Dow Plunges 680 Points on Economic Woes -wanglaoba(胃口倍好，身体倍棒) @埃德蒙顿华人论坛:埃德蒙顿枫下论坛 The Rolia Forum of Edmonton

本文发表在 rolia.net 枫下论坛Tuesday December 02, 2008 (08:15 AM EST)

The S&P 500 and Nasdaq each tumbled nearly 9% Monday after dismal reports on U.S. manufacturing sentiment and construction spending

U.S. stocks suffered a sharp sell-off on the first day of December, and closed at their worst levels of the session. The large-cap S&P 500 index and the technology-heavy Nasdaq composite index each sank nearly 9%. The declines in major U.S. indexes erased most of the gains from the market's five-session rally.

On Monday, the Dow Jones industrial average finshed lower by 679.95 points, or 7.7%, at 8,149.09. The broad S&P 500 index dropped 80.03 points, or 8.9%, to 841.35. The tech-heavy Nasdaq composite index sank 137.50 points, or 8.95%, to 1,398.07.

Things were even worse in other corners of the market. The S&P MidCap 400 index tumbled 10.9% Monday.

The U.S. stock market "is facing a new round of selling pressure as the financial picture is still a question mark," said Jay Collins of DT Trading in Chicago. "[The U.S. jobs report] due on Friday is the news story of the week and is expected to reinforce the bleak jobs picture that lies ahead."

"The downturn happened so fast today there wasn't much chance to position for it," said S&P technical analyst Chris Burba.

Wall Street was spooked by fresh reminders of economic weakness in the U.S. and around the globe. Among the items driving the selling: A report released Monday by the Institute of Supply Management showed that U.S. manufacturing contracted at the steepest rate in 26 years in November. Another reports showed construction spending slumping in October.

To put an exclamation point on the economy's troubles, the National Bureau of Economic Research's business cycle dating committee, widely recognized as the arbiter of U.S. recessions, said the economy began its current downturn in December, 2007.

Meanwhile, Treasuries experienced an enormous rally as investment capital flowed heavily out of equities. Traders cited speculation of more rate cuts by the Federal Reserve and possibly government purchases of Treasuries in order to keep yields down and support lending.

Oil futures plunged to finish below $50, their lowest close in three years. The U.S. dollar index was higher. Gold futures plunged on demand worries.

Fed Chairman Ben Bernanke said Monday that the central bank will act as needed to preserve the viability of key institutions and that further interest-rate reductions are "certainly feasible." Bernanke said the economy remains under "considerable stress" and acknowledged that the Fed's various liquidity programs have failed to return private credit markets to normal.

Also, U.S. retail data from the first weekend of the holiday shopping season were mixed and "not really impressive" according to S&P MarketScope.

On the New York Stock Exchange Monday, 28 stocks were lower in price for every four that posted gains. The ratio on the Nasdaq was 24-4 negative.

Equity markets in Europe finished sharply lower, with major indexes down 5.2% in London, 5.9% in Frankfurt, and 5.6% in Paris registering declines. Asian markets ended mixed, with Tokyo stocks falling 0.9%, Hong Kong climbing 1.6%, and Shanghai gaining 1.3%.

Wall Street looked to news on the retail sector as the all-important holiday shopping season kicked off on Friday, Nov. 28. "We believe consumers remained spooked by market turmoil and refrained from shopping during [November]. We are projecting one of the weakest Holiday shopping seasons on record," wrote Merrill Lynch analyst Lorraine Maikis in a note Monday.

Technology shares were hard-hit Monday. Intel (INTC) was among the stocks leading the way lower with a decline of 9%. The Semiconductor Industry Association reported Monday that worldwide sales of semiconductors declined 2.4% in October to $22.5 billion compared to sales of $23.0 billion in October, 2007.

Among the other industry groups hard-hit in Monday's session: The S&P Investment Banking&Brokerage index fell 15.2% as Ladenburg Thalman analyst Richard Bove cut his earnings estimate for Goldman Sachs (GS), citing the impact of changes in the value of the company's holdings in China and Japan.

The S&P Oil&Gas Exploration&Production index plummeted 14.8% amid the sharp decline in crude oil futures.

The Diversified Metals&Mining index slumped 12%. Bloomberg reported that copper fell for a second day in Shanghai after China's contraction in manufacturing signaled the growing risk of a slump in the world's biggest consumer of the metal. The S&P Gold index fell 8.1% amid a sharp drop in prices for the yellow metal.

