20110819 0958 Global Market Related News.

Asian Stocks Slide, Revisiting Last Week’s Lows, on Global Economy Concern (Source: Bloomberg)
Asian stocks fell, revisiting levels from last week’s worldwide stock rout, amid signs the global economy is slowing and Europe’s debt crisis will damage the banking system. BHP Billiton Ltd. (BHP), the world’s largest mining company, lost 3.1 percent in Sydney after oil and metal prices slumped. Billabong International Ltd. (BBG), a surfwear maker that gets almost half its sales from the Americas, tumbled 21 percent after annual profit missed analyst estimates and U.S. jobless claims and consumer prices advanced faster than projected. Mitsubishi UFJ Financial Group Inc. (8306), Japan’s biggest bank by market value, dropped 1.1 percent in Tokyo. Toyota Motor Corp. (7203), the world’s largest carmaker, sank 1.5 percent after Goldman Sachs Group Inc. lowered its rating on the Japanese auto sector.
The MSCI Asia Pacific Index fell 2.2 percent to 120.49 as of 10:17 a.m. in Tokyo. The gauge is headed for lowest close since Aug. 8, and a fourth straight week of loss. About 20 stocks dropped for each that advanced on the index today.

GLOBAL MARKETS-Growth worries hobble stocks, Swiss franc slips
LONDON, Aug 18 (Reuters) - European equities followed Asian stocks lower on Thursday as investors fretting about the global growth outlook cut exposure to riskier assets, while the Swiss franc fell on talk the central bank was intervening in the forwards market.
"At the start of the week, we were expecting a selloff and it hadn't materialised, with people selectively putting money into a few stocks keeping the froth alive, and so I think it is overdue," the head.

Growth worries hobble stocks, Swiss franc slips
LONDON, Aug 18 (Reuters) - European equities followed Asian stocks lower on Thursday as investors fretting about the global growth outlook cut exposure to riskier assets, while the Swiss franc fell on talk the central bank was intervening in the forwards market.
"At the start of the week, we were expecting a selloff and it hadn't materialised, with people selectively putting money into a few stocks keeping the froth alive, and so I think it is overdue," the head of institutional trading at a UK-based investment bank, said.
 
U.S. Consumer Prices Rise More Than Forecast (Source: Bloomberg)
The cost of living in the U.S. climbed more than forecast in July, which could make it harder for Federal Reserve Chairman Ben S. Bernanke to convince colleagues to immediately act to spur growth after manufacturing in the Philadelphia region plunged in August. The consumer-price index increased 0.5 percent from June, more than twice the 0.2 percent median forecast of economists surveyed by Bloomberg News, figures from the Labor Department showed today in Washington. The Philadelphia Fed’s general economic index dropped to minus 30.7 this month, the lowest since March 2009, when the economy was in a recession. Stocks slumped and gold prices soared to a record as the data showed the world’s largest economy was in danger of shrinking even as inflation picked up. Another report showed fewer Americans on average filed claims for unemployment benefits over the past month, indicating the job market is holding up for now.

Consumer Confidence in Economy Lowest Since Recession in Bloomberg Index (Source: Bloomberg)
Consumer confidence in the U.S. economic outlook slumped in August to the lowest level since the recession, raising the risk that spending will dry up. The Bloomberg Consumer Comfort Index’s monthly expectations gauge dropped to minus 34, the weakest since March 2009, from minus 22 in July. The weekly measure of current conditions was minus 48.3 for the period ended Aug. 14 compared with minus 49.1, which was the worst reading since mid-May. The most unstable market in the history of American stocks, wage gains that are failing to keep up with inflation and unemployment hovering around 9 percent may be causing Americans to lose faith that the economy and their financial situations will soon improve. Applications for unemployment benefits climbed last week to the highest level in a month.

U.S. Fed’s Low-Interest-Rate Pledge May Retard Recovery, Fisher Tells CNBC (Source: Bloomberg)
Federal Reserve Bank of Dallas President Richard Fisher said the central bank’s pledge to keep the benchmark U.S. interest rate near zero through at least mid- 2013 may lead to “unintended consequences” and hurt growth. “Now you know that you can wait to borrow because rates are going to be locked in at very low levels for a two-year period,” the regional bank chief said today in an interview with CNBC. “This might well further retard the recovery.” The Dallas Fed chief joined presidents Charles Plosser of Philadelphia and Narayana Kocherlakota from Minneapolis this month in posing the most opposition in almost 19 years to a Federal Open Market Committee decision. They dissented from the FOMC’s Aug. 9 decision to hold interest rates near zero at least until mid-2013, preferring instead to maintain a commitment to do so for an unspecified “extended period.”

