The unemployment rate across the 16-nation eurozone hit 10% in February, the first time it has reached double figures since the euro was introduced.
US stocks fall after sell-off in Asia
Written by times of india
Monday, 31 August 2009 20:25
A big drop in Asian markets sent US stocks falling as investors worried once again about the global
economy.
Major US indexes lost about 1 percent Monday after China's main index plunged 6.7 percent, adding to a nearly 3 percent drop on Friday. The selloff in Chinese shares has been fed by concerns over a tightening in bank lending that could hurt the country's economy. That in turn has weighed on markets around the globe this month.
Japan's Nikkei stock average fell 0.4 percent after the country's opposition party came to power in a landslide victory. European markets were also lower.
There was little U.S. economic news expected Monday, but key readings come later this week on manufacturing and employment in August that have the ability to either sustain or upset the market's massive six-month rally.
After rising more than 45 percent from 12-year lows in March, the Dow Jones industrial average stands about 500 points away from 10,000. Investors have grown increasingly worried that the market may have gotten too far ahead of the economy. Without evidence of actual economic growth, analysts have warned that the market's rally could fizzle in the coming weeks, especially as traders head into September, historically a rough month for the stock market.
"There's enough jitteriness to set the stage for a decline," said Hugh Johnson, chairman and chief investment officer of Johnson Illington Advisors. "The economic numbers could neutralize the nervousness, could put portfolio managers' worries to rest."
Two big deals between The Walt Disney Co. and Marvel Entertainment Inc. and oilfield services companies Baker Hughes Inc. and BJ Services Co. did little to support the market.
In early trading, the Dow Jones industrial average fell 82.83, or 0.9 percent, to 9,461.37. The Standard & Poor's 500 index fell 11.71, or 1.1 percent, to 1,017.22, while the Nasdaq composite index fell 26.81, or 1.3 percent, to 2,001.96.
About eight stocks fell for every one that rose on the New York Stock Exchange, where volume came to 207.2 million shares, compared with 215.6 million at the same time on Friday.
In other trading, the Russell 2000 index of smaller companies fell 9.58, or 1.7 percent, to 570.28.
Germany's DAX index and France's CAC-40 were down 0.8 percent in afternoon trading. The London Stock Exchange was closed for a public holiday.
Bond prices mostly rose. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.44 percent from 3.45 percent late Friday.
Two big acquisitions totaling close to $10 billion did little to excite investors Monday. Dealmaking and companies' willingness to part with cash or take on debt, is typically seen as a sign of confidence in the economy.
Walt Disney said it plans to buy Marvel Entertainment for $4 billion in cash and stock.
Disney shares slid 45 cents to $26.39, while Marvel shares jumped more than 26 percent, or $10.20, to $48.85. Earlier Monday, Baker Hughes said it will buy BJ Services in a cash-and-stock deal valued at $5.5 billion.
BJ Services shares shot up more than 7 percent, adding $1.10 to $16.53. Baker Hughes shares fell $2.94, or 7.7 percent, to $35.15.
Despite Monday's pullback, stocks are on track to have their best August since 2000. Most of the gains were made earlier this month as investors cheered improvements in consumer confidence and an upbeat assessment of the economy from Federal Reserve Chairman Ben Bernanke.
Last week, the major indexes all rose less than 0.5 percent amid light trading and little news.
Trading is expected to be relatively light this week as well, with many traders taking vacations. Light volume can skew the market's movements. Still, there are a number of important readings on the economy that could sway the market one way or the other.
On Tuesday, the Institute for Supply Management will issue its assessment of the manufacturing industry during August. Economists are expecting ISM's manufacturing index to come in at 50.1, up from 48.9 in July. A reading above 50 would indicate growth in manufacturing, something that hasn't happened since January 2008.
The most important piece of data this week is the government's monthly jobs report on Friday. Economists are expecting another 220,000 jobs were lost, down from 247,000 in July. Last month's report showed an unexpected dip in the unemployment rate and investors are anxious to see if the rate continues to fall.
As unemployment spiked this year, Americans who lost their jobs or were worried about their job security dramatically cut back on their spending. If fewer jobs are being lost, consumers might start to feel comfortable spending again and help get the economy back on its feet.
August sales reports from major retailers this week will provide the latest insight into consumer spending.
Ford plans to bring Rs 3L-plus small car
Written by times of india
Monday, 31 August 2009 20:22
Ford has started work on a new low-cost small car to sell in fast-growing markets like India, China, Eastern Europe and
A senior company official said the new small car would not be confined to one market but will be positioned across markets, sporting a "Rs 3 lakh-plus price range," making it one of the low-cost cars for the company globally. "We plan to grow business in B (small) cars globally, and especially in the Asia-Pacific region where we plan to raise the share of B cars to our line-up from 15% to 45%," John G Parker, Ford's group executive V-P for Asia-Pacific and Africa, told TOI here.
Asked whether India would be one of the global development and manufacturing base for such a low-cost car, considering that other companies like Hyundai, Suzuki and GM too were shifting production of such products here, he said it was too early to comment on that. "Potentially yes is all that I can say on this at the moment," he said. Parker also clarified that this new car would be different to the small car that Ford would be launching in India in 2010. "But linkages would certainly be there. We are looking at integrated product development system at Ford now," he said.
