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http://uk.news.yahoo.com/22/20081023/tts-uk-financial-d1d4700.html
Job cuts and carmaker woes deepen fears
Reuters 24th October 2008
Bleak outlooks from world carmakers and more job cuts by major U.S. companies including General Motors and Xerox deepened fears of an extended global recession and sent markets down again on Thursday.
Wall Street slipped after rising early, Asian shares tumbled, hit by weaker-than-expected Japanese export data, European stocks closed slightly lower as losses in banks and automobiles eclipsed gains in oil and defensive shares, and emerging markets were pounded again.
Brazil's Bovespa stock index was down 6 percent.
A top U.S. banking regulator said the government must do more to guarantee mortgage loans to persuade lenders to modify their terms and help ward off foreclosures.
Sweden and New Zealand cut interest rates. A growing number of countries are looking to the International Monetary Fund for help, including Iceland, Hungary, Belarus, Pakistan and Ukraine. The IMF said it is discussing possible loan packages for a number of countries, but denied market speculation it is preparing a $1 trillion (620.5 billion pound) aid package.
U.S. workers lined up in unexpectedly large numbers last week to file new claims for jobless benefits.
"We think this month we'll see more than 200,000 jobs lost," said Nigel Gault, chief U.S. economist at Global Insight in Lexington, Massachusetts. "We're looking at the economy contracting in the fourth quarter very sharply, certainly contracting in the first quarter, maybe contracting in the second quarter as well," he said.
U.S. CORPORATE WOES
U.S. carmaker General Motors said it was temporarily suspending the company match for its retirement savings program to preserve cash. It also said it planned involuntary cuts in its salaried and contract workforce starting this year.
Chrysler LLC said it was closing one plant early and eliminating a shift at another, resulting in 1,825 job cuts.
New York-based bank Goldman Sachs Group Inc plans to cut nearly 3,300 jobs, or around 10 percent of staff, a source said.
Among U.S. companies posting lower profits were Dow Chemical, Xerox and Starwood Hotels. Xerox and Starwood also said they would be cutting jobs.
Japanese exports grew only 1.5 percent in September from a year earlier, well short of forecasts, prompting worries that the world's second-biggest economy is heading into recession and renewing speculation about a rate cut. [ID:nT148498]
Sony slashed its operating profit forecast, citing reduced demand for flat TVs and digital cameras.
Italy's Fiat, Germany's Daimler and South Korea's Hyundai added to the gloom among automakers with bleak 2009 forecasts.
Former U.S. Federal Reserve Chairman Alan Greenspan said he was "shocked" at the breakdown of U.S. credit markets and said he sees more layoffs and a jump in unemployment ahead. He also said he was "partially" wrong to resist regulation of some securities.
Despite his past concerns that risks were being underestimated, "this crisis, however, has turned out to be much broader than anything I could have imagined," Greenspan said in remarks prepared for delivery to Congress.
Federal Deposit Insurance Corp Chairman Sheila Bair said regulators were working with the Bush administration to create a loan guarantee program to ease pressure on homeowners.
DOLLAR AND YEN SURGE
The dollar and yen continued to surge. The dollar rose to two-year highs against the euro and a basket of other currencies as recession fears encouraged investors to further cut exposure to risk. The low-yielding yen reached a six-year high against the euro.
"It's a fast-moving market, and in general, risk aversion is high," said Tom Levinson, currency strategist at ING.
Central banks worldwide are trying to limit the damage from the worst financial crisis since the Great Depression.
Sweden, which joined the U.S. Federal Reserve and others in coordinated cuts two weeks ago, lowered its key interest rate 1/2 percentage point and signalled more to come.
New Zealand cut rates by a record one percentage point and hinted at more reductions and Bank of England Governor Mervyn King said Britain too was ready to lower interest rates again.
The central banks of Brazil, Turkey and Norway acted to boost liquidity and Canada said the government would guarantee borrowing from banks.
Economists say businesses are only starting to feel the effects of the crisis set off by a U.S. housing market collapse 15 months ago, even as credit flows start to unfreeze and banks begin lending to each other again.
Asian stocks fell to a four-year low and the FTSEurofirst 300 index trimmed earlier losses to close down 0.5 percent after watching Wall Street rise in morning trading.
After U.S. stocks hit a five-year low on Wednesday, the Dow , the S&P 500 and Nasdaq slipped more than over 2 percent in afternoon trading, after rising earlier.
Calpers, the largest U.S. public pension fund, said it may need to tap California public employers for more money if heavy investment losses do not reverse.
The interbank cost of borrowing longer-dated dollars rose for the first time since governments detailed a raft of bank bailout measures, hurt by recession fears.
Emerging stocks continued recent sharp falls, debt spreads gaped, Russia's credit default swaps moved into distressed territory and the Turkish lira tumbled again.
