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Aug 4, 2011

Smaertcompany News: Markets tumble on recession fears, How the Productivity Commission would fix retail – and why it won't happen quickly, Fashion retailer collapses

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Today on SmartCompany we take a long look at the Productivity Commission’s report into the structure of the retail sector. The Commission says action is needed in areas such as labour costs, trading hours and zoning, but as James Thomson says in Entrepreneur Watch, there is little that governments can do quickly. Retailers will remain on their own – and as we see with today’s report on the collapse of fashion retailer Brown Sugar, things will remain tough.

For all this and more, head to our
home page.

How I
How I improved my SEO by scrapping AdWords
Ready Steady Print founder Joshua Kamil reveals why relying on SEO and improving your conversion rate will get you better results than Google AdWords. BY PATRICK STAFFORD.
Joshua Kamil

Exit Strategies
When to sell your business
There are very few entrepreneurs who would say they sold a business at the right time. So when is that elusive right time? BY TOM MCKASKILL.
Exit Strategies

Aunty B
My divorcing colleague is bringing his pain and anger to work.
Don't try and fix things because there is little you can do about his personal life and don't get caught up thinking you can.
Aunty B

Selling strategies
Trent Leyshan
As this example shows, the grass isn't always greener when you sell your business.
Trent Leyshan

Online sales
Chris Thomas
Adding urgency to your offers is a sensational way to improve conversions.
Chris Thomas

Female Entrepreneur
Naomi Simson
A great culture ensures greater productivity, and that ultimately delivers a better bottom line result.
Noami Simson

Entrepreneur Watch
James Thomson
Retailers might welcome the Productivity Commission’s recommendations, but they shouldn’t expect government action.
James Thomson

The Australian Capital Circle: Gillard gets new top mandarin

Capital Circle Newsletter
Gillard gets new top mandarin
 
There's change at the top of the public service as Julia Gillard tackles new challenges.

The Prime Minister is in Melbourne catching up with electorate work. She has no public events scheduled.
Tony Abbott is on leave. Acting Opposition Leader Julie Bishop is in Perth. She's appeared on Nine's Today Show this morning and will visit a dry cleaning firm later in the day to talk about the carbon tax.
Moran bows out: Australia's most senior public servant, Terry Moran, will retire next month, sparking a high-level shake-up of the bureaucracy. Defence Department secretary Ian Watt has been named as Mr Moran's replacement as Department of Prime Minister and Cabinet secretary. He's a highly-regarded operator known for his ability to make budget savings. He previously headed the Department of Finance and the Department of Communications. Moran was poached from Victoria by Kevin Rudd but relations between the pair had soured by the time Rudd got the chop. Dr Watt is replaced in Defence by national security adviser Duncan Lewis, a Duntroon-trained former SAS man. As Brendan Nicholson notes, his appointment is a break in tradition that decrees the department's head be drawn from outside the military.
Right hook: Former Liberal senator and Right-faction powerbroker Nick Minchin has had a crack at Malcolm Turnbull through the letters page of The Australian over his speech to the National Press Club this week. Minchin says of his former colleague: "His preoccupation (with conservatives) reveals a man who can't get over losing the Liberal leadership in 2009 and is desperate for someone to blame for taking it away from him." He says Turnbull has only himself to blame for losing the leadership and urges him to become a team player. "It was his deficiencies as a leader - not those terrible conservatives - that led to his demise."
Dilemma: The first group of asyl
Read more...

