During the week, negative economic news from Europe was tempered by a rise in German business confidence and reports of economic stabilization in the United States, notably in the housing industry. Several reports signaled that the U.S. housing market is stabilizing after a drop-off in activity following the expiration of a homebuyers’ tax credit in April. U.S. leading economic indicators were also slightly positive.
But what sparked the broadest response from diverse parts of the financial markets this week was a signal from the U.S. Federal Reserve Board that it would begin buying more government debt if that is necessary to stimulate the economy. This prompted record-high gold prices – with gold futures reaching $1,300 per ounce Friday morning – and a drop in the value of the U.S. dollar against numerous foreign currencies.
U.S. economic news
Home sales, home starts rise
A couple of positive reports on the U.S. housing market were released this week. The U.S. Department of Commerce reported that U.S. housing starts rose 10.5% in August to a seasonally adjusted 598,000 annual rate. This unexpectedly positive news was followed by a report from the National Association of Realtors that August home sales rose 7.6% from the previous month to 4.13 million on a seasonally adjusted annual basis. However, the price of U.S. homes fell 0.5%, according to the Federal Housing Finance Agency.
Fed says it could take future action
Although the Federal Reserve made no changes to its key short-term interest rate and took no other immediate steps, it said in a statement that it “is prepared to provide additional accommodation if needed to support the economic recovery,” and it expressed concern about inflation being too low.
Consumer Price Index flat
The U.S. core Consumer Price Index, excluding energy and food, was flat from July to August, according to the U.S. Department of Labor. The overall CPI rose 0.3%. Year over year, the CPI rose 1.1%, with the core CPI up 0.9% in August from a year earlier. Because sluggish domestic demand is likely to keep inflation tame, many analysts expect the Fed to make large-scale asset purchases in the coming months.
Weekly jobless number rises
Initial unemployment claims rose by 12,000 to 465,000 in the week ended September 18, the U.S. Department of Labor said, but the four-week moving average fell by 3,250 to 463,250, reinforcing a longer-term positive trend.
Economic indicators lead upwards
The Conference Board’s index of leading economic indicators rose slightly, but more than expected in August. This suggests a continued weak economic recovery, but eases immediate concerns of a double-dip recession.
Corporate debt defaults down
The default rate for U.S. corporate debt is expected to drop below 3% by the end of 2010, according to Moody’s Investors Service. This is a sharp drop from a peak of 14.6% in November 2009 and below the default rate of 3.1% from August 2008, a month before the financial crisis began.
Demand for capital goods rises
Although durable goods orders declined overall by 1.3% in August, orders for non-defense capital goods, excluding aircraft – a gauge of capital spending by businesses – increased by 4.1%. A sharp drop in demand for airplanes and cars was balanced by rising demand for machinery, computers, and fabricated metal products.
U.S. and global corporate news
Brazil’s Petrobras offers record share sale
Petroleo Brasileiro (Petrobras), Brazil’s federal oil company, introduced a share offer of $70 billion, which was snapped up, with the Brazilian government buying $43 billion and the market purchasing the remaining shares. Strong demand allowed Petrobras to sell the shares almost at par with Thursday’s closing price. The proceeds will go to develop recently discovered large offshore oil fields. Petrobras expects to double its oil output by 2014, making Brazil the world’s fifth-largest oil producer, according to The Wall Street Journal.
Nike’s profit rises 9%
Shoe and athletic apparel manufacturer Nike announced a 9% growth in its quarterly profit on higher demand for its athletic apparel and less costly discounting. The company says its revenue has rebounded in the last three quarters, following lagging demand during the recession.
Darden announces higher sales
Darden Restaurants, the casual-dining giant that owns Olive Garden, LongHorn Steakhouse, and Red Lobster, posted a 20% rise in first-quarter earnings. Although same-store sales fell 1.7% at Red Lobster, they rose more than 2% at Olive Garden and LongHorn in a positive sign for the casual-dining industry.
General Mills has healthy earnings
General Mills’ earnings rose 12% on higher sales of certain cereal brands and changes in the value of some commodity hedges. Profit was somewhat diminished by higher raw-material costs.
Global economic news
Eurozone growth slows
Private sector output growth in the eurozone slumped to a seven-month low in September and is expected to slow more in the fourth quarter, according to a survey by financial-information company Markit. The firm's monthly measure of private-sector activity fell to 53.8 in September from 56.2 in August. However, any number above 50 indicates growth. Meanwhile, new industrial orders in the eurozone posted their sharpest monthly drop in a year and a half in July. Factory orders fell 2.4% from June but rose 11.2% above year-earlier numbers.
