salepushed up values, Hometrack Ltd. said. The average cost of a home in England and Wales climbed 0.2% from September to156,400 pounds (US$258,000), the London-based property-research company said in an e-mailed statement yesterday. Houseprices fell 4.2% y-o-y. “The last six months has seen a continued improvement in housing market sentiment on the back ofrising demand and a lack of housing for sale,” said Richard Donnell, director of research at Hometrack. “Prices have firmed andthe discount between sales and asking prices is back to the same level it was at the start of the credit crunch over two yearsago.” Buyers are returning to the property market after home values dropped as much as a fifth from their 2007 peak andinterest rates fell to a record low. (Bloomberg)

And suddenly the bad news surface.....

Stocks tumbled Friday, more than erasing the previous session's gains, as investors dumped a variety of shares at the end ofa rough week and choppy month on Wall Street. Bond prices rallied, sending yields lower, in a classic flight-to-quality. Thedollar was mixed versus other major currencies. Oil and gold prices fell. The Dow Jones industrial average lost nearly 2.5% (-250 pts, close 9,712.73). The Dow lost as much as 278 points earlier. It was the Dow's biggest one-day selloff on a point basissince April 20. The S&P 500 index fell 2.8% (-30 pts, close 1036.19) and the Nasdaq composite shed 2.5% (-52 pts, close2045.11). U.S. light crude oil for December delivery retreated US$2.87 to settle at US$77 a barrel on the New York MercantileExchange after rallying 3% in the previous session. (CNN Money)

* * * * *

Americans cut spending for the first time in five months and a gauge of confidence weakened, signaling consumers willmake a limited contribution to the recovery without government incentives. Consumer spending fell 0.5% in September after a1.4% jump in August, Commerce Department figures showed in Washington. The Reuters/University of Michigan final index ofconsumer sentiment decreased to 70.6 in October from 73.5 the month before. Mounting jobs losses, stagnant incomes andthe expiration of programs such as the cash-for-clunkers auto rebates threaten to hold back household spending as the nationemerges from a recession. (Bloomberg)



CIT Files For Bankruptcy
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CIT filed for bankruptcy Sunday afternoon, in a high-stakes restructuring intended to keep the doors open at one of the U.S.'s largest small-business lenders.
Fallout Forces Scramble for New Sources of Cash
MarketBeat: CIT Default Costs
Asian Stock Markets Decline
Asian share markets were mostly lower, with exporter stocks weighing on the Tokyo market. China's benchmark index bucked the regional trend, rising 0.5%.
Stocks Set to Track Overseas Weakness

ALL the good news from US, thus klse going to follow suit

Stocks rallied Thursday in a broad-based advance as a strong report on economic growth in the third quarter reassured investors that the recovery is on track. The Dow Jones industrial average gained just shy of 2% (+200 pts, close 9,962.58), according to early tallies. It was the Dow's biggest one-day percentage gain since July 15, and came exactly 80 years after Wall Street's darkest day, the Crash of 1929. The S&P 500 index added 2.3% (+23 pts, close 1,066.11), its biggest one-day percentage gain since July 23. The Nasdaq composite climbed 1.8% (+38 pts, close 2,097.55), its biggest one-day percentage gain in about a month. U.S. light crude oil for December delivery recovered from Wednesday's downturn, rising US$2.41 to settle at US$79.87 a barrel on the New York Mercantile Exchange. (CNN Money)

* * * * *

U.S. economy returned to growth in the 3Q after a yearlong contraction as government incentives spurred consumers to spend more on homes and cars. The world’s largest economy expanded at a 3.5% pace from July through September, figures from the Commerce Department showed in Washington. Household purchases climbed 3.4%, the most in two years. Policy makers will now focus on whether the recovery, supported by government spending and tax credits, can be sustained into 2010 and generate jobs. The record US$1.4trn budget deficit means President Barack Obama has little room for maneuver as he tries to keep unemployment from rising above 10%, while Federal Reserve policy makers wind down emergency programs in a bid to prevent a surge in inflation. (Bloomberg)

