While you were sleeping: Bernanke, growth awaited

While you were sleeping: Bernanke, growth awaited

Aug. 27 (BusinessDesk) – Investors are awaiting U.S. Federal Reserve Chairman Ben Bernanke’s address at the central bank’s annual forum in Jackson Hole, Wyoming, on Friday where he may give more signals of a return to quantitative easing.

There have been mixed signals on the pace of the world’s biggest economy. First-time jobless claims fell by 31,000 to 473,000 last week, according to the Labor Department, beating market expectations of 490,000. The unemployment rate, though, is 9.5% and the jobless numbers remain elevated.

The labour data comes a day before the Commerce Department releases revised figures for second-quarter gross domestic product, expected to show growth was revised down to 1.4% from last month’s estimate of 2.4%.

Stocks on Wall Street fell, with the Dow Jones Industrial Average dropping 0.4% to 10024.11. Cisco Systems, IBM, and Intel led the decline.

Intel, the world’s largest chipmaker, is near agreement to acquire the wireless business of Europe’s Infineon Technologies, Bloomberg reported, citing people with knowledge of the talks. The business may be worth 1.5 billion euros.

The acquisition would be the second this month for Intel, which announced the US$7.68 billion purchase of McAfee Inc. Meantime, Dell raised its bid for 3Par Inc. to about $1.6 billion, beating an offer from Hewlett- Packard Co.

The Standard & Poor’s 500 Index down 0.4% to 1051.16. The Nasdaq Composite shed 0.7% to 2127.19.

Shares also fell after the Federal Reserve Bank of Kansas City said that manufacturing in its region slowed this month.

Treasury bonds rose, pushing the yield on the 10-year note down 4 basis points to 2.5% after the U.S. sold $29 billion of seven-year debt at a record-low yield of 1.989%, lower than traders had expected.

Toyota, the world’s largest automaker, has announced the recall of 1.1 million Corolla and Matrix vehicles to fix a defect that could cause vehicles to stall.

In Europe, the U.K.’s FTSE 100 gained 0.9% to 5155.84, Germany’s DAX 30 edged up 0.2% to 5912.58 and France’s CAC 40 climbed 0.7% to 3475.03.

Spain has downplayed the likely fallout of a court ruling that its auditing of sales tax was illegal, saying it may result in a few hundred million euros of tax revenue delayed rather than media reports of as much as 5 billion euros.

The yen weakened to 107.4 per euro from 107.05 and traded little changed at 84.40 per dollar. The greenback bought 1.2725 per euro from $1.2659.

Crude oil rose for a second day after the U.S. jobless claims data soothed concern that the American economy is stalling. Crude for October delivery rose 84 cents to US$73.36 a barrel on the New York Mercantile Exchange.

(BusinessDesk)

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