April 20, 2021

Stocks Mixed as Traders Wait for the Fed

U.S. stocks rallied to record highs on Wednesday after the Federal Reserve surprised investors and decided against trimming its bond-buying stimulus program, which has fueled Wall Street’s rally of more than 20 percent this year.

The Standard Poor’s 500 Index was up 20.67 points, or 1.21 percent, at 1,725.43. The Dow Jones industrial average was up 146.44 points, or 0.94 percent, at 15,676.17, and the Nasdaq Composite Index was up 37.94 points, or 1.01 percent, at 3,783.64.

Most market participants were expecting the central bank to begin a withdrawal of the bond-buying program by about $10 billion a month.

The committee said it saw recent economic data “as consistent with growing underlying strength in the broader economy.” However, the statement continued, “The committee decided to await more evidence that progress will be sustained before adjusting the pace of its purchases.”

Investors had been hesitant to make big bets ahead of what is expected to be the first tentative step by the Federal Reserve to wean the world off its stimulus program that has helped prop up the American economy and equity markets for much of the year.

Traders had generally expected the Fed’s Federal Open Market Committee to make modest cuts to its $85 billion in monthly asset buying, so the decision to keep the program intact, at least for now, came as a surprise.

Many equity options traders appear less worried by the Federal Reserve’s announcement than by Washington’s looming debt and budget battles. Hedges on volatility have been on the rise, but those bets do not look to be specifically tied to the Fed.

European shares were mostly higher, and the FTSEurofirst 300 closed up 0.4 percent, near a five-year closing high hit on Monday.

Markets in other kinds of assets were also suggesting that investors were not too worried about the Fed announcement. The dollar held near a four-week trough against a basket of major currencies on Wednesday, as investors bet that any move by the Federal Reserve to roll back stimulus would be modest.

Adobe Systems, known for its Photoshop and Acrobat software, said it expected subscriber growth to top the 331,000 it added in the third quarter because of strong demand from corporate customers. The stock was up 9.2 percent.

FedEx, the courier company, posted a bigger quarterly profit as it cut costs and its lower-priced ground shipping business did well, sending its shares up 6 percent.

This article has been revised to reflect the following correction:

Correction: September 18, 2013

Due to an editing error, an earlier version of this article misstated stocks’ gains in Wednesday’s stock rally.  Stocks climbed about 1 percent during trading on Wednesday, not 20 percent. Federal Reserve policies have been credited with helping to fuel  a 20 percent rally this year.

Article source: http://www.nytimes.com/2013/09/19/business/daily-stock-market-activity.html?partner=rss&emc=rss

Worst Day for Markets in Two Months as Signals Are Mixed

The stock market was pummeled on Thursday after two big companies issued grim sales forecasts and economic data added to investors’ concerns that the Federal Reserve would soon start winding down its economic stimulus program.

The Dow Jones industrial average fell more than 225 points, its worst day in nearly two months. Investors also sold off bonds, driving the yield on the 10-year Treasury note to its highest level in more than two years.

Before the start of trading, Wal-Mart Stores cut its estimates for annual revenue and profit, warning that cautious shoppers are spending less. The news followed a disappointing revenue forecast from Cisco Systems late on Wednesday.

In a twist, more signs of resilience in the nation’s economy weighed on the stock market. Reports on inflation and the job market appeared to raise the odds that the Fed would begin winding down its $85 billion monthly program of buying Treasury and mortgage-backed securities as early as next month. Many investors think that the Fed’s effort to keep interest rates extremely low has underpinned the stock market’s record run.

“People are worried that this move up in interest rates will kill the recovery, and we won’t see the anticipated second-half improvement in growth and corporate earnings,” said Alec Young, global equity strategist at S. P. Capital IQ.

The Dow industrials lost 225.47 points, or 1.5 percent, to close at 15,112.19. The Standard Poor’s 500-stock index fell 24.07 points, or 1.4 percent, to 1,661.32. The selling swept across all 10 industry groups in the S. P. 500.