* * * * *

U.S. household purchases climbed at a 3.4% pace from July through September, the strongest performance in more than two years, the Commerce Department’s report on gross domestic product showed in Washington. The gain helped drain stockpiles at a US$130.8bn rate, a decrease second only to the prior quarter’s record drop. In the first six months of the year, companies shut down assembly lines in a bid to cut inventories as sales plunged. The improvement in demand last quarter caused goods on hand at retailers, wholesalers and manufacturers to continue falling, pointing to a pickup in production that will spur growth even as consumer spending probably cools. (Bloomberg)

US MARKET & NEWS 13.8.2009

Stocks sustained gains Wednesday after the Federal Reserve held interest rates near historic lows and signalled the
economy has finally started to stabilize. Wall Street rallied leading up to the Fed announcement as signs of improvement in the
housing market pushed investors back into stocks following a two-day retreat. The market seesawed a bit after the
announcement, with the Dow, Nasdaq and S&P 500 pushing toward fresh 2009 highs, before trimming those gains by the
close. The Dow Jones industrial average gained 1.3% (+120.2 pts, close 9,361.6). The Nasdaq gained 1.5% (+28.9 pts, close
1,998.7) and the S&P 500 index gained 1.2% (+11.5 pts, close 1,005.8). U.S. light crude oil for September delivery rose 71
cents to settle at US$70.16 a barrel on the New York Mercantile Exchange. (CNNmoney)
* * * * *
The Federal Reserve plans to slow the pace of its purchases of U.S. Treasuries as the recession eases, and signalled
that the US$300bn program will end in October. The program was previously scheduled to end in September. Policy makers
acknowledged signs that the worst recession since the 1930s may be ending, saying that data “suggests that economic activity
is levelling out.” Chairman Ben S. Bernanke’s US$1trn expansion of the Fed’s balance sheet, providing emergency funding for
banks and markets from commercial paper to asset-backed securities, has helped thaw financial markets, which the Fed said
have “improved further in recent weeks.” (Bloomberg)
* * * * *
The U.S. trade deficit widened less than forecast in June, reflecting a second consecutive gain in exports spurred by a
pick-up in economies around the world. The gap increased 4% to US$27bn from US$26bn in May, which was the lowest level
in almost a decade, Commerce Department figures showed yesterday in Washington. Exports gained 2%, helped by stronger
demand for goods such as semiconductors and aircraft engines, while imports rose 2.3%, led by a higher cost for oil.
Increases in both exports and imports signal the worst global slump in the post-World War II era is coming to an end, helping
the U.S. pull out of the recession. Federal Reserve policy makers today committed to keeping rates low to secure an economic
recovery after wrapping up a two-day meeting. The trade gap was projected to widen to US$28.7bn, according to the median
of 70 forecasts in a Bloomberg News survey of economists. Deficit projections ranged from US$31bn to US$25.5bn.
(Bloomberg)
* * * * *
The U.S. budget deficit reached a record for the first 10 months of the fiscal year and broke a monthly high for July as the
recession curbed revenue and the government ramped up spending to rejuvenate the economy. The shortfall so far for the
fiscal year that ends Sept. 30 totalled US$1.27trn compared with a US$389bn year-to-date gap in 2008, the Treasury said
yesterday in Washington. The excess of spending over revenue for July climbed to US$180.7bn compared with a US$102.8bn
gap in July 2008 as the government spent more than in any month in U.S. history. Tax receipts are sliding and spending is
surging even as some economists say the recession may have ended. (Bloomberg)
* * * * *
Home price declines in the U.S. accelerated in 2Q09, dropping by a record 15.6% y-o-y, as foreclosures weighed on values.
The median price of an existing single-family home dropped to US$174,100, the most in records dating to 1979, the National
Association of Realtors said yesterday. Total sales rose 3.8% to a seasonally adjusted annual rate of 4.76m from 1Q09 and fell
2.9% from 2Q08. Prices fell in 129 out of 155 metropolitan areas from a year ago and 39 states experienced sales increases
from 1Q09, the Chicago-based realtors group said. Home prices are falling even as a survey of economists indicates that the
U.S. economy is recovering from the worst recession since the 1930s. The economy will expand 2% or more in four straight
quarters through June, the first such streak in more than four years, according to the median of 53 forecasts in the monthly
Bloomberg News survey. (Bloomberg)
* * * * *
Bank of England Governor Mervyn King said inflation may miss the central

