U.S. economic news for the week ended September 16, 2011

Stocks made significant gains this week after investors were encouraged by central banks vowing to pump dollars into the European banking system to avert a liquidity crisis. All eyes remain on Europe and its leaders' determination to control its debt crisis. On Friday, as concern intensified about Greek debt and the eurozone's financial stability, European finance ministers and U.S. Treasury Secretary Timothy Geithner began a two-day meeting in Wroclaw, Poland, to tackle the crisis.

U.S. and global economic news

Central banks join forces to stem liquidity crisis
The European Central Bank said it will lend dollars to euro-area banks in a series of three-month loans to ensure that the banks have enough U.S. currency through the end of the year. The ECB will coordinate the action with the U.S. Federal Reserve Board and other central banks. The move came this week after two banks borrowed from the ECB's seven-day offerings. The announcement was seen as a sign that the banks are having difficulty accessing U.S. currency as Europe's debt crisis makes financial institutions wary of lending. Earlier in the week, French and German leaders confirmed that they will support Greece's continued participation in the shared euro currency.

SNB vows to defend currency; leaves rate at zero
The Swiss National Bank left its three-month Libor target rate at zero after unexpectedly lowering the benchmark from 0.25% last month. The bank said it is ready to take "further measures" if needed to cap gains in the Swiss franc against the euro.

U.S. economic data show continued slowing
U.S. retail sales remained unchanged in August as the sluggish labor market and limited income growth took a toll on consumers. Prices paid by producers were also unchanged in August, according to the U.S. Department of Labor, while the so-called core costs that exclude food and fuel rose less than forecast. The Consumer Price Index for August showed an inflation rate of 0.4%, with a core rate of 0.2%. Meanwhile, a report from the U.S. Department of Commerce showed inventories rose less than forecast in July. Initial claims for unemployment benefits were worse than expected last week.

Container trade points to weakening global economy
The Port of Long Beach's total container trade fell 6.9% in August. The drop was the largest in five months. Weaker global trade could push the economy closer to recession.

U.S. and global corporate news

Moody's downgrades Société Générale and Crédit Agricole
Moody's Investors Service downgraded its long-term ratings of Société Générale and Crédit Agricole by one notch. Moody's cited the level of state support that SocGen received and Crédit Agricole's significant Greek holdings as reasons behind the downgrade.

UBS trader loses $2 billion; BofA to cut 30,000 jobs; Morgan Stanley's Mack to exit post
UBS shares lost ground after the Swiss bank said it would likely post a third-quarter loss after a rogue trader racked up as much as $2 billion in losses using the firm's own money. The incident raised fears among investors about the bank's ability to manage risk and global regulators' ability to monitor it. Bank of America announced a $5 billion cost reduction plan that would include the elimination of 30,000 jobs. The job cuts represent the largest single work force reduction in a U.S.-based company so far this year. Morgan Stanley's shares got a boost after the firm disclosed that Chairman and Chief Executive John Mack will step down from the board at the end of the year.

Best Buy reports 30% drop in profit
Best Buy, the world's largest electronics chain, reported a 30% drop in quarterly profit and cut its full-year earnings forecast. Best Buy's sales have come under pressure as shoppers, in search of better deals, shift to online rivals. The retailer said market share gains in smartphones and tablets did not offset declines in sales of televisions and computers.

RIM loses ground
Research in Motion's stock tumbled after the maker of BlackBerry announced it saw a year-over-year decline in shipments of its smartphones, the first decline in nearly a decade. RIM shares have lost more than one-half of their value this year as the company loses market share to Apple's iPhone and devices that run off Google's Android system. For the quarter ended August 27, RIM posted a profit 59% lower than for the same quarter last year.