US stocks retreat amid Europe’s debt woes as economic data disappoint
U.S. stocks fell, threatening the 2011 gain for the Standard & Poor’s 500 Index, on concern Greece will default and signs the American economy is cooling down. Wells Fargo & Co and Bank of America Corp slid at least 1.7%, following losses in European lenders, as officials failed to agree on a rescue plan for Greece. Alcoa Inc and Exxon Mobil Corp sank more than 2.1% as commodities slumped. The Morgan Stanley Cyclical Index of companies most-tied to the economy fell 2% on lower-than-forecast data on manufacturing, industrial output and homebuilder confidence. The S&P 500 slumped 1.7% to 1,265.42 at 4 pm in New York, trimming this year’s gain to 0.6%. The Dow Jones Industrial Average fell 178.84 points, or 1.5%, to 11,897.27. Both indexes dropped to the lowest levels since March. (Bloomberg)
U.S: Consumer prices increased in May as prices for everything from autos to hotel rooms climbed, signaling raw-material expenses are filtering through the economy. The consumer-price index increased 0.2% MoM last month and was up 3.6% YoY from May 2010, the biggest year-over-year advance since October 2008. (Source: Bloomberg)
U.S: Industrial production rose 0.1% MoM in May after no change. Factory production climbed 0.4% MoM, led by the biggest gain in business equipment output in four months. (Source: Bloomberg)
U.S: Manufacturing in New York area unexpectedly shrank in June, a sign the industry still faces parts shortages following the disaster in Japan. The Federal Reserve Bank of New York's general economic index dropped to minus 7.8, the lowest level since November, from 11.9 in May. (Source: Bloomberg)
U.S: Global demand for assets rose in April, Treasury says. Global demand for U.S. stocks, bonds and other financial assets rose in April from a month earlier, led by longer-maturity securities, the Treasury Department reported. Net buying of long-term equities, notes and bonds totaled USD 30.6b during the month compared with net buying of USD 24b in March. Including short-term securities such as stock swaps, foreigners purchased a net USD 68.2b, less than net buying of USD 127.1b the previous month. (Source: Bloomberg)
U.S: Homebuilder confidence fell in June to nine-month low as executives turned more pessimistic on the outlook for sales, a sign that any pickup will take time to develop. The National Association of Home Builders/Wells Fargo sentiment index unexpectedly fell to 13 from 16 in May, the biggest drop in a year. (Source: Bloomberg)
U.K: Jobless claims surged more than economists expected in May and wage growth slowed, pointing to a continued squeeze on households as inflation accelerates. Jobless-benefit claims jumped 19,600 from April, when they rose a revised 16,900. Wage growth excluding bonuses slowed to 2% in the three months through April, the weakest since the quarter through August. (Source: Bloomberg)
Greece: Crisis threat to Banks is main stability risk, ECB says. "Greece could have a contagion effect," ECB Vice President Vitor Constancio said at a briefing in Frankfurt, when presenting the bank's semi-annual Financial Stability Review. "That's the reason why we are against any sort of default with haircuts and any form of private-sector event that could lead to a credit event or a rating event." (Source: Bloomberg)
Singapore: Retail sales growth accelerated in April as an influx of tourists and rising wages spurred spending at department stores and boosted purchases of luxury goods. The index measuring purchases excluding automobiles rose 10.1% YoY after climbing a revised 7.4% YoY in March. Including vehicles, which are sold subject to government caps, total retail sales rose 8.1% YoY. (Source: Bloomberg)
Singapore: Employers added more jobs than initially estimated last quarter as the services industry increased payrolls to support demand in the growing economy. The city-state added 28,300 jobs in the three months through March, compared with an earlier estimate of 23,700, the Ministry of Manpower said in a statement. The seasonally adjusted unemployment rate fell to 1.9% from 2.2% the previous quarter. (Source: Bloomberg)
South Korea: Signals further rate increases to tame inflation
South Korea’s central bank signaled it will add to this year’s three interest-rate increases as inflation and household debt remain elevated. Sustained job growth and wage increases are adding to inflation that’s exceeded the central bank’s target since January, prompting the bank to raise interest rates last week. A surprise decrease in the nation’s unemployment rate last month adds to evidence that higher borrowing costs won’t cause the economy to slump, said economist Park Sang Hyun. (Bloomberg)
China: Boosts Treasuries buying as global U.S. demand rises
Global demand for US stocks, bonds and other financial assets rose in April from a month earlier, as China increased its holdings of Treasuries after five months of declines, the Treasury Department reported. Net buying of long-term equities, notes and bonds totaled USD30.6 billion during the month compared with net buying of USD24bn in March, according to statistics in Washington. Including short-term securities such as stock swaps, foreigners purchased a net USD68.2 billion, less than net buying of USD127.1bn the previous month. (Bloomberg)
China: Foreign investment increases in May on consumer demand. FDI rose 13.4% YoY in May as companies including Prada SpA and Samsonite LLC expand to tap rising consumer spending in the world's second-largest economy. Investment climbed to USD 9.2b. For the first five months, the total was USD 48b, a gain of 23.4% YoY, the ministry said. (Source: Bloomberg)
Philippines: Debt rating was raised to the highest level since the start of 2005 by Moody's, after the government took steps to reduce its budget deficit. The country's foreign and local currency long-term bond ratings were increased to Ba2 from Ba3, Moody's said in a statement. The outlook is stable. The move brings the country to two levels below investment grade, placing it above Vietnam and lower than Malaysia and Indonesia. (Source: Bloomberg)
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