Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

While you were sleeping: Bells toll for Dell

While you were sleeping: Bells toll for Dell

(BusinessDesk) August 18 - Blame Dell Inc for today’s slump on Wall Street.

The world’s No. 2 PC maker cut its sales forecast yesterday after the market close as consumers, governments and companies are slashing their spending on technology. Dell shares plunged more than 9% after it slashed its full-year revenue growth estimate to between 1% and 5%, from an earlier 5% to 9% forecast.

Shares in bigger rival Hewlett-Packard Co, which is scheduled to report quarterly earnings on Thursday, also were dragged lower. The reality is that more consumers and companies are opting for tablets and smartphones instead of computers.

"We are going to see similar trends" when HP reports its results, Brian Marshall, analyst with Gleacher & Co, told Reuters, noting "maybe some weakness on the topline."

He also noted a "pause" in technology business spending. In particular, US government spending has slowed as the nation seeks to rein in its finances.

In late trading, the Dow Jones industrial average fell 0.29%, the Standard & Poor's 500 Index declined 1.17% while the Nasdaq Composite Index dropped 0.89%.

In a bid to bolster the economy and his re-election chances, President Barack Obama plans to ask Congress for billions of dollars in fresh spending to reduce unemployment while also proposing to take a bigger bite out of the nation’s long-term deficit, according to Bloomberg News.

With the U.S. unemployment rate at 9.1% and economic growth slowing, Obama plans to propose a mix of tax cuts and infrastructure spending that goes beyond the measures he’s been promoting over the last several weeks, Bloomberg reported, citing an administration official speaking on condition of anonymity because details for the speech haven’t been completed.

Obama’s speech is mooted to be made early next month.

Despite the weakness in the world’s biggest economy, not all companies are suffering. Staples Inc posted a better-than-expected quarterly profit today and raised its profit outlook.

Staples CEO Ron Sargent said he did not see a double dip in the U.S. economy, though the country was “probably more likely to stay in economic purgatory for a while longer,” Reuters reported.

Retailer Target Corp also beat expectations, as did Abercrombie & Fitch Co though the latter warned that “a period of greater uncertainty” lay ahead.

In Europe, the Stoxx 600 Index ended the day with a 0.2% increase.

On the currency market, the Swiss franc climbed as much as 2% after the Swiss National Bank’s efforts to curb its rise disappointed investors.

Switzerland’s beleaguered central bank said it would boost liquidity by expanding banks' sight deposits to 200 billion francs from 120 billion francs and take additional steps if needed, even as the government ran the rule over possible measures of its own to offset the impact of the currency's gains on economic growth, according to Bloomberg.

“The market was expecting far more radical measures ... like targeting a specific exchange rate. This is more of the same, and is inadequate in an environment where investors are seeking safe havens,” Lena Komileva of Brown Brothers Harriman said.

The SNB’s failure to meet expectations was similar to how investors responded to the end result of the meeting between French President Nicolas Sarkozy and German Chancellor Angela Merkel, who put aside plans for euro bonds, and instead put a renewed focus on better economic cooperation among the eurozone’s members.

The Dollar Index, which measures the U.S. currency against a basket of its major counterparts, declined 0.42%.

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 


Stats: Auckland’s Population Falls For The First Time
In the wake of the COVID-19 pandemic, New Zealand’s population growth slowed down with Auckland recording a population decline for the first time ever, Stats NZ said today. “New Zealand saw slowing population growth in all regions... More>>



BusinessNZ: Third Snapshot Report Reveals $9.5 Billion Business Investment In Climate Action

Signatories to the Climate Leaders Coalition have committed to invest $9.5 billion over the next five years to reduce emissions from their businesses, as revealed in their third anniversary snapshot report released today... More>>

Digitl: The home printer market is broken
Printers are more of a security blanket that a serious aid to productivity. Yet for many people they are not optional.
Even if you don’t feel the urge to squirt ink onto dead trees in order to express yourself, others will insist on printed documents... More>>


Retail NZ: Some Good News In COVID Announcements, But Firm Dates Needed

Retail NZ is welcoming news that the Government is increasing financial support for businesses in light of the ongoing COVID-19 lockdown, and that retail will be able to open at all stages of the new “Covid Protection Framework... More>>

ComCom: Companies In Hot Water For Selling Unsafe Hot Water Bottles And Toys

A wholesaler and a retailer have been fined a total of $140,000 under the Fair Trading Act for selling hot water bottles and toys that did not comply with mandatory safety requirements. Paramount Merchandise Company Limited (Paramount) was fined $104,000 after pleading guilty in the Manukau District Court... More>>



Reserve Bank: Robust Balance Sheets Yield Faster Economic Recovery

Stronger balance sheets for households, businesses, financial institutions and the government going into the pandemic contributed towards maintaining a sound financial system and yielding a faster economic recovery than following previous deep recessions... More>>