(Reporting by Reuters bureaus worldwide; Editing by Steve Orlofsky and Brian Moss)
Job cuts and carmaker woes deepen fears
Reuters 24th October 2008
Bleak outlooks from world carmakers and more job cuts by major U.S. companies including General Motors and Xerox deepened fears of an extended global recession and sent markets down again on Thursday.
Wall Street slipped after rising early, Asian shares tumbled, hit by weaker-than-expected Japanese export data, European stocks closed slightly lower as losses in banks and automobiles eclipsed gains in oil and defensive shares, and emerging markets were pounded again.
Brazil's Bovespa stock index was down 6 percent.
A top U.S. banking regulator said the government must do more to guarantee mortgage loans to persuade lenders to modify their terms and help ward off foreclosures.
Sweden and New Zealand cut interest rates. A growing number of countries are looking to the International Monetary Fund for help, including Iceland, Hungary, Belarus, Pakistan and Ukraine. The IMF said it is discussing possible loan packages for a number of countries, but denied market speculation it is preparing a $1 trillion (620.5 billion pound) aid package.
U.S. workers lined up in unexpectedly large numbers last week to file new claims for jobless benefits.
"We think this month we'll see more than 200,000 jobs lost," said Nigel Gault, chief U.S. economist at Global Insight in Lexington, Massachusetts. "We're looking at the economy contracting in the fourth quarter very sharply, certainly contracting in the first quarter, maybe contracting in the second quarter as well," he said.
U.S. CORPORATE WOES
U.S. carmaker General Motors said it was temporarily suspending the company match for its retirement savings program to preserve cash. It also said it planned involuntary cuts in its salaried and contract workforce starting this year.
Chrysler LLC said it was closing one plant early and eliminating a shift at another, resulting in 1,825 job cuts.
New York-based bank Goldman Sachs Group Inc plans to cut nearly 3,300 jobs, or around 10 percent of staff, a source said.
Among U.S. companies posting lower profits were Dow Chemical, Xerox and Starwood Hotels. Xerox and Starwood also said they would be cutting jobs.
Japanese exports grew only 1.5 percent in September from a year earlier, well short of forecasts, prompting worries that the world's second-biggest economy is heading into recession and renewing speculation about a rate cut. [ID:nT148498]
Sony slashed its operating profit forecast, citing reduced demand for flat TVs and digital cameras.
Italy's Fiat, Germany's Daimler and South Korea's Hyundai added to the gloom among automakers with bleak 2009 forecasts.
Former U.S. Federal Reserve Chairman Alan Greenspan said he was "shocked" at the breakdown of U.S. credit markets and said he sees more layoffs and a jump in unemployment ahead. He also said he was "partially" wrong to resist regulation of some securities.
Despite his past concerns that risks were being underestimated, "this crisis, however, has turned out to be much broader than anything I could have imagined," Greenspan said in remarks prepared for delivery to Congress.
Federal Deposit Insurance Corp Chairman Sheila Bair said regulators were working with the Bush administration to create a loan guarantee program to ease pressure on homeowners.
DOLLAR AND YEN SURGE
The dollar and yen continued to surge. The dollar rose to two-year highs against the euro and a basket of other currencies as recession fears encouraged investors to further cut exposure to risk. The low-yielding yen reached a six-year high against the euro.
"It's a fast-moving market, and in general, risk aversion is high," said Tom Levinson, currency strategist at ING.
Central banks worldwide are trying to limit the damage from the worst financial crisis since the Great Depression.
Sweden, which joined the U.S. Federal Reserve and others in coordinated cuts two weeks ago, lowered its key interest rate 1/2 percentage point and signalled more to come.
New Zealand cut rates by a record one percentage point and hinted at more reductions and Bank of England Governor Mervyn King said Britain too was ready to lower interest rates again.
The central banks of Brazil, Turkey and Norway acted to boost liquidity and Canada said the government would guarantee borrowing from banks.
Economists say businesses are only starting to feel the effects of the crisis set off by a U.S. housing market collapse 15 months ago, even as credit flows start to unfreeze and banks begin lending to each other again.
Asian stocks fell to a four-year low and the FTSEurofirst 300 index trimmed earlier losses to close down 0.5 percent after watching Wall Street rise in morning trading.
After U.S. stocks hit a five-year low on Wednesday, the Dow , the S&P 500 and Nasdaq slipped more than over 2 percent in afternoon trading, after rising earlier.
Calpers, the largest U.S. public pension fund, said it may need to tap California public employers for more money if heavy investment losses do not reverse.
The interbank cost of borrowing longer-dated dollars rose for the first time since governments detailed a raft of bank bailout measures, hurt by recession fears.
Emerging stocks continued recent sharp falls, debt spreads gaped, Russia's credit default swaps moved into distressed territory and the Turkish lira tumbled again.
(Reporting by Reuters bureaus worldwide; Editing by Steve Orlofsky and Brian Moss)