This is perhaps the first time that Ford has spoken of work on a low-cost product to push up volumes globally. With the interest in low-cost segment, the company now joins companies like GM and Hyundai who too have announced exploratory plans in the segment that holds the potential of big volumes in fast-developing markets like India. On specific India plans, Parker said the company's new small car was on course and would be out by 2010, with localisation of over 80%. "It will the first offering from Ford in the mass-market segment and we are making efforts to keep it cost-competitive and a great value proposition," he said.
Asked whether the company would have a multi-product strategy in the small car segment, he said Ford planned to have more than one car there. "We cannot be satisfied with just one product in this crucial segment. India is a big car market and we can't just meet the demand with just one product in small cars," he said.
The company is investing around $500 million fresh money in India for building small car and engine manufacturing capacity.
South America.
US bank stocks on a roll, but for how long?
Written by reuters
Monday, 31 August 2009 20:04
It's been a banner year for long-beleaguered US bank stocks, but now investors have to worry if the shares will flag.
After two years on life support, bank stocks and broader industry indexes have enjoyed strong gains in 2009, including a 3 percent rise in the sector's major index and a several-fold spike in share prices for the biggest US banks since a March bottom.
Many analysts say the industry is resurgent, like the banking boom in the 1990s that followed the commercial real estate crash, but others are skeptical.
"There will be some price gains and losses short-term, but this is very similar to the performance I remember in October 1990," said Jeff Davis, senior research analyst at FTN Equity Capital Markets.
"If you went back to October 1990, it looked like the world was going to end. It was a lousy two or three more quarters, but then the banks went on this two- to three-year run."
Investors, both individual and institutional, are becoming more comfortable investing in financial stocks as the industry stabilizes after a credit crisis that claimed two of the nation's largest banks and more than a hundred smaller ones, some analysts said.
The KBW Bank Index is up 3 percent this year, closing Tuesday at 46.65. The index bottomed on March 6 at 18.62, down 84 percent from its July 2007 peak, but has been rebounding ever since.
JPMorgan Chase & Co's (JPM.N: Quote, Profile, Research, Stock Buzz) stock price has nearly tripled from $14.96 on March 6, closing Tuesday at $43.58. Bank of America Corp (BAC.N: Quote, Profile, Research, Stock Buzz) stock has spiked 600 percent since a March 6 bottom of $3.14, closing Tuesday at $17.75.
Michele Garren, an Atlanta-based Invesco Ltd (IVZ.N: Quote, Profile, Research, Stock Buzz) portfolio manager, said the asset management firm's $8.2 billion global equities portfolio is underweight banks. The firm is building positions in select banks with strong future growth prospects, but is cautious about the wider sector, she said.
"We feel like the system wasn't really cleared, that there wasn't the creative destruction needed for a strong rebound, but there are positive trends at work in the industry," said Garren, noting a favorable yield curve and some banks with strong capital bases for acquiring weaker rivals.
Yet the short-term outlook remains uncertain, as investors contend with a weak economy and the prospect of rising credit losses.
Some analysts say bank stocks have become too expensive, buoyed by hope rather than banks' current performance.
Banks have not demonstrated an ability to produce earnings similar to pre-2007 levels and are still dogged by credit problems, Richard Bove, veteran banking analyst with Rochdale Securities LLC, said in a research note.
Investors, he said, are now buying weak bank stocks that used to be the high fliers of the industry, with the expectation that they'll return to their pre-crisis performance. Bove views that as unlikely.
"If there is any lesson to be learned from the movement of stock prices over the past decades, it is that expectations drive stock prices far more than fundamentals," he said in a research note. "Psychology trumps reality every time."
News Head Lines
Written by Administrator
Monday, 31 August 2009 10:16
Don't import Indian eggs, say Dhaka poultry operators
Bangladesh News.Net
Dhaka, Aug 31 (IANS) Bangladesh's poultry operators are protesting egg imports from India that enter the market during the festive season at less than half the price.
First swine flu death reported in Bangladesh Bangladesh News.Net
Dhaka, Aug 31 (Xinhua) In the first swine flu death case in Bangladesh, a female patient who infected with the influenza A (H1N1) virus died in hospital Sunday.
Chevron's Dhaka deal runs into trouble
Bangladesh News.Net
Dhaka, Aug 30 (IANS) Prime Minister Sheikh Hasina has sought 'explanation' from state-run Petrobangla for awarding a gas compressor station contract to American multinational Chevron last year, canceling an open tender.
Netbook sales surge, but can the furor last
Nokia's new netbook computer, the Booklet 3G, is seen at Nokia corporate headquarters in HelsinkiAugust 24, 2009. The world's top cellphone maker Nokia said on Monday it would start to make laptops
Canada to issue first U.S. dollar bond in decade
The Department of Finance said Friday Canada plans to issue up to US$3-billion in U.S.-dollar-denominated bonds – the first foreign currency global debt in more than a decade.
Toyota will shut California plant in first closure
Toyota Motor Corp. will shut an assembly plant for the first time in its 72-year history after the failure of a joint venture with General Motors Corp. New United Motor Manufacturing Inc
