- Europe’s Crisis Creeps North as Schneider, Daimler Cut Targets. The European debt crisis is moving north into the region’s corporate engine room. Companies from Schneider Electric SA (SU) to Daimler AG (DAI) reduced forecasts for the year, while Sweden’s Sandvik AB said it will cut production. Pernod-Ricard SA, BASF SE (BAS) and ABB Ltd. (ABBN) cautioned for a continued slowdown. “The current economic situation is marked by a growing insecurity and volatility,” Daimler Chief Financial Officer Bodo Uebber said on a conference call today. Daimler “can’t hold onto targets that are then not realistic. We have to accept that it is so.” Almost half of the companies in the Stoxx Europe 600 Index that have reported earnings this quarter missed estimates for net income as consumers and governments rein in spending. The effects of the debt crisis that started in Greece in 2009 have spread to Germany, the region’s largest economy. Business confidence there fell to the lowest in more than two and a half years this month as neighbors’ demand for its exports waned. “The problems of southern Europe are spreading to the core of the continent,” said Markus Steinbeis, who helps manage about 1 billion euros ($1.3 billion) at Huber, Reuss & Kollegen Vermoegensverwaltung GmbH in Munich. “The earnings figures are showing slowing growth trend in the core. We will see slow growth ahead of us in Europe as a whole.”
- ECB Is Said to Push Bankia Losses as Spain Purges Assets. European authorities are pushing Bankia group to impose losses on junior debt holders as Spain purges a banking system clogged with about 180 billion euros ($234 billion) of bad real estate assets, people familiar with the talks said. The European Central Bank and European Commission want investors including holders of preference shares to swap their securities for new stock to reduce the cost to the taxpayer, according to two people who asked not to be named because the discussions are private.
- Santander Profit Plunges on Spain Property Purge, U.K. Banco Santander SA (SAN), Spain’s biggest bank, said third-quarter profit fell a greater-than-estimated 94 percent after purging more soured real estate and as earnings fell in the U.K. and in Brazil, its largest market. Net income dropped to 100 million euros ($130 million) from 1.8 billion euros a year earlier, the Santander, Spain-based bank said in a filing to regulators today. That missed the 1.21 billion-euro median estimate in a Bloomberg survey of 10 analysts.
- WPP(WPP) Cuts Sales Growth Forecast as Clients Slash Spending. WPP Plc (WPP), the largest advertising company, slashed its full-year sales growth target for the second time in two months as clients in North America and Europe cut spending. The stock dropped as much as 5.2 percent. Revenue growth for the year, excluding the effect of currency fluctuations and acquisitions, will be 2.5 percent to 3 percent, down from an earlier forecast of about 3.5 percent, the company said in a statement today.
- Goods Orders Point to U.S. Business Spending Slump: Economy. Orders for business equipment such as computers and communications gear stalled in September, signaling a slowdown in investment that may curb U.S. economic growth. Bookings for non-defense capital goods excluding aircraft, considered a proxy for future spending, were little changed after rising 0.2 percent in August, a Commerce Department report showed today in Washington. Other data showed consumer confidence is climbing even as the labor market makes limited progress. “Businesses are not prepared to commit to big-ticket investments,” said Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts. “The uncertainty and global slowdown are clear negatives for capital spending. The third quarter was soft, and we can’t see the fourth quarter being much better.”
- New York Times Co.(NYT) Plunges -17% After Reporting Surprise Loss. “A very disappointing third quarter,” Douglas Arthur, an analyst with Evercore Partners Inc. (EVR), said in an interview. “Very weak advertising and higher costs than expected,” said Arthur, who has rated the stock the equivalent of buy since August 2010. Times Co. fell 17 percent to $8.86 at 11:40 a.m. in New York, the biggest intraday drop since April 2009.
