World stocks slide after dour US economy news

World stock markets slide as dour US economy news renews concerns about slowdown

Christopher Morie of Jefferies Execution Services works beneath an electronic sign board on the floor of the New York Stock Exchange, Thursday, Aug. 19, 2010, in New York. (AP Photo/Henny Ray Abrams)

On Friday August 20, 2010, 4:48 am

BANGKOK (AP) -- World markets dropped Friday as more dour reports on the U.S. economy renewed concerns about a slowing recovery and sent stock investors packing.

Wall Street set the stage for Asia and Europe's losses after figures showed an unexpected rise in first-time claims for U.S. unemployment benefits and a drop in manufacturing activity in the Philadelphia region.

The numbers spooked investors around the globe, some taking them as a sign that the world's largest economy is headed back to recession.

The "jury is still out as to whether bulls or bears will be sure winners given an uncertain economic outlook and poor U.S. economic data," Taiwan International Securities said in a report. "Investors ought to stay cautious and are advised to under weigh stocks until the risks and negative sentiment subside."

Oil prices, meanwhile, wallowed below $75 a barrel amid expectations that demand for crude will weaken.

Early in Europe, Germany's DAX dropped 0.5 percent to 6,042.12, France's CAC-40 was off 0.5 percent at 3,555.39 and Britain's FTSE 100 fell 0.2 percent to 5,200.45.

Futures augured slight gains on Wall Street with Dow futures ahead by 1.2 points, or 0.1 percent, to 1,072.50 and broader S&P futures up 11, or 0.1 percent, to 10.246.00.

Japan's benchmark Nikkei 225 stock average retreated 183.30, or 2 percent, to 9,179.38 and South Korea's Kospi dropped 0.2 percent to 1,775.54.

Australia's S&P/ASX 200 index faded 1.1 percent to 4,430.90 ahead of national elections Saturday and the Shanghai Composite Index shed 1.7 percent to 2,642.31.

Adding to the glum mood in China was uncertainty stemming from Beijing's announcement earlier in the week that it would examine the finances of heavily indebted local government agencies set up to invest in real estate and infrastructure.

"It showed that the scrutiny is getting into a substantial stage, and that might hurt earnings of real estate developers or banks," said Li Jun, an analyst for Central Securities in Shanghai.

Elsewhere, Hong Kong's Hang Seng gave up 0.4 percent to 20,984.29. Markets in Singapore, Taiwan, India, and New Zealand also fell while Malaysia, Thailand and Indonesia posted moderate gains.

The Dow Jones industrial average fell 144 points, or 1.4 percent, to 10,271.21 on Thursday. The broader Standard & Poor's 500 index fell 18.53, or 1.7 percent, to 1,075.63, while the Nasdaq composite index fell 36.75, or 1.7 percent, to 2,178.95.

In currencies the dollar rose to 85.38 yen from 85.26 yen late Thursday in New York while the euro slipped to $1.2824 from $1.2819.

Benchmark crude for October delivery was up 9 cents to $74.52 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 99 cents to settle at $74.43 on Thursday.

Associated Press researcher Bonnie Cao in Beijing contributed to this report.

http://finance.yahoo.com/news/World-stocks-slide-after-dour-apf-1166499081.html?x=0

Stock futures drop as jobless claims rise

Stock futures fall after claims for unemployment benefits rise unexpectedly

• Companies:

  • Intel Corporation
  • McAfee, Inc.
  • Sears Holdings Corporation

• Topics:

  • Stocks

In this Aug. 11, 2010 photo, specialist John Urbanowicz, left, talks with a colleague on the floor of the New York Stock Exchange. Stock futures rose Thursday as investors anticipate fresh reports will signal the economy continues to grow, albeit slowly. (AP Photo/Richard Drew)

Related Quotes

Symbol	Price	Change
INTC	19.59	0.00
MFE	29.93	0.00
SHLD	67.25	0.00

Stephen Bernard, AP Business Writer, On Thursday August 19, 2010, 9:03 am

NEW YORK (AP) -- Stock futures retreated Thursday after the Labor Department said claims for unemployment benefits rose unexpectedly, renewing concerns about the pace of a recovery.

The disappointing news about the jobs market came minutes after futures got a lift from news that Intel Corp. was acquiring McAfee Inc. The acquisition, valued at $7.68 billion, helped cushion the fall from the jump in unemployment benefit claims.

The two announcements are the latest to provide a conflicting picture of the recovery. Economic reports have regularly shown the pace of a rebound is slowing and companies are skittish about adding new workers. That has hurt stocks on some days in recent weeks. It has also stoked fears about the economy falling back into recession.

At the same time, corporate announcements, including earnings reports for the past six weeks, have largely showed companies are doing well. Mergers and acquisitions activity is often considered a positive sign because it means companies are willing to spend money to grow their businesses and are confident that business prospects are improving.

The Labor Department said initial claims for unemployment benefits rose by 12,000 to 500,000 last week from an upwardly revised 488,000 a week earlier. Economists polled by Thomson Reuters forecast claims would fall slightly.

