Last updated: June 15, 2012 3:09 pm
Gains in financial stocks push up European equities - Reuters UK
* FTSEurofirst 300 index rises 0.5 percent in early trade
* Financials stocks lead market rally
* Hopes that central banks deal with any Greek vote fallout
LONDON, June 15 (Reuters) - European shares advanced on Friday as financial stocks rose on expectations of new central bank measures to deal with the risk of a Greek exit from the euro zone.
The FTSEurofirst 300 index was up 0.5 percent at 987.46 points by 0745 GMT. Germany's DAX was up 0.9 percent, while France's CAC-40 index rose 1 percent.
Investors are wary ahead of elections in Greece on June 17, which could determine the future of the debt-ridden country in the euro zone currency bloc.
Officials from G20 nations told Reuters on Thursday that central banks were ready to take steps to stabilise financial markets, if needed, by providing liquidity and preventing any credit squeeze after Sunday's election.
The signal that world authorities were ready to take steps to prevent any worsening of Europe's debt crisis supported European financial shares on Friday, which have fallen sharply in recent weeks due to their exposure to Greece.
The STOXX 600 European bank index rose 1.6 percent, while the European insurance index gained by 1.3 percent.
However, Securequity sales trader Jawaid Afsar said he would be tempted to sell off shares later on Friday, in order to minimise any hits to portfolios in case of any unforeseen outcomes from the Greek election.
"If you're already in the rally, you should use the rally to start closing out your positions to reduce the risk ahead of Sunday," he said.
JN Financial trader James Fogden also said the European equities market rally could peter out later in the day, with an expiry of options contracts due at 1000 GMT also likely to make the trading session a volatile one.
"We could see a bit of a pull-back later," he said.
The FTSEurofirst has been within a tight trading range between 970 and 990 points established in early May, and traders said it was likely to remain in that range while uncertainty over the euro zone debt crisis persisted. (Reporting by Sudip Kar-Gupta; Editing by Louise Ireland)
UPI NewsTrack Business - United Press International
U.S. markets rise
NEW YORK, June 14 (UPI) -- U.S. stock markets appeared to defy gravity Thursday, heading higher despite a global downturn.
With stocks lower in Asia and Europe, the Dow Jones industrial average added 155.53 points, or 1.24 percent, to 12,651.91.
The Nasdaq composite index gained 17.72 points, or 0.63 percent, to 2,836.33.
The Standard and Poor's 500 gained 14.22 points, or 1.08 percent, to 1,329.10.
On the New York Stock Exchange, 2,166 stocks advanced and 920 declined on a volume of 3.5 billion shares traded.
The Bureau of Labor Statistics Thursday said consumer prices for all items rose 1.7 percent in the past 12 months before seasonal adjustment.
In a separate report, the Labor Department said first-time unemployment benefit claims rose by 6,000 to 386,000 in the week ended Saturday.
The benchmark 10-year treasury note fell 14/32 to yield 1.643 percent.
The euro rose to $1.2628 from Wednesday's $1.2557. Against the yen, the dollar fell to 79.40 yen from Wednesday's 79.48 yen.
In Tokyo, the Nikkei 225 index dropped 0.22 percent, 18.95 points, to 8,568.89.
In London, the FTSE 100 index slid 0.31 percent, 16.76, to 5,467.05.
Europe's auto capacity may be too high
DETROIT, June 14 (UPI) -- An auto industry expert said automakers in Europe need to reduce production capacity in order to stay competitive.
Richard Hanna, global automotive leader for PriceWaterhouseCoopers, said: "These factories are very capital-intensive. They need to be sweating to make money.
"We don't see, overall, the European market growing. You have to take some capacity out," he said.
Due to the great recession, U.S. automakers trimmed manufacturing capacity by about 5 million vehicles per year, Hanna said.
Automakers are face a serious economic downturn in Europe and a possible disruption of financial systems if Greece or any other nation leaves the eurozone, the 17-country region that shares the euro as currency, The Detroit News reported Thursday.
"The current business environment in Europe is challenging and will require some tough decisions," said Ford Motor Co. spokesman Mark Truby.
"The industry still has not faced up to the overcapacity issues despite the severe economic issues since 2008," Truby said.
Chrysler and Fiat Chief Executive Officer Sergio Marchionne said all eyes on are the upcoming weekend election in Greece, which could decide the fate of the currency region.
"I think a lot depends now on what happens on June 17. I don't want to exaggerate the value of that vote, but it is going to be the catalyst for a variety of decisions," Marchionne said.
Quarterly statements outline the story that has automakers on edge in Europe.
Ford, for example, lost $149 million in Europe in the first three months of 2012, after posting a $293 million profit for the last quarter in 2011.
General Motors came out even January through March in Europe in 2011 and lost $300 million on the continent in the first quarter this year, the newspaper said.
Poll: Small businesses back Obamacare
WASHINGTON, June 14 (UPI) -- Half of the respondents in a recent survey of small business owners said they prefer that the U.S. Supreme Court leave the Affordable Care Act mostly intact.
The bill, signed into law in 2010, could be upheld, struck down or modified by the country's high court.
A business advocacy group, Small Business Majority, said a recent poll of 800 business owners in Florida, Illinois, Louisiana, Michigan, Missouri, New York, Texas and Virginia showed strong support for the law.
Fifty-percent of the respondents indicated they would like the Supreme Court to leave the bill, known in some circles as Obamacare, mostly upheld. Concurrently, a third of the respondents indicated they would like the court to cancel the healthcare program that many Republicans deem too costly.
By an 8-to-1 majority, respondents indicated they would use their state's online insurance exchange program, while a 2-to-1 majority indicated they would like their state to set up an insurance exchange program.