The Automobile Manufacturers index dropped 8.7% amid fresh developments in the beleaguered sector. Ford Motor Co. (F) announced that it will re-evaluate strategic options for Volvo Car Corp., including the possible sale of the Sweden-based premium automaker. Ford said the decision comes in response to the significant decline in the global auto industry particularly in the past three months and severe economic instability worldwide.

General Motors' (GM) management on Sunday was racing to finalize a viability plan to take to Congress, with a boardroom hellbent on securing a federal rescue loan, according to a Wall Street Journal report. At the same time, directors -- unlike chief executive Rick Wagoner -- are also insisting that all options stay on the table, including a Chapter 11 bankruptcy filing, if a bailout doesn't come through, said the Journal.

In U.S. economic news Monday, the National Bureau of Economic research declared a U.S. business cycle peak in December of 2007, which means that the current recession now officially started in January, as most economists including ourselves had assumed. The decision was made in a conference call last Friday, and largely reflects the peak in payroll employment in December of last year.

The Institute for Supply Managment's manufacturing index fell to 36.2 in November, after diving 4.6 points to 38.9 in October, as the contraction in manufacturing picked up speed. The November figure is the lowest level since 1982. The employment index dipped to 34.2 from 34.6, and was at a relative high at 51.9 in July. The new orders component dropped to 27.9 from 32.2. The production index fell to 31.5 from 34.1. Prices paid plunged to 25.5 from 37.0; that index was at 91.5 in May.

"Both households and businesses are deleveraging rapidly, just as banks did over the past year, and the pull-back is sharply impacting spending and output as gauged by the November sentiment indicators", says Action Economics.

U.S. construction spending fell 1.2% in October, after flat reading in September (revised up from -0.3% previously). On a year-over-year basis, spending is off 4.6%, not quite as bad as the prior pace. Residential spending remained very weak, falling 3.5% and is down 23.6% from a year earlier. Nonresidential spending dipped 0.1% but is up 9.1% year-over-year. Public spending rebounded 0.7% after a 0.9% decline in September. Private spending fell 2.0% after a 0.4% increase in September.

Federal Reserve Chairman Ben Bernanke said in a speech Monday that further interest-rate reductions are certainly feasible, but added the scope for conventional rate policy remains limited. He said that the monetary and fiscal stimulus will help the recovery, and that he sees some signs of stabilization in the financial markets. However, labor market conditions worsened in November, and economic activity has downshifted further. He believes economic conditions will remain weak for a time longer though he suggested together with international partners will restore confidence and get the economy back on track.

Widely followed equity analyst Meredith Whitney of Oppenheimer (OPY) believes the U.S. credit card industry may pull back more than $2 trillion of lines of credit over the next 18 months.

Looking at economic developments outside the U.S., the UK is "closer than ever before" to joining the EUR, according to the president of the European Commission, Jose Manuel Barroso. Speaking on a French radio show, he said British politicians were considering the move because of the effects of the global credit crunch. However, Downing Street said its position on the euro remained the same. Barroso acknowledged "the majority" of British people continued to oppose joining the eurozone. But he said the recent economic uncertainty had made the currency a far more attractive option.

Meanwhile, the chairman of the Bank of Japan's policy board decided to call an unscheduled monetary policy meeting on Tuesday. "The purpose of the emergency meeting is to discuss monetary control matters," the BoJ said.

Among companies in the news Monday, Ford Motor Co. (F) announced that it will re-evaluate strategic options for Volvo Car Corp., including the possible sale of the Sweden-based premium automaker. Ford said the decision comes in response to the significant decline in the global auto industry particularly in the past three months and severe economic instability worldwide.

General Motors' (GM) management on Sunday was racing to finalize a viability plan to take to Congress, with a boardroom hellbent on securing a federal rescue loan, according to a Wall Street Journal report. At the same time, directors -- unlike chief executive Rick Wagoner -- are also insisting that all options stay on the table, including a Chapter 11 bankruptcy filing, if a bailout doesn't come through, said the Journal.

General Electric Co. (GE) shares fell after Merrill Lynch cut its EPS forecasts on the diversified conglomerate to reflect the incrementally worse industrial and financial services environment. In other U.S. markets Monday, Treasuries rallied. The 10-year note surged 47/32 in price to 108-21/32 for a yield of 2.75%. The 30-year note roared up 130/32 to 123-28/32 for a yield of 3.24%.