Evening Market Wrap

Evening Market Wrap

Commentary


Stocks saw substantial weakness on Thursday, as continued worries about the economic outlook led to broad based selling pressure that dragged the markets down to their worst levels of the year. The major averages saw further downside going into the close, ending the session near their worst levels of the day. (Aug 4, 2011) Full Article

Economic News


First-time claims for U.S. unemployment benefits showed a modest decrease in the week ended July 30th, according to a report released by the Labor Department on Thursday, although the drop came from the previous week’s upwardly revised number. The report showed that initial jobless claims edged down to 400,000 from the previous week’s revised figure of 401,000. Economists had been expecting jobless claims to rise to 403,000 from the 398,000 originally reported for the previous week. (Aug 4, 2011) Full Article

Corporate News


T-Mobile USA, Inc., the U.S. wireless operation of Deutsche Telekom AG (DTEGY.PK), posted second-quarter net income of $212 million, down 48% from the $404 million reported last year. Adjusted OIBDA totaled $1.3 billion, lower than $1.4 billion in the year-ago quarter. Total revenues, including service, equipment and other revenues, were $5.1 billion, as compared to last year's $5.4 billion. Service revenues in the second quarter slid slightly to $4.6 billion from $4.7 billion. (Aug 4, 2011) Full Article


German sports goods giant Adidas AG (ADDDF.PK, ADDYY.PK) Thursday said second-quarter net income attributable to shareholders increased to 140 million euros from 126 million euros in the prior year period. Earnings per share rose to 0.67 euros from 0.60 euros. (Aug 4, 2011) Full Article


Food maker Kraft Foods Inc. (KFT) is scheduled to report second-quarter earnings on Thursday. The Northfield, Illinois-based company acquired British confectioner Cadbury in February 2010 in a deal worth 11.9 billion pounds. (Aug 4, 2011) Full Article


Kraft Foods Inc. (KFT) second-quarter net earnings attributable to the company grew to $976 million or $0.55 per share from $937 million or $0.53 per share a year earlier. Operating earnings per share for the three-mointh period were $0.62, 3.3% higher than $0.60 in the prior-year quarter, driven mainly by currency and operating gains, including the benefit from accounting calendar changes, partially offset by unrealized losses from hedging activities. (Aug 4, 2011) Full Article


General Motors Co. (GM) reported that its second-quarter net income attributable to common stockholders was $2.5 billion or $1.54 per share, up from $1.3 billion or $0.85 per share in the year ago quarter. Analysts polled by Thomson Reuters expected the company to report earnings of $1.20 per share for the quarter. (Aug 4, 2011) Full Article

Forex Top Story


The dollar rallied on a turbulent day in the markets Thursday, as a global run from risk gave the reserve currency a modest boost. Measured against a basket of major counterparts, the dollar jumped to its highest level since July 19, taking back steep recent losses. Stocks were hammered and commodity prices tumbled amid mounting concerns about the health of the global economy. A discouraging jobless claims report from the U.S. was overshadowed by a trio of interest rate decisions. Central bankers in the euro zone and Japan eased monetary policy this morning, acknowledging that the pace of the fragile recovery has stalled. The European Central Bank kept its key interest rate on hold and added liquidity to the banking system. Earlier, Japanese authorities intervened in the currency markets to weaken the surging yen. The Bank of England retained its key interest rate at a record low and maintained the size of the quantitative easing at GBP 200 billion. At the end of two-day rate setting meeting, the Monetary Policy Committee led by Governor Mervyn King decided to hold the interest rate at 0.50 percent. The dollar rose to a two-week high of $1.4190 versus the euro, and improved to $1.6290 against the sterling. After surging above Y80 after the Japanese intervention, the dollar quickly eased back below Y79. The buck hit a record low Y76.28 earlier in the week, prompting officials in Tokyo to take action. The Swiss franc remained the world's most attractive currency, staying at CHF 0.7680 versus the buck. The dollar hit an all-time low near CHF 0.76 on Tuesday. On the other other hand, the dollar rallied to a monthly high versus its petro-linked Canadian counterpart. With oil dropping below $90 a barrel, the dollar was nearly two cents from par against the loonie. First-time claims for U.S. unemployment benefits showed a modest decrease in the week ended July 30th, according to a report released by the Labor Department on Thursday, although the drop came from the previous week's upwardly revised number. The report showed that initial jobless claims edged down to 400,000 from the previous week's revised figure of 401,000. Economists had been expecting jobless claims to rise to 403,000 from the 398,000 originally reported for the previous week. (Aug 4, 2011) Full Article