US& GLOBAL MARKET 29.7.2009

Stocks ended mixed Tuesday as investors weighed a weaker-than-expected consumer confidence report and a better-thanexpectedhousing report in the aftermath of a big rally. Stocks have gained for the last two weeks, as investors have breatheda sigh of relief that second-quarter results have been mostly better than expected. The Dow and S&P 500 have added around11.5% and the Nasdaq has gained 12%. But after such a big run in a short period of time, stocks have become vulnerable. TheDow Jones industrial average lost 0.1% (-11.8 pts, close 9,096.7). The Nasdaq gained 0.4% (+7.6 pts, close 1,975.5) and theS&P 500 index lost 0.3% (-2.6 pts, close 979.6). In currency trading, the dollar fell against the euro and fell against theJapanese yen. U.S. light crude oil for September delivery fell US$1.15 to settle at US$67.23 a barrel on the New YorkMercantile Exchange. (CNNmoney)

* * * * *

A gauge of U.S. house prices posted its first monthly gain in three years, but consumer confidence this month fellmore than forecast. The S&P/Case-Shiller home-price index rose 0.5% m-o-m in May, the first gain since July 2006 andbiggest since May of that year, the group said yesterday in New York. The S&P/Case-Shiller home-price index was down17.1% y-o-y, less than projected and the smallest y-o-y drop in nine months. Economists forecast the index would drop 17.9%y-o-y, according to the median of 32 projections in a Bloomberg News survey. The Conference Board’s confidence indexdropped to 46.6, a second consecutive decline, following a reading of 49.3 in June, the New York-based research group said.The figure reached a record low of 25.3 in February. (Bloomberg)

* * * * *

U.K. house prices rose for the first time in 17 months in June, led by gains in London, the Land Registry said yesterday.The average price of a home in England and Wales increased 0.1% m-o-m, the first gain since January 2008, to 153,046pounds (US$253,000), the government agency said in a report on its Web site. Values in the capital rose 2%. The report addsto evidence that the market for residential property is stabilizing while the economy is mired in the worst recession in ageneration. A survey published this week by London-based property researcher Hometrack Ltd. showed prices held their valuefor a third month in July. Half of the 10 regions tracked by the Land Registry showed an increase from the previous month.Yesterday’s national reading is down 14% y-o-y. (Bloomberg)

* * * * *

Japanese manufacturers probably increased production for a fourth month in June, capping the largest quarterly outputexpansion in more than 50 years. Production climbed 2.5% from May, according to the median forecast of economistssurveyed before a Trade Ministry report tomorrow. That would be an 8.3% quarterly gain, the biggest increase since the end ofthe Korean War in 1953. Leaner inventories and US$2.2trn in emergency spending by governments worldwide have stabilizedglobal demand, giving a lift to Japanese exports. Automakers including Mitsubishi Motors Corp., benefiting from subsidies onfuel-efficient cars, are raising production and reinstating overtime. Japan’s output will still be a quarter below last year’s,economists said. (Bloomberg)

* * * * *

China’s rate of inflation may rebound in 2H09, the People’s Bank of China said yesterday, adding that it plans to keeppolicies stable to ensure an economic recovery. China’s economy is at a “critical” stage, the central bank said in a report on itsWeb site. It said the acceleration in growth in 2Q09 from 1Q09 had exceeded expectations. Premier Wen Jiabao and the rulingCommunist Party’s Politburo last week pledged to maintain a “moderately loose” monetary policy, countering speculation thatrecord new loans and surging asset prices will trigger a tightening. Consumer prices fell 1.7% y-o-y in June, the fifth monthlydecline and the biggest drop since 1999. (Bloomberg)