The U.S. dollar index was higher at 86.48.

January West Texas Intermediate crude oil futures fell more than $5.00 to end the New York session at $49.28 per barrel, the lowest close in more than three years, according to Bloomberg. At a Nov. 29 meeting in Cairo, the Organization of Petroleum Exporting Countries, which supplies approximately 40% of the world's oil, postponed a decision on a cut in output until the Dec. 17 meeting in Algeria. OPEC said it will use this time to gauge the impact of the 1.5 million barrel a day cut announced in October.

February gold futures were down $41.20 to $777.80 per ounce at 2:05 p.m. ET, the biggest one-day decline in about eight months, amid speculation that demand for the yellow metal will weaken as the global economy continues to struggle.

Among Monday's stocks in the news, Mentor Corp. (MNT) agreed to be acquired by Johnson&Johnson (JNJ) in a deal valued at about $1.07 billion in cash. Mentor shareholders will get $31.00 per share.

Aon Corp. (AOC) announced that it had completed its acquisition of Benfield Group Ltd. for GBP 3.50 per common share and GBP 2.80 per preference share, in each case in cash; and the assumption of GBP 91 million of Benfield's net debt, representing an enterprise value of approximately GBP 935 million. In connection with the acquisition, Aon announced a global restructuring plan, with cumulative costs of about $185 million and estimated job cuts of 500 to 700 positions.

Two months after converting to a bank-holding company, executives at Morgan Stanley (MS) are considering a variety of scenarios to increase deposits, including acquisitions of regional banks with a customer base that overlaps with the company's existing brokerage and asset-management clients, according to a Journal report.

Parametric Technology (PMTC) announces that it has increased its share repurchase authorization from $50 million to $100 million.

DHT Maritime (DHT) says it reached agreement with Overseas Shipholding Group (OSG) whereby OSG has declared part of extension options for the seven vessels on time charter from DHT upon expiry of the vessels current initial charter periods. DHT says the declared extensions increase its fixed charter coverage from an average of 3.7 years to 4.6 years for the total fleet of 9 vessels. DHT notes that its contracted fixed charter hire revenues will increase by a minimum $70 million to about $400 million as a result of the extensions.更多精彩文章及讨论，请光临枫下论坛 rolia.net

ZT: Delinquent Mortgages Set to Nearly Double in 2009 -wanglaoba(胃口倍好，身体倍棒); 2008-12-2 {2882} (#1547@52)
本文发表在 rolia.net 枫下论坛* DECEMBER 2, 2008
By JANE J. KIM

The number of consumers with delinquent mortgages is poised to almost double by the end of next year, hitting its highest level in at least 16 years, according to a leading credit bureau.

TransUnion LLC, which analyzed about 27 million consumer records in its database, predicted that the proportion of consumers with mortgages that are 60 days or more past-due will hit 7.17% in the fourth quarter of 2009.

That would be the highest level reached since the Chicago credit bureau -- which is releasing the data on Tuesday -- first started tracking these statistics in 1992. It compares with an expected delinquency rate of 4.67% at the end of 2008.

The big culprit is adjustable-rate mortgages that were underwritten several years ago, when lending standards were loose.

Now, many of the initial teaser rates on these loans are expiring and resetting to higher interest rates and higher loan payments.

"There are a lot more loans that will be resetting throughout 2009 through 2011," says Ezra Becker, principal consultant in TransUnion's financial-services group, who notes that rising unemployment and depreciating home values are other contributing factors. "There may be an ongoing flow of consumers who may now be able to pay their mortgage but may not be able to a year from now."

Mortgage delinquencies are likely to peak in the first quarter of 2010 as today's new loans, which have tighter underwriting standards, take effect, he says.

TransUnion also predicted that credit-card delinquencies would rise, though not nearly as sharply. By the end of this year, the ratio of credit-card borrowers who are 90 days or more delinquent on one or more of their credit cards is expected to reach 1.09% -- roughly the same levels reached at the end of 2007, and flat with third-quarter levels -- according to TransUnion.

However, as conditions worsen, the delinquency rate is expected to climb to 1.37% by the end of 2009, or roughly the same levels reached in the fourth quarter of 2007.

