Top Scoops

Book Reviews | Gordon Campbell | Scoop News | Wellington Scoop | Community Scoop | Search

 

While you were sleeping: Overnight wrap 11/2/09

While you were sleeping: BusinessWire overnight wrap

Feb. 11 – Stocks on Wall Street tumbled on disappointment at a lack of detail in Treasury Secretary Timothy Geithner revamped financial rescue plan to mop up bad bank assets.

Bank of America and Citigroup led the Dow Jones Industrial Average down 4.7% to 7879.64 as Wall Street rounded out its biggest one-day slide since President Barack Obama’s inauguration.

Aluminium producer Alcoa fell 9.4% to US$7.69 after Standard & Poor’s cut its credit rating. General Electric dropped 8% to US$11.60 and Boeing fell 6.1% to US40.20.

The Standard & Poor’s 500 Index fell 4.7% to 828.92 and the Nasdaq Composite declined 3.7% to 1531.

Geithner unveiled plans for government financial aid that may exceed US$2 trillion to revive consumer lending and soak up toxic bank assets, saying previous efforts by the Bush administration had failed to gain public confidence.

“This is a challenge more complex than any our financial system has ever faced, requiring new programmes and persistent attention to solve,” he said. “Instead of catalyzing recovery, the financial system is working against recovery.”

The Treasury package includes a private-public fund to buy as much as US$1 trillion of bad bank assets and about the same amount to free up credit to consumers and companies.

The federal government also plans to inject more funds into banks, though with tighter conditions including curbs on dividends and executive salaries. The process will “take time,” Geithner said.

Citigroup chief executive Vikram Pandit said his firm would make a “profitable investment for the American people” with its US$45 billion of bailout funds, Bloomberg reported, citing a draft of his statement for a hearing before the U.S. House of Representatives Committee on Financial Services.

The CEOs of eight banks are due to testify tomorrow on the US$700 billion TARP fund, including JPMorgan Chase & Co., whose shares tumbled 9.3% to US$24.75 on the Dow.

The U.S. dollar and the yen strengthened against the euro as disappointment about the Treasury bank rescue drove investors to the relative haven of the two biggest currencies.

The U.S. dollar rose to $1.2873 per euro from $1.3003. The yen advanced to 116.18 per euro from 118.94. The yen strengthened to 90.19 per dollar from 91.46.

Commodities fell on skepticism about the package will be enough to revive lending to consumers and businesses that would help to revive economic growth in the U.S.

Crude oil sank to the lowest in three weeks before Energy Department figures tomorrow that may show rising U.S. stockpiles as demand wanes. Crude for March delivery fell 4.8% to US$37.66 a barrel on the New York Mercantile Exchange.

Copper futures for March delivery fell 2.3% to US$1.576 a pound in New York while gold futures for April delivery rose 2% to US$911.10 an ounce.

Meantime, the U.S. Senate approved an $838 billion economic stimulus package by 61 votes to 37 which includes US$293 billion of tax cuts and over US$500 billion in new spending.

In Europe, UBS posted the biggest loss in Swiss corporate history, 19.7 billion Swiss francs, and said it would eliminate 2,000 investment banking jobs as it staggers under credit losses. The shares rose about 10% after the firm said the start of the New Year has been “encouraging.”

The Dow Jones Stoxx 600 Index fell 2.8% to 193.82. The FTSE 100 Index fell 2.2% to 4213.08 and DAX 30 Index dropped 3.5% to 4505.54 and the CAC 40 declined 3.6% to 3020.75.

(Businesswire)

© Scoop Media

 
 
 
Top Scoops Headlines

 

Forgetting Citizenship: Australia Suspends Flights From India

As India is being devastated by COVID-19 cases that have now passed a daily rate of 400,000, affluent and callous Australia has taken the decision to suspend all flights coming into the country till mid-month. The decision was reached by the Morrison ... More>>

Digitl: UK Spy Chief: “The West Has To Go It Alone On Tech"

“Cybersecurity is an increasingly strategic issue that needs a whole-nation approach. The rules are changing in ways not always controlled by government. More>>

The Conversation: From Five Eyes To Six? Japan’s Push To Join The West’s Intelligence Alliance

Craig Mark , Kyoritsu Women's University As tensions with China continue to grow, Japan is making moves to join the “Five Eyes” intelligence-sharing alliance. This week, Japan’s ambassador to Australia, Shingo Yamagami, told The Sydney Morning ... More>>

The Conversation: Without The Right Financial Strategies, NZ’s Climate Change Efforts Will Remain Unfinished Business

When it comes to climate change, money talks. Climate finance is critical for enabling a low-emissions transition. This involves investment and expenditure — public, private, domestic and transnational — that demonstrably contributes to climate ... More>>

Dr Terrence Loomis: Does Petroleum Industry Spying Really Matter?

Opinion: Nicky Hager’s latest revelations about security firm Thompson and Clark’s ‘spying’ on climate activists and environmental organisations on behalf of the oil and gas industry and big GHG emitters makes entertaining reading. But it does ... More>>

Mixed Sight: New Zealand, The Five Eyes And China

The Five Eyes arrangement between the United States, United Kingdom, Canada, Australia and New Zealand has always resembled a segregated, clandestine club. Focused on the sharing of intelligence between countries of supposedly like mind, it has shown that ... More>>