The latest setback in Greece’s financial crisis sent the Standard and Poor’s 500 index to its lowest level of the year, putting it on the edge of a new bear market.
The index, the benchmark for most U.S. stock funds, has fallen 19.4 percent since its high for the year on April 29. A 20 percent drop would signify the start of a bear market, ending a bull market that began in March 2009. The S&P 500 has gained 76 percent since then, including dividends.
European markets slumped, dragging U.S. stocks down along with them, after Greece said it will miss deficit reduction targets it agreed to as part of its bailout deal. Benchmark indexes in Germany, France and Spain all fell 2 percent.
The Dow Jones industrial average fell 258.08 points, or 2.4 percent, to 10,655.30. The S&P 500 lost 32.19, or 2.9 percent, to 1,099.23. That’s below its closing low of 1,119 for the year, reached on Aug. 8.
Indexes measuring smaller stocks fell even more than the Dow and S&P, which are dominated by large companies. The Nasdaq composite slid 79.57, or 3.3 percent, to 2,335.83. The Russell 2000 index of small companies plunged 5.4 percent to 609.49.
All 10 company groups in the S&P index fell. Banks, energy, and consumer discretionary stocks had the steepest declines. The yield on the 10-year Treasury note fell to 1.75 percent from 1.91 percent late Friday as investors piled into lower-risk investments. The yield hit a record low of 1.71 percent on Sept. 22.
“The market is continuing to trade based on what is happening in Europe, and that is going to overshadow everything else,” said Quincy Krosby, market strategist at Prudential Financial. “The math (for the Greek bailout) didn’t add up a year ago, and the math doesn’t add up today. The market knows that and is waiting for the Europeans to acknowledge it.”
The renewed concerns about Europe’s debt problems pushed the euro down to $1.32 versus the dollar, a 9-month low. The stronger dollar could hurt large U.S. companies that rely on exports by making their products more expensive overseas. Coca-Cola Co. fell 3.2 percent to $65.42. Caterpillar Inc., which sells construction equipment globally, lost 4.5 percent to $70.55. Boeing, another large exporter, dropped 3.7 percent to $58.25.
“Everything that is coming out of Greece suggests that the dollar is only going to strengthen, which doesn’t bode well for the international firms,” said J.J. Kinahan, chief options strategist at T.D. Ameritrade. “It’s tough to be bullish on anything at the moment.”
The Dow briefly turned higher after 10 a.m., when the Institute of Supply Management said its gauge of U.S. manufacturing did better than Wall Street had predicted in September. The Dow and S&P turned mixed within 20 minutes, then took a sharp slide shortly after noon.
The slump started the market off on a weak note for the fourth quarter. Concerns that the U.S. economy is headed for another recession helped send the S&P 500 index, the basis for most mutual funds that invest in U.S. stocks, down 14 percent over the three months that ended in September. It was the worst quarter for the stock market since the financial crisis of 2008.
Some investors are also concerned that Friday’s jobs report will show that unemployment rose from 9.1 percent in September. “If I had to bet, I would say it’s more likely that more jobs have been lost than a surprise to the upside,” said T.D. Ameritrade’s Kinahan.
In corporate news, AMR Corp., the parent company of American Airlines, plummeted 33 percent to $1.98 as concerns flared up again that the company could be headed for bankruptcy protection. The stock hadn’t closed below $2 since 2003. American is considered the most vulnerable among U.S. carriers to an economic downturn.
Bank of America Corp. plunged 9.6 percent to $5.53, the lowest price for the stock since the financial crisis in 2008. The company has fallen 59 percent since January as investors fret that the nation’s largest bank will be hit with more settlements over mortgage securities that lost value after the housing bust.
Yahoo Inc. gained 2.7 percent, to $13.53, after the head of Chinese Internet company Alibaba Group Holdings said he would be interested in buying the company. Yahoo, which recently ousted Carol Bartz as its CEO, has been trying to decide whether to sell parts of the company.
Nine stocks fell for every one that rose on the New York Stock Exchange. Volume was heavy at 5.8 billion shares.
