Stocks were volatile this week as President Barack Obama's $447 billion plan to generate jobs failed to bolster investor confidence in the U.S. economy, and U.S. Federal Reserve Board Chairman Ben S. Bernanke disappointed markets by not detailing new plans to boost growth. Weakness in overseas markets added to the jitters as concerns over the likelihood of a Greek default mounted ahead of a meeting of finance ministers and central bankers from the Group of Seven leading economies in Marseilles, France. The euro fell to a nine-month low against the U.S. dollar, and Greek credit default swaps soared to record levels. Further unnerving markets this week were reports that the United States had received specific and "credible" information that al Qaeda is planning car and truck bombings in New York and Washington to coincide with the 10-year anniversary of the September 11 terrorist attacks.
U.S. and global economic news
Obama calls for extension of unemployment benefits
In the announcement of his $447 billion plan to spur growth, President Obama called on U.S. lawmakers to pass $62 billion in spending to extend unemployment insurance benefits through 2012 and fund programs to alleviate long-term joblessness.
Swiss central bank caps franc
The Swiss National Bank effectively put a cap on its currency, the Swiss franc. The bank said it would buy euros in "unlimited quantities" whenever the eurozone currency falls below 1.20 francs.
ECB and BOE keep rates unchanged
The European Central Bank and the Bank of England kept interest rates unchanged this week. ECB President Jean Claude Trichet warned that the eurozone's economy will grow more slowly than previously expected, between 1.4% and 1.8% in 2011, and between 0.4% and 2.2% in 2012. Trichet also said that risks to medium-term inflation have moderated, but he stopped short of signaling a change in the bank's interest rate path.
Greek credit default swaps hit record
Credit default swaps insuring Greek sovereign bonds jumped 212 basis points to a record 3,238 this week. The surge, which signals that investors believe there is more than a 90% chance that Greece will default, came after reports that the Greek economy shrank more than previously reported. The country's gross domestic product contracted 7.3% in the second quarter.
U.S. trade deficit posts biggest drop in over two years
In July the U.S. trade deficit posted its biggest drop in nearly two-and-one-half years as exports surged to a record high and oil prices fell from the near-three-year highs reached in May.
U.S. jobless claims rise
U.S. jobless claims rose more than expected last week, by 2,000 to 414,000, as the labor market continues its struggle to recover.
U.S. and global corporate news
Groupon cancels roadshow
Groupon canceled its investor roadshow and is reevaluating plans for an initial public offering amid the current market volatility.
Twitter boasts 100 million users
Twitter, the largest U.S. microblogging service, announced that it now has more than 100 million active users worldwide. Usage has increased more than 80% since the beginning of the year.
Google to buy Zagat
Google agreed to buy restaurant review company Zagat Survey as the Internet giant moved to take a share of revenue from local businesses. Earlier this year, Google entered into a two-year agreement with Local.com to implement certain advertising and search services.
Saab Automobile vowed to appeal the refusal of a Swedish court to grant the carmaker protection from creditors. The ruling essentially opens the way for labor unions representing unpaid workers to petition for bankruptcy and reclaim wages.
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