Credit-card delinquencies are lower than mortgage delinquencies in part because credit-card lenders have more ways to control the potential losses, such as reducing customers' credit lines.

And while delinquencies are likely to climb, they aren't expected to hit historic highs, such as when they hit 1.89% in the fourth quarter of 2002, when consumers were struggling through a recession and the aftermath of Sept. 11.

"We are really going to see issues throughout all of 2009," Mr. Becker says.

"Even when the economy starts to recover, there's a delayed effect in how consumers start to respond. If a consumer is unemployed and goes into delinquency, when they get a job they're not going to start repaying immediately. They have to build up their funds."

Write to Jane J. Kim at jane.kim@wsj.com更多精彩文章及讨论，请光临枫下论坛 rolia.net

China Fears Restive Migrants As Jobs Disappear in Cities -wanglaoba(胃口倍好，身体倍棒); 2008-12-2 {12066} (#1548@52)
本文发表在 rolia.net 枫下论坛* DECEMBER 2, 2008

By SHAI OSTER

SHUANGFU VILLAGE, China -- Fan Junchao has spent most of the past five years living hundreds of miles from his small family farm here. Encouraged by the local government, he leased out his meager plot and worked on construction crews in big cities, making several times what he could have earned on crops.

Shai Oster/The Wall Street Journal

Laid off migrant workers across China are returning home to villages like Shuangfu, above.

Now his construction project has been halted, and Mr. Fan has returned home. "Right now, I don't have a plan," he says. "I'm just taking it one step at a time."

Mr. Fan is among hundreds of thousands of China's 130 million migrant workers -- known as the "floating population" -- being cast out of urban jobs in factories and at construction sites.

China's roaring industrial economy has been abruptly quieted by the effects of the global financial crisis. Rural provinces that supplied much of China's factory manpower are watching the beginnings of a wave of reverse migration that has the potential to shake the stability of the world's most populous nation.

Fast-rising unemployment has led to an unusual series of strikes and protests. Normally cautious government officials have offered quick concessions and talk openly of their worries about social unrest. Laid-off factory workers in Dongguan overturned patrol cars and clashed with police last Tuesday, and hundreds of taxis parked in front of a government office in nearby Chaozhou over the weekend, one of a series of driver protests.

On Wednesday, workers let go from a liquor factory in northern China mounted a protest in Beijing, at the parent company's headquarters. In the latest sign of economic stress, China's currency fell Monday by its single largest margin on record against the dollar, on expectations the central bank might devalue it to prop up sagging growth.

As the government tries to calm tensions in the cities, it also fears that newly unemployed migrants returning home could upend the already-strained social system in the countryside.

At a train station 30 miles from Mr. Fan's village, officials are keeping 24-hour tabs on arrivals to monitor how many of the surrounding area's two million migrants will return from industrial centers. Around 60,000 have already done so, they say -- and many more are expected, despite Beijing's efforts to persuade workers to stay in cities and train for potential new jobs.

Mr. Fan, a 55-year-old grandfather, helps support his grandchildren as well as himself and his wife -- and one of his two sons, now working as an apprentice after his factory wages were cut. Mr. Fan worries his other son, also a migrant worker, will next be out of a job. He offers guests cups of hot water instead of tea because he is trying to scrimp.

Many of the returning workers, like Mr. Fan, have too little income from the land to support their families. Beijing has been encouraging many to lease out their farms to more profitable cooperatives -- which don't share their increased earnings from the crops with the landholders -- at the same time it encouraged their moves into the cities, by loosening rules for doing both in the past few years. Those rules were formalized earlier this year.

China's work force returns home to rural areas because of the slowing economy, but the land they used to subsist on is now being farmed by larger companies. (Dec. 1)

Others have no farms to come back to, having seen their land gobbled up by decades of previous Chinese urbanization drives, in which unscrupulous developers and corrupt officials often illegally seized peasants' land.

For workers accustomed to a decade of double-digit growth, China's sudden downturn has come as a shock to the system. Migrant workers -- estimated to make up a tenth of the country's population -- have powered China's economic success in the three decades since free-market reforms began.

They supply the low-cost labor for the country's rapidly growing infrastructure and dominant low-priced exports. The wages they send home have helped spread prosperity from the booming cities into the relatively poor countryside. But the global slump threatens a precarious balance if unemployment continues to grow. Already it has caused China's construction industry to seize up and prompted many factories that once churned out toys, electronics and clothing to cut work forces or close up shop.