The Nasdaq composite index dropped 63.16 points, or 1.7 percent, to 3,606.12.

“It seems like an overreaction today,” said Randy Frederick, managing director of active trading and derivatives at the Schwab Center for Financial Research.

Mr. Frederick said many investors were speculating that the improving economy meant that the Fed would start pumping less money into the financial system in the coming months. If that results in lower bond prices and even higher yields, it could lead more investors to dump dividend-paying stocks in favor of bonds.

“Some of the stocks getting hit hardest recently are big companies paying dividends,” Mr. Frederick said. Utilities stocks are down 3 percent this week, for example, the worst of the S. P. 500’s industry groups.

The government said on Thursday that the number of Americans applying for unemployment benefits dropped to 320,000 last week, the lowest level since October 2007, two months before the start of the recession.

A slowly improving economy should eventually lead to higher spending and more sales for big companies. But right now, investors are more focused on the Fed’s next move, said Natalie Trunow, the chief investment officer at Calvert Investments.

“There’s this counterintuitive reaction to economic news,” Ms. Trunow said. “Positive data comes out and markets aren’t excited about it. They say, ‘Uh-oh, the stimulus will be removed.’ ”

Wal-Mart fell $1.99, or 3 percent, to $74.41 after the company cut its profit and revenue forecasts for 2013. It also reported second-quarter results that missed Wall Street’s estimates.

Shares of Cisco Systems fell $1.89, or 7 percent, to $24.49, for the biggest drop of the 30 big companies in the Dow, after the company announced plans late on Wednesday to cut 5 percent of its work force, roughly 4,000 employees, as its sales slow.

Cisco’s announcement led to selling in other technology stocks, as it is widely regarded as a bellwether for the entire industry. That is because the company sells a wide range of products to corporations and governments and its fiscal quarters end a month later than most major technology companies’, which gives investors an early look into current conditions.

The Dow has slumped 2 percent so far this week, and the S. P. 500 is down 1.8 percent. However, the Dow is up 15.3 percent for the year so far, while the S. P. 500 is up 16.5 percent. Both indexes closed at nominal highs on Aug. 2.

In the bond market, interest rates climbed, and the yield on the 10-year Treasury note, a benchmark for interest rates on mortgage loans, jumped as high as 2.81 percent in early trading. The selling in the 10-year note eased a bit later in the day and its price ended down 15/32, to 97 22/32, giving it a yield of 2.77 percent, up from 2.71 percent late on Wednesday.

Higher long-term interest rates could cool housing sales. “A sharp increase in long-term rates translates into a sharp increase in mortgage rates,” Ms. Trunow said. “That’s bound to impact the housing market.”

Article source: http://www.nytimes.com/2013/08/16/business/daily-stock-market-activity.html?partner=rss&emc=rss

New Data Suggest a Pause in China’s Slowdown

HONG KONG — China’s economy faces major structural challenges in the coming years, but for now, the slowdown of the recent past may have bottomed out.

A new batch of economic data released Friday provided additional signs of buoyancy in an economy that has been weighed down by lackluster international demand. The Chinese government has also taken a tough-love approach, eager to wean the country from its reliance on exports and cheap credit.

Industrial output growth, which had been languishing around 9 percent for the past few months, jumped to 9.7 percent in July, the National Bureau of Statistics reported. The figure easily beat expectations for a rise of 9 percent, and helped support tentative signs that conditions in the country’s manufacturing sector were starting to show a moderate improvement.

Retail sales grew 13.2 percent from a year earlier, slightly less than the 13.5 percent that analysts polled by Reuters had expected, but in line with the performance of the past few months.

And investment in fixed assets, like buildings and machinery, in urban areas also was in line with expectations, growing 20.1 percent in the first seven months of this year.

Together with unexpectedly solid import and export data released Thursday, this week’s data appeared to show that the Chinese economy has stabilized, at least for now, and prompted some analysts to project a modest pickup in the coming months.

