U.S. dollar still low by Corina Ciubotaru

The U.S. dollar has been weakening against the euro for six consecutive sessions and this makes it that more difficult for the economy to bounce back. The euro reached $1.4160 late Thursday in New York and $1.4189 in Europe. After the mortgage crisis, the American economy has had difficulties in every aspect, including consumers' spending power. Since the dollar is constantly hitting new lows in relation to the euro and other currencies, American tourists have less spending power abroad, which could make them choose to travel more in their own country. The housing market is still in a slump as hundreds of thousands of houses remain unsold and the number of new ones being built is also very low. The Fed's rate cut last week didn't seem to have a serious short-term impact visible in ordinary people's lives; however, it did manage to jumpstart stock markets once again and another cut is expected, probably by another half-point. The core inflation which excludes food and energy costs rose 1.8 percent during the last year but remained within the Fed's comfort zone of between 1 and 2 percent. A recession is possible, but chances are markets will eventually return to normal since the economy is still growing. The good news however is that unemployment rates are somewhat decreasing and have reached the lowest level since May during the week ending September 22nd. In relation to some of the other important currencies like the yen and the Swiss franc, the dollar rose on Wednesday in New York.

related story: http://news.yahoo.com/s/ap/20070927/ap_on_bi_ge/dollar;_ylt=ArqgOxj5p6h0NmUF6.BQDY.s0NUE

by Corina Ciubotaru for PocketNews (http://pocketnews.tv)

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Nasdaq and Borse Dubai fight about OMX tougher by Nina Gotzmannova

At first it seemed like a quick deal. Nasdaq, American stock company will buy OMX, Swedish-Finnish financial service company from Nasdaq OMX Group. Because OMX is world leader in financial instruments trading systems, the price was high, $3.7 billion. But then Borse Dubai came into speculations. Bid of Borse Dubai was higher, $4 billion. They are interested in OMX because with this purchase they can get brilliant access to the biggest firms in Scandinavia. Last week Borse Dubai purchased a 27.4% stake in the exchange for 230 kronor ($33.3) per share. But the stakes has increased by now. Nowadays an OMX share is worth 265 kronor ($40.67) per share. Last week appeared someone new, who also showed interest. Qatar Investments Authority bought 9.98 % stake last Thursday and it is possible the stake had increased to 14 % by now. They had also purchased 20% in London Stock Exchange. So Nasdaq and Borse Dubai were forced to make a deal and not to argue about the price. If they will wait too long, someone else will take OMX. They agreed, that Nasdaq will control OMX, while Borse Dubai will receive several ‘favors', such as 20 % stakes in Nasdaq. On Wednesday both companies announced some news. They had raised their bid to $4.9 billion. So it is harder for Qatar group to fight for the company. They also took some steps to prevent Qatar to block the takeover. In response for this bid Nasdaq and Borse Dubai has received support from several key shareholders in OMX. They are currently searching for the support from other important shareholders.

by Nina Gotzmannova for PocketNews (http://pocketnews.tv)

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Bye, bye dollar by Claudia Sonea

The United States' housing market and a worsening credit crunch determined Fed to take a dramatic action this week. The half-point cut in its benchmark interest rates weakened the dollar against other currencies, although the main goal was to revive credit markets. However, the central bank is too less concerned about the value of the nation's currency, according to Michael Woolfolk, senior currency strategist at the Bank of New York. So the recent decline means more expensive trips to Paris, Rome Bangalore and Toronto, but from the point of view of export it might turn out to be profitable. Thursday, for the first time since November 1976, the US dollar became equal to Canadian dollar, so the prices in New York are the same with the ones in Toronto. David Gilmore, a partner at Foreign Exchange Analytics in Essex, Conn. Stated that Thursday drop doesn't necessarily mean it will meltdown, but it is definitely a matter of greater concern than U.S. households. The result has two sides; on one hand exports become more competitive and on the other the prices for imports to the U.S. will boost up. Also the number of American tourists has become scarcer, while foreigners tempted by cheaper accommodation choose USA as a holiday destination. Despite the fact that Fed's decision weakened the US dollar strength, the Canadian dollar would have rise without the rate cut, because it is a major oil exporter and it has benefited from soaring crude prices and a strong economy. Woolfolk said that dollar's decline was too gradual for the Fed to worry about inflation. Replacing the dollar as a reserve currency of choice, the 13-nation euro reached a 1.40 key benchmark against the American currency. Due to the India's booming economy the rupee rose to 39.92 per dollar in intraday trading and for the first time the greenback lost ground against the nine-year old currency. Moreover, it doesn't come as a surprise that the pound has gained terrain and worth now $2.0099. Bad news are also for the government that are left without foreign investors because of their currency weakening, therefore being forced to pay higher rates at weekly auctions to find buyers for its bills, notes and bonds.