Political News


President Barack Obama’s approval rating in the key swing state of Florida took a bit hit during the prolonged debt limit debate, and the results of the latest Quinnipiac University poll released on Thursday suggest that it has not improved since the crisis was resolved. (Aug 4, 2011) Full Article

The Economist | BusinessThis Week: Highlights Of New Coverage From 30th July - To 5th August

The EconomistBusiness This Week

Highlights from The Economist online's Business this week

» The euro crisis, part 394: Rearranging the deckchairs
» Growth figures: Six years into a lost decade
» Banking: The humbling
» Foxconn: Robots don't complain


» The crisis of confidence in the euro zone showed no sign of abating as the yields on Italian and Spanish ten-year government bonds jumped again to well above 6%, increasing the countries' borrowing costs. Investors are worried that last month's second bail-out for Greece will not stop the contagion. One concern is that the European Financial Stability Facility does not have sufficient funding to rescue Italy and Spain, and that officials are moving too slowly to implement the new powers granted to the EFSF to buy up the debt of troubled economies. See article
» America's economic recovery in the first half of this year was much weaker than assumed. Official data showed GDP rising by just 1.3% at an annual rate in the second quarter and by a revised 0.4% in the first three months. See article
» Figures from around the world suggested that manufacturing output has dropped back to the level it was at two years ago, when many countries began to pull out of recession. In America an index of new orders for goods registered a contraction for the first time since June 2009.
» There were some big job-cut announcements this week. HSBC said it would eliminate another 25,000 jobs on top of the 5,000 it confirmed are already going, mostly in America and Europe, though it expects to recruit up to 15,000 employees in emerging markets such as Brazil and Hong Kong. Barclays decided to reduce its workforce by a further 1,600. And Merck said it would slash another 13,000 jobs, as it reported that quarterly profit had almost tripled. See article
» The central banks of Japan and Switzerland intervened separately in the currency markets to halt the continuing appreciation of the yen and the Swiss franc, which threatens exports and could undermine growth in both countries. In the wake of the debt crises in America and the euro zone both currencies have increasingly come to be seen as havens by investors.

China in the driving seat
» Porsche and BMW reported healthy rises in first-half profits, which they attributed in large part to the demand in China for German premium cars.
Click Here!
» Toyota put some of the blame for a poor set of quarterly earnings on costs associated with the surging yen. The carmaker produces about half the vehicles it sells worldwide in Japan, a higher proportion than its domestic rivals. Still, Toyota raised its profit outlook for the year by 40%, as it is recovering more quickly than it expected from March's earthquake and tsunami.
» The share prices of Hitachi and Mitsubishi Heavy Industries rose as it emerged that the giant Japanese engineering conglomerates are in merger negotiations. Both companies have significant operations in nuclear-power technology and infrastructure, which have seen business dry up since Japan's earthquake and meltdowns at the Fukushima reactors.
» Northumbrian Water Group agreed to a takeover worth £4.7 billion ($7.6 billion) from a consortium led by Li Ka-shing, as Hong Kong's richest man continues his spree of acquisitions of British utilities.
» In an important ruling in favour of the biotech industry, a federal appeals court overturned a judge's decision last year that genes could not be patented. The case was brought by Myriad Genetics, which wants to patent two genes that help forecast the risk of breast and ovarian cancer.
» Carlos Slim launched a $6.5 billion bid to buy the 40% of Teléfonos de México (Telmex) not already owned by his América Móvil telecoms company. Telmex is Mexico's biggest landline provider. Buying it would strengthen Mr Slim's ability to offer consumers a bundle of mobile, fixed-line and broadband services.
» Research in Motion unveiled its next generation of BlackBerry smartphones, including a new touch-screen phone. The devices, which work on its 7 Operating System, may help boost BlackBerry's market share in America, which fell to 12% in the second quarter from 33% a year ago, according to Canalys, a consultancy.

