Stocks (MXWD) dropped for a seventh day, extending the longest losing streak since November, on concern the global recovery is faltering. The euro weakened to a two- year low, the yen rallied and government borrowing costs from Germany to South Korea declined to records.
The MSCI All-Country World Index lost 0.8 percent at 7:25 a.m. in New York. Standard & Poor’s 500 Index futures slid 0.8 percent after the U.S. gauge closed little changed yesterday. Germany’s two-year note yield fell to a record minus 0.029 percent, with 10-year U.S. Treasury yields within five basis points of the lowest ever. The yen strengthened more than 0.5 percent against all 16 of its major peers, while the euro depreciated to the lowest since June 2010 against the dollar. Oil slipped 1.3 percent and silver slumped 1.6 percent.
South Korea lowered interest rates today for the first time in more than three years and Australian employers unexpectedly cut payrolls. Manufacturing output in the euro area rebounded in May as growth in Germany offset a drop in France. Minutes from the Federal Reserve’s June meeting showed yesterday that only two policy makers backed more bond purchases to bolster growth.
“The global economy is deteriorating faster than central banks can ease policy,” said Tomomi Yamashita, a senior fund manager in Tokyo at Shinkin Asset Management Co., which oversees about $6.3 billion. “Your best bet is to hold on to cash.”
The Stoxx Europe 600 Index fell 0.9 percent. Temenos Group AG plunged 24 percent to a three-year low after the Swiss maker of banking software cut its revenue-growth forecast and said Chief Executive Officer Guy Dubois will leave. Aegis Group Plc surged 45 percent as the U.K. advertising company agreed to be bought by Japan’s Dentsu Inc. in a 3.16 billion-pound ($4.9 billion) deal.
Jobless Claims
Futures on the S&P 500 erased an earlier advance of as much as 0.2 percent. A Labor Department report at 8:30 a.m. in Washington may show that initial claims for jobless benefits fell to 370,000 last week from 374,000 the prior period, according to forecasts from 47 economists compiled by Bloomberg.
The MSCI Emerging Markets Index (MXEF) sank 1.8 percent, its biggest intra-day decline since June 21. The Kospi Index fell 2.2 percent and the won weakened 0.9 percent, the most since May 16, after the Bank of Korea unexpectedly cut borrowing costs. Chinese stocks listed in Hong Kong slid 2.2 percent and benchmark indexes fell more than 1 percent in Russia, India, Hungary, Taiwan and Thailand.
Record-Low Yields
The yield on Australia’s one-year note declined as much as 12 basis points and touched a record low of 2.313 percent. Yields on South Korea’s debt due March 2017 slid 25 basis points to 3.08 percent in Seoul, Korea Exchange Inc. prices show. That’s the lowest level since Bloomberg started compiling Korean bond rates in 2000.
The yield on 10-year Treasury notes fell three basis points, or 0.03 percentage point, to 1.49 percent, approaching the June 1 all-time low of 1.4387 percent.
Austrian five-year yields fell to as low as 0.73 percent and similar-maturity French yields dropped to 0.89 percent, both records. Belgian 10-year rates tumbled to 2.64 percent and Dutch two-year yields reached 0.014 percent, all-time lows.
The European Central Bank said overnight deposits of financial institutions dropped to 324.9 billion euros, the lowest level in almost seven months after policy makers said last week they would no longer pay interest for the funds.
The euro fell 0.5 percent to $1.2181 and reached $1.2173, the lowest since June 30, 2010. It fell 1.1 percent against the yen and the dollar weakened 0.6 percent versus the yen.
Oil in New York fell to $84.67 a barrel and silver slipped to $26.6975 an ounce. The S&P GSCI gauge of 24 commodities retreated 0.6 percent.
Cocoa futures dropped 3.1 percent in New York after European bean usage declined 18 percent to a three-year low in the second quarter. Corn climbed 1.5 percent to $7.1425 a bushel after Goldman Sachs Group Inc. and Citigroup Inc. raised their price forecasts because of U.S. crop damage from the worst drought since 1988.
To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Richard Frost in Hong Kong at rfrost4@bloomberg.net
To contact the editor responsible for this story: Justin Carrigan at jcarrigan@bloomberg.net
Diablo 3's real-money auctions attract get-rich cheaters - BBC News
In sheer sales terms there's no doubt Diablo 3 has been a big success. Blizzard, the creator of the game, claims it is the fastest-selling PC game so far.
But the jury is still out on whether one aspect of the game, its real-money auction house, is the success that Blizzard wants, and perhaps needs, it to be.