related story: http://news.yahoo.com/s/ap/20070920/ap_on_bi_ge/dollar;_ylt=AqP8CbbRKCdzBaqE86geJces0NUE

by Claudia Sonea for PocketNews (http://pocketnews.tv)

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The sun over Wall Street by Claudia Sonea

Stock market has passed through a tremendous series of losses that disestablished it. However, last week Wall Street rose sharply and mostly because of high expectations regarding Federal Reserves' decision on cutting rates, lower interest rates. Fed Chairman Ben Bernanke despite the traders' opinion he will reveal during a speech to Germany's Bundesbank Fed's next move, he kept on talking about something else, about the globe to cooperate toward economic stability. According to Wall Street a rate cut will help bolster the U.S. economy and ease problems caused by tightening credit availability. It is necessary to lower interest says Steven Goldman, chief market strategist, Weeden & Co., who believes that more rate cuts will have to take place if they want to stabilize stock market. Housing, unemployment, decrease of retail prices and debt aversion made the stock market to be volatile. Mark Zandi, chief economist at Moody's Economy.com forecasts a new wave of recessions in the next six to 12 months. The U.S. economy slipping into recession got was calmed down by the Commerce Department's report on the U.S. trade deficit. The Dow rose 180.54, the Standard & Poor's 500 index rose 19.79, or 1.36 percent, Nasdaq composite index rose 38.36, only bonds suffered because being the only source of getting money easily, they were the first to go. More bad news for the dollar, that is losing ground in face of the euro and the British pound. Crude oil jumped 74 cents to $78.23 after OPEC agreed to boost its crude output by 500,000 barrels a day in an effort to calm markets unnerved. OPEC was expected to keep current output targets in place. European equity markets did not have a favorable forecast for the annual economic growth. The European Commission is reducing the growth due to the fear that region's economy will reach its peak as tighter credit conditions raise the risk of a global slowdown. More to come on this subject…

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Things are improving in the American economy by Corina Ciubotaru

The housing market crisis in America has affected all levels of the economy and many countries around the world. Stocks plummeted, indexes too and the only one who could fix things was the Fed. So it did what it had to, cut the loan rate by half a point and allowed the market to jumpstart itself through investors putting their money where they belong, in companies. But even though stocks and indexes like the Dow, NASDAQ, Standard & Poor's or the Russell 2000 have rocketed yesterday as a result of the cut, fears of recession still hover over American financial analysts. The housing market is still in a slump, as thousands of homes are yet to find a buyer and banks aren't giving loans as easily as they did. The housing starts fell to a 1.331 million unit annual pace in August, the slowest in 12 years. But the stock market has done well again today. After the Dow industrial, NASDAQ and S&P rose yesterday by 2.51%, 2.71% and 2.92% respectively it seems they are following a rising trend. Oil prices have also risen above the record $81, nearly hitting $82; energy prices are on the increase, while the core CPI, which excludes food and energy prices rose 0.2 percent. The dollar slumped against the euro and bonds have been abandoned in favor of higher-profit stocks, which sent their price downwards. Commodity prices also fell in August but investors are optimistic things will work out for the best in the end.

related story: http://news.yahoo.com/s/ap/20070919/ap_on_bi_st_ma_re/wall_street;_ylt=Ag1eKrVOdFzcRE63Jc6l19Ks0NUE

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Asian, European stocks rise on rate cut by Delia Cruceru

