U.S. stock futures are falling as uncertainty about a tentative deal to resolve Greece’s debt crisis weighs on investor sentiment ahead of a summit of European leaders.
Dow Jones industrial futures are down 65 points to 12,549. The broader S&P 500 futures are down 7 points to 1,305. The Nasdaq composite is 14 points lower at 2,443.
The leaders gathering in Brussels hope to focus on how to stimulate economic growth when huge government spending cuts threaten to push many countries back into recession short term personal loan.
The latest data showed Spain’s economy shrank in the last three months of 2011.
European markets also declined. In Asia, most indexes fell as investors reacted to Friday’s release of data showing the U.S. economy grew more slowly than expected in the fourth quarter.
Greece’s finance minister believes his country will be able to reach a deal with private bondholders to cut its debt, despite tougher terms set by its eurozone partners.
Evangelos Venizelos said Tuesday “We have the green light from the Eurogroup to close the deal with the private sector in the next few days.”
Greece is in talks with private creditors to swap their existing bonds with news ones of a lower value and interest rates.
On Monday night, eurozone ministers decided to cap interest rates on the new bonds below 4 percent, less than the private creditors would like.
The bond swap will cut the face value of Greek bonds in half, thereby slicing some euro100 billion off its debt, and push repayments far into the future.
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Stocks closed modestly higher Monday after a reported threat to Germany’s credit rating deflated a morning market rally. The Dow Jones industrial average closed up 78 points, giving back much of a 167-point gain from earlier.
News reports Monday afternoon said Standard & Poor’s will put all nations that use the euro on “creditwatch negative,” meaning there is a 50-50 chance of a downgrade in the coming months. S&P had warned of possible rating demotions for many of the countries. But the inclusion on the list of Germany, Europe’s strongest economy, came as a surprise.
Stocks had risen strongly in the morning after the leaders of France and Germany called for a new treaty to impose greater fiscal discipline on European countries. Yields on Italian government bonds receded sharply after the new government of Mario Monti introduced sweeping austerity measures over the weekend. That suggests that traders believe Italy is less likely to default.
“There’s pent-up demand, and people will use any excuse to get back in, thinking there’s been too much pessimism,” said Brian Gendreau investment strategist with Cetera Financial Group. Despite strong signals about the U.S. economy, the market has been weighed down by negative headlines about the U.S. budget impasse, credit-rating downgrades of the U.S. and other nations, and Europe’s spreading crisis, Gendreau said.
The Dow Jones industrial average rose 78.41 points, or 0.7 percent, to 12,097.83.
The gains were broad. All 10 industry groups in the S&P 500 rose. Financials stocks were among the biggest winners. Investors have feared that U.S. banks might be dragged down by their close connections to the unstable European financial system.
JPMorgan Chase & Co. jumped 3.7 percent, the most in the Dow. Bank of America was the second-biggest gainer, rising 2.7 percent. Citigroup Inc. rose 5.9 percent, Morgan Stanley 6.8 percent.
The S&P 500 rose 13, or 1 percent, to 1,257. The Nasdaq rose 29, or 1.1 percent, to 2,656.
Investors are hoping that a summit of European leaders on Thursday and Friday will produce concrete measures to prevent a messy breakup of the euro currency, which is shared by 17 nations. Markets have been jittery because of fears that the euro might disintegrate, causing a sharp recession in Europe that would spread through the world economy.
While the statements from French President Nicolas Sarkozy and German Chancellor Angela Merkel were far from a long-term solution, investors are eager to buy on any hint of good news because they have been earning meager returns from relatively low-risk investments such as Treasurys and CDs, Gendreau said no faxing payday loans.
Italian bond yields dropped to their lowest level in a month, a day after the nation’s new government introduced austerity measures. That suggests traders believe that Italy is far less likely to default. The main Italian stock index jumped 2.9 percent.
Italy’s borrowing costs pulled back from a level that might have forced the nation to default. Analysts say bailing out Italy would be too costly and would hurt the credit standing of German and France, which have the strongest economies in the euro group.
The yield on the 10-year Italian bond plunged half a percentage point to 5.93 percent. It rose above 7 percent last month, a level at which other nations were forced to take bailouts. By comparison, bond yields in Germany, Europe’s largest and most stable economy, are roughly 2 percent.
