Archive for the ‘investors’ Category

Asia stocks lackluster, China stimulus hopes wane

November 11, 2008

Most Asian stock markets retreated Tuesday after weakness on Wall Street, as concerns about the global economy sapped enthusiasm over China‘s nearly $600 billion package to boost growth.

Tokyo’s Nikkei 225 index was down 272.13 points, or 3 percent, to 8,809.30 as the yen strengthened against the dollar. In Hong Kong, the Hang Seng benchmark was 2.2 percent lower at 14,407.45 points.

Australia’s benchmark fell 3.6 percent. Markets in Singapore, South Korea and India also declined.

The Shanghai Composite index, up earlier in the session, fell 1.5 percent despite figures showing the country’s inflation rate eased further last month.

By JEREMIAH MARQUEZ, AP Business Writer

In this Feb. 16, 2008 file photo provided by China's Xinhua ...
In this Feb. 16, 2008 file photo provided by China’s Xinhua News Agency, workers prepare for construction of a new project Shanghai Center at the building site in Pudong District of Shanghai, east China. China’s economy is still growing at an enviable rate: It expanded 9 percent in the quarter ending Sept. 30, 2008. But that was the slowest in 5 years and down from 11.9 percent last year. Forecasts for next year range as low as 7.5 percent.(AP Photo/Xinhua, Niu Yixin, File)

Regional equities were up sharply Monday on hopes that China’s 4 trillion yuan ($586 billion) stimulus package, announced Sunday, would keep its economic growth from falling too fast and help fuel demand for exports from other Asian countries.

But the rally proved short lived amid fresh evidence of more economic troubles.

In the U.S., major electronics retailer Circuit City Stores Inc. filed for bankruptcy protection. Investors also speculated about the fate of General Motors Corp., Chrysler and Ford Motor Co. after the automakers met with lawmakers last week in hopes of securing financial help.

In Asia, Japan’s government reported the country’s current account surplus in September plunged almost 50 percent from a year earlier as export growth waned in the face of a global slowdown.

“It’s what I’d term a ‘fally:’ a rally based on fallacy,” Kirby Daley, senior strategist at Newedge Group in Hong Kong, said of Monday’s advance. “The fallacy being that the China stimulus package is the answer to all of Asia’s problems. While it will help and is a step in the right direction, it will not fully insulate Asia from feeling the impact of the global downturn.”

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http://news.yahoo.com/s/ap/20081111/a
p_on_bi_ge/world_markets_22

Investors cheer China’s stimulus package

November 10, 2008

Investors welcomed China‘s multibillion dollar stimulus package but analysts said Monday that Beijing must ensure companies get access to more credit to sustain its effectiveness.

A man walks past buildings on the city skyline in Shanghai, ... 
A man walks past buildings on the city skyline in Shanghai, China, Tuesday Oct. 21, 2008. In the foreground is the Shanghai World Financial Center, and at left the Jinmao Tower. China’s economy expanded by just 9 percent in the third quarter, its most sluggish pace in five years.(AP Photo/Greg Baker)

Stock markets in Japan, Hong Kong and mainland China soared following Sunday’s announcement of the 4 trillion yuan, or $586 billion, package as China joined moves by governments around the world to cushion the blow of the global slowdown.

By JOE McDONALD, AP Business Writer

The package calls for higher government spending on roads, airports and other infrastructure and bigger subsidies to the poor and farmers. It promises more lending for rural projects, smaller companies and consumers but gives no details.

The plan represents another drastic step away from lending curbs and other anti-inflation measures that Beijing imposed over the past three years but has been rolling back since mid-2008 as government alarm about slowing economic growth mounts.

“It is clear that aggressive fiscal stimulus is necessary to jump start the economy at a time of sharply deteriorating outlook and sentiment,” said UBS Securities economist Tao Wang in a report to clients.

Still, “given the importance of bank financing in China … increasing bank lending would be critical to sustain corporate investment needs,” he said.

The plan follows an unexpectedly sharp slowdown in economic growth that has raised the prospect of job losses and unrest. China’s economic growth fell to 9 percent in the third quarter, its lowest level in five years, and analysts expect export growth to fall as low as zero in coming months as global demand weakens.

British Prime Minister Gordon Brown welcomed China’s move and said he looked forward to discussion of coordinating policy at a Washington meeting this week of leaders from the Group of 20 major economies. Chinese President Hu Jintao is due to attend.