After the Federal Reserve decided Tuesday to cut its rate, the stocks extended their rally on Wall Street Wednesday as stock markets from Europe and Asia rise. The Federal Reserve has cut its benchmark interest rate by a half percentage point to 4.75 percent, a move to help the U.S. economy to stay away from recession as the mortgage markets are making troubles. "I think investors are in general thinking there's a better chance of the economy improving than there was a week ago," said J. Bryant Evans, a portfolio manager at Cozad Asset Management. "Down the road we might see this as helping the economy but it could also help inflationary pressures. That is the thing that the Fed is weighing: help the economy by reducing rates versus inflation." After Tuesday, the Dow Jones industrials rose 59.99, or 0.44 percent, to 13,799.38 after it climbed nearly 336 points. In Europe Britain's FTS 100 Index rose with 2.8 percent to 6,460.00, in Germany the DAX Index gained 2.3 percent to 7,750.84 and France's CAC-40 rise 3.3 percent to 5,730.82. In Asia, Japan's Nikkei 225 Index gained 579.74 points, or 3.7 percent while Hong Kong's Hang Seng index climbed 977.79 points, or 3.98 percent, to 25,554.64. In India Bombay's Sensex Stock Exchange soared 654 points, or 4.2 percent, to 16,323. The Bank of Japan decided not to raise its key interest rate, remaining unchanged at 0.5 percent, as a response to the Federal Reserve cut.

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by Delia Cruceru for PocketNews (http://pocketnews.tv)

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Dollar holds near lows as markets mull rate cut by Delia Cruceru

After the Federal Reserve's rate cut, the dollar fell to a record low against euro, as investors expect more rate cuts in the future. This year, the dollar has lost 5.5 percent in front of the European currency, especially after the rate cut made by the Feds. It is the 15 year low of dollar against major currencies, felling to 79.091, its lowest since 1992, but recovered to 79.229 by 0808 GMT. The European currency touched Wednesday a record of 1.3988 dollars and Tuesday it ended at 1.3976 dollars. But the dollar rose against the Japan's currency, to 116.07 yen from 116.05 yen, because of the national Bank of Japan decision to hold the rates unchanged. "The lower interest rate means the dollar has lost more support," said Laura Ambreseno, currency strategist at Morgan Stanley. "I think the move will help other central banks get back on to a hiking path as this boost for the U.S. economy should help the rest of the world maintain strong growth." Even the New Zeeland dollar registered a hit against the U.S. dollar climbing with 0.6 percent to $0.7300. "The market is taking a break. The dollar is losing interest-rate support, and I think $1.40 against the euro is within reach this week," said Kathy Lien, chief currency strategist at DailyFX.com in New York.

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Wall Street on-hold by Claudia Sonea

After this summer when stock market indexes fell from record highs to big time losses, Wall Street awaits Fed's decision on Tuesday. Fears about home sluggish, economic growth, unemployment, retail sales rattled investors and rushed Fed to take a decision concerning the rate cut. The main question remains if the interest rates will be lowered or not. Bob Doll of BlackRock Inc. reveals that if the Federal Reserve lowers rates by a quarter of a percentage point, the stock market crisis will still not come to an end. Also Swiss Re chief U.S. economist says that even though investors are crossing their fingers hoping there will be a half-point rate cut, policy makers are not keen on offering them satisfaction. Moreover, the central bank, which hasn't reduced the benchmark fed funds rate since 2003, fears it might look like bailing out the investors. To all this the it adds the weakening of dollar strength in face of the euro and the Dow Jones industrial average 4 percent above 14,000.41. Last week the expectation of a rate cut and the corporate good news about returning to normal on the bond market- a safe source of quick money- brought gains to investors. The Dow closed with a raise of 2.51 percent, the Standard & Poor's 500 index rose 2.11 percent, and the Nasdaq composite index rose 1.42 percent. However, the two main concerns of the Fed remain the core inflation- food and energy prices- and the economy. Therefore Kurt Karl states that despite the fact that it might look like bailing out, it is also an action of protecting economy. Sluggishness in housing and an up tick in jobless claims will be very little affected even after Fed'd decision. Tuesday is a special day for investors, but after the meeting Federal Reserves might raise more question than it is supposed to answer. Wall Street is on-hold until after Tuesday afternoon. Will there be a compromise and a new direction towards solving the stock market issue? Don't go away more to come.

