Late Edition December 01 2008 at 03:27 PM Chi-Chu Tschang and Harry Maurer
The Dow Turns Tail
After a five-day upswing, Wall Street took a sharp dive today, with the Dow down more than 500 points at 3:30 p.m. Traders apparently turned their focus back on the severe problems the economy faces, spurred by reports on retail sales over the weekend and by a report showing weakness in the manufacturing sector.
On the factory front, the Institute of Supply Management said that manufacturing activity contracted in November at the steepest rate in 26 years. The institute's manufacturing index slid to 36.2 after falling 4.6 points to 38.9 in October. U.S. construction spending declined 1.2% in October. And while retail sales on Black Friday, the day after Thanksgiving, were healthy, they appear to have fallen off for the rest of the weekend, making for more pessimistic projections for holiday sales this year. Meanwhile, the business cycle dating committee of the National Bureau of Economic Research said that the U.S. economy entered a recession in December, 2007.
Source: BusinessWeek
Bernanke Says Weakness Will Persist
Fed Chairman Ben Bernanke didn't do much to dissipate the general gloom, saying in a speech in Austin, Tex., that the economy would "probably remain weak for a time." He said exports and housing particularly face challenges, and called for new regulations that would give the Fed more leeway to help institutions "critical" to the economy. He also admitted that the Fed's traditional tool, its control over interest rates, was of limited use at this point, and suggested that he would focus more on pumping liquidity into the financial system.
Source: New York Times
Chapter 11 for Pilgrim's Pride
The No. 1 U.S. chicken producer filed for bankruptcy protection, citing rising grain costs that have led to four straight quarters of losses. It said it will seek $450 million in financing to fund operations during its reorganization.
Source: Bloomberg
J&J Buys Mentor
Deals are as rare as hen's teeth these days, but Johnson & Johnson pulled one off, buying breast-implant maker Mentor for $1.07 billion. The company will expand J&J's aesthetic products line and boost competition with Allergan. The deal amounts to a high 92% premium over Friday's closing share price.
Source: CNNMoney.com
OPEC Ends Meeting with No Plan to Prop up Prices
At a meeting in Cairo, members of the oil cartel couldn't agree on a plan to cut production in a bid to boost oil prices, which have plunged more than 60% since their record high last summer.
Source: New York Times
Frozen Credit Markets Thaw in Europe
Corporate borrowers looking to raise cash before the end of the year tapped European credit markets for €23 billion in November--the highest amount since June, 2003. But the lending comes at a steep price.
Source: Wall Street Journal
Stimulus All the Rage--Except in Germany
Governments around the world are throwing hundreds of billions of dollars at the economic crisis in a bid to restart growth. But Germany remains wary of fiscal stimulus, especially after it has spent years getting its public finances back into shape.
Source: Reuters
Terror Attacks Stagger the New Mumbai
The coordinated attacks that killed at least 190 people late last week could claim yet another victim: The growth and reputation of India's financial capital and one of Asia's most important emerging money centers.
Source: BusinessWeek
Baidu Faces Wave of Legal Challenges
China's leading Internet search engine, which has long enjoyed government support and commands 70% of the domestic search market, faces a mass complaint filed by 100 companies critical of Baidu's business model.
Source: Financial Times
Ryanair Launches Fresh Bid for Aer Lingus
The Irish discount airline, whose previous play to take over its conventional Dublin-based rival fell flat, has come back with a new offer that values Aer Lingus at half the price offered two year ago.
Source: Guardian
Delta to Alter Its Boeing Order Book
In the wake of its merger with Northwest, Delta Airlines will reportedly change the mix of planes it is buying from Boeing to include fewer of the delayed 787 Dreamliners and more 777s.
Source: Wall Street Journal
Volvo and Saab Seek Swedish Aid
General Motors and Ford have reportedly approached the Swedish government about providing financial assistance for their money-losing Saab and Volvo brands--both of which could eventually be sold as the U.S. auto giants struggle to survive.
Source: Financial Times
How Private Equity Strangled Mervyns
Cerberus, Sun Capital, and Lubert-Adler stripped the 59-year-old retailer of its assets and threw 30,000 people out of work. Mervyns' collapse reveals dangerous flaws in the private equity playbook.
Source: BusinessWeek
Conversation of the Day: Engineering, Suddenly Sexy
Reader Brian V writes: "Due to the 'sexiness' of tech and the lure of finance, we have lost an entire generation of skilled workers. There are plenty of well-paying, challenging manufacturing jobs going begging."
Read the Story and Tell Us What You Think
Hot Topic on the Business Exchange: YouTube
YouTube, a video sharing Web site owned by Google, is the online leader in user generated and professional video, hosting TV and movie clips, music videos, and amateur video uploads on the Web. Robert Stoltz and others are sharing their insights.
No comments:
Post a Comment
Keep a civil tongue.