‘’The better-than-expected July activity data has largely dampened the concern of a hard landing of China’s economy,’’ economists at Australia and New Zealand Banking Group wrote in a note. It suggests that China’s economy ‘’is bottoming out.’’

China had been gradually losing steam for many months as it left behind the supercharged growth that turned it into the world’s second-largest economy, after the United States. Economic growth is likely to come in at about 7.5 percent this year, a far cry from the double-digit annual increases the country enjoyed for much of the past three decades.

Still, the data for July appeared to indicate that some of the recent drags on growth have eased.

Export demand from the West has improved as the United States and other economies have gained momentum. And domestically, the authorities in Beijing have clarified in recent weeks that while they are prepared to tolerate slower growth, they will also step in to prevent growth from slowing too rapidly.

Beijing has also announced a string of small-scale measures aimed at propping up activity — tax cuts for small businesses, for example, and measures aimed at speeding up railroad construction in inland and poor areas.

The improved policy clarity and support measures appear to have encouraged the increased activity, especially in the private sector, said Stephen Schwartz, chief economist for Asia at the Spanish bank BBVA in Hong Kong.

The latest reports on Friday “gives us more confidence in our forecast that growth will stabilize in the third quarter, and pick up gradually in the fourth quarter,” Mr. Schwartz said. However, like many other analysts, he said that the outlook for next year and beyond remained uncertain as China battles with the tough overhauls that are needed as the country tries to shift toward more efficient, balanced and sustainable growth.

Economic turmoil in the West and rising wages at home have undermined the export growth that formed the bedrock of China’s growth for decades. The fact that China’s population is aging and its labor force is shrinking means there is an urgent need to raise labor productivity and reduce the inefficiencies and misallocations of capital that have marred growth for years. And overcapacity, corruption and poor allocation of assets continue to affect growth.

Inflation figures released Friday underlined the challenges facing many industries. While consumer price inflation remained muted in July, at 2.7 percent, the price of goods as they leave the factory gate fell 2.3 percent from a year ago, continuing a decline that has lasted for more than a year.

Beijing has sought to rein in credit in a bid to tackle the flow of easy money that fueled growth in recent years, but that has generated worries about asset quality and potentially destabilizing defaults further down the line.

These challenges will weigh on China for years, prompting some analysts to warn — despite the apparent stabilization in July — that growth will slow to well below the current official target of 7.5 percent.

‘’While we believe the government could delay sub-7 percent growth into 2014, we do not believe it can be avoided,’’ Zhang Zhiwei, China economist at Nomura, wrote in a note, adding that he believed the government was likely to cut its growth target for next year to 7 percent.

‘’Leverage in the economy remains high, and many industries continue to face overcapacity problems,’’ Mr. Zhang said. ‘’The resolution of these problems will inevitably require a period of constructive destruction — expect some bankruptcy cases.’’

Article source: http://www.nytimes.com/2013/08/10/business/global/new-data-suggest-stabilizing-chinese-economy.html?partner=rss&emc=rss

Fed Meeting Ends With No Sign of New Direction

The Fed acknowledged the weak pace of growth during the first half of the year, describing the rate as “modest” rather than “moderate,” but maintained its forecast that “economic growth will pick up from its recent pace,” according to a statement published after the committee’s two-day meeting.

The Fed also noted the sluggish pace of inflation, which has dropped to the lowest pace on record, but said that it continued to expect a rebound.

As usual, the Fed maintained its flexibility, noting that it was ready to increase or decrease its stimulus campaign as warranted by economic conditions.

The decision was supported by 11 of the 12 members of the Federal Open Market Committee. The sole dissenter was Esther L. George, president of the Federal Reserve Bank of Kansas City, who has dissented at each meeting this year, citing the risks of financial destabilization and higher inflation.

The committee had little time to digest the latest economic data. The government announced earlier Wednesday that the economy expanded at an annual rate of 1.7 percent in the second quarter, better than economists had expected but below the pace that Fed officials regard as necessary to create enough jobs to bring down the unemployment rate. The Fed has predicted faster growth in the second half of the year.