* * * * *

India’s central bank may start reversing its interest-rate cuts in early 2010 as food and energy prices fan inflation, after itkept borrowing costs unchanged yesterday to bolster economic growth. “On the way forward, the Reserve Bank will have toreverse the expansionary measures to subdue inflationary pressures while preserving the growth momentum,” GovernorDuvvuri Subbarao said. Inflation may “creep up” to about 5% by March next year compared with an April estimate of 4%, hesaid. India is vulnerable to inflation as it relies on imported oil and demand for food from its 1.2bn people exceeds supply.Besides being buffeted by higher global commodity costs, inflation in India is also fuelled by congested roads and ports andpower shortages that add to the cost of doing business. (Bloomberg)

US MARKET 27.7.2009

The Nasdaq fell Friday, ending a 13-session winning streak after Microsoft reported a weaker-than-expected quarterly
profit. But the broader market mustered gains at the end of an up week on Wall Street. The Dow Jones industrial
average gained 0.26% (+23.95 pts, close 9,093.24)). The S&P 500 index gained 0.31% (+2.97 pts, close 979.26). The Nasdaq
Composite Index fell 0.39% (-7.64 pts, close 1,965.96). In currency trading, the dollar fell against the euro and the Japanese
yen. US light crude oil for September delivery rose 89 cents to settle at $68.05 a barrel on the New York Mercantile Exchange.
(CNNmoney)
* * * * *
The worst U.S. recession in five decades probably eased in 2Q09 as trade and government stimulus mitigated the damage
from declines in housing, inventories and consumer and business spending, economists said before a report this week. The
world’s largest economy shrank at a 1.5% pace following a 5.5% drop in 1Q09, according to the median forecast of 66
economists surveyed by Bloomberg News ahead of Commerce Department figures due July 31. Other reports may show
orders for long-lasting goods fell and sales of new houses rose. Leaner stockpiles set the stage for a return to growth this
quarter as manufacturing and homebuilding stabilize, while efforts to revive demand globally boost exports. Consumer
spending, which accounts for 70% of the economy, may be slower to recover as unemployment is projected to keep rising and
home values are likely to fall further. (Bloomberg)
* * * * *
Wagers against the Standard & Poor’s 500 Index declined for the first time since May as investors shorted fewer
shares of financial institutions, including a 92% reduction in bets on American International Group Inc. Short interest on the
S&P 500 fell to 9.98bn shares as of July 15, a decrease of 0.2% from two weeks earlier. Financial companies saw the only
decline among 10 industries, with short interest falling 7.1% to 3bn shares. (Bloomberg)

US MARKET 24.7.2009

Stocks rallied Thursday, with the hitting its highest point since November, as investors welcomed better-than-expectedquarterly results and home sales. The Dow Jones industrial average gained 2.1% (+188.0 pts, close 9,069.3). The Nasdaqgained 2.5% (+47.2 pts, close 1,973.6) and the S&P 500 index gained 2.3% (+22.2 pts, close 976.3). In currency trading, thedollar gained against the euro and the Japanese yen. U.S. light crude oil for September delivery rose US$1.76 to settle atUS$67.16 a barrel on the New York Mercantile Exchange. (CNNmoney)

* * * * *

Sales of existing homes in the U.S. rose in June for a third consecutive month, signalling the four-year slump thatprecipitated the financial crisis is ending. Purchases climbed 3.6% to an annual rate of 4.89m, stronger than forecast and thehighest level since October, the National Association of Realtors said yesterday in Washington. Sales gains buttress FederalReserve Chairman Ben S. Bernanke’s remarks this week that the worst housing downturn in eight decades appears to bemoderating. Economists forecast existing-home sales would rise to a 4.84m rate from a previously reported 4.77m for May,according to the median of 68 projections in a Bloomberg News survey. Estimates ranged from 4.7m to 5m. (Bloomberg)