Also Monday, the government said China’s wholesale inflation eased in October, which gives authorities more leeway to stimulate the economy without the threat that they might ignite new price rises. Producer prices rose 6.6 percent in October from the year-earlier period, down from August’s 12-year high of 10.1 percent.

Alarmed at falling growth, the government switched its official goal in mid-2008 from a single focus on fighting inflation to a dual target of ensuring fast economic expansion while also containing price rises. It has cut interest rates three times in recent weeks and lifted limits on how much each Chinese bank can lend.

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http://news.yahoo.com/s/ap/20081110/ap_on_bi_
ge/as_china_stimulus_package_13

Since Obama Election, Stock Market Down 929 Points

November 6, 2008

Wall Street plunged for a second day, triggered by computer gear maker Cisco Systems warning of slumping demand and retailers reporting weak sales for October. Concerns about widespread economic weakness sent the major stock indexes down more than 4 percent Thursday, including the Dow Jones industrial average, which tumbled more than 440 points.

Comments from Cisco that it saw a steep drop in orders in October and reports from retailers that consumers are skipping trips to the mall provided fresh evidence of the economy’s struggles. While sales at Wal-Mart Stores Inc. benefited from bargain-seekers, some specialty retailers posted huge drops in monthly sales.

Adding to investors’ list of worries, the Labor Department said the number of people continuing to draw unemployment benefits jumped to a 25-year high, increasing by 122,000 to 3.84 million in late October. It marked the highest level since late February 1983, when the economy was being buffeted by a protracted recession.

While new claims for unemployment benefits dipped by 4,000 to a seasonally adjusted level of 481,000 last week, the levels remain elevated. The findings added to the market’s unease ahead of Friday’s October employment report, a widely watched barometer of the economy’s health.

“I think everybody kind of simultaneously — the consumers and businesses — is tightening belts so that’s triggering a reasonably precipitous slowdown that’s widespread,” said Ed Hyland, global investment specialist at J.P. Morgan’s Private Bank. “This is something that we haven’t really seen, this level of this rapid and significant pullback both in the market and the economy.”

Thursday’s rout follows a drop of more than 5 percent in the market Wednesday that saw the Dow plunge nearly 500 points as investors fretted that weak readings on employment and downcast profit forecasts and job cuts from financial companies to steelmakers signaled broad economic troubles.

Still, the market’s two-day slide follows an enormous run-up since last week so some pullback was expected, analysts said. Through the six sessions that ended Tuesday, the benchmark Standard & Poor’s 500 index, surged 18.3 percent.

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http://biz.yahoo.com/ap/081106/wall_street.html
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By Alexandra Twin
CNN Money
NEW YORK (CNNMoney.com) — Stocks slumped for a second straight session Thursday, bringing the Dow’s losses to 929 points since Election Day, as fears of a prolonged recession sent investors running for the exits.

The Dow Jones industrial average (INDU) lost around 443 points, or 4.9%. The two-session decline of 929 points, or 9.7%, marked the biggest two-session point loss ever and the biggest two-session percentage decline in 21 years, according to Dow Jones.

The Standard & Poor’s 500 (SPX) index lost 5% and the Nasdaq composite (COMP) declined by 4.3%.

The Dow slumped 486 points Wednesday as President-elect Barack Obama’s historic victory gave way to worries about the economy he inherits. Those same worries continued to drag on stocks Thursday.

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http://money.cnn.com/2008/11/06/markets/markets_newyork/index.htm?postversion=2008110615

Stocks likely to recover no matter who’s president

November 2, 2008

Wall Street prefers Republicans, McCain supporters argue. But stocks have done better under Democratic presidents, Obama supporters fire back.
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When it comes to the stock market — especially this turbulent market — does it really matter who is elected president?

Yes and no.

By MADLEN READ, AP Business Writer

Politicians do influence the economy — and they’ll play a big role in how the country emerges from this current crisis. But analysts say neither presidential candidate can be a cure for what’s ailing Wall Street.

Wall street broker William F. Lawrence looks at a monitor as ... 
Wall street broker William F. Lawrence looks at a monitor as he works on the trading floor of New York Stock Exchange shortly after the market opened Tuesday, Oct.28, 2008 (AP Photo/David Karp)

“The economy is a big, big machine, and the president is one government bureaucrat,” said Ron Florance, Wells Fargo Private Bank Director of Asset Allocation.

Moreover, most analysts believe the battered stock market has nowhere to go but up next year, no matter who ends up in the White House — and history will probably give the victor credit even if he actually had little to do with the rally.

“The timing couldn’t be better,” Florance said.

Still, the stock market is just one part of the economy, and under either Barack Obama or John McCain, the United States needs to recover from a downturn whose severity has not yet been determined. And either candidate will face a budget deficit of around $500 billion when he’s sworn into office — a shortfall expected to climb to $1 trillion next year.

Because of the deficit, the financial climate might end up affecting the new president’s policies more than his policies will affect the financial climate.

“This whole financial crisis will largely serve as an agenda buster for at least the first year,” said John Lynch, chief market analyst at Evergreen Investments.

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http://news.yahoo.com/s/ap/20081102/ap_on_bi_ge/
election_stock_market;_ylt=AjHIhG0
9rDPBeQhWEHXZESys0NUE

London’s FTSE 100 falls sharply on recession fears

October 16, 2008

Shares prices in FTSE 100 in London opened down sharply as fears of recession gripped markets worldwide.

By Alistair Osborne and Edmund Conway
The Telegraph (UK)

With Japanese shares suffering their biggest loss in two decades, investors were in no mood to hold stocks and within minutes of the start the FTSE 100 index of leading shares fell 236 points – or 5.8pc – to 3840.

Miners, travel companies and retailers were among the biggest fallers as markets focussed on an economic slowdown. TUI Travel slid 18.8pc, platinum miner Lonmin 17pc and plumbing group Wolseley 13pc.

Markets have been spooked the effect of a slowdown on trade as America reported worse-than-expected US retail sales, unemployment rocketed in Britain and increasing evidence of falling demand from China’s once booming economy.

Tokyo’s Nikkei 225 index plunged 11.41pc to close at 8458, as growing fears of a global recession hammered world markets.

South Korea, whose export-driven economy is in crisis, with the won in freefall and Standard & Poor’s saying it might cut credit ratings for the country’s leading banks, saw the Kospi index fall 9.4pc in the afternoon, heading for its worst day ever.

Hong Kong’s Hang Seng index was down 7.6pc, with mainland Chinese firms exposed to falling commodity prices worst hit. Australia’s benchmark S&P/ASX 200 fell 6.7pc and New Zealand’s NZX-50 4.8pc to 2,765, its lowest level since September 2004.

Sentiment is grim. “Don’t stand in front of the freight train,” said Sonray Capital Markets chief economist Clifford Bennett in Tokyo. “This is clearly a panic with further to go. The equity market game has fundamentally changed.”

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http://www.telegraph.co.uk/finance/markets/
3207907/Financial-crisis-FTSE-100-falls-sharply-
on-recession-fears.html

U.S. Is Investing $250 Billion in Banks: Bush Addresses Financial Crisis

October 14, 2008
WASHINGTON — President Bush, speaking from the Rose Garden Tuesday before the markets opened in New York, called the government plan to invest up to $250 billion in banks essential to help assure stability in the nation’s financial system.

Under the proposal that is similar to those initiated by European governments on Monday, President Bush said the Treasury Department would invest up to $250 billion in banks, receiving an equity stake in return.

“This is an essential short-term measure to ensure the viability of the American banking system,” Mr. Bush said.

The United States would also guarantee new debt issued by banks for three years — a measure meant to encourage the banks to resume lending to one another and to customers, officials said.

The Federal Deposit Insurance Corporation would also offer an unlimited guarantee on bank deposits in accounts that do not bear interest — typically those of businesses — bringing the United States in line with several European countries, which have adopted such blanket guarantees.

In addition, Mr. Bush said the Federal Reserve would start a program to become the buyer of last resort for commercial paper, a move intended to help businesses get the money they need for day-to-day operations.

Mr. Bush’s comments were the latest in series by administration officials and government leaders around the world to try to calm the financial turmoil and help stave off a deep recession. And markets around the world have rebounded on news of the coordinated efforts by various governments. The Dow Jones industrial average gained 936 points, or 11 percent, the largest single-day gain in the American stock market since the 1930s and future indexes were substantially higher. European markets were up at least 5 percent on Tuesday after rising nearing 10 percent Monday.

The president described the four measures as “unprecedented and aggressive.” Each of the new programs protects taxpayers and is “limited and temporary,” Mr. Bush said.

“These measures are not intended to take over the free market,” he said, but to safeguard it.