2013: Rise of the machine
» It emerged that Foxconn is planning to increase the number of robots it uses on its production lines in China from today's 10,000 to 1m by 2013. Foxconn currently employs 1m people in China to assemble a whole host of consumer devices, including Apple's iPhone, but workers' wages are climbing rapidly. Several workers at its factory in Shenzhen have committed suicide. See article
» Poundland, a British discount retailer which prices all its goods at £1 ($1.60), announced plans to expand into the euro area. Its new stores are to be called Dealz (not Euroland).

The Economist | Politics This Week: Highlights of New Coverage from 30th July - 5th August 2011

The EconomistPolitics This Week
 Highlights from The Economist online's Politics this week
» The debt-ceiling deal: No thanks to anyone
» Turkey's army: At ease
» Spanish politics: Anyone want to run this country?
» Italy and the euro: Rabbit in headlights
» Islam and the Arab spring: Bring the Islamists in
» Syria: Bloodier still
» India's politics: Dust in your eyes
» Brazil's industrial policy: Dealing with the real
 


» After months of acrimonious budget negotiations, Congress passed legislation to increase the limit on America's debt ceiling, which Barack Obama signed just hours ahead of a Treasury-imposed deadline after which, the Treasury said, America would be at risk of a default. The deal envisages $2.1 trillion in spending cuts, but no tax increases. The Republicans claimed victory.
See article
» Before that deal, Mr Obama announced a compromise agreement that raises fuel-efficiency standards, requiring the average car sold in America to get 54.5 miles per gallon of fuel (65.4 miles per imperial gallon) by 2025.
» Turkey's military leadership resigned en masse, in protest against the government's decision to block promotions for officers accused of plotting a coup. What would have been a crisis at other points in Turkey's history quickly blew over; the government moved to appoint replacements and protests were muted. See article
» With Spain said to be increasingly at risk of a bail-out, the Socialist prime minister, José Luis Rodríguez Zapatero, announced that a general election would be held on November 20th, four months ahead of schedule. Polls suggest that the opposition conservative People's Party will win. See article
» The crisis in the euro area forced Italy's prime minister, Silvio Berlusconi, to make an emergency address to parliament. His speech, which included claims that markets were "incorrectly" judging Italian debt, looked unlikely to calm investor fears about Italy's whopping debt pile. See article
» Hungary's ruling Fidesz party said it wanted to introduce legislation that would allow it to charge three former Socialist prime ministers with mismanaging the public finances. The move adds to concerns about what some see as the government's authoritarian tilt.
» Britain's nuclear authority decided to shut down the Mox facility at Sellafield, which produces mixed oxide fuel, because of the damage caused by the Fukushima disaster to Japan's nuclear industry, the Mox plant's biggest customer.

Standing to account
» The trial of Hosni Mubarak, Egypt's former president, began in Cairo. Charged with corruption and ordering the killing of protesters, he was carried into court at a police academy on a stretcher—and pleaded not guilty. Mr Mubarak's sons, Alaa and Gamal, a former interior minister and six officials of the former regime are all on trial at the same time.
»Tens of thousands of Islamists, including members of the Muslim Brotherhood and Salafists inspired by the puritanical zealotry of early Islam, filled Cairo's Tahrir Square to call for a state governed by religious law. See article
» Government forces in Syria were reported to have killed at least 100 people since July 31st, mostly in the town of Hama, the country's fourth-biggest, where protesters have been demonstrating for the past month. See article
» General Abdel Fatah Younis, a former interior minister in Colonel Muammar Qaddafi's regime who had defected and was commanding Libya's rebel forces, was assassinated in murky circumstances near Benghazi, the rebel headquarters. See article
» Famine worsened in the Horn of Africa, especially in Somalia. The UN estimates that more than 12m people in Djibouti, Ethiopia, Kenya and Somalia need urgent help; tens of thousands have already died and hundreds of thousands more risk starvation.
» South Africa's government agreed to lend 2.4 billion rand ($360m) to Swaziland, its tiny neighbour, after international donors refused to help the country's absolute monarch, who is facing a political crisis.