German business confidence rises
German business confidence rose surprisingly in September, according to the German research institute Ifo. Its closely watched German business sentiment index rose to 106.8 in September from 106.7 in August, beating expectations of a slight drop.
Irish GDP stumbles
Just after Ireland recovered from its recession in the first quarter of 2010, its Central Statistics Office announced this week that its second-quarter gross domestic product unexpectedly fell 1.2%. Ireland was the first country in the eurozone to slide into recession and was one of the most troubled economies in the area last year.
Tuesday, September 28, 2010
Monday, September 20, 2010
U.S. Economic News Week Ending September 17, 2010
U.S. stocks rose this week as encouraging earnings reports and improved employment data buoyed investor sentiment. Gold, oil, and silver also moved higher. U.S. Treasuries rose as concerns increased that Ireland might have to seek external assistance from the International Monetary Fund as it grapples with its budget deficit.
Recent economic instability has been a trigger for gold buying. Gold prices rose to a record high of $1,274.75 per ounce this week amid talk that central banks will be net buyers of bullion this year for the first time in two decades and as worries increased that the U.S. Federal Reserve Board will have to do more to prop up the U.S. economy.
U.S. economic news
Consumer and producer prices show tame inflation
U.S. consumer prices rose in August for the second consecutive month as gas and food prices rose. Underlying inflation, however, was flat. The seasonally adjusted Consumer Price Index rose 0.3% from July. The underlying inflation rate, which is most closely watched by the U.S. Federal Reserve Board, was unchanged. Core consumer prices, which strip out volatile energy and food prices, posted the smallest gain in the past three months. Meanwhile, producer prices climbed 0.4% in August, putting them 3.1% above their level one year ago. Again, much of the gain was the result of the jump in energy prices.
Factory production cools
U.S. factory production cooled in August with industrial production rising 0.2% after a 6% gain in July. The data point to a slower pace of growth. Capacity utilization, which measures the percentage manufacturers' plants and facilities that are use, increased to 74.7% last month from 74.6% in July. The gauge averaged 80% over the past 20 years. The lower number indicates that there is now enough spare plant equipment and space available to prevent the bottlenecks and higher prices that could occur if demand rises.
Unemployment applications fall
Applications for U.S. unemployment benefits unexpectedly fell last week to the lowest level in two months, a sign the labor market is improving. Initial jobless claims dropped by 3,000 to 450,000 in the week ended September 11.
U.S. and global corporate news
Oracle reported that its quarterly profit jumped 20%, aided by demand for business software and the addition of hardware sales from Sun Microsystems, which Oracle acquired earlier this year.
China's Anshan Iron and Steel Group said it will buy 14% of Steel Development, a Mississippi-based steelmaker, and jointly invest in up to five mills. The deal has sparked strong lawmaker opposition in the United States over worries that technology will flow to China and jobs will be lost. Initially Anshan planned to build a $168 million plant in Amory, Mississippi, where the U.S. plant is headquartered.
While FedEx said its fiscal first-quarter profit more than doubled, its earnings forecast for the current quarter fell short of analysts' estimates. The company raised its full-year earnings forecast and said it will eliminate 1,700 jobs.
Global economic news
Japan intervenes to support yen
Japan sold the yen against the dollar this week for the first time since 2004 in an effort to prevent the yen's gains from undermining the exports propelling Japan's growth. The unilateral move came after the yen fell below 85 per dollar for the first time in almost two weeks. The currency has rallied as concerns about the durability of the U.S. recovery and the effect of Europe's debt woes.
Australian consumer confidence falls
Australian consumer confidence fell in September for the first time in three months as households grew more concerned about the economic outlook.
India raises interest rates to contain inflation
The Reserve Bank of India increased interest rates for the fifth time this year and said its actions have brought the monetary situation close to normal. The repurchase rate was boosted to 6% from 5.75%, and the reverse repurchase rate a half point to 5%.
Eurozone exports fall
European exports fell in July for the first time in three months in July as a global slowdown started to curb orders for companies across the euro region. In July exports dropped 0.6% from June, when they rose 5.3%. Imports fell 1.5%. The trade surplus jumped to 6.8 billion from 2.3 billion in June.
Recent economic instability has been a trigger for gold buying. Gold prices rose to a record high of $1,274.75 per ounce this week amid talk that central banks will be net buyers of bullion this year for the first time in two decades and as worries increased that the U.S. Federal Reserve Board will have to do more to prop up the U.S. economy.