The Fed’s chairman, Ben S. Bernanke, surprised investors after the committee’s last meeting in June by announcing that the central bank expected to reduce the volume of its monthly asset purchases later this year, and to end the purchases by the middle of next year, provided that economic growth met the Fed’s expectations. The central bank has increased its holdings of mortgage-backed securities and Treasury securities by $85 billion a month since December.

Interest rates rose in response, undermining the purpose of the bond-buying program, but Fed officials have not backed away from that timeline. Mr. Bernanke and others have said that if the economy needs more help, they would rather lean on other tools, like the policy of holding short-term interest rates near zero.

The Fed has said that it intends to maintain that policy at least as long as the unemployment rate remains above 6.5 percent and likely for some time thereafter as long as inflation remains under control. The rate was 7.6 percent in June.

Mr. Bernanke described this as “a change in the mix of tools” in testimony before the House Financial Services Committee earlier this month.

The shift in strategy appears to reflect a reassessment of the potential costs of asset purchases. A number of Fed officials have expressed concern that the bond-buying could destabilize markets, for example by reducing the supply of low-risk assets, thus distorting prices or encouraging speculation. Other economists, including Lawrence H. Summers, a leading candidate to succeed Mr. Bernanke at the Fed, have expressed similar concerns about the purchases.

The Fed has also faced persistent questions about the benefits of the purchases. Mr. Bernanke and his allies say the bond-buying, by reducing borrowing costs, has contributed to a recent rise in home and auto purchases. Other economists, however, regard these effects as minor at best.

Fed officials and supportive economists also have suggested that the central bank’s asset purchases are valuable in convincing investors that the central bank is maintaining its long-term commitment to suppressing borrowing costs. As long as the Fed is buying bonds, it is not about to start raising rates.

Article source: http://www.nytimes.com/2013/08/01/business/economy/fed-maintains-course-on-policy.html?partner=rss&emc=rss

China’s Credit Squeeze Relaxes as Interest Rates Drop

The central government made no official announcement on the situation, and it was unclear whether policy makers had intervened, but short-term interest rates fell sharply Friday from a day earlier, when they had reached some of the highest levels in a decade.

Still, the Chinese financial markets remained under pressure. Rates for institutions that were seeking interbank funding on Friday were still substantially higher than a few weeks ago. Financial experts expressed skepticism that the government would do more to aid banks that were temporarily starved for cash.

The reluctance of policy makers to act comes amid growing concerns that China’s economy is weakening and that the government has abandoned its longstanding policy of responding to any hint of an economic slowdown by expanding credit.

By signaling a new restraint in monetary policy, Beijing seems to be tackling what analysts say is the growing risk of poor lending practices and overcapacity in the economy.

Louis Kuijs, an economist at the Royal Bank of Scotland, said Friday that the government’s response to weak cash flows in the interbank market, where banks make short-term loans to one another, was a sign of the government’s new resolve.

“It was the shift in the stance of the P.B.C. that made all the difference,” he said, referring to the People’s Bank of China, the central bank, acting in a way that had sent interest rates higher. “The government at the moment wants to signal, ‘we’re working on reform — we’re not interested in short-term stimulus,’ like China did in the past.”

The apparent decision not to pump more cash into the economy rocked China’s financial markets Thursday. Investor worries were compounded by newly released economic data indicating that manufacturing activity was contracting and export and job growth were tepid.

As credit markets began to freeze up and mistrust among banks spread, rumors circulated of defaults. Late Thursday, the Bank of China, one of the country’s biggest lenders, issued a statement on its Web site denying local news reports that it had defaulted on interbank payments.

By late Friday, the markets had settled somewhat. The overnight lending rate between banks had dropped to 8.49 percent, down from a record high of 13.44 percent on Thursday, but still much higher than last month’s levels of less than 4 percent.

Another benchmark rate for borrowing costs between banks, the seven-day repurchase rate, opened Friday at 8.1 percent, briefly soared as high as 25 percent and closed at 5.5 percent.

