Hot Economic News Releases

U.S. stocks opened lower after the announcement of a sharper than expected slowdown in economic growth in the U.S. in the second quarter.

In the first exchanges, the Dow Jones lost 0.8% or 80.53 points to 10,386 points while the Standard & Poor's 500 index yielded 0.9% or 10.25 points to 1090 points and the composite index the Nasdaq fell by 1.2% or 27.41 points to 2224.54 points.

The U.S. economy slowed sharply in the second quarter at an annualized rate of 2.4% against 3.7% in the first quarter, according to figures published Friday in the first estimate by the Commerce Department. The market was expecting growth of 2.5%.

On the values front, Merck was down 1.6%.The pharmaceutical company has yet reported Friday in quarterly earnings above expectations.

Chevron was down 0.8% despite a profit tripled in the second quarter.

Boeing released a quarterly earnings above expectations but down from last year due to lower deliveries of aircraft.

The U.S. group, world number two sector behind Airbus (EADS) has achieved in second quarter net earnings of $ 787 million, or $ 1.06 per share, against 998 million ($ 1.41 per share) a year earlier.

Financial analysts had expected a profit of $ 1.01 per share according to Thomson Reuters I / B / E / S.

The quarterly revenue fell 9% year on year to 15.6 billion dollars.

Sales of the division of civil aviation has dropped 12% to $ 7.4 billion aircraft deliveries declined by 9%.Boeing Commercial Airplaines recorded 88 orders for the quarter and 20 cancellations.

The backlog stood at 3,304 civil aircraft late June, for a value of 252 billion dollars.

The turnover of the defense business has declined in parallel from 8% to $ 8 billion, mainly due to lower volumes in the Network & Space Systems branch.

Net sales of Boeing Capital has dropped 3% to 162 million.

Norsk Hydro believes that the aluminum market may have reached its highest level this year in the second quarter and maintained its forecast of growth of 12% of its markets upstream and downstream in 2010.

The Norwegian producer of aluminum has made a profit before interest and taxes (EBIT) current of 1.1 billion kroner (137 million euros) in the second quarter, after losing 618 million kronor last year on same period. Analysts polled by Reuters had expected a profit of 900 million kroner.

"The numbers are very solid," said Samir Bendriss, an analyst with Pareto."They are particularly successful in the upstream activity, with higher prices, higher volumes and lower costs than expected."

The group assigns him, this performance to increase its volumes, the strength of its margins and tight control of costs.

"We still anticipate that demand in our major markets upstream and downstream will grow by about 12% in 2010," he said.

However, Norsk Hydro estimates that the global market for aluminum is oversupplied despite the recovery in demand linked to the moderate recovery of economic growth.

"There are many elements that suggest that the second quarter will be stronger in 2010", said group general manager, Svein Richard Brandtzaeg, at a press conference.

The group said world demand for primary aluminum, excluding China, has increased in the second quarter to an annualized level of consumption of around 24 million tonnes, while production outside of China increased 25 million tons on an annualized basis.

"Demand should be stable in the third quarter but with a normal seasonal decline," said Norsk Hydro.

The Norwegian group also warned that its results for its underlying activities of alumina (aluminum oxide) and raw materials are expected to fall in the second half after a solid six months, due to an expected drop courses alumina and rising costs of bauxite.

"The decline (will be) following the expected decline in margins," the group said.

Around 9:45 GMT, was virtually unchanged at 34.96 crowns.

Mizuho Financial Group, Sumitomo Mitsui Financial Group and Mitsubishi UFJ Financial Group can view each more than 100 billion yen (885 million) profit for April-June period, reports the Nikkei newspaper.

The newspaper claims that large Japanese banks have grown their results for their fiscal first quarter thanks to their trading operations, while recording lower losses on bad loans through a smaller number of large bankruptcies.

Mizuho, which posted a loss of 4.4 billion yen for the period April to June 2009 due to losses on the CDS (credit default swaps) should post a profit of around 150 billion yen for the same period this year with its trading, the Nikkei wrote.

Sumitomo Mitsui Financial Group should in turn generate between 150 and 200 billion yen profit, against a profit of 72.7 billion last year, the newspaper said without citing sources.

Mitsubishi UFJ Financial Group for its part should record a profit of more than 100 billion yen, against 75.9 billion a year earlier, writes the Nikkei.