Monday’s strong gains follow the best week in more than two years for U.S. stock indexes. The S&P 500 rose 7.4 percent last week, the most since March 2009. The Dow jumped 7 percent, the most since July 2009.
Markets are hopeful that, given the gravity of the situation afflicting the euro zone, the German and French leaders will come up with a common proposal for tighter integration on budget matters. Analysts say that such a plan could lead to further emergency aid from the European Central Bank, possibly through the International Monetary Fund.
In corporate news:
_ Gannett Co. leapt 10.2 percent after the media company was upgraded to “buy” from “neutral” by analysts at Lazard Capital Markets.
_ Incyte Corp. fell 2 percent after a Citigroup analyst downgraded the drug maker to “neutral” from “buy,” saying its new blood-disease drug Jakafi might not work as a long-term treatment.
_ SuccessFactors Inc. soared more than 50 percent after the company agreed to be sold to German software company SAP for $3.4 billion. SuccessFactors makes software specializing in human resources tasks. The deal is part of SAP’s plan to compete with software rival Oracle Corp.
Workers continued to stash more money in their 401(k) plans in the third quarter, but the stock market’s sharp decline only left them further behind in reaching their savings goals.
The average balance in Fidelity Investments’ plans dropped nearly 12 percent, falling to $64,300 by the end of September from $72,700 three months earlier, the company said Wednesday.
That setback snapped four consecutive quarters of increases, and even put investors behind where they stood a year ago. Their balances were down 2 percent compared with September of last year, according to Fidelity, the largest workplace savings plan provider, with 11.7 million participants.
Blame the 14 percent decline in the Standard & Poor’s 500 index in the third quarter. Investors worried about the European debt crisis and slow economic growth at home, leading to the stock market’s worst quarterly loss since the financial crisis in late 2008.
Workers’ 401(k)s are typically invested in bonds along with stocks to help reduce volatility. Third-quarter investment gains for bonds helped offset some of the stock market’s decline, preventing deeper damage to account balances.
The damage also was eased because workers set aside more from their paychecks to stash in 401(k)s, while employers increased matching contributions.
Fidelity said 84 percent of plan participants contributed over the past 12 months, the highest level in more than two years. Their average contribution was $5,890, setting a record, and up $200 from the same period a year earlier. Employers contributed an average $3,320, an increase of $220.
Over the past 10 years, about two-thirds of annual increases in account balances have been due to workers’ added contributions and company matches, with one-third the result of investment returns, said Beth McHugh, Fidelity’s vice president of market insights.
There are several reasons why changes in account balances don’t match the performance of market indexes. Results depend on the performance of the specific funds an investor holds. Plus, participants in 401(k)s also pay investment fees, which chip away at returns. Investment earnings and contributions can grow tax-free in employer-sponsored 401(k)s, which the government established to encourage saving for retirement.
Balances have risen eight of the 10 quarters since early 2009, when the stock market meltdown reduced the average to $46,200.
Workers who have stayed in the market haven’t been able to rely on investment gains to build up 401(k) savings, because stocks remain about 23 percent below their historic peak in October 2007. Instead, they’ve had to rely on contributions from themselves, and their employers.
Fidelity’s 401(k) participants appear to recognize that, McHugh said. Each quarter for the past two and half years, more workers have increased their contributions than cut them.
However, Fidelity reported a recent slight increase in hardship withdrawals from 401(k)s, reflecting the financial stress many workers face as the economic recovery struggles to find momentum. About 2.3 percent took hardship withdrawals over the 12 months ended Sept. 30. In the latest 12-month period, workers making hardship withdrawals removed an average $5,800.
“People are still looking at their retirement accounts as a source of funds,” McHugh said. “We recommend people look at it as a last resort.”
The major reason? Hardship withdrawals can subject the participants to taxes and possible early withdrawal penalties, if they occur before age 59 1/2. Withdrawals also leave less money in an account to grow as a result of potential market gains and compounding, setting an investor back further in reaching their goals.
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Actress Sienna Miller told a media ethics inquiry Thursday that she was left paranoid and scared by years of relentless tabloid pursuit that ranged from paparazzi outside her house to the hacking of her mobile phone.