* * * * *

The number of Americans filing claims for unemployment benefits jumped last week from a six-month low asdistortions caused by shifts in the timing of auto-plant shutdowns subsided. Applications rose by 30,000 to 554,000 in the weekended July 18, in line with forecasts, figures from the Labour Department showed yesterday in Washington. Claims had fallenby 93,000 over the previous two weeks. The number of people collecting unemployment insurance decreased to the lowestlevel in three months, also reflecting seasonal issues surrounding closures at carmakers. (Bloomberg)

US & GLOBAL MARKET 23.7.2009

The Nasdaq gained for the 11th straight session Wednesday as investors welcomed Apple's profit results, but concerns about Boeing and Coca-Cola's profits dragged on the Dow. The Dow Jones industrial average lost 0.4% (-34.7 pts, close 8,881.3). The Nasdaq gained 0.5% (+10.2 pts, close 1,926.4) and the S&P 500 index lost 0.1% (-0.5 pts, close 954.1). In currency trading, the dollar gained against the euro and fell versus the Japanese yen. U.S. light crude oil for September
delivery fell 21 cents to settle at US$65.40 a barrel on the New York Mercantile Exchange. (CNNmoney)

* * * * *
Federal Reserve Chairman Ben S. Bernanke said a potential wave of defaults in commercial real estate may present a “difficult” challenge for the economy, without committing to additional steps to aid the market. Bernanke, testifying before the Senate Banking Committee yesterday, urged lenders to modify “problem” mortgages to avert defaults. Christopher Dodd, the Connecticut Democrat who chairs the panel, told Bernanke that “some have suggested” the commercial market “may even dwarf the residential mortgage problems” in the U.S. The state of commercial real estate was one of the most-asked-about subjects in questioning by lawmakers so far in Bernanke’s two days of testimony on the economy. Bernanke said it’s too early
to tell how effective the Fed’s main initiative in the area will be. (Bloomberg)
* * * * *
U.S. home prices had the smallest annual drop in 10 months, signalling the free fall of property values is abating in the three-year housing slump at the centre of a global recession. Prices declined 5.6% y-o-y in May and rose 0.9% m-o-m, the Federal Housing Finance Agency in Washington said yesterday. Economists expected a 0.2% drop for the month, according to
the median of 16 estimates in a Bloomberg survey. Five U.S. regions showed price increases in May from April, the FHFA said. Job losses and record foreclosures have deterred buyers and slashed U.S. home prices 33% since the July 2006 peak, according to the S&P/Case-Shiller index. The highest unemployment since 1983 and the biggest foreclosure rate on record
thwarted government efforts to revive real estate demand. (Bloomberg)
* * * * *
European industrial orders declined more than economists expected in May as the worst recession in six decades curtailed demand for machines and equipment. Orders to industrial companies in the euro region fell 30.1% y-o-y, the European Union’s statistics office in Luxembourg said yesterday. That was the 10th straight drop and followed a record 35.3%
decline in April. Economists forecast a 27.9% fall in May, according to the median of 14 estimates in a Bloomberg survey.From the prior month, May orders fell 0.2%, also more than economists expected. (Bloomberg)

* * * * *
Bank of England policy makers voted unanimously to maintain their asset-purchase program in July, saying there was no clear evidence to support an increase as the risks to the economy had probably diminished. The nine-member Monetary Policy Committee, led by Governor Mervyn King, kept the benchmark interest rate at 0.5% and said they will review the size of
the money-printing plan in light of new economic forecasts in August, according to minutes of the July 9 decision released by the bank yesterday in London. Policy makers didn’t allude to investor expectations for an increase in the plan size, which led to a sell-off in government bonds after the July decision to keep it unchanged. While data suggest the housing market slump now
may have eased and the recession has shown signs of moderating, a recovery has yet to become entrenched in the British economy. (Bloomberg)

