General News:
– U.S. stocks followed European markets lower after losses tied to subprime mortgages spread through credit markets, threatening earnings at banks and brokerages.
– Treasuries rose, led by short- maturity notes, after European money market rates surged and the European Central Bank said it would provide unlimited funds at a below-market rate of 4 percent to avert a liquidity crisis.
– First-time claims for jobless benefits rose last week to a level that still indicates strength in the labor market.
– July sales at Wal-Mart Stores Inc. and J.C. Penney Co. exceeded analysts’ estimates while those at apparel retailers such as Abercrombie & Fitch Co. fell as customers limited clothing purchases.
– The U.S. economy will grow less than previously forecast as a rout in subprime borrowing hampers consumer spending, according to a survey of economists.
– The back-to-school shopping season had a disappointing start in July as consumers rattled by a weakening housing market and other financial pressures stayed away from stores and malls.
– Residential mortgage delinquencies and defaults are becoming more common among borrowers in the category just above subprime, American International Group said.
– A major French bank, BNP Paribas, announced that it was suspending three of its asset-backed securities funds, saying it could no longer value them accurately because of problems in the U.S. subprime mortgage market.
Asia/Europe:
Asia:
– Asian stocks rose, led by technology and financial shares, as a pickup in U.S. mortgage applications eased concern subprime losses will derail economic growth.
– The Bank of Korea unexpectedly raised its benchmark interest rate for a second time in two months to curb lending that may fuel asset-price bubbles.
– Istithmar PJSC, an investment firm owned by the Dubai government, will buy Barneys New York apparel chain for $942.3 million after Japan’s Fast Retailing dropped out of a bidding war.
– China Construction Bank Corp. hired Citic Securities Co. and two rivals as advisers on a Shanghai share sale to raise about $6.5 billion, which would make it the largest this year, people with knowledge of the offering said.
– HSBC Holdings Plc became the first overseas bank to win regulatory approval to set up a rural bank in China, a nation of 800 million farmers.
Europe:
– European stocks declined after BNP Paribas SA, France’s biggest bank, halted withdrawals from funds and surging demand for cash drove overnight lending rates higher.
– The European Central Bank, in an unprecedented response to a sudden demand for cash from banks roiled by the subprime mortgage collapse in the U.S., loaned 94.8 billion euros ($130 billion) to assuage a credit crunch.
– European bonds rose after lending rates between banks surged and the region’s central bank said it would provide unlimited funds to avert a credit crunch.
– AstraZeneca Plc’s top-selling stomach pills Nexium and Prilosec are being reviewed by U.S. regulators after two small, long-term clinical trials suggested the drugs may increase the risk of heart attacks or sudden death.
Corporate News:
– Natural and organic grocery chain Wild Oats Markets Inc. (OATS) said its second quarter profit dropped 97% due to higher costs and charges that offset improved sales.
– Satellite broadcaster DirecTV Group Inc. (DTV) said second-quarter earnings fell 2% on a sharp rise in operating costs, although demand for its high definition services increased.
– The Home Depot Inc. (HD) warned that it may get less than expected for its wholesale distribution unit and it is lowering how much it will pay to buy back a portion of its battered stock, a double dose of bad news that sent company shares diving.
– Internet telephone company Vonage Holdings Corp. (VG) reported a much reduced loss for the second quarter as it scaled back marketing, but it also saw a drastic drop in new subscribers.
– Campbell Soup Co. (CPB) is putting Godiva up for sale, saying the decadent Belgium chocolate does not fit with the company’s focus on healthy, down-home foods.