U.S. economic news
Consumer and producer prices show tame inflation
U.S. consumer prices rose in August for the second consecutive month as gas and food prices rose. Underlying inflation, however, was flat. The seasonally adjusted Consumer Price Index rose 0.3% from July. The underlying inflation rate, which is most closely watched by the U.S. Federal Reserve Board, was unchanged. Core consumer prices, which strip out volatile energy and food prices, posted the smallest gain in the past three months. Meanwhile, producer prices climbed 0.4% in August, putting them 3.1% above their level one year ago. Again, much of the gain was the result of the jump in energy prices.
Factory production cools
U.S. factory production cooled in August with industrial production rising 0.2% after a 6% gain in July. The data point to a slower pace of growth. Capacity utilization, which measures the percentage manufacturers' plants and facilities that are use, increased to 74.7% last month from 74.6% in July. The gauge averaged 80% over the past 20 years. The lower number indicates that there is now enough spare plant equipment and space available to prevent the bottlenecks and higher prices that could occur if demand rises.
Unemployment applications fall
Applications for U.S. unemployment benefits unexpectedly fell last week to the lowest level in two months, a sign the labor market is improving. Initial jobless claims dropped by 3,000 to 450,000 in the week ended September 11.
U.S. and global corporate news
Oracle reported that its quarterly profit jumped 20%, aided by demand for business software and the addition of hardware sales from Sun Microsystems, which Oracle acquired earlier this year.
China's Anshan Iron and Steel Group said it will buy 14% of Steel Development, a Mississippi-based steelmaker, and jointly invest in up to five mills. The deal has sparked strong lawmaker opposition in the United States over worries that technology will flow to China and jobs will be lost. Initially Anshan planned to build a $168 million plant in Amory, Mississippi, where the U.S. plant is headquartered.
While FedEx said its fiscal first-quarter profit more than doubled, its earnings forecast for the current quarter fell short of analysts' estimates. The company raised its full-year earnings forecast and said it will eliminate 1,700 jobs.
Global economic news
Japan intervenes to support yen
Japan sold the yen against the dollar this week for the first time since 2004 in an effort to prevent the yen's gains from undermining the exports propelling Japan's growth. The unilateral move came after the yen fell below 85 per dollar for the first time in almost two weeks. The currency has rallied as concerns about the durability of the U.S. recovery and the effect of Europe's debt woes.
Australian consumer confidence falls
Australian consumer confidence fell in September for the first time in three months as households grew more concerned about the economic outlook.
India raises interest rates to contain inflation
The Reserve Bank of India increased interest rates for the fifth time this year and said its actions have brought the monetary situation close to normal. The repurchase rate was boosted to 6% from 5.75%, and the reverse repurchase rate a half point to 5%.
Eurozone exports fall
European exports fell in July for the first time in three months in July as a global slowdown started to curb orders for companies across the euro region. In July exports dropped 0.6% from June, when they rose 5.3%. Imports fell 1.5%. The trade surplus jumped to 6.8 billion from 2.3 billion in June.
Friday, September 10, 2010
U.S. Economic News Week Ending September 10, 2010
Gold prices, after settling at a record high of $1,259.30 an ounce on Tuesday, retreated later in the week as investors appeared slightly calmer about the health of European banks and the global economy. Still, renewed worries about Europe’s sovereign debt situation pressured the world’s stock markets, although U.S. stocks were mostly up during this post-Labor Day week. Also this week, mortgage rates increased for the first time since June, with the 30-year fixed rate rising slightly to 4.35%.
U.S. economic news
Trade deficit narrows in July
The nation’s trade deficit fell 14% in July to $42.8 billion from $49.8 billion in June, according to a report from the U.S. Department of Commerce. The figure is well below the $47.3 billion gap that had been forecast by economists. Led by aircraft and capital goods, exports reached a record $153.3 billion in July, up 2% from June and 18% from one year earlier. Imports fell 2% from June to $196.1 billion. A smaller trade deficit is potentially good news for the economy because it suggests trade will have less negative impact on growth in the third quarter than it had in the second quarter.
Credit card debt plummets
According to the U.S. Federal Reserve Board, revolving credit outstanding (almost entirely credit card debt) fell $4.4 billion to $827.8 billion in July from June. That figure represents a decline of 15% from the peak of $973.6 billion reached in August 2008.
