Archive for the ‘AP-Business’ Category

The stock market buckled Monday under the weight of a crisis in Europe and danger of recession at home. Reeling from a downgrade of American debt, the Dow Jones industrials plunged 634 points.

It was the worst day for the market since the financial crisis in the fall of 2008 and extended Wall Street's sudden, sharp decline. Stocks have lost 15 percent of their value in just two and a half weeks.

Monday was the first trading day since Standard and Poor's downgraded the United States' risk-free credit rating, and the selling started at the opening bell. The Dow dropped 250 points in minutes. For the rest of the day, investors looked for safer places for their money. With few buyers left for stocks, the market could only drift lower.

The Dow finished the day down 5.5 percent. The point decline was the worst since Dec. 1, 2008, and the sixth-steepest ever. The average ended at 10,809.85, its first close under 11,000 since November.

FRANKFURT, Germany (AP) -- A risky European Central Bank decision to fight the continent's debt crisis by buying Spanish and Italian bonds on Monday started pushing down the soaring interest yields threatening those countries with financial disaster.

But some analysts warned that the move transfers significant risk to the balance sheet of an institution long reluctant to move beyond its traditional role controlling inflation. Others warned that a half-hearted intervention would not stamp out the crisis.

The radical expansion of the ECB's bond-buying program cements the bank's unwilling role as the institution with primary responsibility for solving's Europe 21-month-old financial crisis.

The ECB had been reluctant to become directly involved in averting the crisis, instead pushing politicians to get their countries' finances under control and build up their own crisis management system.

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NEW YORK (AP) -- U.S. stock futures tumbled Monday amid a rout in global stocks after Standard & Poor's downgraded the U.S. credit rating for the first time.

S&P cut the long-term debt rating for the U.S. by one notch to AA+ from AAA late Friday. The move wasn't unexpected, but it comes when investors are already feeling nervous about a weak U.S. economy, European debt problems and Japan's recovery from its March earthquake.

Ahead of the opening bell, Dow Jones industrial futures are down 222 points, or 1.9 percent, to 11,181. S&P 500 futures are down 27, or 2.3 percent, to 1,171. Nasdaq 100 futures are down 50, or 2.3 percent, to 2,134.

In Europe, the German DAX index fell 2 percent. In Asia, Japan's Nikkei 225 index fell 2.2 percent.

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TOKYO (AP) -- The world's leading economies on Sunday urgently discussed the stability of financial markets after a historic U.S. credit downgrade rattled investors already worried about European debt crises.

Deputies from the Group of 20 advanced and emerging economies talked by telephone Sunday about proposals to minimize market shocks, South Korea's central bank said. And the financial ministers from the Group of Seven economies planned talks before Asian markets open Monday.

The countries are concerned Standard & Poor's downgrade of the U.S. credit rating late Friday will shake global markets. In a sign of the fallout, Middle East markets tumbled Sunday on the first day of business after the downgrade.

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JERUSALEM (AP) -- Israel on Sunday formed a panel of government ministers and some of the country's leading economic experts to draw up a plan to reduce the soaring cost of living, marking a new effort to defuse demonstrations over prices that drew over a quarter-million people onto the streets the night before.

The announcement comes after three weeks of mushrooming protests sparked by complaints over housing costs. Since then, the protests have gained new momentum as Israelis grow increasingly frustrated with their struggle to make ends meet despite economic growth in the country that is outpacing that of other developed nations. Saturday's turnout of over 250,000 people in public squares presented Israel's most stable government in years with a chorus of discontent it could not afford to ignore.

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The person spoke on condition of anonymity because the level and timing of the contacts had yet to be confirmed.

Standard & Poor's downgrade of the U.S. credit rating Friday night added to growing fears over debt levels and economic growth in the world's biggest economy and in large European nations such as Italy and Spain. The downgrade is also set to hurt Europe, whose economy is closely linked to the U.S. and whose weak members depend on strong demand abroad for their goods to help them grow.

Many economists see the world's big central banks as the last line of defense at this moment in the crisis, after policymakers in Europe and the U.S. have failed to agree on the kind of shock-and-awe moves that many investors demand.

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