U.S. stock futures fell Monday as talks dragged on between Greek political leaders over a fresh austerity package that is required if the debt-ridden country is to get a crucial bailout package.
Dow futures are down 24 points at 12,769. The broader Standard & Poor’s 500 futures fell 4 points to 1,335. The Nasdaq composite futures fell 5 points to 2,519.
The declines follow a big gain Friday on the heels of surprisingly good U.S. employment figures.
In Europe, the leaders of the parties backing Greece’s coalition government are set to hold a second day of emergency talks over austerity measures that rescue creditors are demanding in return for more money.
Fears that a deal won’t emerge have reinforced concerns of a disorderly Greek debt default that could send shockwaves through the global economy. Prime Minister Lucas Papademos will meet with negotiators from the eurozone and the International Monetary Fund in the afternoon and then with the leaders of the three parties backing his coalition.
The parties all publicly oppose steep cuts in private sector pay demanded by the eurozone and IMF, but their backing is needed for the government to reach a deal for the bailout, which must be approved by the Greek Parliament. The new euro130 billion ($171 billion) bailout deal is vital for Greece to avoid bankruptcy next month as it cannot cover a euro14.5 billion ($19.1 billion) bond repayment due March 20 without the rescue funds.
The bailout’s implementation also depends on Greece’s progress in separate talks with banks and other private bondholders to forgive euro100 billion ($131 payday loans.6 billion) in Greek debt, in exchange for a cash payment and new bonds with more lenient repayment terms.
In Europe, the FTSE 100 index of leading British shares was down 0.2 percent at 5,892 while Germany’s DAX fell 0.2 percent to 6,756. The CAC-40 in France was 0.6 percent lower at 3,406.
Oil prices tracked the broader market trends, with benchmark oil for March delivery down $1.17 at $96.67 a barrel in electronic trading on the New York Mercantile Exchange.
Greece will likely remain the focal point over the week, though a raft of corporate earnings, particularly in Europe, and a host of central bank meetings could garner some interest. The European Central Bank’s monthly policy meeting on Thursday could be crucial in determining market expectations of whether there will be further interest rate reductions. Meanwhile, many traders think the Bank of England will clear the way to inject more money into the U.K. economy in the hope of boosting lending.
Earlier Asian shares mostly traded higher as investors there had their first chance to respond to join in the advance generated by Friday’s upbeat jobs data.
Japan’s Nikkei 225 index rose 1.1 percent to close at 8,929.20, its highest closing in more than three months but Hong Kong’s Hang Seng lost 0.2 percent to 20,709.94. Benchmarks in Singapore and mainland China also rose.
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.
Police say unknown bombers detonated locally made dynamite near an important bridge in Nigeria’s oil-rich southern delta overnight, though no one was injured.
The blast happened Friday night in Yenagoa, the capital of Bayelsa state, the home of President Goodluck Jonathan. Bayelsa state police spokesman Eguavoen Emokpae said the bomb targeted a bridge, but caused little damage.
The blast occurred as Bayelsa state is under increasing political pressure over an upcoming gubernatorial race in the state no teletrack payday loan. The winner of the race will control a state budget that’s larger than some nations surrounding oil-rich Nigeria. Violence remains common in elections in Nigeria, a nation of more than 160 million people and a top crude oil supplier to the U.S.
Claims for jobless benefits last week dropped to the lowest level in almost four years, pointing to an improvement in the U.S. job market that may help bolster spending in the new year.
Applications (INJCJC) for unemployment insurance payments plunged by 50,000 to 352,000 in the week ended Jan. 14, less than forecast and the fewest since April 2008, according to data from the Labor Department issued today in Washington. Other reports showed consumer prices were little changed in December for a second month and builders started work on the most single-family houses in more than a year.
Jobless claims, which tend to be volatile week to week around holidays, have trended down over the past month, a sign employment may pick up after payrolls grew by 200,000 in December. Gains in incomes, combined with less inflation, will probably underpin household spending, which accounts for about 70 percent of the world
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.
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Stocks indexes were little changed Wednesday following a big gain the day before. Gains by retailers offset a decline in banking and financial stocks. Most other sectors were flat.
The Dow Jones industrial average inched up 3 points to 12,400 as of 12:30 p.m. Trading was relatively subdued following a surge of nearly 180 points the day before, which brought the Dow to its highest level since July. The Dow started the day lower, losing as many as 60 points in mid-morning trading, then went back to breakeven shortly after noon.
The Standard & Poors 500 index was down less than a point at 1,276, while the Nasdaq fell 2 points to 2,646.
Phone equipment maker Acme Packet Inc. plunged almost 20 percent after saying its quarterly profit and revenue would be well below analyst expectations.
Yahoo Inc. fell 2 percent after it named Scott Thompson, president of eBay Inc.’s PayPal division, as its new CEO. Yahoo has been without a permanent CEO since firing Carol Bartz in September. The company’s board lost patience with her attempts to turn around the struggling Internet company during her 2 1/2 years on the job.
European markets fell after the euro weakened to $1.29 versus the dollar from $1.30 the day before. Another increase in Italy’s long-term borrowing rates renewed worries about Europe’s flailing efforts to restore investors’ confidence in the region’s governments.