Few analysts expect the liquidity strains to lead to a financial or economic crisis because Beijing has the tools to avert a serious slowdown, with its tight control over the banking and financial sector.

But experts say the risks are rising and the choices are grim: if the government pulls back on lending, the economy could suffer in the short term; if it pumps more money into the economy to avert a slowdown, it could do long-term damage to an economy that many believe is already suffering from overinvestment.

There are also growing concerns about China’s huge shadow banking sector, with some financial experts warning of hidden liabilities tied up in local government projects, as well as the so-called wealth management products that are sold to investors through banks and trust funds but do not appear on the financial companies’ balance sheets.

“Persistent tight liquidity conditions in China’s financial sector could constrain the ability of some banks to meet upcoming obligations on maturing wealth management products on a timely basis,” the credit ratings agency Fitch Ratings said in a report Friday.

Joe Zhang, a longtime banker and the author of “Inside China’s Shadow Banking: the Next Subprime Crisis?,” said the decision by China’s central bank to discipline banks by allowing the rates to rise this week was necessary.

“Effectively, they are telling commercial banks to go and sort out their problems,” he said in a telephone interview Friday. “The banks have lent out too much money. And what happens over time? You go from prime to subprime to silly loans. This is what happened with the U.S. subprime crisis. Banks start lending to bad projects. We’ve been too reckless.”

Neil Gough contributed reporting from Hong Kong.

Article source: http://www.nytimes.com/2013/06/22/business/global/chinas-bank-lending-crunch-eases.html?partner=rss&emc=rss

Nikkei Dives More Than 4 Percent

HONG KONG — The battered Japanese stock market lurched into bear market territory Thursday, after a tumble of 4.5 percent took the combined decline in the Nikkei 225 index since May 23 to more than 20 percent.

By early afternoon in Tokyo, the Nikkei 225 hovered around 12,680 points, about 20 percent below a high of nearly 16,000 reached in intraday trading three weeks earlier.

The drop on Thursday was one of many sharp declines seen in recent weeks, since a feverish six-month rally in Japanese stocks — incited by optimism over the government’s aggressive efforts to reinvigorate the listless economy — came to an abrupt end.

The Nikkei 225 soared more than 80 percent between mid-November and mid-May, but staged a sudden about-face with a 7.3 percent plunge on May 23.

Sentiment has been fragile and trading volatile ever since, as investors have taken stock of the challenges that face “Abenomics,” the economic policies of Prime Minister Shinzo Abe, and weighed the pros and cons of taking profits after the rally.

But factors beyond Japan also have come into the fray, and helped send markets lower around the world.

In China, which is a key engine of global growth, the flow of economic data in recent weeks has reinforced the picture of an economy that is struggling to regain momentum.

And in the United States, comments on May 22 by Ben S. Bernanke, the chairman of the U.S. Federal Reserve, that he and his colleagues might consider paring back their bond-buying programs “in the next few meetings” if the economy is showing signs of improvement have helped fan global nervousness. Investors and analysts, meanwhile, have struggled to assess the possible implications of even a small withdrawal of the bond buying that has supported markets in recent years.

The concerns about the “tapering” of U.S. stimulus measures have sent stocks lower around the world. In the United States, the Dow Jones industrial average and the S. P. 500 have sagged 3.2 percent and 4 percent, respectively, in the past three weeks. The DAX in Germany has fallen about 4.5 percent and the CAC 40 in France has dropped more than 6 percent.

Key markets in the Asia-Pacific region have tumbled even more.

The Straits Times index in Singapore and the Hang Seng in Hong Kong have both shed more than 10 percent since May 22, and in Australia, the S.P./ASX 200 has sagged more than 9 percent.

Article source: http://www.nytimes.com/2013/06/14/business/global/asian-stock-markets.html?partner=rss&emc=rss

Little Change in Wall Street Indexes

For the first time since November, the Standard Poor’s 500-stock index posted a loss in consecutive weeks. Investors seemed willing to take money off the table after several months of gains.