* * * * *
The U.K.’s house-price slump will persist until 2012 and hurt consumer spending, the National Institute of Economic and Social Research said. Home values will resume their decline because recent gains were driven by a lack of available homes and the number of mortgages remains 65% lower than before the financial crisis, the London-based institute said yesterday. It also predicts gross domestic product will keep falling until the final quarter of this year. (Bloomberg)

* * * * *
Japanese demand for banks loans fell over the past three months as companies turned to an improving credit market for funding and households cut spending amid the worst recession since World War II. An index of demand for loans by businesses declined to minus 14 in July from 13 in April, the Bank of Japan said in a quarterly survey of loan officers in Tokyo yesterday. Households’ desire to borrow dropped to minus 14, the lowest since the central bank began the report in April 2000. Some Japanese may remain reluctant to take on debt until there are more signs of a sustainable economic recovery. Japanese banks became more willing to lend to companies than they were three months ago, the survey showed. An index of willingness to lend money to large businesses rose to 5 this month from minus 1 in April. (Bloomberg)
* * * * *

US MARKET & NEWS 22.7.2009

Stocks finished higher Tuesday with the Dow ending at a 6-month high after a volatile session in which investors weighed
better-than-expected corporate earnings with Federal Reserve Chairman Ben Bernanke's warning that the economic recovery
would be slow. The Dow Jones industrial average gained 0.8% (+67.8 pts, close 8,915.9). The Nasdaq gained 0.4% (+6.9 pts,
close 1,916.2) and the S&P 500 index gained 0.4% (+3.5 pts, close 954.6). In currency trading, the dollar gained against major
currencies, including the euro, British pound and Japanese yen. U.S. light crude oil for August delivery rose 72 cents to settle
at US$64.72 a barrel on the New York Mercantile Exchange. (CNNmoney)
* * * * *
Federal Reserve Chairman Ben S. Bernanke said while the economy is showing “tentative signs of stabilization,” the
central bank intends to maintain a “highly accommodative” monetary policy for “an extended period.” “The pace of
decline appears to have slowed significantly,” Bernanke said yesterday in semi-annual testimony before the House Financial
Services Committee. At the same time, “in light of the substantial economic slack and limited inflation pressures, monetary
policy remains focused on fostering economic recovery,” he said. Fed officials said in a report submitted as part of Bernanke’s
testimony that policy will be “tightened” when the labour market improves, an economic recovery takes hold and pressures
holding down inflation “diminish.” The comments follow a rally in stocks and a rebound in corporate earnings that have stoked
speculation the worst recession in half a century is ending. (Bloomberg)
* * * * *
Regional Federal Reserve bank directors expressed concern that rising unemployment and loss of wealth from falling
incomes and house prices posed a risk to recovery from the worst recession in at least half a century. The boards of
directors of all 12 regional Fed banks voted to request leaving the so-called discount rate, or the rate on direct loans to
commercial banks, unchanged at 0.5% in meetings before the Fed’s Open Market Committee gathering in June, the central
bank said yesterday. “While pointing to signs of some stabilization in economic conditions, most notably the slowing pace of
decline in GDP, and to modest improvements in financial markets, they generally considered economic activity to be weak and
the financial system to remain somewhat fragile,” the Fed said in minutes of the Board of Governors’ discussions on the
discount rate. (Bloomberg)
* * * * *

US MARKET & NEWS 17.7.2009 the worst is over?

Stocks rallied Thursday, finding momentum in a choppy session, as investors welcomed JPMorgan Chase's better-than expected profit report and geared up reports from tech leaders after the close. After the close, Google reported higher quarterly earnings that topped estimates. IBM reported higher quarterly earnings that topped estimates on lower revenue that missed analysts’ forecasts. The Dow Jones industrial average gained 1.1% (+95.6 pts, close 8,711.8). The Nasdaq gained 1.2% (+22.1 pts, close 1,885.0) and the S&P 500 index gained 0.9% (+8.1 pts, close 940.7). In currency trading, the dollar gained versus the euro and fell versus the yen. U.S. light crude oil for August delivery rose 48 cents to settle at US$62.02 a barrel on the New York Mercantile Exchange. (CNNmoney)

