Archive for macroeconomy
June 13, 2007 at 2:20 am · Filed under macroeconomy
Major stock indexes finished lower for a second straight session Thursday, led down by the tech sector after disappointing guidance from Apple (http://www.businessweek.com/ticker/). Reports on consumer prices, housing starts, and Philadelphia-area manufacturing pointed toward a solid economy, but Federal Reserve Chairman Ben Bernanke’s Senate testimony raised concerns about fiscal policy, says http://outlook.standardandpoors.com.
On Thursday, the Dow Jones industrial average edged down 9.22 points, or 0.07%, to 12,567.93. The broader Standard & Poor’s 500 index fell 4.25 points, or 0.3%, to 1,426.37. The tech-heavy Nasdaq composite slid 36.21 points, or 1.46%, to 2,443.21.
NYSE breadth was negative, with 20 issues declining for every 13 advancing. Nasdaq breadth was 22-9 negative on the exchange’s heaviest volume so far this year.
Investors were sifting through a barrage of firm economic data Thursday. The U.S. consumer price index, or CPI, rose 0.5% in December, while the core CPI rose 0.2%. The headline gain was larger than expected, says Action Economics.
The Philadelphia Fed’s index of regional manufacturing activity added to the solid economic news. The Philly Fed index rebounded to 8.3 in January, much better than expected, from a revised -2.3 in December.
Meanwhile, U.S. housing starts climbed 4.5% to a 1.642 million rate in December, from a downwardly revised 1.572 million in November. In addition, U.S. jobless claims fell 8,000 to 290,000 in the week ended Jan. 13, from a downwardly revised 298,000 a week earlier.
The numbers may keep the Fed on hold with a bias toward further interest-rate hikes, some analysts say. “Interest rates will continue to be pressured higher, but the process should be slow,” says Tom Sowanik, chief investment officer at Clearbrook Research, a part of Clearbrook Financial. “Stocks will respond to earnings, and the earnings appear to be coming in strong once again.”
In Washington, Bernanke’s prepared remarks to the Senate Banking Committee focused on fiscal policy, saying the nation faces huge problems with entitlements for the elderly. The Fed chief avoided discussion of the economic outlook or monetary policy.
Looking ahead, Friday’s economic docket holds a preliminary reading for the University of Michigan’s consumer sentiment index.
The tech sector paced the stock market’s losses Thursday. Shares of Apple (http://www.businessweek.com/ticker/) fell after the tech bellwether said second-quarter sales will be as much as $4.9 billion, less than analysts forecast. J.P. Morgan downgraded the stock from overweight to neutral.
Oil prices tumbled, weighing on corresponding shares. In the energy markets, February West Texas Intermediate crude oil futures skidded $1.76 to $50.48 a barrel, briefly dipping below $50, after an inventory report showing an unexpectedly large increase in supplies.
In earnings news, Merrill Lynch (http://www.businessweek.com/ticker/) was lower despite pulling near a 52-week high in intraday trading after the company reported fourth-quarter profit that topped Wall Street expectations.
IBM (http://www.businessweek.com/ticker/) was among companies set to announce quarterly results after the bell. Companies reporting earnings Friday include Citigroup (http://www.businessweek.com/ticker/), General Electric (http://www.businessweek.com/ticker/) and Motorola (http://www.businessweek.com/ticker/).
On the M&A front, GE reportedly plans to buy part of Abbott Laboratories’ (http://www.businessweek.com/ticker/) diagnostic-equipment unit for about $8 billion.
Rite Aid (http://www.businessweek.com/ticker/) shareholders approved the drugstore chain’s acquisition of 1,850 Brooks and Eckerd stores from the Jean Coutu Group.
Among Thursday’s other stocks in the news, Electronic Arts (http://www.businessweek.com/ticker/) was higher after Citigroup raised its recommendation on the stock from hold to buy.
Shares of Intuit (http://www.businessweek.com/ticker/) rose after Citigroup upgraded the software maker from hold to buy.
European markets finished mixed, paring early gains. The FTSE-100 index in London rose 5.8 points, or 0.09%, to 6,210.3. Germany’s DAX index fell 12.08 points, or 0.18%, to 6,689.62. In Paris, the CAC 40 index was down 6.74 points, or 0.12%, to 5,555.04.
Asian markets ended higher. In Japan, the Nikkei 225 index gained 109.58 points, or 0.63%, to 17,370.93. In Hong Kong, the Hang Seng index climbed 212.94 points, or 1.06%, to 20,277.51. Korea’s Kospi index advanced 3.73 points, or 0.27%, to 1,383.21.
Treasury Market
Treasury yields ticked lower after a round of solid economic data. The 10-year note rose in price to 99-01/32 for a yield of 4.75%, while the 30-year bond advanced to 94-22/32 for a yield of 4.84%. A late rally in prices possibly reflected short covering after recent losses, says S&P.
June 13, 2007 at 2:20 am · Filed under macroeconomy
Indonesian police have arrested the alleged leader of Jemaah Islamiyah, the south-east Asian terror group blamed for the 2002 Bali nightclub bombings and a series of other attacks in recent years, a spokesman said today.
Abu Dujana, Indonesia’s most-wanted Islamic militant, was detained along with seven other suspected terrorists in raids on the country’s main island of Java over the weekend, said police spokesman Sisno Adiwinoto.