The insurance exchange program is one that allows owners of independent businesses to join a larger risk pool.
Small Business Majority said 49 percent of entrepreneurs indicated their interest in buying insurance through the Affordable Care Act would increase when a tax credit for small businesses offering insurance becomes available to small business participants.
Small Business Majority said the survey was conducted by Greenberg Quinlan Rosner Research. The results have a margin of error of 3.5 percentage points.
Nokia to phase out 10,000 jobs
ESPOO, Finland, June 14 (UPI) -- Finnish handset giant Nokia said Thursday it would phase out 10,000 jobs by the end of 2013 in a broad restructuring plan meant to save billions of dollars.
The total financial repositioning is not completely known. Nokia said it plans to sell some assets, such as its line of Vertu luxury mobile phones, which it is selling to EQT VI, a private equity firm. It said it was aiming to reduce operating cost by $2 billion by the end of next year.
The company said it would cut research-and-development units, which would mean closure of Nokia facilities in Ulm, Germany, and Burnaby, Canada.
Its manufacturing plant in Salo, Finland, would close, although Nokia said it would keep its R&D unit in Salo going.
In a statement, Nokia said "this period of transition" includes a shakeup of its executive team.
Among the leadership changes, Nokia said Juha Putkiranta would serve as executive vice president of operations. Timo Toikkanen would take the post of executive vice president of mobile phones.
The company's chief marketing officer, Jerri DeVard, will "step down," Nokia said. Chris Weber would take the post of executive vice president of sales and marketing.
With the changes, Nokia is aiming to "focus on the products and services that our customers value most, while continuing to invest in the innovation that has always defined Nokia," said President and Chief Executive Officer Stephen Elop.
Elop called the job cuts "a difficult consequence of the intended actions we believe we must take to ensure Nokia's long-term competitive strength."
Nokia employs 139,000 people, the company's Web site says.
DAILY MAIL COMMENT: The eurozone meltdown is a financial crisis too grave for distractions - Daily Mail
|
It was another truly terrifying day for the global economy, in which events moved at a dizzying speed.
First, Spain’s borrowing costs surged beyond 7 per cent – a level that is widely considered unsustainable, and which has already triggered full-scale bailouts in Greece and Ireland.
Then, at home, Sir Mervyn King delivered a speech that many judged to be the gravest by a Bank of England governor in living memory, in which he warned of the chaos in the eurozone creating ‘the paralysing effect of uncertainty’.
Traders look at electronic boards at the stock exchange in Madrid as the country's borrowing costs surge beyond seven per cent
Indeed, Sir Mervyn, speaking grimly of storm clouds gathering rapidly overhead, said the situation was so dire that he and George Osborne had agreed to take emergency action ‘within weeks’.
He and the Chancellor then proceeded to announce details of two schemes designed to pump 140billion into Britain’s banks over the next 12 months.
The idea is for the banks to hand Sir Mervyn their assets. In return, he will loan them money at hugely reduced rates for them to pass on to businesses struggling to stay afloat and families who want to buy or re-mortgage homes.
Governor of the Bank of England Sir Mervyn King before his speech yesterday
Without question, it is a desperate attempt to avoid Britain being gripped by a credit crunch – and, with the eurozone edging ever closer to disaster, both Sir Mervyn and Mr Osborne left the country in no doubt that these are hugely perilous times.
Yet where was the Prime Minister yesterday, when these bold measures – so lacking from the Queen’s Speech and March Budget – were being unveiled?
For an entire day, David Cameron was on the witness stand at the Leveson Inquiry, answering questions about his errors of judgment in becoming so close to Rebekah Brooks, the appointment of Andy Coulson as the Downing Street director of communications and the handling of Rupert Murdoch’s BSkyB bid.
In truth, it was not always an edifying spectacle. How Mr Cameron’s toes must have curled when he was being grilled about a text message sent to him by Mrs Brooks on the eve of his 2009 party conference speech, telling him: ‘Professionally, we’re definitely in this together!’ and signing off: ‘Yes he Cam!’
But, in fairness, the Prime Minister took the opportunity to make encouraging noises about the freedom of the Press and the dangers of statutory regulation.
So where was the PM? While the world economy faced meltdown, he was answering questions at the Leveson Inquiry
The real question, however, is for how much longer Westminster’s energy can continue to be sapped by a Press standards inquiry now entering its ninth month, which has questioned every senior member of the Cabinet, including the Chancellor – not to mention the past three prime ministers?
If financial disaster is to be averted, our political leaders must move on, with their minds focused remorselessly on the economy and implementing the radical kickstart plan unveiled by Sir Mervyn and Mr Osborne last night.
There is too much at stake for any more distractions from what really matters to a British public fearful of losing their homes and their livelihoods.
Criminal priorities
Yesterday it emerged that burglars, drug dealers and violent thugs who should have been sent to jail had been freed back on to the streets wearing electronic tags instead.
Duly, six out of ten breached the terms of their conditions – not least by committing sickening new offences.
When it comes to minor motoring offences, however, the authorities wish to see no mercy – with cash-raising 90 fines now planned for remaining in the motorway middle lane for too long, or using the wrong lane at a roundabout.
Truly, our justice system has a warped sense of priorities.
Would these be the very same banks which have just awarded record bonuses to senior management for their performance? In Barclays case, disgustingly and immorally, bonuses twice as much as shareholder dividends. The stcok market is no higher than 5yrs ago but coropate fat cats are, in their apalling greed, awarding themselves record renumeration while the middle classes and working classes real incomes decline. The underclass , of course , continues to have billions of our money thrown at it. Get a grip Cameron.
- R G James, Brasschaat Belgium, 15/6/2012 14:46
Report abuse