Unexpected gas glut
Gasoline stockpiles increased by a record 5% during July and August. Supplies typically fall 6% in these two months. One benefit to gas buyers from the unexpected surplus: prices at the pump have remained largely the same during the summer months. The extreme gains in gasoline supplies are a result of record refinery output and high imports more than making up for robust consumption.
Fed's Beige Book reports uneven growth and signs of deceleration
The Fed reported in its Beige Book survey of economic conditions in the central bank’s 12 districts that recovery is occurring unevenly across the country. The report stated that regions dependent on manufacturing and farming were making the most progress while those reliant on housing were struggling. The report also said that while the U.S. economy maintained its expansion overall, five Fed districts have experienced “mixed conditions or a deceleration in overall economic activity” in mid-July through the end of August. The other seven regions all reported modest growth or conditions that were improving.
New unemployment claims fall
The U.S. Department of Labor reported that applications for unemployment benefits fell by 27,000 to 451,000 in the week ended September 4. Economists had predicted a much smaller drop of just 2,000 claims. While total initial jobless claims are still much higher than they would be in a healthy economy, they are now at their lowest level since July 10.
U.S. and global corporate news
Bristol-Myers Squibb announced that it is acquiring biotechnology company ZymoGenetics for $735 million. The deal is the latest in a series of small-to-midsize acquisitions and partnerships that Bristol has made over the past few years in an attempt to strengthen its product lineup.
British Airways and American Airlines, which won approval for their joint venture in July, will start their alliance on flights across the Atlantic in October. The two airlines will align their frequent-flier programs, allowing travelers to earn and use their miles on both airlines.
Talbots reported a profit of $941,000 for the quarter ended July 31, a considerable turnaround from a prior-year loss of $24.5 million. The women’s clothing and accessories retailer cited lower costs and resistance to markdowns as reasons for its improved earnings. Despite posting a profit, net sales decreased 1.3% to $300.7 million and same-store sales fell 1.4%, following a 25% drop in same-store sales one year earlier.
McDonald’s said same-store sales rose 4.9% in August from a year earlier, narrowly falling short of analyst estimates. Analysts projected global sales would increase 5%. The world’s largest restaurant chain reported that sales increased 4.6% in the United States, thanks in part to the popularity of its higher-margin smoothies and frappes.
Global economic news
OECD predicts slowdown in global economy
The Paris-based Organization for Economic Cooperation and Development projected that the pace of global economic expansion during the second half of 2010 will be slower than previously estimated. In its short-term forecast for the Group of Seven leading industrial nations, the think tank said annualized growth in G-7 gross domestic product will slow to 1.4% in the third quarter and 1% in the fourth quarter. That comes on the heels of growth of 3.2% and 2.5% in the first and second quarters of the year, respectively. Saying there is great uncertainty surrounding the world economy in the months ahead, the OECD added that central banks around the world may need to be prepared to provide additional economic stimulus.
Bank of Canada lifts benchmark rate
Canada’s central bank increased its benchmark interest rate for the third time this year, raising its target rate for overnight loans between commercial banks to 1% from 0.75%. Canada’s increases are the first among Group of Seven countries following last year’s global recession. The country seems to be recovering from the global economic downturn faster than most countries, as Canada has already returned to pre-recession employment levels. In addition, “consumption and investment have ‘evolved’ as anticipated and are expected to remain buoyant,” the Bank of Canada said.
Ireland’s state-owned bank to be split
Ireland’s troubled banking system became the latest victim in Europe’s continuing economic crisis, as the government said it would break up the weakest of its major banks to try to prevent a run by depositors. Anglo Irish Bank, which was nationalized by Ireland’s government last year, will likely be divided into a government-backed bank that would hold customer deposits and an “asset recovery” bank that would hold the bank’s increasingly bad loans. The intention is that eventually the recovery bank’s assets will be sold off in whole or in part. The move is being made as Ireland attempts to restore the reputation of its financial system.
U.S. economic news
Trade deficit narrows in July
The nation’s trade deficit fell 14% in July to $42.8 billion from $49.8 billion in June, according to a report from the U.S. Department of Commerce. The figure is well below the $47.3 billion gap that had been forecast by economists. Led by aircraft and capital goods, exports reached a record $153.3 billion in July, up 2% from June and 18% from one year earlier. Imports fell 2% from June to $196.1 billion. A smaller trade deficit is potentially good news for the economy because it suggests trade will have less negative impact on growth in the third quarter than it had in the second quarter.