Meng Jianzhu, China's minister of public security, told a conference of regional government officials late last month that there are "lots of social problems affecting stability under the current circumstances," the official Xinhua news agency reported. Among the major problems to address, Mr. Meng said: "Work should be improved on serving and managing the floating population." Beijing has been warning local officials to take extra efforts to ensure stability, focusing their efforts on re-employment programs.

National statistics on how many migrant workers have been laid off and returned home aren't available, but regional numbers are significant. Yin Weimin, minister of human resources and social security, estimated at a news conference this month that about 300,000 of the 6.8 million migrant workers from one province, Jiangxi, to the south of Mr. Fan's Anhui province, have returned home.

The situation "is continuing to develop, the number of rural migrant workers returning home is gradually increasing, and we are closely following this," he said. Other provinces have reported similar numbers.

Officials in the central province of Hubei estimate that they've also had 300,000 laid off workers come home just in the past two months. In Hubei's capital, Wuhan, officials estimate that the number will eventually total 600,000 in their city alone.

In Fuyang, the city nearest to Shuangfu, officials tracking returnees note that it's not easy for industrial workers to return to country life or work. "These aren't the same peasants like the peasants of yesterday," says an official from the city's Human Resource and Labor Bureau, stamping his foot one recent cold morning during a 12-hour shift outside the train station. "They don't raise crops, they have skills." He and other officials work to interview at least 200 migrants a day to find out their plans, where they're coming from and which they are returning to. The government also has had the chief local party official of each village conduct a regular head count of returnees.

Minutes after stepping off the train in Fuyang, 18-year-old Liang Wenzheng, just laid off from his job of three years on an electronics assembly line in Dongguan, shoulders his bags and surveys the future. "If I can't find a job, I'll have to farm at home. I don't want to do that -- I'm just 18," he said.

Migrant workers left their villages over the years because there was too little land for them to earn a decent living. China has roughly the same amount of farmable land as the U.S., where only 2% of workers are employed in agriculture. But China has some 730 million rural residents -- more than twice the entire American population.

Between 80 million and 100 million rural residents are either completely landless or don't have access to enough land for subsistence, estimates Joshua Muldavin, professor of geography and Asian studies at Sarah Lawrence College. "The increases right now with the large-scale return of peasants could add tens of millions to that," he says. "Its importance can't be exaggerated in China and internationally."

Despite China's recent prosperity, steamroller-flat Anhui province remains poor. The dirt road leading from the simple brick courtyard home Mr. Fan built heads past piles of charred old cloth shoes -- used as a cheap coal substitute for boiling tofu.

The newest change has come as farmers like Mr. Fan have rented their land to new agribusiness in a government-supported bid to boost rural incomes by combining farms into more efficient, modern operations. Mr. Fan two years ago transferred farming rights to three-fifths of his land -- which totals less than an acre -- to a new company established by a local government official to sell expensive, organically grown vegetables in greenhouses to supermarkets and hotels.

Mr. Fan, like others, got a standard price based on harvesting wheat, a staple but also an extremely cheap crop, while the cooperative has gone on to grow exotic vegetables that fetch higher prices from the new urban middle class.

Mr. Fan's rent from the farming company is about one-seventh what he was making in construction. His wife still supervises farming of the other portion. The combined income makes his family better off than some, but couldn't support his two sons, daughters-in-law and grandchildren.

Mr. Fan, a high-school graduate, was slow to leave his village even as others did. He learned how to be a bricklayer between harvests of wheat, soybeans and corn on his land, which was allocated to his and other families after China's farm communes were disbanded in the last 1970s.

In the mid-1990s, the government redistributed more land to farmers. It continued to keep ownership of the land public, but gave farmers long-term leases. Mr. Fan received one mu, a sixth of an acre, for each of the five people in his household -- himself, his wife, two sons and a grandparent. His family has doubled in size since then.

After watching his neighbors return prosperous from city jobs for years, Mr. Fan in 2003 ventured hundreds of miles to work as a bricklayer in Heilongjiang province, on China's northern border with Russia. He gradually raised his bricklaying income from 30 yuan a day ($4.30) to 70 yuan.