Banks are under pressure to improve their credit operations, while long term rates are at their lowest level in five years, also highlighted the daily.

Weak retail sales in France since the beginning of the year raises concerns for household consumption, but without calling into question the prospect of a mild acceleration of growth in the second quarter.

INSEE said on Friday down 1.4% of household spending on manufactured goods in June after an increase (revised) 0.6% in May, which was only the second of the year.

Throughout the second quarter, they fell 0.9% after falling 1.9% in January-March.

Purchases of manufactured goods only represent about a fifth of consumer spending on goods and services, including food, a statistic that is much less volatile and released only on a quarterly basis.

Household consumption has stagnated in the first quarter and is still waiting INSEE stalled in second quarter net sales to be known on August 13 during the initial results of the national accounts.

Some economists, like Dominique Barbet from BNP Paribas, now does not preclude a decline in household consumption, which would be a first since the second quarter of 2008.

But, he says, the strength of industrial production and exports expected to "save" the growth in the second quarter, it expects to 0.4% or 0.5% after the meager 0.1% the first three months of the year.

"That said, the outlook is still quite weak and not with this level of consumption we can expect 1.5 to 2.0% growth per year," he adds.

Bercy, it remains serene by estimating it would take a 0.3% or more of household consumption to speak stall."Nothing like on the radar", make sure there in the entourage of the Minister of Economy Christine Lagarde.

CONCERN FOR THE FUTURE

Regarding industrial production, it was not until August 10 to hear the numbers of the second quarter, but May's increase (+1.7% and +0.5% for the only manufacturing) was a good omen.

Already, the quarterly business survey released Friday by INSEE showed that the request to industry has made significant progress on these three months, but prospects are less favorable then.

"We had a sort of dichotomy between demand indicators that are not extraordinary, except perhaps for export, and offer those who are supported, as shown by surveys from INSEE" observes Dominique Barbet

He added: "The concern is more for the future."

Nick Kojucharov, Europe economist at Goldman Sachs, the link between low spending on manufactured goods and consumer confidence, which has faltered significantly since the beginning of the year.

"That does not mean that the recovery derailed in France – surveys and industrial production are trending up – but that French consumers, who strongly supported the request at the beginning of the recovery, now is the key" says he.

Down nine points since January, the consumer confidence indicator calculated by INSEE has stabilized at -39 in July, its lowest level since May 2009.

The decline in household spending in June is in large part to the launch late summer sales, June 30 instead of June 25 in 2009.

This contemplates an upward correction in July, but only temporarily according to economists.And anyway, "the fact that consumers have stopped buying clothes from three months to wait for the summer sales is not really what we might call a positive signal to private consumption, observes Olivier Gasnier of Societe Generale.

The high level of unemployment, worries about tax and the evolution of the purchasing power of households should continue to curb consumption, he adds.

If the support of replenishment orders and exports fades at the same time, the prospect of slower growth in the third quarter will be inevitable, confirming the slow recovery.

In its last forecast in June, Insee expecting 0.4% growth in the third and fourth quarter, after +0.5% in April-June, a pace sufficient to meet the government target of 1.4% on year.

The European Union announces it will appeal the conviction of the World Trade Organization (WTO) on subsidies provided to Airbus.

Airbus and Boeing accuse several years to receive public funding they deem illegitimate.

On 30 June, a panel of WTO experts found some illegal European subsidies provided to Airbus, a subsidiary of EADS, giving due in part to a U.S. complaint filed in 2004.

The appeal against this decision the EU will be filed before a special meeting of the Dispute Settlement Body of WTO, says a source close to the case.

The meeting, which started at 10:00, was convened at the request of the United States in the adoption of the June decision by the panel of experts, which would have forced the EU to end in 90 days to grant British, German and Spanish on the A380.

"This issue is too important to allow misinterpretations Group of Experts (DSB) without challenge," the EU trade commissioner Karel de Gucht, in a statement.

The call of the EU must be treated within 90 days, according to WTO rules.

In the day Wednesday, a lawyer for Boeing reported confidence in Boeing regarding this procedure.

"We are confident about the outcome of this appeal, as we were when the U.S. had opened the proceedings," said Robert Novick, a member of the firm WilmerHale.