* * * * *
The number of Americans filing claims for unemployment benefits fell last week to the lowest level since January, depressed by shifts in the timing of auto plant shutdowns. Initial jobless claims dropped by 47,000 to 522,000, lower than forecast, in the week ended July 11, from a revised 569,000 the prior week, the Labour Department said yesterday in
Washington. The number of people collecting unemployment insurance plunged by a record 642,000, also reflecting seasonal issues surrounding the closures at carmakers. A Labour analyst said the distortions may play havoc with claims data for another couple of weeks. General Motors Co. and Chrysler Group LLC accelerated shutdowns this year heading into bankruptcy, months before the traditional July closings. Through the gyrations, job losses may subside amid signs the housing and manufacturing slumps are easing. (Bloomberg)

* * * * *

U.S. foreclosure filings hit a record in the first half, a sign that job losses and falling property prices deepened the housing recession, according to RealtyTrac Inc. More than 1.5m properties received a default or auction notice or were seized by banks in the six months through June, the Irvine, California-based seller of default data said yesterday in a statement. That’s a 15%
y-o-y increase. One in 84 U.S. households received a filing. Home prices in 20 major U.S. metropolitan areas dropped 18.1% y-o-y in April, according to the S&P/Case-Shiller index. The unemployment rate rose to 9.5% in June, the highest since 1983, bringing the total number of lost jobs to about 6.5m since the recession started in December 2007, the Labour Department
said. Defaults by subprime borrowers with poor credit histories spurred the housing recession and spread to prime borrowers as home prices and sales declined. One in eight Americans is now late on a payment or already in foreclosure, the Washington-based mortgage group said. (Bloomberg)

* * * * *
The worst U.S. recession in at least five decades may be over at year’s end, said Nouriel Roubini, the New York University economist who predicted the financial crisis. “In many ways the worst is behind us in terms of economic and financial conditions,” Roubini said, cautioning that “the recession might continue through the end of the year.” He said his comments yesterday on the recession ending by year-end were consistent with views he “expressed previously” and that he continues to see a “shallow, below-par and below-trend recovery.” “We should continue with fiscal stimulus and we might need a second one,” Roubini said. There’s still a “meaningful amount of weakness” in labour markets, industrial production and housing, he said. A second stimulus package of as much as US$250bn may be needed sometime early next year, particularly if unemployment goes “well above 10% by the end of the year,” he said. (Bloomberg)

* * * * *
A split among Federal Reserve officials widened last month: Depending on who is doing the forecasting, economic growth will either remain stalled next year or will accelerate to the fastest rate since 1999. Minutes from the Fed’s June meeting show central bankers are less certain than they were in April over how the economy will emerge from the worst recession in a half century. Policy makers have differing assessments of how quickly credit markets will heal, and how effective a US$78bn fiscal stimulus and US$1trn expansion of the Fed’s balance sheet will be, according to the Federal Open Market Committee’s minutes released Wednesday. Central bankers left the benchmark lending rate in a range of zero to 0.25% last month and said the policy rate was likely to remain “exceptionally low” for an “extended period.” The range of projections forn2010 growth showed a gap of 3.2 percentage points, up from a 2.5 percentage-point divide in April. The lowest forecast suggests the economy will grow just 0.8% from 4Q09 to 4Q10; the highest projects 4% growth. (Bloomberg)
* * * * *
Global