The S. P. 500 ended May up 2.1 percent, its seventh straight month of gains — the longest streak since 2009. The index is up 14.3 percent in 2013, scoring its best five-month start to a year since 1997. Over the last seven months, it has climbed 15.5 percent.

Trading has been volatile for most of the week on concerns that the Federal Reserve will retreat from its monetary policy, the main engine behind the strong rally in equities this year.

Data on Friday pointed to a soft American economy but failed to quell speculation about possible action by the Fed. Consumer spending fell in April for the first time in almost a year, and inflation pressures were subdued.

But a separate report showed manufacturing rose more than expected in May, reflecting an expansion of business activity after a contraction in April.

“The economic data we have seen over the last week or so has been quite positive,” said Peter Kenny, chief market strategist at Knight Capital in Jersey City. He added: “It also speaks to the fact that tapering or a shift in monetary policy is more likely — the more positive it is. As a result, people are more than happy to ring the register — you never go broke ringing the register on a winning trade.”

Selling accelerated near the market’s close with the rebalancing of the MSCI indexes at the end of the day. Credit Suisse forecast $19 billion in total trading as a result of the rebalancing, with $15 billion related to developed markets.

“What’s happened in the last hour here, there’s some index and month-end rebalancing that accelerated the downturn,” said Bucky Hellwig, senior vice president of BBT Wealth Management in Birmingham, Ala.

The Dow Jones industrial average slid 208.96 points, or 1.36 percent, to close at 15,115.57. The S. P. 500 lost 23.67 points, or 1.43 percent, to finish at 1,630.74. The Nasdaq composite fell 35.39 points, or 1.01 percent, to end at 3,455.91.

For the week, the Dow fell 1.2 percent, the S. P. 500 lost 1.1 percent, and the Nasdaq dipped 0.1 percent. For May, the Dow rose 1.9 percent and the Nasdaq gained 3.8 percent.

The stock market’s advance this year has come largely on supportive monetary policies from central banks around the world, which helped the markets ignore the Wall Street adage of “sell in May, go away” — a historical trend of seasonal weakness. In May 2012, the S. P. 500 fell 6.3 percent.

Energy and health care stocks were among the session’s worst performers, with Pfizer and Exxon Mobil the two biggest drags on the S. P. 500. Pfizer lost 3.6 percent to $27.23, while the S. P. health care sector index dropped 2.2 percent. Exxon Mobil slid 1.8 percent to $90.47. The S. P. energy sector index lost 2 percent.

Palo Alto Networks shares lost 10.8 percent to $48.52 after the company gave an outlook that was below expectations.

The benchmark 10-year Treasury note fell 4/32 on Friday, to 96 19/32, as its yield rose to 2.13 percent, from 2.12 percent late Thursday evening.

Article source: http://www.nytimes.com/2013/06/01/business/daily-stock-market-activity.html?partner=rss&emc=rss

Markets Lower as Stimulus Worries Continue

Wall Street opened lower Wednesday, joining European markets, as investors continued to question the longevity of the Federal Reserve’s stimulus program.

In early trading the Standard Poor’s 500-stock index fell 0.7 percent, the Dow Jones industrial average was also 0.7 percent lower, and the Nasdaq composite was 0.6 percent lower.

Supportive monetary policies from central banks around the world have lifted equity markets this year, with the S.P. 500 up more than 16 percent. On Tuesday, stocks soared and the Dow closed at another record high after the Bank of Japan and European Central Bank reassured investors that policies designed to boost economic growth would stay in place.

Last week, indexes fell on concerns that the program may be scaled back sooner than expected, and strong economic data on Tuesday stirred speculation that the Fed may begin tapering off its program soon. The concerns sent United States Treasury debt yields to their highest levels in over a year and pulled equities back from session highs.

Tuesday “was the first time we saw rates spike on concerns about the Fed tapering, and if that spreads, it will have negative ramifications for the rest of the market,” said Adam Sarhan, chief executive of Sarhan Capital in New York.