Toronto Councillor Adam Vaughan can tell the minute he looks at a condo building in his downtown ward if it
President Ali Abdullah Saleh abruptly returned home to Yemen on Friday after more than three months of being treated in Saudi Arabia for wounds from an assassination attempt, in a move apparently aimed to ensure his grip as his loyalists and opponents wage urban warfare in the capital.
Hours after his return, the fighting intensified as heavily shelling hit the strongholds of Saleh’s opponents in the capital, reinforcing fears that his return signals an escalation of fighting into an full-fledged attempt to crush his rivals.
The White House was blindsided by the sudden return. U.S. officials conceded it was a surprise and said Secretary of State Hillary Rodham Clinton wasn’t warned of Saleh’s plans when she met Tuesday in New York with the foreign minister of Saudi Arabia, which has been working with Washington and Yemen to try to arrange a transfer of power.
The return could be a significant blow to those attempts. A degree of stability in the strategic but impoverished Arab nation is a priority for the United States, which wants a partner to continue the fight against one of al-Qaida’s most active branches, based in Yemen and accused of plotting attacks in the U.S. Islamic militants have already exploited months of turmoil to seize control of cities in southern Yemen.
Abdullah Obal, an opposition leader, said he believed Saleh “returned to run the war and drive the country into an all-out civil war.”
“The cannons are now speaking. Gunfire is doing all the talking,” Obal said.
Saleh made no immediate public appearances, but his return breathed life into the camp of his supporters who turned up in the thousands for the Friday sermon that became a massive show of faith in the country’s leader for 33 years.
“We love you, Ali,” chanted thousands massed on Boulevard 70, a street near the presidential compound.
The return threatens to further break open the deep divisions that have riven Yemen since the protest movement kicked off in February demanding Saleh’s ouster and an end to his authoritarian regime. Saleh’s security forces cracked down hard on protesters, killing hundreds, which prompted members of his government, miltary and allied tribes to join the opposition.
In early June, an explosion ripped through a mosque where Saleh was praying in his Sanaa presidential compound. The blast left him severely burned over much of his body and wounded with wooden shards, and nearly a dozen of his top aides were seriously wounded. Saleh has since been in Saudi Arabia for treatment.
Both the U.S. and Saudi Arabia were believed to be trying to keep Saleh from leaving Saudi Arabia, and signing onto a deal proposed by Gulf Arab states, under which he would resign and hand power to his vice president to form a national unity government in return for immunity from any prosecution.
The mercurial Saleh has repeated promised to sign the agreement, then refused at the last minute.
White House Press Secretary Jay Carney said Friday, “We urge President Saleh to initiate a full transfer of power and arrange for presidential elections to be held before the end of the year within the framework” of the agreement.
“A political solution is the best way to avoid bloodshed,” he said.
This week, the deadlock that endured even during Saleh’s absence broke down into the worst violence in months after he recently delegated his vice president to restart negotiations with opponents on the deal. It was considered another stalling tactic by Saleh. It sparked an escalation in the protests and a violent crackdown in Sanaa and other cities.
Forces loyal to the president’s son Ahmed attacked protesters in the streets and battled troops led by one of the regime’s top rivals, Maj. Gen. Ali Mohsen al-Ahmar, a former Saleh aide who joined the opposition early in the uprising, as well as tribal fighters who back the protesters.
Around 100 people have been killed _ mostly protesters as regime troops hit their gathering with shelling or barrages of sniper fire from rooftops. Residents have been forced to hunker down in their homes or flee the city as the two sides exchanged bombardment over Sanaa from strongholds in the surrounding hills.
Saleh slipped back into the country before dawn on Friday. In a statement on the state news agency, he called for a truce, saying “the solution won’t be through cannons and barrels, but through dialogue, understanding and ending the bloodshed.”
But his opponents dismissed the negotiations call, convinced that Saleh has no intention to step down and aims to break his rivals with military force. Sultan al-Barkani, the head of the ruling party’s bloc in parliament and a Saleh backer, told Al-Jazeera television that it was “totally unlikely” that the president will resign. “Saleh will not leave except through elections,” he said.
