‘Business’ Archives
Fed Pledges Low Rates Through 2013
The U.S. Federal Reserve Tuesday signaled it plans to keep its benchmark short-term interest rate close to zero for at least another two years as it sharply downgraded its view of the U.S. economy. In a statement after a one-day policy meeting, Fed officials said they expect the weak economy to warrant exceptionally low levels for the federal funds rate "at least through mid-2013." Seven voted in favor of this action, with three voting against. While not the bold step to buy more bonds that some in the markets were hoping for, the move may help keep borrowing rates low and drive investors into riskier assets like stocks. The Dow Jones Industrial Average was up in volatile trade Tuesday, after suffering its biggest one-day decline since the 2008 crisis on Monday. Officials Tuesday [...]
Spot Gold up $68 regains safe-haven status on U.S. downgrade
NEW YORK (MarketWatch) -- After last week's slip, gold reclaimed its title as the ultimate safe haven. Gold got caught in a market-wide downdraft Thursday, as investors sold profitable gold holdings to cover losses in other assets, giving the precious metal a black eye. But Standard & Poor's decision late Friday to cut the U.S. government's credit rating restored gold's reputation as a haven whose risk profile is unblemished by political wrangling, excessive debt or central-bank interventions. S&P's move helped propel gold futures to a record of $1,718.50 a troy ounce Monday, up more than $60 from Thursday's settlement. The contract for August delivery settled up $61.40, or 3.7%, at $1,710.20 a troy ounce on the Comex division of the New York Mercantile Exchange. via Gold [...]
Dow Dives 616 Points As Market Re-Rates U.S. Growth Outlook
Standard & Poor’s Friday downgrade of the U.S. credit rating sparked the expected selloff in New York Monday, but the depth and ferocity of the nosedive was also driven by a fundamental rethink of America’s economic growth. The rate of U.S. growth “is being rapidly discounted by the market,” says John Richards, head of market strategy (Americas) at RBS, ahead of analysts taking down their expectations. That contributed to the massive slide that had the Dow Jones Industrial Average down 616 points, or 5.4%, at 10,828 10 minutes before the closing bell. The S&P 500 and Nasdaq lost more than 6% apiece, with the former off 76 points to 1,123 and the latter 162 points to 2,370. The Russell 2000, a growth-focused index, slumped 5.3%. via Dow Dives 600 Points As Market [...]
G7: Commited to Ensure Liquidity, Support Markets
The Group of Seven nations is committed to taking coordinated action to ensure liquidity and to support financial market functioning, financial stability and economic growth, G7 finance ministers and central bank governors said in a statement. "These actions, together with continuing fiscal discipline efforts will enable long-term fiscal sustainability," the statement released early on Monday said. "No change in fundamentals warrants the recent financial tensions faced by Spain and Italy. We welcome the additional policy measures announced by Italy and Spain to strengthen fiscal discipline and underpin the recovery in economic activity and job creation," it added. Senior officials conferred by phone before Asian financial markets opened as financial crises on both sides of the Atlantic [...]
Geithner Rips S&P for ‘Really Terrible’ Move on US Downgrade
Treasury Secretary Timothy Geithner ripped Standard & Poor's two days after the ratings agency downgraded US debt, saying the stunning move was based on a "lack of knowledge" about the nation's finances. Geithner also said the debt crisis presents Congress with a chance to "earn back confidence of investors around the world" and he reiterated his support for President Obama, who asked Geithner to stay on even as calls intensified over the weekend for his resignation. "S&P has shown really terrible judgment and they've handled themselves very poorly," he said in an exclusive interview with CNBC. "And they've shown a stunning lack of knowledge about basic U.S. fiscal budget math. And I think they drew exactly the wrong conclusion from this budget agreement." As he spoke, US [...]