Hard graft
» B.S. Yeddyurappa, the chief minister of Karnataka in south India, resigned amid a mining scandal that has robbed the state of $3.6 billion. He faces a criminal probe. Free of him, the Hindu-nationalist Bharatiya Janata Party is now in a better position to harangue the national government, led by Congress, over other cases of corruption. See article
Click Here!
» In Pakistan the second CIA station chief in seven months was forced to leave the country, reflecting still strained relations with Islamabad.
» Street-fighting in Karachi killed at least 60 people over five days. Three hundred people were killed during July, as Pakistan's largest city exploded along the ethnic lines of its Sindhi, Muhajir and Pushtun populations, egged on by the main political parties.
» Violence in the western Chinese region of Xinjiang spread to the city of Kashgar, where more than 20 people were killed in a series of attacks. One restaurant was mobbed by men wielding knives and another was set on fire. Officials blamed Muslim separatists.
» Sir Michael Somare, leader of Papua New Guinea for half of its independent history, was officially removed from office, four months after being laid up by heart surgery. Over on the western half of the island the Indonesian territory of Papua saw thousands of people marching for the right to hold a referendum on independence.

Brazil first!
» Brazil's government unveiled a new industrial policy, aimed at helping manufacturers cope with the strength of the real and Chinese imports. It features tax breaks, preferences for Brazilian firms in government procurement and a quadrupling of the number of inspectors to monitor imports. See article
» Police in Mexico captured José Antonio Acosta (aka "El Diego"), the alleged leader of a drug gang in Ciudad Juárez, whom they say has confessed to ordering the murder of some 1,500 people.
» A court in Guatemala sentenced four former soldiers to more than 6,000 years each in prison for their role in a massacre in 1982 during the country's civil war, in which up to 200,000 people died.
» Mauricio Macri, a conservative, was re-elected as mayor of Buenos Aires, winning 64% of the vote to 36% for his opponent, a supporter of Argentina's president, Cristina Fernández. Mr Macri's victory followed a similar defeat for the president's candidate in Sante Fé province, arousing hopes among the opposition that Ms Fernández may find it harder than it seemed to win a second term in October's presidential election.

Reuters - Daily Investor Update: Wall Street plunges in worst selloff in two years.



News
LATEST NEWS
Wall Street plunges in worst selloff in two years
NEW YORK (Reuters) - Investors fled Wall Street in the worst stock-market selloff since the depths of the Great Recession in early 2009 in what has turned into a full-fledged correction. | Full Article

BNY Mellon imposes fee on rapidly growing deposits
August 04, 2011 03:34 PM ET
NEW YORK (Reuters) - Bank of New York Mellon Corp said it is being overwhelmed with deposits from investors fleeing risky markets, and said it will begin charging for above-average deposits. | Full Article
Jobs, retail sales data support recovery hopes
August 04, 2011 11:27 AM ET
WASHINGTON (Reuters) - The number of Americans claiming new unemployment benefits was steady last week and heavy discounting lifted sales at retailers in July, hopeful signs for the sputtering economy. | Full Article
Kraft's Rosenfeld breaking up food giant she built
August 04, 2011 02:46 PM ET
NEW YORK (Reuters) - Kraft Foods Inc Chief Executive Irene Rosenfeld plans to break up the food giant, just 18 months after driving through the controversial acquisition of UK chocolate maker Cadbury. | Full Article
GM profit nearly doubles, slowdown risk ahead
August 04, 2011 12:54 PM ET
DETROIT (Reuters) - General Motors Co's quarterly profit shot past Wall Street expectations, but its share price slipped as investors focused on the risks of a sputtering economy and resurgent Japanese rivals. | Full Article

Reuters - Daily Investor Update: Wall Street plunges in worst selloff in two years.