Credit card debt plummets
According to the U.S. Federal Reserve Board, revolving credit outstanding (almost entirely credit card debt) fell $4.4 billion to $827.8 billion in July from June. That figure represents a decline of 15% from the peak of $973.6 billion reached in August 2008.
Unexpected gas glut
Gasoline stockpiles increased by a record 5% during July and August. Supplies typically fall 6% in these two months. One benefit to gas buyers from the unexpected surplus: prices at the pump have remained largely the same during the summer months. The extreme gains in gasoline supplies are a result of record refinery output and high imports more than making up for robust consumption.
Fed's Beige Book reports uneven growth and signs of deceleration
The Fed reported in its Beige Book survey of economic conditions in the central bank’s 12 districts that recovery is occurring unevenly across the country. The report stated that regions dependent on manufacturing and farming were making the most progress while those reliant on housing were struggling. The report also said that while the U.S. economy maintained its expansion overall, five Fed districts have experienced “mixed conditions or a deceleration in overall economic activity” in mid-July through the end of August. The other seven regions all reported modest growth or conditions that were improving.
New unemployment claims fall
The U.S. Department of Labor reported that applications for unemployment benefits fell by 27,000 to 451,000 in the week ended September 4. Economists had predicted a much smaller drop of just 2,000 claims. While total initial jobless claims are still much higher than they would be in a healthy economy, they are now at their lowest level since July 10.
U.S. and global corporate news
Bristol-Myers Squibb announced that it is acquiring biotechnology company ZymoGenetics for $735 million. The deal is the latest in a series of small-to-midsize acquisitions and partnerships that Bristol has made over the past few years in an attempt to strengthen its product lineup.
British Airways and American Airlines, which won approval for their joint venture in July, will start their alliance on flights across the Atlantic in October. The two airlines will align their frequent-flier programs, allowing travelers to earn and use their miles on both airlines.
Talbots reported a profit of $941,000 for the quarter ended July 31, a considerable turnaround from a prior-year loss of $24.5 million. The women’s clothing and accessories retailer cited lower costs and resistance to markdowns as reasons for its improved earnings. Despite posting a profit, net sales decreased 1.3% to $300.7 million and same-store sales fell 1.4%, following a 25% drop in same-store sales one year earlier.
McDonald’s said same-store sales rose 4.9% in August from a year earlier, narrowly falling short of analyst estimates. Analysts projected global sales would increase 5%. The world’s largest restaurant chain reported that sales increased 4.6% in the United States, thanks in part to the popularity of its higher-margin smoothies and frappes.
Global economic news
OECD predicts slowdown in global economy
The Paris-based Organization for Economic Cooperation and Development projected that the pace of global economic expansion during the second half of 2010 will be slower than previously estimated. In its short-term forecast for the Group of Seven leading industrial nations, the think tank said annualized growth in G-7 gross domestic product will slow to 1.4% in the third quarter and 1% in the fourth quarter. That comes on the heels of growth of 3.2% and 2.5% in the first and second quarters of the year, respectively. Saying there is great uncertainty surrounding the world economy in the months ahead, the OECD added that central banks around the world may need to be prepared to provide additional economic stimulus.
Bank of Canada lifts benchmark rate
Canada’s central bank increased its benchmark interest rate for the third time this year, raising its target rate for overnight loans between commercial banks to 1% from 0.75%. Canada’s increases are the first among Group of Seven countries following last year’s global recession. The country seems to be recovering from the global economic downturn faster than most countries, as Canada has already returned to pre-recession employment levels. In addition, “consumption and investment have ‘evolved’ as anticipated and are expected to remain buoyant,” the Bank of Canada said.
Ireland’s state-owned bank to be split
Ireland’s troubled banking system became the latest victim in Europe’s continuing economic crisis, as the government said it would break up the weakest of its major banks to try to prevent a run by depositors. Anglo Irish Bank, which was nationalized by Ireland’s government last year, will likely be divided into a government-backed bank that would hold customer deposits and an “asset recovery” bank that would hold the bank’s increasingly bad loans. The intention is that eventually the recovery bank’s assets will be sold off in whole or in part. The move is being made as Ireland attempts to restore the reputation of its financial system.
Friday, September 3, 2010
U.S. Economic News Week Ending September 3, 2010
Stocks got a lift this week after more modest-than-expected job losses and an unexpected jump in home sales eased some concern that the economic rebound is weakening. Adding to the more buoyant mood among investors were Wednesday's reports of strong manufacturing data from China and the United States, which further relieved concerns about a global slowdown.