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Fed's rate cut made indexes rise dramatically by Corina Ciubotaru

It looks like a rate cut was all the Fed needed to do to give the American economy a breath of fresh air. Following a cut by half a percentage point in the funds rate, all of the stock indexes rose dramatically: the Dow increased by 335.97 or 2.51 percent; the NASDAQ composite index soared by 70.00 or 2.71 percent; the Standard & Poor's Index 500 rose 43.13 or 2.92 percent, while the Russell 2000 index of smaller companies rose by 3.97 percent to 806.63. For the Dow, it was the biggest gain since 2003 while the S&P and NASDAQ haven't risen this much since 2002. This massive investment in the stock market came about because nobody thought the Fed would actually go through with the alleged half-point cut and it also led to the dollar dropping seriously by comparison to the euro. Oil prices exceeded $81 per barrel, and the price of gold has also increased dramatically. But will it be enough to support the entire economy's return to normal? The housing market is the main factor that's going to hold back economic growth for the next period of time, as more jobs might be lost in the construction or manufacturing industry. Many houses have remained unsold and people will have to pay higher mortgage rates as the Fed's rate cut is only beginning to take effect. The American economy is not expected to grow significantly for the rest of the year, but at least some change is starting to show.

related story: http://news.yahoo.com/s/ap/20070918/ap_on_bi_st_ma_re/wall_street;_ylt=Anv6L1QNnYfRdHQS7sPM5fKs0NUE

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House votes to aid struggling homeowners by Delia Cruceru

The House approved Tuesday a plan for expanding the federal banking mortgages to help homeowners avoiding foreclosures. The bill passed the House 348-72 and it will allow the Federal Housing Administration (FHA) to back the refinanced loans of ten of thousands of borrowers who are delinquent on payments because their mortgages are resetting to sharply higher rates from low initial "teaser" levels. The Republican Barney Frank, who represents Fall River and New Bedford and also heads the House Financial Services Committee, will introduce a legislation aimed at shielding consumers from deceptive practices. "In the subprime market, it is clear that financial innovation outstripped regulation," Frank said at a Sept. 5 hearing. "Can we come up with regulation that will diminish the harm without chilling the whole operation?" Last week the Senate approved legislation that will help nonprofits and other groups that offer counseling and information to help homeowners avoid foreclosure, with $200 million. Results from RealtyTrac Inc. show that the number of foreclosure filings reported in the United States last month more doubled compared with August 2006 and jumped 36 percent from July. There are estimated that this year and the next one, 2 million to 2.5 million adjustable-rate mortgages will be "reset", jumping from the "teaser" rates and it would create a crest during the next year's presidential and congressional election campaigns.

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Panic-stricken customers may damage the economy by Nina Gotzmannova

British economy is vulnerable, is liable to fear of customers and depends on US economy. This fact had shown after Northern Rock, currently the fifth largest mortgage lender in Britain, asked The Bank of England for emergency funds. Despite the funds in the bank are safe and secure, people chose to stand in queue and withdraw their money. After the crisis of subprime mortgage market in US in March this year, British financial and mortgage market remain unwarranted. Practices of mortgage providers offering loans up to one quarter higher than the property of the value were known in Britain too, and the possible collapse of banks or mortgage lenders terrified them. Northern Rock is not the only British bank asking for help. Anyway, it was the first one in 15 years. However, up to now the bank has not withdrawn any funds from the Bank of England. But who is withdrawing are the customers. Large queues filled main streets in British towns and panicking people don't hesitate to wait several hours to get their possessions. Since Friday an estimated £2 billion had been withdrawn. On 17 September it was announced that British government and the Bank of England will guarantee all existing deposits. This act can lead to decreasing on business confidence and for sure will lead to sale of the bank. Images of hundreds of people waiting in front of the bank has ruined and damaged the reputation of the bank and it has to be sold quickly. Also the crisis can close Britain economical growth, which was uninterrupted for the previous ten years. In the end, the gross domestic product can decrease up to 1 percent in 2008 and 2009.

related story: http://news.yahoo.com/s/ap/20070917/ap_on_bi_ge/britain_northern_rock;_ylt=AnzNqnH4UpTJG9aHxwRQ55qs0NUE

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UK's Northern Rock is heading for a takeover by Corina Ciubotaru