News
LATEST NEWS
Wall Street plunges in worst selloff in two years
NEW YORK (Reuters) - Investors fled Wall Street in the worst stock-market selloff since the depths of the Great Recession in early 2009 in what has turned into a full-fledged correction. | Full Article

BNY Mellon imposes fee on rapidly growing deposits
August 04, 2011 03:34 PM ET
NEW YORK (Reuters) - Bank of New York Mellon Corp said it is being overwhelmed with deposits from investors fleeing risky markets, and said it will begin charging for above-average deposits. | Full Article
Jobs, retail sales data support recovery hopes
August 04, 2011 11:27 AM ET
WASHINGTON (Reuters) - The number of Americans claiming new unemployment benefits was steady last week and heavy discounting lifted sales at retailers in July, hopeful signs for the sputtering economy. | Full Article
Kraft's Rosenfeld breaking up food giant she built
August 04, 2011 02:46 PM ET
NEW YORK (Reuters) - Kraft Foods Inc Chief Executive Irene Rosenfeld plans to break up the food giant, just 18 months after driving through the controversial acquisition of UK chocolate maker Cadbury. | Full Article
GM profit nearly doubles, slowdown risk ahead
August 04, 2011 12:54 PM ET
DETROIT (Reuters) - General Motors Co's quarterly profit shot past Wall Street expectations, but its share price slipped as investors focused on the risks of a sputtering economy and resurgent Japanese rivals. | Full Article

Congress reaches deal on FAA shutdown: The Washington Post | Politics Afternoon Edition

The Washington Post
Politics Afternoon Edition

HEADLINES

  1. Congress reaches deal on FAA shutdown

    Congressional leaders reached agreement Thursday on stopgap funding for the Federal Aviation Administration, ending a stalemate that cost 4,000 furloughed federal workers almost two weeks of pay and drained more than $300 million from the Treasury.
    » Read full article
  2. THE FIX: The most unpopular Congress. Ever.

    14. That’s the approval rating for Congress in the latest CNN/Opinion Research Corporation national poll. It’s the lowest approval rating ever for Congress in a CNN poll and one of only three times that approval has dipped below 20 percent.
    » Read full article
  3. Mystery company dissolves after giving $1 million pro-Romney PAC

    A mysterious company gave $1 million to an independent political committee supporting former Massachusetts Gov. Mitt Romney for president and then quickly folded, raising questions about the donation.
    » Read full article
  4. What Obama can learn from Bill Clinton

    As Obama seeks to pick his way through the difficult political path laid out before him, he would do well to heed the example of the only other modern president who spent his 50th birthday in the White House: Bill Clinton.
    » Read full article
  5. POLITICAL BOOKWORM: Glenn Beck hits the books

    If you’ve been wondering where Glenn Beck is since he left FOX, he’s still on the radio — and moving bigtime into publishing.
    » Read full article

NYT: Afternoon Business News: E.C.B. Buys Bonds in Bid to Quell Sovereign Debt Crisis


BUSINESS

E.C.B. Buys Bonds in Bid to Quell Sovereign Debt Crisis

By JACK EWING AND JULIA WERDIGIER
The European Central Bank's intervention in bond markets may have backfired and sent stock markets skidding in the United States and Europe.

G.M. Earnings Climb 89%

By BILL VLASIC
The results were driven by strong sales in General Motors's core North American market and were higher than expectations.

Late July Weakness Clouds Retail Outlook

By STEPHANIE CLIFFORD
Same-store sales rose for the month, but the emphasis was on clearance merchandise, and pressure to discount may persist.

When Havens Fight Back

By HIROKO TABUCHI
The strength of the Japanese yen and Swiss franc against the dollar and euro has compelled their governments to intervene to protect exporters.

I.M.F. Chief to Face French Investigation

By LIZ ALDERMAN
A commission at the Court of Justice decided that Christine Lagarde's role in a $580 million arbitration decision should be examined.