While strong corporate earnings have also contributed to the equity market’s surge in 2013, central bank stimulus has pushed investors to add to positions on market declines, limiting extended sell-offs. So, any change to the stimulus program may prompt a round of profit taking.

“There’s still a question about how much we can grow without stimulus, and what will happen to the market when rates go up,” Mr. Sarhan said.

In company news, Smithfield Foods surged 24.7 percent in early trading after China’s Shuanghui Group agreed to buy the company for $34 a share.

Shares of Trina Solar Ltd traded in the United States 5.8 percent after the company reported its seventh straight quarterly loss.

Apple’s chief executive, Timothy D. Cook, said late Wednesday he expected the company to release “several more game changers,” hinting that wearable computers could be among them. Apple shares rose 0.4 percent.

In Europe, shares and bonds fell across the board as Tuesday’s robust economic data out of the United States fanned speculation the Federal Reserve may soon begin tapering back its bond-buying program.

The FTSE Eurofirst 300 index of top European shares was down 1.3 percent, giving back the previous day’s 1.3 percent gain.

In Asian markets, Tokyo’s Nikkei and the Shanghai composite both ended the day 0.1 percent higher, but the Hang Seng in Hong Kong fell 1.6 percent.

The dollar, which has been rising on bets on a reduction in Fed stimulus, hovered near three-year highs against most major currencies, held in check by a stronger yen.

The yen, often used as a safe haven by investors, gained as stocks fell, rising around 1 percent at 101.29 to the dollar

Article source: http://www.nytimes.com/2013/05/30/business/daily-stock-market-activity.html?partner=rss&emc=rss

Chinese Officials Receive Prison Terms for Economic Data Leaks

Opinion »

Op-Ed: Small Isn’t Always Beautiful

Job growth is about new companies that will start small and, if they survive, perhaps grow large.

Article source: http://www.nytimes.com/2011/10/25/business/global/chinese-officials-receive-prison-terms-for-economic-data-leaks.html?partner=rss&emc=rss

Stock Markets in Asia Resume Their Slide

Dismal U.S. jobs data on Friday and fresh worries about Europe’s ability to deal with the debt crisis engulfing some of the euro zone states prompted investors once again to dump stocks and flee into assets deemed safer, like gold and U.S. Treasuries

On Monday, in Germany, the Dax index plummeted 5.3 percent, the FTSE 100 in Britain lost 3.6 percent, and several Asian stock markets fell well over 2 percent.

Stock markets in the Asia-Pacific region continued to sink Tuesday, though less dramatically.

By midmorning, the Nikkei 225 index was 1.2 percent lower, while the benchmark indexes in Singapore, Hong Kong and South Korea lost 0.9 percent.

The Taiex in Taiwan and the S. P./ASX 200 in Australia were down 1.1 percent, and in mainland China, the Shanghai composite index slipped 0.4 percent.

“Key economic data continues to disappoint as global business sentiment surveys weakened further and the U.S. employment report printed well below market expectations,” analysts at Barclays Capital said in a research note.

“Increasing concerns over global growth appear to have halted the brief rally in risk assets in the last week of August,” they said, adding that investors are likely to remain edgy, and financial markets volatile, over the next few weeks.

U.S. markets had taken a major battering on Friday, with falls of more than 2 percent, after data showed the U.S. economy had added no jobs in August.

Futures on the Standard Poor’s 500 index were 2.3 percent lower in early Asian trading on Tuesday, indicating that the market is likely to sag again when Wall Street reopens. The U.S. market was closed for Labor Day on Monday.

U.S. Treasuries jumped, pushing the yield on the 10-year Treasuries to 1.92 percent, a record low, according to Bloomberg News.

Gold was trading at just under $1,900 an ounce, not far off a nominal record high of just over $1,913, hit late last month. The precious metal is seen as a haven in times of uncertainty, and its sharp ascent in recent weeks has reflected the global nervousness that has built up this year.

Article source: http://www.nytimes.com/2011/09/07/business/global/daily-stock-market-activity.html?partner=rss&emc=rss