In the UK, the company pockets a £1 fee per item sold in the real-money auctions and 15% of the final sale price for commodities, including gold.
For fans of that other Blizzard success, World of Warcraft (Wow), letting players spend real money to buy gear for their character is decidedly odd. Blizzard explicitly bans Wow players buying and selling gear outside the game. Those caught, risk losing their account.
Not so in Diablo 3 - almost every item can be traded for in-game gold or sold for real-world cash, provided you can find a buyer.
Ladan Cockshut, who is studying online game culture for a PhD, said Blizzard probably took the decision to create the real-money auction house after off-game Wow transactions continued to take place despite its rules.
"There are a few people I know who have bought characters and gear through an unofficial channel," said Ms Cockshut. "A lot of them had real problems as a result."
Legitimising the trading of gear would help overcome some of these problems, said Ms Cockshut, even though some players might not like it because it changed the dynamics of the game.
Instead of good gear being earned by time spent playing in the game and thus was a symbol of that player's commitment, it meant players could just buy what they need, she said.
Games consultant Markus Eikenberry said, with the auction house, Blizzard was trying to satisfy the very different needs of players.
"There's a lot of people that want to play and have money but no time and want to pay to accelerate themselves," he said.
"And there's a lot of people that have time and no money so it's a marriage made in heaven as the auction house lets them can play and earn."
Money farmersPity the poor barbarian
In real life I am a journalist, in Diablo 3 a poverty-stricken barbarian. He sometimes struggles to defeat even the meanest foes despite wearing the best gear I can afford, which isn't saying much.
Browsing the auction site is an exercise in teeth-grinding envy as I scroll through page after page of gear I have no hope of buying.
So I decided to try some of the tricks that can help generate cash. They work, after a fashion.
The best exploit a quirk of the game. One, for witch doctors not barbarians sadly, involves standing in a particular spot on a particular quest so your tame ferrets can kill endlessly spawning spiders who drop cash when they expire.
Others are a real grind and involve endlessly re-starting a particular chapter either to buy specific loot from a vendor that is in demand on the auction house or to repeat an encounter with a puny boss that drops lots of gear.
Doing this means playing a different game. I didn't buy Diablo 3 so I could farm cash. I bought it to defeat evil and save the world. So, I'll stay poor and honest and I'll struggle. Whoever heard of a millionaire barbarian, anyway?
However, the auction house in Diablo 3 has stirred huge interest from the so-called gold farmers.
These players make a living by building up huge reserves of the virtual currencies used in popular games. They then sell this for real cash in the game, if possible, or on grey markets if there is no in-game auction house.
Some have gone to great lengths to cash in. Mr Eikenberry recorded an interview with one farmer who was simultaneously running 100 Diablo accounts and claimed to be making about 60 million game gold (about $90, £58) an hour.
The farmer contacted Mr Eikenberry because he wanted Blizzard to fix some of the exploits he was using to cash in. The sheer number of exploits meant rampant inflation was causing the exchange rate of game gold to real cash to crash.
Mr Eikenberry said the farmer was in the "medium range" of those exploiting the game. There were likely to be others running many more accounts, most of which were stolen from other players, and making lots more game cash.
Diablo 3 was proving so tempting to the farmers, he said, because it legitimised what they did.
"Every farmer dreams of going legit and being able to do business without someone trying to stop them," he told the BBC.
"I'd say 90% of the farmers out there are looking at Diablo 3 right now."
This was causing real problems for Blizzard because, he said, Diablo 3 was not designed to be played for hours and hours and hours.
Blizzard had banned some accounts for the most blatant abuse and updated the game several times to make it much harder to exploit. But, said Mr Eikenberry, it would have to keep vigilant to ensure the game was not overwhelmed.
"I can see a lot of the pain they are going through. I knew they were going to have a bunch of these problems," he said. "Diablo 3 is the first really big title to do a real-money auction house."
But Blizzard is not only the company to take steps to tackle players attempting to unfairly profit from games.
Zynga's chief technology officer recently told the BBC about efforts to tackle "cheats" at two of its most popular titles.
"There was a UK-based hacker in poker who was trying to get chips and sell them on the black market at a discount to what we sell them for," said Cadir Lee.
"We ultimately tracked him down and were successful in prosecuting him.
"In Mafia Wars... where there have been exploits, we respond and take action. We try and do things to slow down botters [computer controlled accounts]. But it can be hard to differentiate a botter from an actual player.
"We decide what is a reasonable rate that a human could do and set an upper limit. If someone goes beyond that, we flag it as being suspicious. Our first choice is to program in limits... but in extreme cases we have banned people, and you can go on our forums and see people who complain about that."