In 2006, a medicine merchant in Shuangfu, Gao Dongfang, had an idea to raise more valuable vegetables on the village's land using techniques that the villagers didn't know about or couldn't afford. "We wanted to change the way things are done here," said his older brother, Gao Haifei. "It's always been wheat and beans, beans and wheat." The younger Mr. Gao obtained a post as village party secretary, and eventually consolidated 200 acres from farmers in neighboring villages. He brought in an expert from another agribusiness, who introduced vegetables like Israeli green peppers and Taiwanese eggplants.

The business, called Orient Modern Vegetable Cooperative, has earned up to 10 or more times the value from a given piece of land than villagers reaped using their traditional techniques and crops. Mr. Fan's wife signed a 10-year contract with the firm in 2006 while he was away working. The lease brings in 3,500 yuan per year, equal to $513.

This fall, Mr. Fan went to a new construction site, this time in Wuxi, a booming lakeside city near Shanghai. Days after he arrived to work on a 15-story, high-end apartment building, he started hearing rumors that the developer was having trouble selling apartments and wouldn't be able to pay his contractors. Two weeks later, the foreman of Mr. Fan's 40-man work team told them to collect their last paychecks and go home.

Mr. Fan now thinks a lot about his two sons, and what will happen if they also lose their current jobs. "I'm really worried," he says. He thought they would never have to farm again. They have worked as migrant laborers all their adult lives.

His younger son continues to work in a furniture factory. Older son Fan Yaxian, 29, is apprenticing as a truck driver after his factory wages were cut. "I don't know how to farm," Fan Yaxian says. He hopes to start his own small business.

Mr. Fan has no such aspirations. "I don't have a head for business," he says. "I can only go down the path of a migrant worker. If I can't be a migrant worker, I don't have any other ideas."
—Ellen Zhu in Shanghai and Andrew Batson in Beijing contributed to this article.

Write to Shai Oster at shai.oster@wsj.com更多精彩文章及讨论，请光临枫下论坛 rolia.net
Dow Plunges 680 Points on Economic Woes -wanglaoba(胃口倍好，身体倍棒); 2008-12-2 {12457} (#1549@52)
本文发表在 rolia.net 枫下论坛Tuesday December 02, 2008 (08:15 AM EST)

The S&P 500 and Nasdaq each tumbled nearly 9% Monday after dismal reports on U.S. manufacturing sentiment and construction spending

U.S. stocks suffered a sharp sell-off on the first day of December, and closed at their worst levels of the session. The large-cap S&P 500 index and the technology-heavy Nasdaq composite index each sank nearly 9%. The declines in major U.S. indexes erased most of the gains from the market's five-session rally.

On Monday, the Dow Jones industrial average finshed lower by 679.95 points, or 7.7%, at 8,149.09. The broad S&P 500 index dropped 80.03 points, or 8.9%, to 841.35. The tech-heavy Nasdaq composite index sank 137.50 points, or 8.95%, to 1,398.07.

Things were even worse in other corners of the market. The S&P MidCap 400 index tumbled 10.9% Monday.

The U.S. stock market "is facing a new round of selling pressure as the financial picture is still a question mark," said Jay Collins of DT Trading in Chicago. "[The U.S. jobs report] due on Friday is the news story of the week and is expected to reinforce the bleak jobs picture that lies ahead."

"The downturn happened so fast today there wasn't much chance to position for it," said S&P technical analyst Chris Burba.

Wall Street was spooked by fresh reminders of economic weakness in the U.S. and around the globe. Among the items driving the selling: A report released Monday by the Institute of Supply Management showed that U.S. manufacturing contracted at the steepest rate in 26 years in November. Another reports showed construction spending slumping in October.

To put an exclamation point on the economy's troubles, the National Bureau of Economic Research's business cycle dating committee, widely recognized as the arbiter of U.S. recessions, said the economy began its current downturn in December, 2007.

Meanwhile, Treasuries experienced an enormous rally as investment capital flowed heavily out of equities. Traders cited speculation of more rate cuts by the Federal Reserve and possibly government purchases of Treasuries in order to keep yields down and support lending.

Oil futures plunged to finish below $50, their lowest close in three years. The U.S. dollar index was higher. Gold futures plunged on demand worries.

Fed Chairman Ben Bernanke said Monday that the central bank will act as needed to preserve the viability of key institutions and that further interest-rate reductions are "certainly feasible." Bernanke said the economy remains under "considerable stress" and acknowledged that the Fed's various liquidity programs have failed to return private credit markets to normal.

Also, U.S. retail data from the first weekend of the holiday shopping season were mixed and "not really impressive" according to S&P MarketScope.

On the New York Stock Exchange Monday, 28 stocks were lower in price for every four that posted gains. The ratio on the Nasdaq was 24-4 negative.

Equity markets in Europe finished sharply lower, with major indexes down 5.2% in London, 5.9% in Frankfurt, and 5.6% in Paris registering declines. Asian markets ended mixed, with Tokyo stocks falling 0.9%, Hong Kong climbing 1.6%, and Shanghai gaining 1.3%.

Wall Street looked to news on the retail sector as the all-important holiday shopping season kicked off on Friday, Nov. 28. "We believe consumers remained spooked by market turmoil and refrained from shopping during [November]. We are projecting one of the weakest Holiday shopping seasons on record," wrote Merrill Lynch analyst Lorraine Maikis in a note Monday.

Technology shares were hard-hit Monday. Intel (INTC) was among the stocks leading the way lower with a decline of 9%. The Semiconductor Industry Association reported Monday that worldwide sales of semiconductors declined 2.4% in October to $22.5 billion compared to sales of $23.0 billion in October, 2007.

Among the other industry groups hard-hit in Monday's session: The S&P Investment Banking&Brokerage index fell 15.2% as Ladenburg Thalman analyst Richard Bove cut his earnings estimate for Goldman Sachs (GS), citing the impact of changes in the value of the company's holdings in China and Japan.

The S&P Oil&Gas Exploration&Production index plummeted 14.8% amid the sharp decline in crude oil futures.

The Diversified Metals&Mining index slumped 12%. Bloomberg reported that copper fell for a second day in Shanghai after China's contraction in manufacturing signaled the growing risk of a slump in the world's biggest consumer of the metal. The S&P Gold index fell 8.1% amid a sharp drop in prices for the yellow metal.

The Automobile Manufacturers index dropped 8.7% amid fresh developments in the beleaguered sector. Ford Motor Co. (F) announced that it will re-evaluate strategic options for Volvo Car Corp., including the possible sale of the Sweden-based premium automaker. Ford said the decision comes in response to the significant decline in the global auto industry particularly in the past three months and severe economic instability worldwide.

General Motors' (GM) management on Sunday was racing to finalize a viability plan to take to Congress, with a boardroom hellbent on securing a federal rescue loan, according to a Wall Street Journal report. At the same time, directors -- unlike chief executive Rick Wagoner -- are also insisting that all options stay on the table, including a Chapter 11 bankruptcy filing, if a bailout doesn't come through, said the Journal.

In U.S. economic news Monday, the National Bureau of Economic research declared a U.S. business cycle peak in December of 2007, which means that the current recession now officially started in January, as most economists including ourselves had assumed. The decision was made in a conference call last Friday, and largely reflects the peak in payroll employment in December of last year.

The Institute for Supply Managment's manufacturing index fell to 36.2 in November, after diving 4.6 points to 38.9 in October, as the contraction in manufacturing picked up speed. The November figure is the lowest level since 1982. The employment index dipped to 34.2 from 34.6, and was at a relative high at 51.9 in July. The new orders component dropped to 27.9 from 32.2. The production index fell to 31.5 from 34.1. Prices paid plunged to 25.5 from 37.0; that index was at 91.5 in May.

"Both households and businesses are deleveraging rapidly, just as banks did over the past year, and the pull-back is sharply impacting spending and output as gauged by the November sentiment indicators", says Action Economics.

U.S. construction spending fell 1.2% in October, after flat reading in September (revised up from -0.3% previously). On a year-over-year basis, spending is off 4.6%, not quite as bad as the prior pace. Residential spending remained very weak, falling 3.5% and is down 23.6% from a year earlier. Nonresidential spending dipped 0.1% but is up 9.1% year-over-year. Public spending rebounded 0.7% after a 0.9% decline in September. Private spending fell 2.0% after a 0.4% increase in September.

Federal Reserve Chairman Ben Bernanke said in a speech Monday that further interest-rate reductions are certainly feasible, but added the scope for conventional rate policy remains limited. He said that the monetary and fiscal stimulus will help the recovery, and that he sees some signs of stabilization in the financial markets. However, labor market conditions worsened in November, and economic activity has downshifted further. He believes economic conditions will remain weak for a time longer though he suggested together with international partners will restore confidence and get the economy back on track.