Miller said the surveillance, and a stream of personal stories about her in the tabloids, led her to accuse friends and family of leaking information to the media. In fact, her cell phone voice mails had been hacked at Rupert Murdoch’s News of the World tabloid.
Miller, 29, became a tabloid staple when she dated fellow actor Jude Law. She said the constant scrutiny left her feeling “very violated and very paranoid and anxious, constantly.”
“I felt like I was living in some sort of video game,” she said.
She called the paparazzi focus on her terrifying.
“For a number of years I was relentlessly pursued by 10 to 15 men, almost daily,” she said. “Spat at, verbally abused.
“I would often find myself, at the age of 21, at midnight, running down a dark street on my own with 10 men chasing me. And the fact they had cameras in their hands made that legal.”
Miller, the star of “Layer Cake” and “Alfie,” was one of the first celebrities to take the News of the World to court over illegal eavesdropping. In May, the newspaper agreed to pay her 100,000 pounds ($160,000) to settle claims her phone had been hacked.
The newspaper’s parent company now faces dozens of lawsuits from alleged hacking victims.
Miller, who looked confident as she gave evidence at London’s Royal Courts of Justice, said challenging Murdoch’s media conglomerate had been a difficult decision.
“I was very nervous about taking on an empire that was richer and far more powerful than I will ever be,” she said. “It was very daunting.”
“Harry Potter” author J.K. Rowling, who has campaigned to keep her children out of the media glare, is due to give evidence later Thursday about media intrusion.
Prime Minister David Cameron set up the inquiry amid a still-unfolding scandal over illegal eavesdropping by the Murdoch-owned tabloid. Murdoch closed down the News of the World in July after evidence emerged that it had illegally accessed the mobile phone voice mails of celebrities, politicians and even crime victims in its search of scoops.
More than a dozen News of the World journalists and editors have been arrested over allegations of illegal eavesdropping, and the scandal has also claimed the jobs of two top London police officers, Cameron’s media adviser and several senior Murdoch executives.
The inquiry, led by Judge Brian Leveson, plans to issue a report next year and could recommend major changes to media regulation in Britain.
Miller took the stand after another witness was allowed to give evidence in private. The courtroom was cleared of the press as the witness, identified only as HJK, testified about suffering intrusions while in a relationship with a well-known figure, whose identity was also kept secret.
Former Formula One boss Max Mosley, who has campaigned for a privacy law since his interest in sadomasochistic sex was exposed in the News of the World, broadened the focus in testimony Thursday, discussing the difficulty of squashing malicious stories in the Internet age.
Mosley successfully sued the News of the World over a 2008 story headlined “Formula One boss has sick Nazi orgy with five hookers.” Mosley has acknowledged the orgy, but argued that the story _ obtained with a hidden camera _ was an “outrageous” invasion of privacy. He said the Nazi allegation was damaging and “completely untrue.”
Mosley said he has had stories about the incident removed from 193 websites around the world, and is currently taking legal action “in 22 or 23 different countries,” including proceedings against search engine Google in France and Germany.
“The fundamental thing is that Google could stop this appearing but they don’t or won’t as a matter of principle,” he said. “The really dangerous things are the search engines.”
“You work all your life to try and achieve something or do something useful,” Mosley added. “And suddenly something like this happens and that’s what you’re remembered for.”
High-profile witnesses still to come include CNN celebrity interviewer Piers Morgan, who has denied using phone hacking while he was editor of the Daily Mirror newspaper.
The hearings have heard allegations of media malpractice and intrusion that extend far beyond the News of the World.
Witnesses have included celebrities like actor Hugh Grant and ordinary people pursued in times of grief, including the parents of murdered 13-year-old Milly Dowler, whose voice mails were accessed by the News of the World after she disappeared in 2002.
Her parents said the hacking gave them false hope their daughter was still alive during the investigation into her disappearance.
On Wednesday, the parents of missing child Madeleine McCann said they were left distraught by false stories and the publication of private information by the tabloid press.
Kate and Gerry McCann told the inquiry they felt powerless in the face of stories, based on concocted evidence, suggesting they had killed their daughter. Madeleine had vanished when she was three during the British family’s 2007 vacation in Portugal.
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