World Markets and Wall Street Turn Gloomy on Euro Paralysis

Arthi Gupta
25 Jun, 2012
New York City

World markets are increasingly questioning the slow pace of leadership response as the debt crisis spreads in Europe. The expectations are low ahead of the next summit of European Union and markets in Asia and Europe traded lower as patience wear thin after two years of failed talks.

[R]8:35 AM New York – World markets are increasingly questioning the slow pace of leadership response as the debt crisis spreads in Europe. The expectations are low ahead of the next summit of European Union and markets in Asia and Europe traded lower as patience wear thin after two years of failed talks.[/R]

Stocks in New York trading were lower as investors question the commitment of political leaders in Europe to bring to finality the slow moving debt crisis in the region.

The slow and halting talks lasting for more than two years has failed to arrest the widening debt contagion that has spread to Spain and Italy and the meeting of leaders this week is expected to be inconclusive.

The 29th meeting of leaders in the last two years have failed to revive economic growth and rebuild confidence in the currency as the unemployment in four member nations exceed 15%.

U.S. investors are looking ahead this week to reports on new homes sales, pending home sales, weekly jobless claims, personal income and spending and the durable goods orders.

European markets declined more than 1% as the slow moving crisis in the euro zone festers and the leaders in the region gather on Thursday to discuss tighter banking and fiscal union.

Spain submitted an official request for financial aid to recapitalize banks today but left out the exact amount of aid and finance minister said in a letter that the estimates of the IMF and two independent consultants are a good baseline to work from.

The Spanish Economy Minister Luis De Guindos formally requested assistance for the country’s banks in a letter sent to Eurogroup President Jean-Claude Juncker.

Most Asian markets edged lower as investors turn their focus away from the euro zone and concentrate on domestic and regional economies.

Moody''s Investors Service said on Monday that it is maintaining its stable outlook on India''s rating. The agency reiterated that various credit challenges such as weak fiscal performance, tendency towards inflation and an uncertain investment policy environment are already incorporated into the current Baa3 rating.

The Reserve Bank of India offered a slew of new measures to arrest the sharp decline in the rupee. The RBI raised the limit of external commercial borrowings of Indian companies for repayment of outstanding rupee loans by $10 billion to $40 billion.

The maximum investment limit for foreign institutional investors in government securities was also lifted by $5 billion to $20 billion.

RIM Plans Split Business

Research In Motion Ltd., the Canadian smartphone maker is planning to split its business into two by separating its handset division from its messaging network, according to media reports on Sunday.

Separately, Hewlett-Packard Co., the computer and printer maker plans to cut around 8,000 jobs in Europe by the end of 2014, the German magazine Wirtschafts Woche reported, citing an unnamed worker representative. The company may cut up to 1,000 jobs in Germany.

B/E Aerospace to Acquire Interturbine

B/E Aerospace agreed to acquire Interturbine Aviation Logistics GmbH, Interturbine Logistics Solutions GmbH, and Interturbine Technologies GmbH for approximately €200 million in cash.

The transaction is expected to close during the fourth quarter.

Earnings Review

Kirby Corp. ((KEX)), the marine transportation and services company expects second quarter earnings of 80 cents to 85 cents per share and fiscal year 2012 earnings of $3.45 to $3.70 per share.

Suedzucker AG, the German sugar company reported first quarter group revenues rose 15% to €1.89 billion from €1.64 billion a year earlier. Operating profit for the quarter surged 43% to €263 million from €184 million the prior year.