Zynga has plans to introduce real-cash gambling elements into future games and is following Diablo's progress.
Others too are likely to adapt their plans depending on the level of success of Diablo 3's auction house.
The sheer number of massively multi-player online games (MMOs) already available means competition is fierce.
Mr Eikenberry said this made it hard for titles to survive on subscription models alone.
"There are two more coming out this year I'm consulting on that are going to primarily earn their funding through peer-to-peer transactions and both are MMOs," he said.
Stocks close lower for fifth day straight - Denver Post
In minutes from their latest meeting released Wednesday afternoon, Federal Reserve officials said they saw a variety of threats to the U.S. economy, including a slowdown in China and a looming budget crunch in Washington. The Fed also didn't signal that new steps to stimulate the economy were on the way.
Stock investors took the news badly at first, but by the end of the day were taking it in stride. The Dow Jones industrial average dropped as many as 118 points shortly after the 2 p.m. release of the Fed's minutes. Thanks to a recovery in the last hour it was down just 48 points at the closing bell, not much different from where it was earlier.
Fed officials said the economy could struggle if Congress fails to avert tax hikes and across-the-board spending cuts scheduled for the end of the year. They also worried that Europe's debt crisis and China's slower growth would weigh on the U.S.
But it was what the Fed didn't say that really tripped the stock market up, said Steven Ricchiuto, chief economist at Mizuho Securities USA. He said many traders had hoped to see evidence that the Fed was prepared to pull the trigger on a new bond-buying effort to prod the economy forward.
"They didn't get what they wanted to see," Ricchiuto said.
The Dow closed at 12,604.53, down 48.59 points. The Standard & Poor's 500 index slipped 0.02 of a point to 1,341.45. The technology-focused Nasdaq composite index lost 14.35 points to 2,887.98.
It was the fifth straight day of losses for both the Dow and S&P. That's the worst stretch for both since a six-day losing streak that ran through May 18. With Europe still working out the details of a bailout for Spanish banks and the U.S. economy still sluggish, there's little for investors to buy stocks.
"The bottom line is that there aren't a lot of investors willing to put money into this market," said Jeff Kleintop, chief market strategist at LPL Financial. "There's not much to get excited about."
The current batch of U.S. corporate earnings, which started to come in this week, isn't expected to help the stock market. Financial analysts forecast that companies in the S&P 500 will report a 2 percent earnings drop in the April-through-June period compared with the year before, according to the research firm S&P Capital IQ. That would be the first fall in profits since the summer quarter of 2009.
Chevron and other energy stocks rose, following oil prices higher. The price of crude oil jumped $1.90, to $85.81 a barrel, after the government said U.S. crude supplies fell for a second week in a row, a sign that demand for energy may be increasing.
Energy stocks led the 10 industry groups within the S&P 500 index, rising 1.4 percent. Chevron gained 97 cents to $104.85 and Exxon Mobil gained $1.27 to $84.38.
In Europe, Spain's borrowing costs fell after the country imposed new sales tax hikes and spending cuts in a bid to slash nearly $80 billion from its budget over the next two and a half years. High borrowing rates and 25 percent unemployment are squeezing Spain's economy.
Europe's debt crisis has led banks and investment funds from around the world to shift their money into Treasurys. High demand for Treasurys has kept U.S. government borrowing rates low.
The Treasury auctioned 10-year notes at a record low interest rate Wednesday afternoon, 1.46 percent.
Among other stocks making bigger moves than the overall market:
— HHGregg plunged 36 percent. The appliance and electronics retailer said after the market closed Tuesday that weak sales will cause its quarterly loss to widen. The company also cut its full-year earnings outlook. Analysts at SunTrust and Stifel Nicolaus downgraded the company's shares. The company's stock lost $4.20 to $7.34.
— AMC Networks jumped 2 percent. A stock analyst at Susquehanna Financial Group said AMC, whose shows include "Mad Men," and "The Walking Dead," could reach a settlement with Dish Network in their dispute over fees by mid-October. Dish replaced AMC's channels on July 1, arguing that they were too expensive. AMC's stock gained 86 cents to $40.73. Dish fell 3 percent, or 95 cents, to $26.80.
— Mead Johnson Nutrition surged 4 percent after a Chinese agency apologized for what it said were false accusations that the company's baby formula contained a possibly dangerous ingredient. The accusations helped knock the company's stock down 3 percent on Tuesday. Mead Johnson jumped $2.99 to $78.28.
STOCKS NEWS EUROPE-Oil price drop to benefit European firms -CS - Reuters UK
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