Obama Plans to Announce Jobs Stimulus Package With Bigger Cuts in Deficit (Source: Bloomberg)
President Barack Obama is seeking to revive a version of the so-called grand bargain with congressional Republicans that would combine long-term U.S. deficit reduction through entitlement benefit cuts and tax increases with immediate steps to boost job growth. Obama plans to press Congress for billions of dollars in fresh spending to reduce unemployment as he also pursues a compromise on long-term deficit cuts. He will begin by laying out his ideas in a speech shortly after the U.S. Labor Day holiday, which is Sept. 5. With the U.S. unemployment rate at 9.1 percent and economic growth slowing, Obama’s aides are working on a mix of tax cuts and infrastructure spending beyond the measures he has been promoting over the last several weeks, an administration official said, speaking on condition of anonymity because details for the speech haven’t been completed.

Jobless Claims in U.S. Top Forecast (Source: Bloomberg)
More Americans than forecast filed applications for unemployment benefits last week, signaling the labor market is struggling two years into the economic recovery. Jobless claims climbed by 9,000 to 408,000 in the week ended Aug. 13, the highest in a month, Labor Department figures showed today in Washington. Economists surveyed by Bloomberg News projected a rise in claims to 400,000, according to the median forecast. The number of people on unemployment benefit rolls rose, while those receiving extended payments fell. Companies like Bank of New York Mellon Corp. (BK) are paring staff, one reason consumers are limiting their spending, which accounts for about 70 percent of the economy. Unemployment at 9.1 percent helps explain why Federal Reserve policy makers last week pledged to hold interest rates at a record low until at least mid-2013 to spur growth.

Philadelphia-Area Factory Index Falls to -30.7, Lowest Since March of 2009 (Source: Bloomberg)
Manufacturing in the Philadelphia region unexpectedly contracted in August by the most in more than two years as orders plunged and factories shed workers. The Federal Reserve Bank of Philadelphia’s general economic index plunged to minus 30.7 this month, the lowest since March 2009, from 3.2 in July. The August gauge exceeded the most pessimistic projection in a Bloomberg News survey in which the median estimate was 2. Readings less than zero signal contraction in the area covering eastern Pennsylvania, southern New Jersey and Delaware. Stocks extended their decline after the figures showed weaker demand from consumers and companies in the U.S. and abroad is posing a risk to the industry that spearheaded the recovery. Fewer customer inventories may indicate producers will see a smaller decrease in orders should the U.S. economy falter.

Existing U.S. Home Sales Unexpectedly Decline to 4.67 Million Annual Rate (Source: Bloomberg)
Sales of U.S. previously owned homes unexpectedly dropped in July, reflecting an increase in contract cancellations due to strict lending rules and low appraisals. Purchases decreased 3.5 percent to a 4.67 million annual rate, the weakest since November, figures from the National Association of Realtors showed today in Washington. The median forecast of economists surveyed by Bloomberg News called for an increase in sales. The median price dropped 4.4 percent from a year earlier, and 16 percent of real estate agents polled said they had at least one pending contract canceled last month. Even with historically low borrowing costs and foreclosure- induced price declines, fewer homebuyers are entering the market. Job growth that’s failed to bring unemployment below 9.1 percent alongside a steady supply of distressed dwellings indicates many Americans may still not be in a position to consider purchasing a home.

Fed’s Dudley Sees Growth Rebounding This Year, ‘Quite Low’ Recession Risk (Source: Bloomberg)
Federal Reserve Bank of New York President William C. Dudley said he expects that the U.S. economy will improve this year after an “anemic” first half and not slip back into a recession. “We very much still expect the economy to recover,” Dudley, 58, said today in response to audience questions after a speech in Newark, New Jersey. Growth during the second half of 2011 will be “significantly firmer” than in the first six months, and the risk of recession remains “quite low,” he said. The policy-setting Federal Open Market Committee last week pledged to keep its benchmark interest rate near zero until at least mid-2013 to revive a recovery that’s “considerably slower” than anticipated. The Fed made the rate pledge after Standard & Poor’s downgraded the U.S. government’s credit rating and Europe’s debt crisis worsened, roiling markets worldwide.

Treasuries Gain on Signs of Slower Growth; 10-Year Yield Nears Record Low (Source: Bloomberg)
Treasuries rose, pushing 10-year yields toward the record low set yesterday, as investors sought refuge in the world’s safest securities on concern global growth is slowing and speculation inflation will remain subdued. U.S. government debt has returned 3.28 percent in August, Bank of America Merrill Lynch data show, on pace for the best month since December 2008 a week after the Federal Reserve said it would keep borrowing costs unchanged until at least mid-2013. Bank of America’s Global Broad Market Index has increased 1.93 percent in August. “We have witnessed a precipitous drop in yield, and it’s not over,” said Akira Takei,’’ head of the international fixed- income department at Mizuho Asset Management Co. in Tokyo, which oversees the equivalent of $39.1 billion and is a unit of Japan’s second-largest bank. “A recession can’t be ruled out. There are more hard times to come.”