England's fifth biggest mortgage lender, Northern Rock, is in a bit of trouble. It appears it went to the Bank of England to ask for emergency funding and as soon as customers found out, they rushed to get their money back. They withdrew almost 2 billion pounds on Friday and Saturday, which amounts to 8 percent of the bank's deposits. Also on Friday, Northern Rock's share price dropped by 31 percent, adding to concerns that the bank might be up for sale soon; in total, the company's shares have dropped 60 percent this year. Offers for purchase are not few, as banks including Barclays and Lloyds TSB have shown interest, only to be discouraged by difficult credit markets. Still, nobody's saying Northern Rock is headed for a takeover, as there are three possibilities for it to continue existing: a takeover, nationalization or restructuring. Customers have been assured that all their money will be returned should they decide to reclaim them. The bank initially had a deposit base of 24 billion pounds and massive withdrawals from its client base would make the other banks feel insecure again about giving loans. The bank's problems are starting to affect the entire British economy; there could even be a mortgage slump and the pound is slowly starting to fall. Today it had a value below $2 for the first time in almost 3 weeks and things look even worse when comparing the pound with the euro: the sterling had the lowest level today since July 2006.

related story: http://uk.news.yahoo.com/rtrs/20070916/tts-uk-northernrock-sale-a8bf950_5.html

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America's economy is bouncing back by Corina Ciubotaru

There are signs that America's economy is strengthening again after the mortgage chaos. Even though the dollar hit an all-time low on Thursday against the euro and other major currencies, stocks are starting to rise due to Countrywide's announcement that it had raised its fund level by $12 billion. Recently, the company borrowed $11.5 billion and sold a $2 billion stake to Bank of America. The Dow Jones industrial average rose 133.23 points, while Standard and Poor's 500 index and Nasdaq went up 12.39 and 8.99, respectively. Individual companies are also doing well on the market: Countrywide went up 14 percent to $18.93, while GM rose 10 percent ($3.09) and Ford gained 5.6 percent. McDonald's also went up to an all-time record of $54.30, adding to the rise of the Dow index, and so have Microsoft, which rose 23 cents, and Boeing, rising 63 cents to $98.95 a share. The Russell 2000 index of smaller companies also rose by 2.45 points, or 0.31 percent, to a level of 780.35. The closing price for crude oil was $80.09 a barrel on the New York Mercantile Exchange, for the first time ever above $80. All this rising in stock markets will probably do much to help the economy as a whole, because investors may become relaxed once more and begin buying stock to jumpstart the economy once more. Indicators in other countries also rose; the FTSE 100 in Britain rose 0.91 percent, the DAX in Germany was up 0.84 percent, and France's CAC-40 added 1.05 percent. The Nikkei stock average in Japan also added 0.15 percent.

related story: http://news.yahoo.com/s/ap/20070913/ap_on_bi_st_ma_re/wall_street;_ylt=Ajcr9Q1lTRBHLrHITehE6pis0NUE

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The dollar hit a new low by Corina Ciubotaru

It hasn't been that long since the subprime mortgage crisis ended in the U.S. and the country finds itself in yet another financial crisis. The dollar is at its lowest point in history compared to the euro, reaching $1.3914 on Wednesday, and it is also doing badly compared to the British pound, the Swiss franc and the yen. American authorities have announced a decrease in employment rate for August and a cut in interest rates is expected for the first time in four years, by half a point. The European Central Bank has also stopped its annual rise in interest rates due to this problem but it is expected to enforce a quarter-point increase by the end of the year. A weak dollar means American exports will be cheaper and imports will be more expensive. An increase in oil prices to more than $80 is yet another concerning factor for market watchers and may also lead to rising prices in all areas. The trade-weighted dollar index was also at its strongest low 79.319 on Wednesday, but rose to 79.530 today. After the mortgage problem disrupted the American economy, everyone expected things to be bad for a while but thankfully, the situation could have been worse. Maybe the pace of economic growth is slowing, maybe it's a hurdle the economy will overcome soon, what's certain is that steps are being taken and the economy of the United States will once again be healthy and a bit more wise after these events.

related story: http://news.yahoo.com/s/ap/20070912/ap_on_bi_ge/dollar;_ylt=AnWroC1lw9kB8SFaViEVfpGs0NUE

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Jobs" decline ratchets investors by Claudia Sonea