The capture of Dujana, an Afghan-trained militant who police say once had links with al-Qaida, is a major victory in the fight against terrorism in Indonesia, a secular nation with the world’s largest Muslim population.
“With this arrest we have successfully stopped acts of terrorism in the future,” said Mr Adiwinoto. “He was a key figure in the terrorist network in Indonesia.” Mr Adiwinoto said Dujana, 37, was being held at undisclosed location.
Police confirmed his identity using dental and DNA samples, he said.
Under the country’s anti-terror law, police can hold a suspect for several weeks without charging them. Jemaah Islamiyah members have been blamed for four attacks on western targets in Indonesia in recent years, including the Bali nightclub attacks that killed 202 people, mostly foreign tourists and a 2003 suicide blast at a hotel.
The group, which police say received funds and direction from al-Qaida in the early 2000s, has also been blamed for attacks in the Philippines, while Malaysia and Singapore have arrested several dozen alleged members in recent years.
Adiwinoto said Dujana played a major role in “almost all” the bombings in Indonesia.
“It is a very significant arrest. It is a major triumph for police,” said leading Jemaah Islamiyah analyst Sidney Jones. “If he will talk, he will be able to give police absolutely rock solid data about everything there is to know about JI.”
Mr Adiwinoto said Dujana’s good Arabic language skills meant he forged close ties with al-Qaida commanders in Afghanistan in the late 1980s and 1990s and - like scores of other militants - personally met Osama bin Laden. “He can assemble bombs and he can recruit members, so he is more important than” other key terror suspects Noordin Top, who remains at large, and Azahari bin Husin, who was shot and killed in a raid in 2005, he said.
Analysts say scores of arrests and raids have weakened Jemaah Islamiyah, and that it is now splintered into several cells. They say most of its estimated 1,000 members do not agree that bombing “soft” civilian target helps the group in its aim of implementing an Islamic state in Indonesia.
The last major terrorist attack in Indonesia was in 2005.
Police say Dujana, who like most of the hardcore members of Jemaah Islamiyah fled to Malaysia in the 1990s to avoid a crackdown by former dictator Suharto, become head of Jemaah Islamiyah four years ago.
Abu Rusdan, the man police say Dujana replaced as head of Jemaah Islamiyah, was arrested in 2003 and sentenced to three-and-a-half years in jail for hiding one of the militants convicted in the Bali blasts.
Indonesia has not made membership of Jemaah Islamiyah a criminal offence.
June 13, 2007 at 2:20 am · Filed under macroeconomy
THEY have been labelled a health hazard, an obstruction and a blot on the city’s World Heritage Site.
Clusters of advertising boards have become a familiar sight to tourists and locals outside shops and cafes in the Capital’s Old Town.
But now community councillors are calling for a “zero tolerance” policy on the boards, which they say are littering pavements. They blame the council for failing to enforce existing rules - which state that advertising boards should not cause an obstruction - and say the only practical solution is a ban.
But traders have reacted furiously, saying small businesses cannot afford to be hit by more regulations.
The Old Town Community Council voted unanimously to call for the crackdown at a meeting last week. They are writing to the city council, demanding action to preserve the appearance of the city centre.
Chairman Bill Cowen, who also runs Costume HaHa in the Grassmarket, said: “Going down the High Street is like running a hurdles race. People have to walk on the road because there are too many on the pavement.
“We think they should be totally banned. The policing of them has been a complete failure. Business people will do anything to get around the regulations. This is the season when tourists start falling over them. There’s a serious public safety aspect. When it’s windy, one could easily fall on a child.”
Edinburgh City Council wardens only ask shopkeepers to move their boards if they think they are causing an obstruction.
A licensing scheme was proposed last year, following a string of complaints, but this was never brought in. Bruce Borthwick, an Old Town community councillor, said this would be difficult to enforce.
He said: “It’s become a sort of arms race between shops. Now it’s got to the stage where it’s a considerable obstruction to the free movement of pedestrians.”
The Old Town Association’s Honorary president, Anya Ansel, said the association was writing to the council. She said: “We feel very strongly about A-boards. The whole of the pavement is cluttered with them. It is a World Heritage Site, but the boards are very unsightly, as well as dangerous. They’re a nuisance and they’re using up public space.
“We’ve been fighting this battle for years. Occasionally the council makes a small gesture but they have never enforced it. We feel there shouldn’t be any at all. The only place for them would be if a business is down a close, such as the Brass Rubbing Centre.”
But Thom McCarthy, manager of Golden Books and Gifts on the Royal Mile, said a ban would be another blow for small businesses.
He said: “The A-board is important for our business, although there is a lot of rubbish outside people’s shops. One shop has four mannequins, and there are baskets selling tartan Nessies. If they’re going to control it, then they would have to have the same rules for everybody.
“An A-board makes a big difference to a person’s business. It’s a form of advertising. If they ban them, it’s going to hit the turnover of small shops. People are already struggling as it is.”
A council spokeswoman said: “The use of A-boards is one way businesses can promote themselves. However, these signs must not cause any obstruction or risks to public safety.
“If we become aware of a sign that is creating a hazard we will work with the business responsible to resolve the issue.
“If the issue cannot be resolved then enforcement action will be taken and the sign will be removed.”
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