Widely followed equity analyst Meredith Whitney of Oppenheimer (OPY) believes the U.S. credit card industry may pull back more than $2 trillion of lines of credit over the next 18 months.

Looking at economic developments outside the U.S., the UK is "closer than ever before" to joining the EUR, according to the president of the European Commission, Jose Manuel Barroso. Speaking on a French radio show, he said British politicians were considering the move because of the effects of the global credit crunch. However, Downing Street said its position on the euro remained the same. Barroso acknowledged "the majority" of British people continued to oppose joining the eurozone. But he said the recent economic uncertainty had made the currency a far more attractive option.

Meanwhile, the chairman of the Bank of Japan's policy board decided to call an unscheduled monetary policy meeting on Tuesday. "The purpose of the emergency meeting is to discuss monetary control matters," the BoJ said.

Among companies in the news Monday, Ford Motor Co. (F) announced that it will re-evaluate strategic options for Volvo Car Corp., including the possible sale of the Sweden-based premium automaker. Ford said the decision comes in response to the significant decline in the global auto industry particularly in the past three months and severe economic instability worldwide.

General Motors' (GM) management on Sunday was racing to finalize a viability plan to take to Congress, with a boardroom hellbent on securing a federal rescue loan, according to a Wall Street Journal report. At the same time, directors -- unlike chief executive Rick Wagoner -- are also insisting that all options stay on the table, including a Chapter 11 bankruptcy filing, if a bailout doesn't come through, said the Journal.

General Electric Co. (GE) shares fell after Merrill Lynch cut its EPS forecasts on the diversified conglomerate to reflect the incrementally worse industrial and financial services environment. In other U.S. markets Monday, Treasuries rallied. The 10-year note surged 47/32 in price to 108-21/32 for a yield of 2.75%. The 30-year note roared up 130/32 to 123-28/32 for a yield of 3.24%.

The U.S. dollar index was higher at 86.48.

January West Texas Intermediate crude oil futures fell more than $5.00 to end the New York session at $49.28 per barrel, the lowest close in more than three years, according to Bloomberg. At a Nov. 29 meeting in Cairo, the Organization of Petroleum Exporting Countries, which supplies approximately 40% of the world's oil, postponed a decision on a cut in output until the Dec. 17 meeting in Algeria. OPEC said it will use this time to gauge the impact of the 1.5 million barrel a day cut announced in October.

February gold futures were down $41.20 to $777.80 per ounce at 2:05 p.m. ET, the biggest one-day decline in about eight months, amid speculation that demand for the yellow metal will weaken as the global economy continues to struggle.

Among Monday's stocks in the news, Mentor Corp. (MNT) agreed to be acquired by Johnson&Johnson (JNJ) in a deal valued at about $1.07 billion in cash. Mentor shareholders will get $31.00 per share.

Aon Corp. (AOC) announced that it had completed its acquisition of Benfield Group Ltd. for GBP 3.50 per common share and GBP 2.80 per preference share, in each case in cash; and the assumption of GBP 91 million of Benfield's net debt, representing an enterprise value of approximately GBP 935 million. In connection with the acquisition, Aon announced a global restructuring plan, with cumulative costs of about $185 million and estimated job cuts of 500 to 700 positions.

Two months after converting to a bank-holding company, executives at Morgan Stanley (MS) are considering a variety of scenarios to increase deposits, including acquisitions of regional banks with a customer base that overlaps with the company's existing brokerage and asset-management clients, according to a Journal report.

Parametric Technology (PMTC) announces that it has increased its share repurchase authorization from $50 million to $100 million.

DHT Maritime (DHT) says it reached agreement with Overseas Shipholding Group (OSG) whereby OSG has declared part of extension options for the seven vessels on time charter from DHT upon expiry of the vessels current initial charter periods. DHT says the declared extensions increase its fixed charter coverage from an average of 3.7 years to 4.6 years for the total fleet of 9 vessels. DHT notes that its contracted fixed charter hire revenues will increase by a minimum $70 million to about $400 million as a result of the extensions.更多精彩文章及讨论，请光临枫下论坛 rolia.net

@Edmonton

Dow Plunges 680 Points on Economic Woes

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