- Hamptons Home Prices Fall as Buyers Seek Cheaper Retreats. Home prices in New York’s Hamptons, the Long Island oceanside retreat for summering Manhattanites, declined in the third quarter as mortgage rates near record lows focused buyer attention on cheaper properties. The median price of homes that sold in the period fell 10 percent from a year earlier to $765,000, according to a report today by New York appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate. In the Hamptons and North Fork, the median for luxury properties, defined as the top 10 percent of all sales, fell 23 percent to $4.23 million. About 63 percent of luxury deals were for properties under $5 million. “Multimillion-dollar properties, that’s the brand of the Hamptons,” said Jonathan Miller, president of Miller Samuel. “But there’s an expansion to that, so its not as one- dimensional as it was during the peak.”
- Syria Accepts Muslim Holiday Cease-Fire as Violence Rages. The Syrian army will recognize a cease-fire for the Eid al-Adha Muslim holiday proposed by the United Nations and reserves the right to respond to rebel attacks, state television announced. The cease-fire, proposed by UN Special Envoy Lakhdar Brahimi, will end on Oct. 29, the state broadcaster said today. The announcement came as clashes raged near Damascus, the capital, and in Aleppo, Daraa and Deir Ezzor, claiming the lives of 25 people, according to Rami Abdel Rahman, head of the opposition Syrian Observatory for Human Rights. Arabyia television, citing activists, said the death toll rose to 46.
Wall Street Journal:
- World Trade Volumes Fall for Third Month. The volume of world trade fell for the third straight month in August, a decline which could make it difficult for many economies undergoing austerity programs to return to growth. In its monthly report, the Netherlands Bureau for Economic Policy Analysis, also known as the CPB, said Thursday that exports from the U.S., Japan and Latin America declined, and world trade volumes fell by 0.4% as they did in July, having fallen by 1.3% in June.
- Fitch: July statement points to late 2013 U.S. rating decision. Fitch Ratings on Thursday said it was sticking to a likely timeline for a late 2013 resolution on its rating for the United States that was laid out in a July statement. Reuters contacted Fitch after rumors that the rating agency was set to downgrade the United States, the world's largest economy, rattled markets on Thursday. "I can just refer you to our ... affirmation where we said that it was unlikely that we were going to resolve the rating or the outlook until late 2013," said Brian Bertsch, a company spokesman. On July 10, Fitch said: "Absent material adverse shocks, Fitch does not expect to resolve the Negative Outlook until late 2013."
- Get Ready: Everything Is Going to Cost More Next Year. Consumers will have to dig deeper into their pockets next year to pay for costlier health care, more expensive grocery bills and higher taxes, an extra drag on the country's already slow-moving economy.
- Why Today's Housing Report Spooked Investors So Much.
- CEO Words of Gloom Cast Shadow Over Earnings Season. An earnings season described even by the most optimistic as muted has been made even more worrying by the pessimism shown by chief executives at globally dominant companies.
- Obama Calls Romney 'A Bullshitter'.
- FRANKENSTORM: The Mother Of All Snowicanes Is Barreling Toward New York City.
- Florida Republicans Are Being Targeted By Fake Voter Purge Letters.
- Mass Layoffs Have Spiked In The Last Two Months.
- WHOA: Japan Has Its Own Fiscal Cliff, And People Are Actually Talking About A Risk Of Imminent Technical Default.
- AMD(AMD) Can't Fire Workers Fast Enough Amid Cash Crisis.
- Two Big Shifts In This New Poll Should Frighten Obama.
- Daily Swing State Tracking Poll. Swing State Tracking: Romney 50%, Obama 46%.
- Europe risks Japan-style slump as money shrinks. All key measures of the eurozone money supply contracted in September and private credit fell at an accelerating pace, dashing hopes of a quick recovery from recession.
- The German parliament and other euro-area legislatures should be empowered to sue the ECB, the Free Democrat Justice Minister in Hesse state Joerg-Uwe Hahn said in an interview.
- Japan July-Sept. Robot Shipments Fall -18.7%. Shipments fall for fourth-straight quarter, citing Japan Robot Association figures released yesterday. Exports fell -26.2% to 74.5b yen, 5th consecutive decline. Exports to China and Europe dropped.