Stocks driven lower by world of worry - Stocks driven lower by world of worry -

Thursday, June 21, 2012

Stocks driven lower by world of worry -

Stocks driven lower by world of worry -

U.S. stocks faltered Thursday, following reports signaling a slowedown of global economic growth.

Investors were already disappointed that the Federal Reserve didn't take more action at the end of its two-day meeting Wednesday so the string of weak reports just added to an already pessimistic market.

The Dow Jones industrial average lost 38 points, or 0.3%. The S&P 500 lost 7 points, or 0.5%. The Nasdaq slipped 19 points or 0.7%.

A Chinese economic report showed just how much the roaring economies of Asia are slowing down. Chinese manufacturing fell to a seven-month low -- a sign that factories there are being hit by sluggish demand, according to the preliminary report of HSBC Manufacturing Purchasing Managers' Index.

Meanwhile, Europe's PMI index for June remained near a three-year low, as manufacturing output in Germany -- the most important European economy -- fell at the fastest rate in three years. It was the second straight month of decline.

The reports come one day after the Fed announced plans to extend its "Operation Twist" program, and made it clear that they remain concerned about the fragility of the U.S. economy. Investors weren't impressed.

"People are coming to the realization that the Fed is pretty much a sideshow to what the European Central Bank does," said Dan Greenhaus, head equity strategist at BTIG. "The Fed has become a slave to events rather than the dictator."

U.S. stocks closed mixed Wednesday following the Fed's announcement.

CNNMoney's own Fear and Greed index shows investors are less fearful, although still in fear territory. But the index had been in extreme fear territory until last week.

World markets: European stocks were mixed in afternoon trading. Britain's FTSE 100 slid 0.4%, but France's CAC 40 gained 0.3% and the DAX in Germany reversed earlier losses to edge higher 0.4%.

Eurozone finance ministers gathered in Luxembourg for a two-day summit.

The continent's leaders are facing pressure to announce new measures to combat their sovereign debt crisis, which remains of grave concern even after news that Greek politicians formed a coalition government led by a pro-bailout party.

Spain's bond auction of 2-, 3-, and 5-year bonds Thursday morning resulted in 2-year yields doubling from the prior auction, and sent yields for the 5- and 7-year notes also markedly higher. But the yield on the benchmark 10-year Spanish bond, which pushed past 7% earlier this week, fell to 6.5%.

Asian markets closed mixed after the China manufacturing report and in reaction to the Fed meeting. The Shanghai Composite lost 1.4% while the Hang Seng in Hong Kong was down 1.3%. But Japan's Nikkei gained 0.8%.

Economy: The Labor Department reported there were 387,000 first-time filings for unemployment benefits in the week ended June 16. That was little changed from the prior week but a bit above the forecast of 380,000 from the economists surveyed by

Existing home sales for May came in slightly below expectations at an annualized rate of 4.55 million, according to the National Association of Realtors.

The Conference Board's Leading Economic Indicators index for May came in higher than expected increasing 0.3%, after decreasing by 0.1% in April.

The Philadelphia Fed's manufacturing index indicated a steep decline of 16.6% significantly worse than the 0.2% drop that economists predicted. A month ago that drop was 5.8%.

Companies: Shares of drugstore chain Rite Aid rose after it reported a loss of 3 cents a share, a bit better than the forecast of a 4 cent a share from analysts surveyed by Thomson Reuters, or the 7 cents a share it lost a year-earlier.

Shares of Bed Bath & Beyond sank more than 10%, after the retailer offered disappointing guidance for the current quarter after the bell on Wednesday.

Shares of open source software provider Red Hat fell 7% after it posted a better-than-forecast gain in earnings late Wednesday, but reported disappointing billings for the quarter.

Food maker ConAgra posted a better-than-expected increase in operating earnings, pushing shares higher. The company said fiscal-year profit would also rise more than current forecasts. But a charge related to its pension plans resulted in it reporting a net loss.

Cigarette maker Philip Morris International, which sells the brands of Altria Group such as Marlboro in overseas markets, cut its full-year earnings guidance, citing a bigger hit from currency exchange rates.

Dow component Johnson & Johnson is close to settling a probe with the Justice Department into the company's promotion of the antipsychotic drug Risperdal, which could include a payment of $1.5 billion, according to a report in the Wall Street Journal.

The payment would be the largest ever for the company, according to the report, but it would avoid a felony charge that could prevent the company from selling its medicines to government health programs such as Medicare. Shares of J&J were down.

Rangers crisis: Ibrox season ticket renewal money held by 'oldco' -

Ibrox season ticket renewal money is being paid into and held by the soon-to-be-liquidated 'oldco' Rangers.

The Sevco group that formed a new business entity to purchase the club’s assets confirmed it is using Rangers FC plc, incorporated in 1899, to receive any season ticket renewal cash paid over.

Rangers claim the money is being held by the old company, which is still under the control of administrators Duff and Phelps, and will be later transferred to new business entity, Sevco 5088 Limited, as part of the deal reached with the consortium led by Charles Green.

Direct debit payments for around 30,000 season tickets are being processed after renewals were sent out by the club on June 8.

A spokesman for Rangers said: "The season ticket renewal direct debits have been operated within the old company until they are transferred to the new company in an ongoing process that will be completed in due course."

Mr Green previously stated that the season ticket renewal cash was not being used to fund his consortium’s takeover and that it would be ring-fenced and held in a "secure" account.

In the failed company voluntary arrangement (CVA) proposal, Duff and Phelps sought those owed money to approve that all season ticket sales and player transfer cash to be held in a bank account by their English solicitors Taylor Wessing. They sought creditors permission to the exclude this money from the payout pot, while they also stated in the CVA proposal that they may seek Sevco’s approval to use the cash to meet "trading costs" should the club have successfully agreed the pence in the pound plan.

On Thursday, the Rangers’ Fans Fighting Fund released a statement after its representatives had met with newco chief executive Mr Green and chairman Malcolm Murray.

In a statement the fund said it had "received satisfaction on the future security of the property assets, forward flow funding and the ring fencing of season tickets for the good of the club."

The fund, which is led by former player Sandy Jardine and at was launched by ex-manager Walter Smith, said it "would encourage fans to renew their season tickets at this time to demonstrate our support for our manager Ally McCoist his management team and our players."

On the back of the meeting, the fund called on supporters to "show solidarity for the club".

Mr Green added: "I can reassure all fans that season ticket money will be ring-fenced in a secure account and will not be used before the current issues surrounding the club, such as what league we will be playing in, are resolved."

Mr Green’s consortium, which is backed by investment banking operation Zeus Capital and Scottish golf clothing firm Glenmuir among others, paid £5.5m to buy the club’s assets, cover the £3m fees of Duff and Phelps and an estimated £1m for the future liquidators of Rangers FC plc, BDO. According to the CVA proposal document, this money will be supplemented by around £2m in outstanding transfer fees owed to Rangers and the cash at bank.

According to the administrators, who were appointed on February 14 after the club had failed to pay around £14m in PAYE and VAT to HMRC following Craig Whyte's May 2011 takeover, around 37,900 season tickets were sold at Ibrox for the 2011/12 season.

Mr Whyte used future season ticket sales to secure £25.3m from London firm Ticketus to effectively fund his takeover by wiping out the club's £18m debt to Lloyds Banking Group.

Related articles

People who read this story also read

No comments: