Spanish stocks dropped sharply early Friday morning after ratings agency Moody’s downgraded its credit score of 16 Spanish banks in the latest blow to the troubled financial sector.
The Ibex 35 index was off more than 2 points shortly after trading began Friday. Banks were among the biggest losers.
Moody’s acted late Thursday, citing banks’ load of non-performing loans amid a recession-plagued economy, their creditworthiness and the government’s sovereign debt problems, among other woes.
Those punished included Banco Santander, SA, the eurozone’s largest bank by market capitalization.
Shares in Bankia SA, a recently nationalized bank, took a roller coaster ride Thursday, ending up sharply lower on reports depositors pulled out a (EURO)1 billion in a week.
On the bond market the interest rate on 10-year bonds was unchanged at 6.25 percent.
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Stocks pulled back sharply as Wall Street got its first chance to react to a slowdown in hiring in the United States in March.
The Dow Jones industrial average dropped 136 points to 12,923 in the first half-hour of trading. The Standard & Poor’s 500 index was off 17 at 1,381, and the Nasdaq composite lost 40 points to 3,040.
The losses were broad _ only 13 stocks in the S&P 500 rose. Financial stocks fell the most. Bank of America was off 3 percent, Citigroup 2.5 percent.
The U.S. added just 120,000 jobs in March, about half the pace from December through February. The slowdown interrupted the strongest stretch of job growth since the Great Recession. The government released its jobs report on Friday, but the stock market was closed.
The stock market had already started to pull back from its strongest first quarter since 1998. The Dow closed as high as 13,264 earlier last week, then lost more than 200 points in three days.
Even before the job number came out, investors were worried that the Federal Reserve does not appear inclined to take further steps to stimulate the economy.
This week, investors will turn their attention to first-quarter corporate earnings reports. Aluminum maker Alcoa releases its results Tuesday, becoming the first company among the 30 in the Dow to do so. Two major banks, JPMorgan Chase and Well Fargo, report on Friday.
Analysts are expecting quarterly earnings to decline slightly compared with a year earlier. That would break a streak of nine straight quarters of earnings growth since 2009.
The yield on the 10-year Treasury note fell to 2.04 percent from 2.06 percent Friday.
In other corporate news:
_ AOL shot up 44 percent after the company agreed to sell hundreds of patents and patent applications to Microsoft for a little more than $1 billion. The company plans to return some of the cash to shareholders.
_ Avon fell 3 percent after the struggling beauty products company named a former executive at Johnson & Johnson, Sherilyn S. McCoy, to be its CEO. She starts April 23.
MADISON, Wis. — Apple’s latest iPad drew the customary lines of die-hard fans looking to be first, and entrepreneurs looking to make a quick profit.
Many buyers lined up for hours, and in some cases overnight, as the tablet computer went on sale in the U.S. and nine other countries. They did so even though Apple started accepting online orders a week ago.
The new model comes with a faster processor, a much sharper screen and an improved camera, though the changes aren’t as big as the upgrade from the original model to the iPad 2.
As with the previous models, prices start at $499 in the U.S.
“I don’t think it’s worth the price, but I guess I’m a victim of society,” Athena May, 21, said in Paris.
Dan Krolikowski, 34, was first in line at a mall in Madison, Wis. He arrived 14 hours before the store’s opening and was buying an extra one to sell on the “gray market.”
“Last year I sold one on eBay and made over $500 in profit,” Krolikowski said, leaning back in a reclining lawn chair he brought. “I’m hoping to do that again this year.”
Those who ordered iPads online started getting them delivered Friday. However, Apple now says there’s a two- to three-week shipping delay for online orders. There’s also demand in countries where the new iPad isn’t available yet.
In Hong Kong, a steady stream of buyers picked up their new devices at preset times at the city’s sole Apple store after entering an online lottery.
The system, which required buyers to have local ID cards, helped thwart visitors from mainland China, Apple’s fastest growing market. A release date in China has not yet been announced. Apple will begin selling the iPad in 25 additional countries next Friday, mostly in Europe.
At the flagship Apple Store on New York’s Fifth Avenue, the composition of the line, and the way many customers were paying for two iPads each with wads of cash, suggested that many of the tablets were destined to be resold abroad.
About 450 people lined up outside Apple’s Ginza store in downtown Tokyo. Some had spent the night sleeping outside the store.
Dipak Varsani, 21, got in line in London at 1 a.m. Thursday and said he was drawn by the new device’s better screen.
“You’ve got clearer movies and clearer games,” he said. “I use it as a multimedia device.”
Despite competition from cheaper tablet computers such as Amazon.com Inc.’s Kindle Fire, the iPad remains the most popular tablet computer. Apple Inc. has sold more than 55 million iPads since its debut in 2010.
Apple says the iPad is propelling us into a “post-PC era,” with computers that work very differently from the traditional laptops and desktops.
Norway is moving closer to a housing bubble as the central bank
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Fireballs lit up the night sky in Greece’s capital as buildings were set ablaze late Sunday amid widespread rioting and looting before a historic parliamentary vote expected to approve harsh austerity measures demanded to keep the country from going bankrupt and within the eurozone.
At least 10 buildings, including a closed cinema, a bank, a mobile phone dealership, a glassware store and a cafeteria, were on fire. There were no immediate reports of people trapped inside. Dozens of shops were also looted in the worst riot damage the country has seen since unrest in December 2008 following the fatal police shooting of a teenager.
Dozens of police officers and at least 37 protesters were injured in Sunday’s violence, and more than 20 suspected rioters were detained. Clashes erupted after more than 100,000 protesters marched to parliament to rally against drastic austerity cuts that will ax one in five civil service jobs and slash the minimum wage by more than a fifth.
“I’ve had it! I can’t take it any more. There’s no point in living in this country any more,” said a man walking through his smashed and looted optician store.
A protester who declined to give his name said: “I don’t care if an ornament shop is burning, but it’s a shame the building is old. We will win.”
Since May 2010, Greece has survived on a euro110 billion ($145 billion) bailout from its European partners and the International Monetary Fund. When that proved insufficient, a new rescue loan package worth a further euro130 billion ($171 billion) was decided _ combined with a massive bond swap deal that will write off half the country’s privately held debt.
But for both deals to materialize, Greece has to persuade its deeply skeptical creditors that it has the will and ability to implement spending cuts and public sector reforms that will end years of fiscal profligacy and tame gaping budget deficits.
A three-story corner building was completely consumed by flames with riot officers looking on from the street, and firefighters trying to douse the blaze. Protesters set bonfires in front of parliament and dozens of riot police formed lines to try to deter them from trying to make a run on parliament. Clouds of tear gas drifted across the square in front of parliament. Many in the crowd wore gas masks and had their faces covered, while others carried Greek flags and carried banners.
Riot police fired dozens of tear gas volleys at rioting youths, who attacked them with firebombs, fireworks and chunks of marble smashed off the fronts of luxury hotels, banks and department stores.
Streets were strewn with stones, smashed glass and burnt wreckage, while terrified passers-by sought refuge in hotel lounges and cafeterias.
Athens Mayor Giorgos Kaminis said rioters tried to storm the city hall building, but were repelled.
“Once again, the city is being used as a lever to try to destabilize the country,” he said.
Conservative New Democracy leader Antonis Samaras said the rioting “hurts the entire country.”
“We are seeing scenes from a future that we must do our utmost to avert,” he said.
Prime Minister Lucas Papademos’ government _ an unlikely coalition of the majority Socialists and their main foes, New Democracy _ was expected to carry the austerity vote, even by a narrow margin.
Combined, they control 236 of Parliament’s 300 seats, although at least 20 lawmakers from both main parties said they would not back the new private sector wage cuts, pension reductions and civil service layoffs dictated by the draft austerity program.
“There are very few such moments in the history of a nation,” Finance Minister Evangelos Venizelos said. “Our country has an acute issue of survival.”
“The question is not whether some salaries and pensions will be curtailed, but whether we will be able to pay even these reduced wages and pensions,” he added credit score. “When you have to choose between bad and worse, you will pick what is bad to avoid what is worse.”
The new cutbacks, which follow two years of harsh income losses and tax hikes _ amid a deep recession and record high unemployment _ have been demanded by Greece’s bailout creditors in return for a new batch of vital rescue loans.
“By Wednesday, finance ministers from eurozone countries must finally approve the financing and support program for Greece,” Venizelos said. “If that does not happen, and it is not at all certain that it will happen unless we raise to the occasion, then we will not be able by Friday, Feb. 17, to officially start the bond exchange process.”
“We won’t be in time to carry out the bond swap by March 5, and we won’t be in time to address the problem of major bond issues that must be paid from March 14-20,” he said. “If that doesn’t happen, the country will go bankrupt.”
The parliamentary debate started shortly after 3:30 p.m. (1330 GMT; 8:30 a.m. EST), and will take about 10 hours, finishing around midnight.
“By midnight today, before markets open, parliament must send the message that our nation is both willing and able,” Venizelos aid. “Unfortunately, the markets have subjugated states.”
German Finance Minister Wolfgang Schaeuble was quoted as telling the Welt am Sonntag newspaper Sunday that Greece “cannot be a bottomless pit.”
“That’s why the Greeks must finally put a bottom in,” he added. “Then we can put something in too.”
Highlighting previous promises he said weren’t kept, Schaeuble said “that is why Greece’s promises aren’t enough for us any more,” according to the report.
Asked whether Greece has a long-term future in the eurozone, Germany’s vice chancellor told ARD television “that is now in the hands of the Greeks alone.”
Philipp Roesler said in the interview broadcast that what matters is not just Greece making pledges.
“We want … the Greek parliament also to approve laws and, as far as possible, take the first steps to implement what has been agreed,” he said.
“Only when that happens, only then can there be new aid _ and Greece urgently needs that,” said Roesler, who is also Germany’s economy minister.
Roesler acknowledged that Greece faces “difficult decisions” but stressed that Germany wants it to be able to get out of trouble.
“It is not enough just to give financial aid _ they must tackle the second cause of the crisis, the lack of economic competitiveness,” he said. “For that, they need … massive structural reforms. Otherwise Greece will not get out of the crisis.”
Introducing the legislation Sunday, Socialist lawmaker Sofia Yiannaka said the intense pressure from Greece’s EU partners to pass the measures was the result of delays in implementing already agreed reforms.
“The delays have our imprint. We should not blame foreigners for them,” she said.
“We have finally found out that you have to pay back what you have borrowed … We used to say ‘poor state, but rich citizens’ because we tolerated tax evasion for populist reasons. Is this the country we want?” Yiannaka added.
Leftist parties and the small rightist LAOS _ a former junior coalition partner _ have vowed to vote against the new austerity.
“You are not trying to save Greece, but a handful of industrialists,” Communist Party spokesman Thanassis Pafilis said. “And you disgracefully blame the struggling people who created the wealth we have. You are trying to send them back to the Middle Ages. We will not allow it.”
The price of natural gas is plummeting at a pace that has caught even the experts off guard.
A 35 percent collapse in the futures price over the past year has been a boon to homeowners who use natural gas for heat and appliances and to manufacturers who power their factories and make chemicals and materials with it.
The country is flush with natural gas as a result of new drilling techniques that have enabled energy companies to tap vast supplies that were out of reach not so long ago. The country’s natural gas surplus has been growing even as the country burns record amounts.
This winter’s warm weather slowed the growth in demand, however, and created a glut. In the Northeast, December was the fourth warmest in the last 117 years. Winter supplies are 17 percent above their five-year average.
The natural gas futures price fell 13 percent last week, to $2.67 per 1,000 cubic feet. That’s the lowest winter-time level in a decade.
“The market has been overwhelmed with gas,” says Anthony Yuen, a commodities analyst at Citibank.
He and other analysts expect the price to average near $3 for all of 2012. If the weather stays mild, the price could even dip below $2, a level not seen since 2002.
Cheap natural gas is mainly a good thing for the economy:
_ More than half of U.S. households use natural gas for heat, and a quarter of the nation’s electricity is made from it. Falling heating and electric costs are offsetting the impact of high gasoline prices and enabling families and small businesses to spend on other things. Residential gas and electric customers are saving roughly $200 a year, according to a study by Navigant Consulting.
_ For companies that make plastics, fertilizer and other chemicals derived from natural gas, the falling prices are nothing short of a windfall. The same goes for makers of products from steel to bricks to beer. All use a lot of natural gas to heat their furnaces. U.S. manufacturers are becoming more competitive globally as a result of the country’s cheap natural gas, industry officials say.
Some industries aren’t cheering, though.
With electricity prices falling, the profits of all electric power producers _ whether they rely on coal, nuclear or wind _ are shrinking.
Companies that drill solely for natural gas are earning less these days, too. That’s prompting some to hunt instead for oil, whose price is near $100 a barrel.
Still, drillers aren’t reducing natural gas production as much as they would have during previous periods of low prices. They’ve found ways to produce the fuel at much lower cost so they can be profitable at much lower prices. And, in many cases, natural gas is a byproduct of oil drilling, which is so profitable that companies are going after every barrel they can find.
Analysts say in some oil and gas fields, drillers could give the gas away and still be hugely profitable just from selling the oil.
The benefit of falling natural gas prices to homeowners is not as big as a major drop in oil and gasoline prices would provide. The average household’s annual gasoline bill is about $4,000, roughly double the average annual gas and electric bill.
Also, the fuel cost is only half of a customer’s bill. The rest is transmission and delivery charges, which don’t change along with fuel prices. Homeowners are paying $10 Payday advance.18 per 1,000 cubic feet of gas on average, including transmission and delivery charges, according to the Energy Information Administration. Over a year, a customer will burn an average of 75,000 cubic feet, or about $760 worth.
The multi-year drop in natural gas prices caught most industry experts by surprise.
In the middle of the last decade, natural gas looked to be in short supply. Production in the U.S. was slowing, imports from Canada were rising and plans for importing liquefied natural gas from the Middle East and elsewhere were drawn up.
Natural gas futures hit nearly $15 in 2005. Chemical and metals manufacturers were shutting U.S. factories and moving overseas, where gas was abundant and cheaper. Farmers in need of fertilizer were turning to inexpensive imports from Canada, Trinidad and Asia.
But over the next few years, drillers perfected methods first tried in 1981 that now allow them to profitably extract gas trapped in shale formations _ layers of fine-grained rock that in some cases have trapped ancient organic matter that has cooked into oil and natural gas.
Engineers combined the ability to drill horizontally into shale with a technique called hydraulic fracturing. Millions of gallons of water, sand and chemicals are pumped into wells to break rock and create escape routes for the gas. In doing so they unlocked natural gas deposits deep underground across the East, South and Midwest that are large enough to supply the U.S. for decades.
This eventually turned the shortage into a glut, and reversed the fortunes of some industries.
An ammonia plant owned by CF Industries in Donaldsville, La., that was shuttered by its former owner in 2004 is running again. Steel maker Nucor Corp. is building a factory in Louisiana; Shell Oil Co. is planning a petrochemical plant in Appalachia; and Dow Chemical is building a type of chemical feedstock plant it hasn’t built in the U.S. since 1995.
“A whole slice of American industry is benefiting,” says Steve Wilson, the CEO of CF Industries, which makes ammonia and other fertilizer ingredients. CF Industries, which is based in Deerfield, Ill., has seen its daily natural gas costs fall from $6 million to $2 million over the past few years. The company is planning to spend more than $1 billion expanding its U.S. plants.
While industrial customers are betting on low prices for years to come, things could change if demand increases sharply because of extreme weather or faster-than-expected economic growth, or if the U.S. begins exporting gas. It’s also possible that natural gas drilling could be curtailed by environmental regulations designed to protect drinking water from hydraulic fracturing.
Legislators in New York and New Jersey have banned hydraulic fracturing temporarily, and the Environmental Protection Agency is studying it and may propose national regulations.
The most likely near-term scenario is that prices keep falling, according to Rusty Braziel, an analyst at Bentek Energy.
“This ain’t the bottom,” he says.
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Jonathan Fahey can be reached at http://twitter.com/JonathanFahey.
Fixed mortgage rates fell once again to a record low, offering a great opportunity for those who can afford to buy or refinance homes. But few are able to take advantage of the historic rates.
Freddie Mac said Thursday the average rate on the 30-year fixed mortgage fell to 3.89 percent. That’s below the previous record of 3.91 percent reached three weeks ago.
Records for mortgage rates date back to the 1950s.
The average on the 15-year fixed mortgage ticked down to 3.16 percent. That’s down from a record 3.21 percent three weeks ago.
Mortgage rates are lower because they track the yield on the 10-year Treasury note, which fell below 2 percent. They could fall even lower this year if the Fed launches another round of bond purchases, as some economists expect.
Average fixed mortgage rates hovered around 4 percent at the end of 2011. Yet many Americans either can’t take advantage of the rates or have already done so.
High unemployment and scant wage gains have made it harder for many people to qualify for loans. Many don’t want to sink money into a home that they fear could lose value over the next few years.
Mortgage applications have fallen slightly on a seasonally adjusted basis over the past four weeks, according to the Mortgage Bankers Association.
Frank Nothaft, Freddie Mac’s chief economist, said that until hiring picks up and unemployment drops significantly, the impact of lower mortgage rates will remain muted.
Previously occupied homes are selling just slightly ahead of 2010’s dismal pace. New-home sales in 2011 will likely be the worst year on records going back half a century.
Builders hope that the low rates could boost sales next year. Low mortgage rates were cited as a key reason the National Association of Home Builders survey of builder sentiment rose in December to its highest level in more than a year.
But so far, they have had little impact on the depressed housing market.
To calculate the average rates, Freddie Mac surveys lenders across the country Monday through Wednesday of each week. The average rates don’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.
The average fee for the 30-year loan fell to 0.7 from 0.8; the average on the 15-year fixed mortgage was unchanged at 0.8.
For the five-year adjustable loan, the average rate declined to 2.82 percent from 2.86 percent. The average on the one-year adjustable loan fell to 2.76 percent from 2.80 percent.
The average fee on the five-year adjustable loan rose was unchanged at 0.7; the average on the one-year adjustable-rate loan was unchanged at 0.6.
After weeks of handwringing about a possible loss of France
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