U.S. economic news
Job losses moderate
Job losses continued to rise in August but at a more modest pace than expected. Nonfarm payrolls fell by 54,000 last month, matching the level of losses recorded in July. Private employers added 42,000 jobs in August, while a reduction in census workers dragged total payrolls down by 100,000 and pushed the unemployment rate up to 9.6%. Earlier in the week, reports showed that initial jobless claims fell by 6,000; that level indicates that the labor market has not improved this year even as the economy expanded.
Manufacturing gains add to enthusiasm
The Institute for Supply Management said its manufacturing index rose to 56.3 in August from 55.5 the prior month. Faster growth in production, employment, and inventories pushed the U.S. manufacturing index higher last month.
Unexpected jump in pending home sales
Pending home sales unexpectedly grew 5.2% in July. The jump was seen as a sign that the market may be starting to stabilize after the expiration of a homebuyer tax credit.
U.S. and global corporate news
Canadian banks miss expectations
The Bank of Nova Scotia's third-quarter earnings rose 14% as the internationally diverse bank posted a record quarter in its domestic banking business. Still, its results missed analysts' expectations. Toronto-Dominion Bank also missed analysts' expectations, despite a 29% jump in profit. That increase was powered by strong retail results in Canada and the United States and lower loan-loss provisions.
Heinz profits rise 13%
H.J. Heinz's fiscal first-quarter earnings rose 13%, helped by strong sales of ketchup and staples such as Classico pasta sauces. During a conference call to announce its results, the Pittsburgh-based company again signaled its interest in making acquisitions in emerging markets.
Global economic news
ECB extends emergency lending measures
European Central Bank President Jean-Claude Trichet extended emergency lending measures for banks into 2011 as the risk of a renewed U.S. recession put the eurozone's rebound in crisis. The ECB said it will keep offering banks unlimited one-week and one-month loans at least until January 18. The ECB will also offer banks three-month loans in October, November, and December at interest rates linked to the ECB's average benchmark rate over the maturity of the loan.
Japan expands lending program and announces $10.8 billion stimulus
In an effort to combat the rising yen, which analysts have blamed for slower export growth and a sputtering economy, the Bank of Japan announced that it would expand its lending program and that the government would implement a $10.8 billion stimulus package.
U.S. economic news
Job losses moderate
Job losses continued to rise in August but at a more modest pace than expected. Nonfarm payrolls fell by 54,000 last month, matching the level of losses recorded in July. Private employers added 42,000 jobs in August, while a reduction in census workers dragged total payrolls down by 100,000 and pushed the unemployment rate up to 9.6%. Earlier in the week, reports showed that initial jobless claims fell by 6,000; that level indicates that the labor market has not improved this year even as the economy expanded.
Manufacturing gains add to enthusiasm
The Institute for Supply Management said its manufacturing index rose to 56.3 in August from 55.5 the prior month. Faster growth in production, employment, and inventories pushed the U.S. manufacturing index higher last month.
Unexpected jump in pending home sales
Pending home sales unexpectedly grew 5.2% in July. The jump was seen as a sign that the market may be starting to stabilize after the expiration of a homebuyer tax credit.
U.S. and global corporate news
Canadian banks miss expectations
The Bank of Nova Scotia's third-quarter earnings rose 14% as the internationally diverse bank posted a record quarter in its domestic banking business. Still, its results missed analysts' expectations. Toronto-Dominion Bank also missed analysts' expectations, despite a 29% jump in profit. That increase was powered by strong retail results in Canada and the United States and lower loan-loss provisions.
Heinz profits rise 13%
H.J. Heinz's fiscal first-quarter earnings rose 13%, helped by strong sales of ketchup and staples such as Classico pasta sauces. During a conference call to announce its results, the Pittsburgh-based company again signaled its interest in making acquisitions in emerging markets.
Global economic news
ECB extends emergency lending measures
European Central Bank President Jean-Claude Trichet extended emergency lending measures for banks into 2011 as the risk of a renewed U.S. recession put the eurozone's rebound in crisis. The ECB said it will keep offering banks unlimited one-week and one-month loans at least until January 18. The ECB will also offer banks three-month loans in October, November, and December at interest rates linked to the ECB's average benchmark rate over the maturity of the loan.
Japan expands lending program and announces $10.8 billion stimulus
In an effort to combat the rising yen, which analysts have blamed for slower export growth and a sputtering economy, the Bank of Japan announced that it would expand its lending program and that the government would implement a $10.8 billion stimulus package.
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