U.S. Stocks Tumble on Concern Over Global Economy, European Banks’ Capital (Source: Bloomberg)
U.S. stocks tumbled, sending the Dow Jones Industrial Average down more than 400 points for the fourth time this month, on concern the global economy is slowing and speculation that European banks lack enough capital. Caterpillar Inc. (CAT) and FedEx Corp. (FDX) fell at least 4.9 percent, pacing losses in stocks most-tied to the economy, as a Philadelphia-area manufacturing index sank to the lowest since 2009, jobless claims and consumer prices rose, and existing home sales slid. Bank of America Corp. (BAC) and Citigroup Inc. (C) fell more than 6 percent, following a plunge in European lenders. Hewlett- Packard Co. sank 6 percent after cutting its earnings forecast.
The Standard & Poor’s 500 Index slumped 4.5 percent to 1,140.65 at 4 p.m. in New York. All 10 groups in the S&P 500 dropped at least 1.2 percent, and only 10 stocks in the benchmark gauge advanced. The Dow fell 419.63 points, or 3.7 percent, to 10,990.58. Treasuries rallied, pushing 10-year yields to a record low. About 11.6 billion shares changed hands on U.S. exchanges as of 4:27 p.m., 44 percent more than the three-month average, according to data compiled by Bloomberg.

Dollar Climbs as Economy Outlook, Contagion Concern Fuel Treasuries Demand (Source: Bloomberg)
The dollar advanced against most of its major counterparts as Asian stocks extended a worldwide rout in equities amid speculation European banks lack sufficient capital. The yen fell for the first time in four days against the greenback as Finance Minister Yoshihiko Noda signaled he’s ready to do another "surprise" intervention in markets to curb gains the currency. The Australian dollar fell as concern over slowing global growth damped demand for higher-yielding assets. The euro weakened versus the dollar before a report forecast to show German producer-price inflation slowed in July. “The situation in Europe seems to be deteriorating by the day,” said Chris Weston, an institutional dealer at IG Markets in Melbourne. “If we do see an escalation and people start focusing again on credit markets like they did in 2008, the dollar will be back in vogue against the risk currencies."

Japan Exports Fall More Than Expected as Yen Gains Cloud Economic Outlook (Source: Bloomberg)
Japan’s exports fell more than expected in July as a global slowdown and a strengthening currency weigh on the outlook for the nation’s sales overseas. Exports decreased 3.3 percent in July from a year earlier, the Finance Ministry said today in Tokyo. The median estimate of 24 economists surveyed by Bloomberg News was for a 2.6 percent decline, after a 1.6 percent decrease in June. Shipments rose 0.8 percent in July from June on a seasonally adjusted basis. The world’s third-largest economy is counting on an export revival to aid its rebound from the record earthquake in March. The yen’s 6 percent advance against the dollar in the past three months may weigh on overseas sales at a time when demand from major markets such as China and the U.S. is faltering.

Posen’s BOE Stimulus Push Shapes Debate as European Debt Crisis Persists (Source: Bloomberg)
Bank of England policy maker Adam Posen’s 11-month push for more stimulus is now shaping the debate among officials as they consider whether the U.K. needs more quantitative easing to fight the danger of Europe’s crisis. With no policy maker seeking an interest-rate increase after Spencer Dale and Martin Weale switched votes, the discussion on the Monetary Policy Committee has shifted toward Posen’s agenda. He has pushed since October to increase the bank’s 200 billion-pound ($261 billion) bond-purchase plan. At stake is whether the U.K. can withstand an intensifying debt crisis in its biggest export market at a time when the domestic economy is struggling to grow and unemployment is rising. Spending cuts by Prime Minister David Cameron’s government to reduce Britain’s deficit have left the onus on the Bank of England to provide stimulus if the recovery falters.

European Stocks Sink Most Since 2009 on Growth, Funding Concerns (Source: Bloomberg)
European equities plummeted the most in more than two years as U.S. economic data missed forecasts, two Federal Reserve officials said the central bank shouldn’t act to protect stock investors and Swedish regulators warned that lenders are unprepared for a freeze in money markets. Dexia SA (DEXB) and Societe Generale SA slid more than 12 percent as the Wall Street Journal also said that U.S. regulators are stepping up scrutiny of Europe’s largest lenders. Fiat SpA (F) lost 12 percent as a gauge of carmakers fell 7.4 percent. Holcim Ltd. (HOLN) sank 8 percent as the world’s second-biggest cement maker reported profit that missed estimates. The Stoxx Europe 600 Index plunged 4.8 percent to 226.7 at the 4:30 p.m. close in London, the biggest drop since March 2009, as only four stocks gained. The gauge has tumbled 22 percent from this year’s peak in February amid concern that Europe will fail to contain its sovereign-debt crisis and that the economic recovery in the U.S. will falter.

FOREX-Swiss franc falls, traders say SNB in swap mkt
LONDON, Aug 18 (Reuters) - The Swiss franc fell against the euro and the dollar on Thursday, with traders citing talk the Swiss National Bank was intervening in the forwards market as part of efforts to curb the surging currency.
The dollar rose against commodity-linked currencies like the Australian dollar  while the yen was supported as European stocks fell and money market strains drove investors to the relative safety of the U.S. and Japanese currencies.