High unemployment is considered the biggest hurdle to a stronger recovery because people worried about jobs have scaled back their spending. Consumer spending accounts for the bulk of the country's economic activity.

Ahead of the opening bell, Dow Jones industrial average futures fell 11, or 0.1 percent, to 10,341. Standard & Poor's 500 index futures fell 1.00, or 0.1 percent, to 1,085.70, while Nasdaq 100 index futures fell 2.25, or 0.1 percent, to 1,834.50.

The Dow has risen the past two days, climbing 1.1 percent during that stretch.

Volume has been particularly light in recent weeks, even by summer standards, meaning many investors are still uncertain about the direction of the economy. If economic reports over the coming months continues to show the economy is growing, even slowly, it could alleviate fears of a second recession. That, in turn, could bring many investors back into the stock market.

Investors will get two other readings on the economy later in the morning when the Federal Reserve Bank of Philadelphia reports on regional manufacturing activity and the Conference Board releases its index on leading economic indicators. Both are expected to show modest improvements.

The Philly Fed index is expected to report an increase in activity, following a similar report from the New York Fed last week. Economists expect the Philly Fed survey to rise to 7 in August from 5.1 last month. Any reading above 0 indicates growth in the sector.

Manufacturing activity had shown consistent growth earlier this year as the recovery took hold. But over the summer, activity has waned a bit. So signs of new growth would add further reassurances that the economy is still growing.

The Conference Board's index of leading economic indicators likely rose 0.2 percent last month after falling a month earlier. The index tries to predict economic activity over the next three to six months, so a rise in the index would indicate the economy is likely to grow during the second half of the year.

Both reports are due out at 10 a.m. EDT.

Chip maker Intel is buying computer-security software maker McAfee in an all-cash deal for $48 per share. McAfee shares surged $17.37, or 58 percent, to $47.30 in pre-opening trading. Intel shares fell 46 cents, or 2.4 percent, to $19.13 after the deal was announced.

In other corporate news, Sears Holdings Corp. reported its second-quarter loss was cut in half as profit margins improved at its Kmart chain. But revenue at stores open at least a year, a key measure of strength in the retail industry, fell during the quarter. Sears shares dipped 8 cents to $67.17.

Bond prices erased most of their losses after the weak jobs report. Investors often move into the safety of government bonds when there are signs the economy is not strong. The yield on the 10-year Treasury note, which moves opposite its price, rose to 2.66 percent from 2.64 percent late Wednesday. Its yield is often used to help set interest rates on mortgages and other consumer loans.

Overseas, Britain's FTSE 100 fell 0.5 percent, Germany's DAX index fell 0.5 percent, and France's CAC-40 dropped 0.5 percent. Japan's Nikkei stock average rose 1.3 percent.

http://finance.yahoo.com/news/Stock-futures-drop-as-jobless-apf-2700438814.html?x=0

Stock futures drop as jobless claims rise

Stock futures fall after claims for unemployment benefits rise unexpectedly

• Companies:

  • Intel Corporation
  • McAfee, Inc.
  • Sears Holdings Corporation

• Topics:

  • Stocks

In this Aug. 11, 2010 photo, specialist John Urbanowicz, left, talks with a colleague on the floor of the New York Stock Exchange. Stock futures rose Thursday as investors anticipate fresh reports will signal the economy continues to grow, albeit slowly. (AP Photo/Richard Drew)

Related Quotes

Symbol	Price	Change
INTC	19.59	0.00
MFE	29.93	0.00
SHLD	67.25	0.00

Stephen Bernard, AP Business Writer, On Thursday August 19, 2010, 9:03 am

NEW YORK (AP) -- Stock futures retreated Thursday after the Labor Department said claims for unemployment benefits rose unexpectedly, renewing concerns about the pace of a recovery.

The disappointing news about the jobs market came minutes after futures got a lift from news that Intel Corp. was acquiring McAfee Inc. The acquisition, valued at $7.68 billion, helped cushion the fall from the jump in unemployment benefit claims.

The two announcements are the latest to provide a conflicting picture of the recovery. Economic reports have regularly shown the pace of a rebound is slowing and companies are skittish about adding new workers. That has hurt stocks on some days in recent weeks. It has also stoked fears about the economy falling back into recession.

At the same time, corporate announcements, including earnings reports for the past six weeks, have largely showed companies are doing well. Mergers and acquisitions activity is often considered a positive sign because it means companies are willing to spend money to grow their businesses and are confident that business prospects are improving.

The Labor Department said initial claims for unemployment benefits rose by 12,000 to 500,000 last week from an upwardly revised 488,000 a week earlier. Economists polled by Thomson Reuters forecast claims would fall slightly.

High unemployment is considered the biggest hurdle to a stronger recovery because people worried about jobs have scaled back their spending. Consumer spending accounts for the bulk of the country's economic activity.

Ahead of the opening bell, Dow Jones industrial average futures fell 11, or 0.1 percent, to 10,341. Standard & Poor's 500 index futures fell 1.00, or 0.1 percent, to 1,085.70, while Nasdaq 100 index futures fell 2.25, or 0.1 percent, to 1,834.50.

