The Dow Jones industrial average slipped early Tuesday, giving up some of its 330-point gain the day before, on worries that Slovakia might not approve a plan to strengthen a European financial rescue fund.
If Slovakia defeats the measure it would complicate efforts to deal with Europe’s debt crisis, which has been rattling markets for months. The measure would increase the size and powers of Europe’s financial rescue program, allowing large amounts of funds to be released quickly to banks and struggling governments before a full-blown crisis sets in. Sixteen countries that use the euro have approved it so far; Slovakia is the holdout. A vote is expected later in the day.
Investors worry that if Greece defaults on its debts, it would hurt banks in Europe and in the U.S. by causing the value of Greek government bonds they hold to plunge. With weaker balance sheets, those banks could become even more reluctant to lend to each other and to businesses and consumers, putting a drag on an already weak global economy.
The Dow Jones industrial average fell 44 points, or 0.4 percent, to 11,395 at 10 a.m. JPMorgan Chase & Co. fell 1.9 percent, the most of the 30 companies in the average.
The Standard & Poor’s 500 index fell 5, or 0.4 percent, to 1,190. The Nasdaq composite index fell 4, or 0.2 percent, to 2,562.
The declines erased some of the gains from Monday, when the Dow jumped 330 points, its largest point increase since Aug. 11. Investors were encouraged after French and German leaders said they would finalize a response to the debt crisis by the end of the month. The plan was light on details.
Dollar Thrifty Automotive Group Inc. fell 2.7 percent after the car-rental company said it was taking itself off the market after failing to get acceptable takeover proposals from Hertz or other companies.
Discount retailer 99 Cents Only Stores Inc. rose 4.3 percent. Ares Management LLC and the Canada Pension Plan Investment Board have offered to buy the company for $22 per share in cash, a 7 percent premium from Monday’s closing price.
Sprint Nextel Corp. fell 1 percent. The stock has plunged 24 percent since Friday, when Sprint said it wants to speed up plans to revamp its high-speed wireless network. Analysts say that will raise its expenses dramatically.
After the closing bell, aluminum maker Alcoa Inc. will become the first company in the Dow Jones industrial average to report third-quarter results. Analysts expect earnings from S&P 500 companies to rise about 12 percent from the same period last year, according to data provider FactSet. Revenue is expected to rise 11 percent.
Japanese automakers Nissan and Mitsubishi are strengthening their cooperation by expanding the number of models they make for each other in Japan.
Nissan and its smaller rival Mitsubishi have had what is called an original equipment manufacturer, or OEM, deal since December 2010. They manufacture specific vehicle models for each other and sell them under their own brands.
Nissan Motor Co. said Thursday it will provide the Fuga luxury sedan to Mitsubishi Motors Corp., starting from summer next year.
They have also started talks on Mitsubishi providing the Minicab-MiEV commercial electric car to Nissan in the fiscal year that begins April 2012.
Such OEM deals are fairly common in the auto industry. They allow companies to cut costs by increasing production scale and to expand their lineup of types of cars they don’t want to invest in the development or manufacturing of personal loans for bad credit.
Under an earlier agreement, Nissan, which also makes the Leaf electric car and March subcompact, is providing the NV200 Vanette compact van to Mitsubishi Motors from next month.
They also set up a joint venture called NMKV Co., which began operating in June, to work together on minicars for the Japanese market, which may later include other nations.
Mitsubishi President Osamu Masuko has said he hopes the joint venture will fuse his company’s design expertise with Nissan’s purchasing power.
“These initiatives are intended to strengthen the competitiveness of both companies in Japan,” both sides said in a statement.
WASHINGTON
CALGARY
Asian stock markets fell Monday, dragged by global economic worries after an unexpectedly weak U.S. jobs report and surging inflation in China.
Wall Street’s sharp drop before the weekend extended to Asia, where investors digested news that U.S. employers created the fewest number of jobs in nine months. The 18,000 net jobs in created in June were a fraction of what many economists expected and dampened hopes that the economy is improving.
Japan’s Nikkei 225 stock average lost 0.5 percent to 10,089.56, with a stronger yen adding more pressure to exporters.
Hong Kong’s Hang Seng retreated 0.7 percent to 22,562.24, South Korea’s Kospi was down 0.8 percent at 2,162.48, and the Shanghai Composite index fell 0.1 percent to 2,796.05.
Also dragging sentiment was data released Saturday showing China’s inflation accelerated to a three-year high in June even as the overheated economy began to cool.
Consumer prices rose 6.4 percent over a year ago, a sharp jump from May’s 5.5 percent rate, China’s government said Saturday. Communist leaders declared taming prices their priority this year, but they have been frustrated amid inflation’s steady rise.
In Australia, the government’s new carbon tax proposal battered stocks. The S&P/ASX 200 shed 1.3 percent to 4,594.60.
Prime Minister Julia Gillard unveiled a plan Sunday to force the country’s 500 worst polluters to pay 23 Australian dollars ($25) for every ton of carbon dioxide they emit.
Australia’s flagship carrier Qantas said Monday the tax will cost it 110 million to 115 million Australian dollars ($118 million to $123 million) for the 2013 financial year and lead to an increase in passenger fares.
Qantas shares tumbled 2.8 percent.
In New York Friday, the Dow Jones industrial average lost 62.29, or 0.5 percent, to 12,657.20.
The Standard and Poor’s 500 index fell 9.42 points, or 0.7 percent, to 1,343.80. The tech-heavy Nasdaq composite dropped 12.85, or 0.4 percent, to 2,859.81.
Oil prices fell to below $96 a barrel Monday in Asia amid signs of a struggling U.S. economy.
Benchmark oil for August delivery was down 33 cents to $95.87 a barrel in electronic trading on the New York Mercantile Exchange. Crude gave up $2.47 to settle at $96.20 on Friday.
In London, Brent crude was steady at $118.33 per barrel on the ICE Futures exchange.
Credit card issuers promise that you won
It
The cost of maintaining empty buildings and the city’s declining student population are prompting St. Louis school officials to try to sell nearly a dozen vacant schools this summer. But two factors are complicating the sales: a tough economy and the lack of state and federal historic tax credits.
Six of the 11 schools went on sale last week. Five more will be held off the market until July in an effort to prevent a glut.
Job growth is sluggish among young adults, a key demographic for developers who in the past remodeled a few former schools as apartments or condos personal loans for bad credit.
St. Louis school officials are no longer reluctant to sell buildings to charter school operators, even though charters are luring more students each year from the school system. Mayor Francis Slay’s office has been working to attract more quality charter schools to the city, in the hope of stopping more families from leaving the city for better schools. In 2009, the city school system lifted its deed restriction prohibiting sale of its buildings to charter schools.
New census figures show an 8 percent drop
WASHINGTON
In my work as a financial journalist, I speak with a lot of advisors and just as many individual investors. Lately I
Powered by WordPress -- XHTML 1.0