"We are confident that the outcome of this appeal will be known by the end of the year."

A complaint against the European American aid mechanisms to Boeing would be decided on July 16, but the decision has been postponed to mid-September.

Louis Welsh, CEO of EADS, has held this postponement unfair.

Johnson & Johnson Tuesday reported a quarterly revenue well below expectations and has revised downward its forecast of annual profit for the second time in a year due to repeated withdrawals from the market painkiller Tylenol and other group of drugs available without prescription.

By mid-session on Wall Street, the title of group care products and U.S. health yielded 2.59% to 58.02 dollars while the Dow Jones, including Johnson & Johnson is, retreated from 0 84%.

The company said in the wake of its results have received a subpoena from the attorney general's office in Philadelphia as part of its withdrawal, without saying more.

For their part, the federal prosecutor's office did not confirm or comment on this procedure.

Johnson & Johnson said that global sales of its consumer goods were down 5.4% over the second quarter to 3.6 billion dollars.

The sales performance was mainly affected by the withdrawal, on April 30 last, a forty drugs used in the treatment of benign childhood diseases.

This decision was taken following a report showing that U.S. health authorities these products had been contaminated by dust and dirt during their manufacture in the factory of J & J in Fort Washington (Pennsylvania), finally closed end April.

The withdrawal of the products involved have cut sales of approximately $ 200 million, said Chief Financial Officer Dominic Caruso during a conference call, adding that closing the plant in Fort Washington is likely to weigh up 600 million dollars in annual sales.

The total turnover of Johnson & Johnson has also been weighed down by a slowdown in sales growth of its medical tools and diagnostic instruments.

The turnover stood at 15.33 billion dollars (0.6%) while analysts on average expected 15.64 billion, according to Thomson Reuters I / B / E / S.

Net income rose to 3.45 billion dollars (2.68 billion euros), or $ 1.23 per share against 3.21 billion ($ 1.15 per share) a year ago.

Excluding items, J & J posted earnings per share of $ 1.21, a level consistent with the average forecast of analysts.

The group has now said it expects earnings per share of between 4.65 and $ 4.75 throughout the year against a previous estimate of 4.80 to 4.90 dollars.

To explain this further revision downward, Johnson & Johnson raised the closure of the plant, which is currently undergoing a costly up to standard, and the pressure existing in Europe on the prices of its prescription drugs .

The International Monetary Fund (IMF) intends to increase its lending capacity of 750-1000 billion dollars to prevent future financial crises, the Financial Times.

The organization wishes to enter into agreements to advance on a case by case basis with member states, rather than offering loans under certain conditions, the newspaper said without citing sources.

"Even during periods of crisis, a large fund that can take massive can help prevent crises," explained Dominique Strauss Kahn, IMF managing director, in the columns of the Sunday edition of the FT.

"The fact that the decreasing financial role does not mean we can do without a big fire power (…) A fund of 1.000 billion is a wise prediction," he says.

South Korea, which currently chairs the G20 group, hopes to convince its partners to approve the draft at the next summit of the organization, to be held in November in Seoul, says the author of the article.

Industrial production increased in the U.S. in June, against all expectations, above-normal seasonal temperatures have boosted the use of air conditioning and therefore the production of electricity, official statistics show the Federal Reserve.

Production was up 0.1% in June while economists and analysts polled by Reuters had forecast an average decline of 0.1%.

The May figure was confirmed at 1.3%.

For the second quarter as a whole, industrial production has emerged up 6.6% yoy, lower than the 7.0% increase recorded during the first three months of the year.

The production sector of utilities rose 2.7%, higher than the Fed said the sharp rise in the use of air conditioning.

Manufacturing output fell for its 0.4%.

The utilization of production capacity has remained stable at 74.1%, but remains below 6.5 points to its average over the period 1972-2009.

The Federal Reserve is closely monitoring these statistics to assess the possible inflationary pressures, which could affect its monetary policy.

The oil has closed lower Wednesday on the physical market in New York after the publication of the minutes of the last meeting of the Monetary Policy Committee of the Federal Reserve.

The text of the Fed shows that its members say they have to be ready to take further measures to support the economy if the climate deteriorates.

The contract on August U.S. light crude ended on a down 11 cents, or 0.14%, to 77.04 dollars a barrel.