Germany’s DAX fell 0.8 percent, while the CAC-40 in France fell 1.5 percent. The FTSE 100 index of leading British stocks was down 0 on line pay day loans.6 percent.
Retailers were among the few industries to rise after a trade group for malls said sales rose 5.3 percent in the last week of December because of strong after-Christmas shopping. Lowe’s Cos. rose 1.5 percent and Ross Stores Inc. rose 2.3 percent. However, Wal-Mart Stores Inc. fell 1.3 percent, making it the biggest decliner among the Dow’s 30 stocks. Analysts have been concerned that some retailers boosted holiday sales with deep discounts that will hurt profits.
Ford Motor Co. rose 2.4 percent after the auto maker said last year’s sales jumped 11 percent because of strong demand for trucks and SUVs. December sales rose 10 percent. Chrysler, owned by Italy’s Fiat, said sales rose 26 percent for the year and 37 percent in January. General Motors Co. said U.S. sales rose 13 percent last year. Analysts have been expecting December to be a strong sales month for the U.S. auto business as confidence in the economy unlocks pent-up demand.
Fallen photography pioneer Eastman Kodak Co. lost 2 cents to 64 cents after the company said its stock could be delisted from the New York Stock Exchange if it doesn’t rise above $1 in the next six months.
U.S. stocks opened the year with a bang on Tuesday. The Dow and S&P 500 each rose 1.5 percent after a measure of U.S. manufacturing expanded at the fastest rate in six months.
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Leaving behind a year of bruising legislative battles, President Barack Obama enters his fourth year in office having calculated that he no longer needs Congress to promote his agenda and may even benefit in his re-election campaign if lawmakers accomplish little in 2012.
Absent any major policy pushes, much of the year will focus on winning a second term. The president will keep up a robust domestic travel schedule and aggressive campaign fundraising and use executive action to try to boost the economy.
Partisan, down-to-the-wire fights over allowing the nation to take on more debt and sharply reducing government spending defined 2011. In the new year, there are almost no must-do pieces of legislation facing the president and Congress.
The one exception is the looming debate on a full-year extension of a cut in the Social Security payroll tax rate from 6.2 percent to 4.2 percent. Democrats and Republicans are divided over how to put in place that extension.
The White House believes GOP lawmakers boxed themselves in during the pre-Christmas debate on the tax break and will be hard-pressed to back off their own assertions that it should continue through the end of 2012.
Once that debate is over, the White House says, Obama’s political fate will no longer be tied to Washington.
“Now that he’s sort of free from having to put out these fires, the president will have a larger playing field. If that includes Congress, all the better,” said Josh Earnest, White House deputy press secretary. But, he added, “that’s no longer a requirement.”
Aides say the president will not turn his back on Congress completely in the new year. He is expected to once again push lawmakers to pass elements of his jobs bill that were blocked by Republicans last fall.
If those efforts fail, the White House says, Obama’s re-election year will focus almost exclusively on executive action.
Earnest said Obama will come out with at least two or three directives per week, continuing the “We Can’t Wait” campaign the administration began this fall, and try to define Republicans in Congress as gridlocked and dysfunctional.
Obama’s election year retreat from legislative fights means this term will end without significant progress on two of his 2008 campaign promises, an immigration overhaul and closing the military prison for terrorist suspects at Guantanamo Bay, Cuba.
Presidential directives probably won’t make a big dent in the nation’s 8.6 percent unemployment rate or lead to significant improvements in the economy. That’s the chief concern for many voters and the issue on which Republican candidates are most likely to criticize Obama.
In focusing on executive actions rather than ambitious legislation, the president risks appearing to be putting election-year strategy ahead of economic action at a time when millions of Americans are still out of work.
“Americans expect their elected leaders to work together to boost job creation, even in an election year,” said Brendan Buck, a spokesman for House Speaker John Boehner, R-Ohio.
Still, Obama and his advisers are beginning 2012 with a renewed sense of confidence, buoyed by a series of polls that show the president’s approval rating climbing as Congress becomes increasingly unpopular.
They believe his victory over Republicans in the payroll tax debate has boosted his credentials as a fighter for the middle class, a theme he will look to seize on in his Jan. 24 State of the Union address.
Obama’s campaign-driven, domestic-travel schedule starts in Cleveland on Wednesday, the day after GOP presidential hopefuls square off in the Iowa caucuses. He will also keep up an aggressive re-election fundraising schedule, with events already lined up in Chicago on Jan. 11.
Campaign officials say Obama will fully engage in the re-election campaign once the Republicans pick their nominee. He will focus almost exclusively on campaigning after the late summer Democratic National Convention, barring unexpected developments at home or abroad.
Among the issues that could disrupt Obama’s re-election plans: further economic turmoil in Europe, instability in North Korea following its leadership transition and threats from Iran.
The president’s signature legislative accomplishment will also come under greater scrutiny in the new year, when a critical part of his health care overhaul is debated before the Supreme Court.
Obama’s foreign travel next year will be limited mainly to the summits and international gatherings every U.S. president traditionally attends. He’s expected to travel to South Korea in March for a nuclear security summit and to Colombia in April for the Summit of the Americas. He’s also likely to visit Mexico in June for the G-20 economic summit.
Two other major international gatherings _ the NATO summit and the G-8 economic meeting _ will be held in Chicago, on home turf.
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