It will take time for our efforts to have their full impact,” Mr. Bush said, “but the American people can have confidence about our long-term economic future.

As the White House has done since the House rejected the initial bailout legislation, Mr. Bush sought to assure Americans that the efforts were necessary to protect their savings and retirement.

“I recognize that the action leaders are taking here in Washington and in European capitals can seem distant from those concerns,” he said. “But these efforts are designed to directly benefit the American people by stabilizing our overall financial system and helping our economy recover.”

Treasury Secretary Henry M. Paulson Jr. outlined the plan to nine of the nation’s leading bankers at a meeting Monday afternoon d. He essentially told the participants that they would have to accept government investment for the good of the American financial system, according to officials.

Of the $250 billion, which will come from the $700 billion bailout approved by Congress, half is to be injected into nine big banks, including Citigroup, Bank of America, Wells Fargo, Goldman Sachs and JPMorgan Chase, officials said. The other half is to go to smaller banks and thrifts. The investments will be structured so that the government can benefit from a rebound in the banks’ fortunes.

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http://www.nytimes.com/2008/10/15/business/economy/15bailout.
html?_r=1&hp=&adxnnl=1&oref=slogin&adxnnlx=1223989371-GE
1byNeb0SM8dBDEOs0rOg

U.S. Investing $250 Billion in Banks: Financial ‘Bailout’ Continues to Intill Hope

October 14, 2008

By Mark Landler
The New York Times

WASHINGTON — The Treasury Department, in its boldest move yet, is expected to announce a plan on Tuesday to invest up to $250 billion in banks, according to officials. The United States is also expected to guarantee new debt issued by banks for three years — a measure meant to encourage the banks to resume lending to one another and to customers, officials said.

A euro coin and one US dollar bill. The dollar has dipped against ... 

And the Federal Deposit Insurance Corporation will offer an unlimited guarantee on bank deposits in accounts that do not bear interest — typically those of businesses — bringing the United States in line with several European countries, which have adopted such blanket guarantees.

The Dow Jones industrial average gained 936 points, or 11 percent, the largest single-day gain in the American stock market since the 1930s. The surge stretched around the globe: in Paris and Frankfurt, stocks had their biggest one-day gains ever, responding to news of similar multibillion-dollar rescue packages by the French and German governments.

Treasury Secretary Henry M. Paulson Jr. outlined the plan to nine of the nation’s leading bankers at an afternoon meeting, officials said. He essentially told the participants that they would have to accept government investment for the good of the American financial system.

Of the $250 billion, which will come from the $700 billion bailout approved by Congress, half is to be injected into nine big banks, including Citigroup, Bank of America, Wells Fargo, Goldman Sachs and JPMorgan Chase, officials said. The other half is to go to smaller banks and thrifts. The investments will be structured so that the government can benefit from a rebound in the banks’ fortunes.

President Bush plans to announce….

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http://www.nytimes.com/2008/10/14/business
/economy/14treasury.html?_r=1&hp&oref=slogin

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Asian Markets Soar On Signs of Renewed Hope

By JEREMIAH MARQUEZ, AP Business Writer 18 minutes ago

HONG KONG – Asian markets soared for a second day Tuesday, led by a record 14 percent jump in Tokyo, after Wall Street rallied from its worst week ever on optimism that government rescue efforts will heal the crippled global financial system.

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http://news.yahoo.com/s/ap/20081014/ap_on_bi_ge/world_
markets;_ylt=AhU9ssfZ2fvgiOjAnyoc0oSs0NUE

A businessman walks past an electonic board showing the Hang ...
A businessman walks past an electonic board showing the Hang Seng Index. Global stock markets staged spectacular gains Monday as governments pumped hundreds of billions of dollars into banks crippled by the credit crunch, coaxing newly confident investors to buy shares.(AFP/Mike Clarke)

A South Korean woman passes a foreign exchange facility in Seoul. ... 
A South Korean woman passes a foreign exchange facility in Seoul.(AFP/File/Jung Yeon-Je)

Dow jumps 936 as governments pledge bank aid

October 13, 2008

By TIM PARADIS, AP Business Writer 

NEW YORK – Wall Street stormed back from last week’s devastating losses Monday, sending the Dow Jones industrials soaring a nearly inconceivable 936 points after major governments’ plans to support the global banking system reassured distraught investors. All the major indexes rose more than 11 percent.
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The market was expected to rebound after eight days of precipitous losses that took the Dow down nearly 2,400 points, but few expected this kind of advance, which saw the Dow by far outstrip its previous record one-day point gain, 499.19, set during the waning days of the dot-com boom. The Standard & Poor’s 500 index also set a record for a one-day point gains.