Lately worries about a possibly decline in employment that might affect consumer desire to spend were cooled off by Fed's speech. On Monday Wall Street closed a mixed volatile session due to the concern that the Federal Reserve might not lower interest rates as much as it was expected. The fears about housing and credit market weakness that affects economy and diminish consumer spending continue. Investors became more optimistic after Fed's speech on Monday, despite the fact that the officials did not give any specific dates about how the central bank might alter rates. San Francisco Fed President Janet Yellen, Dallas Fed President Richard Fisher and Atlanta Fed President Dennis Lockhart assured that although the economy is storming there are no securities for the investors and the unemployment problem should be considered in a mostly strong batch of retail sales reports. It is obvious that there will be a rate cut; the question is if it will happen by a quarter percentage point or a half percentage point to loosen up the tight credit markets. Scott Fullman, director of investment strategy for I. A. Englander & Co, warns that if the Fed won't reduce rates next week there will be a major sell-off. Stock's indexes fell, even though they had a small gain after Gen. David Petraeus said to Congress that he recommended to President Bush that the draw back U.S. forces from Iraq. Not all the stocks had losses, Bear Stearns Cos. Bear Stearns rose 2 percents and Advanced Micro Devices Inc. rose 33 cents, Apple Inc. rose 3.8 percent and Intel Corp. finished 12 cents at $25.35. Also bond prices rose as stocks' prices fell, while mortgages are expected to fall 25 percent next year. The dollar is losing ground in front of other currencies and the investors might shift to gold which rose sharply lately. The stock market is still unbalanced and it is not sure if Fed should impose a rate cut or not. Stay connected and see where everything is heading.

related story: http://news.yahoo.com/s/ap/20070910/ap_on_bi_st_ma_re/wall_street;_ylt=AgkoGTVMEAoPqWsvnDTyTCGs0NUE

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Stocks fall as Street looks for rate cut by Delia Cruceru

Home sales are making problems again on Wall Street as stocks finished lower on Wednesday and the Federal Reserve's regional banks are offering little more assurance that an interest rate cut is likely. Although the Dow Jones Industrials average rose in three of the last four sessions, Wednesday they dropped more than 140 points. According to the National Association of Realtors a decline of pending sales of existing homes reached the lowest level in July in nearly six years. "Our members are telling us some sales contracts aren't closing because mortgage commitments have been falling through at the last moment," said Lawrence Yun, the group's senior economist. In the Federal Reserve "beige book" report that describes the economic conditions in regions around the country, it is said that the overall economy hasn't been widely harmed. According to the report though housing weakness has deepened, the recent turmoil in the financial markets has had only limited effect on the broad economy. After Mattel announced a third recall of its toys the stocks rose with 1 cent $21.98. Apple fell $7.40, or 5.1 percent and Costco Wholesale Corp., the warehouse retailer, after reporting for August weaker sales their stocks fell $2.61, or 4.2 percent, to $59. Over the world, Britain's FTSE 100 index closed down 1.66 percent, Japan's Nikkei stock average fell 1.60 percent, Germany's DAX index declined 1.73 percent, and France's CAC-40 tumbled 2.14 percent.

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Subprime loans face big hikes by Delia Cruceru

Subprime loans are now dominating the economic news, from worse to worse. An increase of several hundred dollars is expected by million of houseowners from U.S., as the interest rate on their home loan is going up. "The meltdown in the subprime market is the biggest threat to the housing market and the broader economy," says Mark Zandi, chief economist at Moody's Economy. com. "It is at the vortex of the problem." In October the loans will be reset and the rates on almost $50 billion worth of mortgages will rise with 2 percents or more. James Kragenbring, senior investment officer at Advantus Capital Management in St. Paul, Minn estimates: "For example, on a $210,000 loan balance (the average subprime amount in 2006), the additional 2.5 percentage point increase on the interest rate adds about $4,560 a year, or about $380 a month." This will mean a serious hit over the wallets, as many people can't afford to pay the debt because mortgage payments are rising faster than their income: "If the borrower is on Social Security, the most their income is rising is 3 percent a year and the mortgage payments are rising much faster than that," says Carol Brent, staff attorney of Legal Services for the Elderly. They can expect now that delinquencies will go up, loans from last year having a rate of 15% delinquencies.

related story: http://news.yahoo.com/s/csm/20070830/ts_csm/asubprime;_ylt=AvnFt0yNRrPiPG.dFF3sguis0NUE

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