US MARKET & NEWS 16.7.2009

Stocks surged Wednesday, with all three major gauges jumping at least 3% after Intel's forecast for a second-half pickup and the Federal Reserve's improved outlook reassured wary investors. Intel reported profit and revenue late Tuesday that dipped from a year ago, but surpassed forecasts. Also, the chipmaker predicted better revenue growth in the third and fourth quarters
thanks to improved demand for personal computers. Both the Dow and Nasdaq saw their best one-day point gains in nearlyMfour months. The S&P 500's gain was the best in two months. The Dow Jones industrial average gained 3.0% (+256.7 pts, close 8,616.2). The Nasdaq gained 3.5% (+63.2 pts, close 1,862.9) and the S&P 500 index gained 3.0% (+26.8 pts, close
932.7). In currency trading, the dollar fell versus the euro and gained versus the yen. U.S. light crude oil for August delivery rose US$2.02 to settle at US$61.54 a barrel on the New York Mercantile Exchange. (CNNmoney)

* * * * *
Industrial production shrank less than forecast and a New York regional factory gauge showed the smallest contraction in more than a year, signalling manufacturing is on the verge of stabilizing. The 0.4% decrease in output at factories, mines and utilities in June was the smallest in eight months, Federal Reserve figures showed yesterday in Washington. The New York Fed’s Empire Index rose to minus 0.6 in July from minus 9.4 the month before. The Commerce
Department said separately consumer prices rose 0.7% last month, spurred by energy costs. (Bloomberg)
* * * * *
The cost of living in the U.S. rose more than forecast in June, led by a jump in energy costs that overshadowed slower price gains for other goods. The consumer price index increased 0.7% after a 0.1% advance in May, the Labour Department said yesterday in Washington. Economists forecast consumer prices rose 0.6 percent, according to the median of 74 projections in a Bloomberg News survey. Excluding food and energy costs, the so-called core index rose 0.2%. Compared with a year earlier, prices fell 1.4%, the biggest drop since January 1950. Declines in consumer spending and business investment are forcing companies to boost incentives or keep a lid on prices in order to move merchandise, and preventing them from passing higher energy costs on to customers. A surge in gasoline costs in recent months is now abating, indicating inflation may moderate as the year progresses. (Bloomberg)

* * * * *
Most Federal Reserve officials judged the economy at risk to further shocks last month even as they rejected an expansion in asset purchases, reflecting doubt at the likely impact of such a move. “Most participants saw the economy as still quite weak and vulnerable to further adverse shocks,” the central bank said in minutes of the Federal Open Market Committee’s June 23-24 meeting released yesterday in Washington. “Although financial market conditions had improved,
credit was still quite tight in many sectors.” Policy makers were concerned that consumer spending will resume its decline once temporary benefits to household incomes from the fiscal stimulus subside, the minutes showed. Some officials also saw a danger of a renewed decline in the housing market, in part as mortgage rates increase. At the same time, the FOMC
concluded that it was best to keep its programs for purchasing Treasuries and mortgage debt unchanged. (Bloomberg)
* * * * *
European consumer prices fell in June for the first time since at least 1996 as energy costs dropped and rising unemployment curbed household spending. Prices in the 16-nation euro area dropped 0.1% y-o-y, the first annual decline since the data were first compiled in 1996, the European Union statistics office in Luxembourg said yesterday. The core rate of
inflation, which excludes volatile energy and food prices, eased to 1.4% from 1.5%. European Central Bank policy makers have downplayed the threat of deflation, blaming negative inflation on the drop in oil prices from a record last year and pointing to the core rate. Energy prices dropped 11.8% y-o-y in June and food prices fell 0.2%, yesterday’s report showed. From May,
overall prices rose 0.2%. (Bloomberg)
* * * * *
European car sales rose in June for the first time in 14 months as government-backed incentives boosted demand at Volkswagen AG and Fiat SpA. New-car registrations increased 2.4% to 1.46m vehicles, the first gain since April 2008, the Brussels-based European Automobile Manufacturers’ Association said in a statement yesterday. Sales for the first six months
fell 11% to 7.43m cars. State-funded sales and vehicle-scrapping subsidies have propped up demand after the recession plunged the auto industry into its worst crisis in decades. The incentives, topped by Germany’s 2,500 euro (US$3,500) bonusfor car buyers who junk old vehicles, have favoured sales of smaller models. (Bloomberg)
* * * * *
Global