Money Show Investors Daily Alert: Red: Howard Gold, Red Flag For Emerging Markets


www.moneyshow.com

Investors Daily Alert
NEW! THE DAILY GURUCandid Daily Interviews with Top Market Experts
4 Corporate Bonds for an Uneasy Market, Marilyn Cohen

Jim Jubak on MoneyShow.com
Europe Silent as Spain and Italy Float Away

Today's Top Pros' Top Picks
2 Buys and 3 Sells in a Slippery Market, Jack Adamo
4 Stocks That Will Grow in This Market, John Reese

Today's Gurus' Views & Strategies
Red Flag for Emerging Markets…and Us, Howard Gold
12 Rules for Turnaround Investors, George Putnam

Today's Charts in Play
High-Yield Bets Bite Back, Tom Aspray

MoneyShow.com Exclusive Interviews
Market Corrections Are Normal, Gil Morales

Ideas from Around the World
4 Yields to Grab in a Recession, Igor Greenwald
Easy Money May Mean Tough Times Ahead, Axel Merk

Today's Featured Videos
Investing in the Post-Crisis Markets, David Callaway
Long-Term Performance of Upgrading, Janet Brown

Stocks dive; Dow off 513 points, worst since 2008: MarketWatch | U.S. Stock Market at Close - Market Pulse


By Laura Mandaro
SAN FRANCISCO (MarketWatch) -- U.S. stocks cratered Thursday, sending the Dow Jones Industrial Average DJIA -4.31% to its worst-point drop since December 2008, as fears about the global economy sparked a broad selloff that accelerated into the close. The Dow average fell 512.76 points, or 4.3%, to 11,383.68, its steepest percentage drop since February 2009. The S&P 500 SPX -4.78% lost 60.27, or 4.8%, to 1,200.07, also its worst percentage drop since February 2009. The Nasdaq Composite COMP -5.08% lost 136.68 points, or 5.1%, to 2,556.39 points. For the year, all three indexes are now negative.

NYT | Business Day: Stocks Tumble as Signs Point to Weak Global Economy



Stocks Tumble as Signs Point to Weak Global Economy

The stock market fell sharply Thursday on intensifying investor fears about a slowdown in global economic growth and worries about Europe’s ongoing debt crisis, which is centered now on Italy and Spain. As Japan intervened to weaken its currency and European stock markets turned negative across the board, United States stocks fell by around 3 percent in morning trading in New York.

The Standard & Poor’s 500-stock index was down 42.70, or 3.39 percent. The Dow was off 356.32, or 3.00 percent, to 11,540.12, and the Nasdaq was down 96.33 points, or 3.58 percent.
A fear haunting markets in the United States is that the economy may be heading for a double-dip recession. Although the fractious debt ceiling debate is now past, markets fear spending cuts and weaker economic data point to a weaker economy. The latest weekly jobless data Thursday again showed the economy was still fragile.

In Europe, the euro zone debt crisis has moved on from smaller countries like Greece to bigger nations like Italy and Spain, spurring investor fears that Europe is unable to get a handle on its festering debt problems.
Earlier in the day, European markets came under intense pressure, with sharp drops in markets in Britain, Germany and other countries. 

Yields on Italian government bonds, already above 6 percent, rose sharply. Yields in Spanish debt markets also increased.
In an attempt to calm markets, the European Central Bank unexpectedly began large-scale intervention in the euro zone debt markets, the first time since March, buying bonds in an apparent attempt to prevent the region’s sovereign debt crisis from engulfing Italy.
The E.C.B. also moved to help weaker banks on the continent that may now be struggling to finance themselves, expanding its lending to institutions in the euro area at the benchmark interest rate.
Jean-Claude Trichet, the president of the E.C.B., said the bank had acted in response to “renewed tensions in some financial markets in the euro area.” 

He said that uncertainty created by the debate in the United States to raise the debt ceiling had unnerved European markets. “It’s clear the entire world is intertwined,” he said. “What happens in the U.S. influences the rest of the world.”