Trader Thomas Riley, right, smiles as he works on the floor ... 
Trader Thomas Riley, right, smiles as he works on the floor of the New York Stock Exchange, Monday Oct. 13, 2008. Wall Street stormed back from last week’s devastating losses Monday, sending the Dow Jones industrials soaring a nearly inconceivable 936 points after major governments’ plans to support the global banking system reassured distraught investors.(AP Photo/Richard Drew)

There were cheers and applause on the floor of the New York Stock Exchange at the closing bell, and trading was so active that prices were still being computed several minutes after the closing bell, longer than it would take on a quieter day.

Still, while the magnitude of Monday’s gains stunned investors and analysts, few were ready to say Wall Street had reached a bottom. The market is likely to have back-and-forth trading in the coming days and weeks — and may well see a pullback when trading resumes Tuesday — as investors work through their concerns about the banking sector, the stagnant credit markets and the overall economy.

John Lynch, chief market analyst for Evergreen Investments in Charlotte, N.C., said Monday’s rally was encouraging but he doubted it signaled the worst has passed.

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http://news.yahoo.com/s/ap/20081013/ap_on_bi_st_
ma_re/wall_street;_ylt=ApLYsluY1tCh_XFB4mDKYges0NUE

Fears of U.S. Recession Deepen Rout of Stocks

October 10, 2008

By Renae Merle, Michael A. Fletcher and Neil Irwin
Washington Post Staff Writers
Friday, October 10, 2008; Page A01

Fear and foreboding took hold on Wall Street yesterday, as the stock market again plunged and investors became convinced that the nation is on the verge of a deep and prolonged recession. The rout continued in Japan, where stocks plummeted in early trading today.

The government took steps toward an extraordinary public investment in U.S. banks, and General Motors stock fell to its lowest price since 1950 on fears it will not be able to weather the downturn. Share prices fell across every industry and for each of the 30 stocks in the Dow Jones industrial average, which was down 679 points, or 7.3 percent, to 8579.19.

But the plummeting stock market could not be blamed on any single piece of horrible news — there were no additional bank failures or government bailouts or corporate bankruptcies.

“I’ve never seen a panic like this,” said David Wyss, chief economist at Standard & Poor’s. “I’ve seen stock market drops, but not an overall panic.”

The broad Standard & Poor’s 500-stock index fell 7.6 percent, the seventh consecutive day of misery on Wall Street. The index has now fallen 42 percent from its all-time high one year ago yesterday and 22 percent this month alone. Stocks are on track for their worst calendar year since 1937.

Fear from Wall Street flooded Asia today, where markets were sharply lower in early trading. Japan’s benchmark Nikkei average plunged more than 10 percent in the morning session, while Australian markets slid more than 7 percent and South Korean stocks fell as much as 8 percent.

“It’s a domino effect. Stocks are falling out of bed. There is distrust in the market and distrust in the government that is trying to heal this,” said Peter Cardillo, chief market economist with New York-based Avalon Partners.

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http://www.washingtonpost.com/w
p-dyn/content/article/2008/10/0
9/AR2008100901205.html?hpid=topnews

China may hold key to calming the storm in world economic markets

October 8, 2008

By Eadie Chen and Simon Rabinovich
Reuters

China, the world’s biggest holder of currency reserves, may yet play an important part in calming a global financial storm from which it is largely sheltered.

Prime Minister Wen Jiabao, who has promised to “join hands” with other nations to tackle the deepest financial crisis since the Great Depression, says the biggest contribution China can make is to keep the world’s fourth-largest economy humming.

To that end, China has cut interest rates twice in three weeks, including a move on Wednesday. Yet speculation is swirling that Beijing could also chip in with a vote of confidence by pledging to hold onto its vast dollar assets and even buy more to help fund the massive bailout of the U.S. financial system now under way.

“For the sake of long-term U.S.-China relations, for the sake of China presenting a better image, I think China should stand up and say that it supports the U.S. dollar and is buying Treasuries,” said Tao Xie, an expert on U.S.-China relations at the Beijing Foreign Studies University.

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http://www.iht.com/articles/2008/10/08/business/col09.php