The Dow has risen the past two days, climbing 1.1 percent during that stretch.

Volume has been particularly light in recent weeks, even by summer standards, meaning many investors are still uncertain about the direction of the economy. If economic reports over the coming months continues to show the economy is growing, even slowly, it could alleviate fears of a second recession. That, in turn, could bring many investors back into the stock market.

Investors will get two other readings on the economy later in the morning when the Federal Reserve Bank of Philadelphia reports on regional manufacturing activity and the Conference Board releases its index on leading economic indicators. Both are expected to show modest improvements.

The Philly Fed index is expected to report an increase in activity, following a similar report from the New York Fed last week. Economists expect the Philly Fed survey to rise to 7 in August from 5.1 last month. Any reading above 0 indicates growth in the sector.

Manufacturing activity had shown consistent growth earlier this year as the recovery took hold. But over the summer, activity has waned a bit. So signs of new growth would add further reassurances that the economy is still growing.

The Conference Board's index of leading economic indicators likely rose 0.2 percent last month after falling a month earlier. The index tries to predict economic activity over the next three to six months, so a rise in the index would indicate the economy is likely to grow during the second half of the year.

Both reports are due out at 10 a.m. EDT.

Chip maker Intel is buying computer-security software maker McAfee in an all-cash deal for $48 per share. McAfee shares surged $17.37, or 58 percent, to $47.30 in pre-opening trading. Intel shares fell 46 cents, or 2.4 percent, to $19.13 after the deal was announced.

In other corporate news, Sears Holdings Corp. reported its second-quarter loss was cut in half as profit margins improved at its Kmart chain. But revenue at stores open at least a year, a key measure of strength in the retail industry, fell during the quarter. Sears shares dipped 8 cents to $67.17.

Bond prices erased most of their losses after the weak jobs report. Investors often move into the safety of government bonds when there are signs the economy is not strong. The yield on the 10-year Treasury note, which moves opposite its price, rose to 2.66 percent from 2.64 percent late Wednesday. Its yield is often used to help set interest rates on mortgages and other consumer loans.

Overseas, Britain's FTSE 100 fell 0.5 percent, Germany's DAX index fell 0.5 percent, and France's CAC-40 dropped 0.5 percent. Japan's Nikkei stock average rose 1.3 percent.

http://finance.yahoo.com/news/Stock-futures-drop-as-jobless-apf-2700438814.html?x=0

Jobless claims rise to highest level in 9 months

AP – In this photo made June 22, 2010, Stacey Miller, 28, center, and her sons Donavan, 11, second from right, …

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By CHRISTOPHER S. RUGABER, AP Economics Writer – 11 mins ago

WASHINGTON – New applications for unemployment insurance reached the half-million mark last week for the first time since November, a sign that employers are likely cutting jobs again as the economy slows.

The Labor Department said Thursday that initial claims for joblessbenefits rose by 12,000 last week to 500,000, the fourth increase in the past five weeks. Wall Street economists forecast that claims would drop.

The four-week average, a less volatile measure, rose by 8,000 to 482,500, the highest since December. There were no special factors that distorted the numbers, a Labor Department analyst said.

The increase suggests the economy is creating even fewer jobs than in the first half of this year, when private employers added an average of about 100,000 jobs per month. That's barely enough to keep theunemployment rate from rising. The jobless rate has been stuck at 9.5 percent for two months.

Stock futures fell on the news. The Dow Jones industrial average futures had risen more than 50 points before the report was released. They dropped quickly and were down as much as 20 points afterward.

Jobless claims declined steadily last year from a peak of 651,000 in March 2009 as the economy recovered from the worst downturn since the 1930s. After flattening out earlier this year claims have begun to grow again.

The number of people continuing to receive benefits fell by 13,000 to 4.5 million, the department said. Thecontinuing claims data lags initial claims by one week.

But that doesn't include millions of people receiving extended unemployment insurance, paid for by the federal government. About 5.6 million unemployed workers were on the extended unemployment benefit rolls, as of the week ending July 31, the latest data available. That's an increase of about 300,000 from the previous week.

During the recession, Congress added up to 73 extra weeks of benefits on top of the 26 weeks customarily provided by the states. The number of people on the extended rolls has increased sharply in recent weeks after Congress renewed the extended program last month. It had expired in June.

Private employers added only 71,000 jobs in July. But that increase was offset by the loss of 202,000 government jobs, including 143,000 temporary census positions.

July marked the third straight month that the private sector hired cautiously. Economists are concerned that the unemployment rate will start rising again because overall economic growth has weakened significantly since the start of the year.

In a healthy economy, jobless claims usually drop below 400,000. But the recent increases in claims provide further evidence that the economy has slowed and could slip back into a recession. Many analysts are worried that economic growth will ebb further in the second half of this year.

After growing at a 3.7 percent annual rate in the first quarter, the economy's growth slowed to 2.4 percent in the April-to-June period. Some economists forecast it will drop to as low as 1.5 percent in the second half of this year.

http://news.yahoo.com/s/ap/us_economy