Obal, the opposition member, blamed the U.S. and Saudi Arabia for not exerting enough pressure on Saleh to quit. He said the opposition was hardening its position in the face of Saleh’s return and that any accord “can no longer give guarantees against prosecution amid all this killing.”
Violence continued even after Saleh’s return. Thuds of mortar rounds raged after sunset in the northern and western part of the capital where Saleh’s opponents have been based. Mortars hit the square in central Sanaa where protesters demanding Saleh’s ouster are camped out, killing two. Other mortars hit a group of anti-Saleh tribal fighters in a neighborhood where battles have raged with Saleh loyalists, killing two tribesmen.
During a brief lull in the fighting, there were mass protests by both sides.
At the opposition rally on Boulevard 60, demonstrators carried pictures of those killed in the violence as speakers urged security forces to stop killing their own people. “The people want the trial of the butcher,” the crowd chanted.
Abdel-Hadi al-Azazi, a protest leader, warned that Saleh’s return means “more divisions, more escalation and confrontations.”
“We are on the verge of a very critical escalation,” he told The Associated Press.
April Alley, a Yemen researcher with the International Crisis Group, said Saleh’s suprise return put both his supporters and opponents off balance, creating an explosive situation but one with also high stakes.
“There is greater incentive to actually come through with a deal,” she said, particularly as negotiations over ways to implement the power transfer had been ongoing until the recent violence.
Retired army general Ahmed Salem said Saleh, an astute military man who has balanced tribal and security loyalties for decades, will be driven by the battle cry.
“He will attempt to stop the advances of his adversaries, and will try to improve his situation on the ground,” Salem said. “His return will enable his supporters, lifts their spirit after a period of confusion because of lack of political management.”
The Ontario Securities Commission has partly lifted its ban on trading in controversial timber company Sino-Forest to allow the completion of several options trades.
The Canadian Derivatives Clearing Corporation had asked the OSC to allow the completion of almost 9,000
More signs of economic weakness triggered a global sell-off in stocks Thursday. The Dow Jones industrial average fell more than 400 points in a return to the wild swings in the market last week.
In the United States, there were reports that more people joined the unemployment line last week than a week earlier, gasoline prices contributed to higher inflation and manufacturing slowed in the mid-Atlantic.
In Europe, bank stocks slid on worries about the region’s debt problems. In Asia, Japan’s exports fell for the fifth straight month.
The U.S. and European economies are “dangerously close to recession,” Morgan Stanley economists wrote in a report. “It won’t take much in the form of additional shocks to tip the balance.”
The Dow Jones industrial average was down 409 points, or 3.6 percent, to 11,001 at noon. The Dow was down by as much as 528 points about a half-hour into trading.
The Standard & Poor’s 500 index fell 46 points, or 3.9 percent, to 1,147. The Nasdaq composite fell 105, or 4.2 percent, to 2,406.
Last week was one of the wildest in Wall Street history. The Dow moved more than 400 points on four straight days for the first time.
But stocks had been relatively stable this week because investors were calmed by strong earnings reports. The Dow had fallen 76 points Tuesday and risen four points Wednesday _ the first time this month that the average rose or fell by less than 100 points on two straight days.
That ended Thursday. And with stocks down big, money flooded into U.S. Treasurys and gold, both considered safer investments.
The yield on the 10-year Treasury note briefly fell below 2 percent for the first time, before recovering to 2.07 percent. Low yields show that investors are willing to accept a lower return on their money in exchange for safety. Demand for government debt has stayed high, and yields low, even after Standard & Poor’s stripped the United States of its top credit rating.
Gold rose $26.30 per ounce to $1,820.30 after earlier climbing to a record of $1,829.70. That’s up from $1,400 at the start of the year and more than double the price several years ago. The price of gold has set one record after another, with some investors looking for stability and others simply looking to cash in.
The Morgan Stanley economists cut their forecast for growth in developed economies this year to 1.5 percent from 1.9 percent. Over the past 20 years, growth for developed economies has been closer to 2.3 percent.
Among the disappointing U.S. economic news:
_ 408,000 people applied for unemployment benefits last week, up from 399,000 the week before and the most in four weeks payday loans.
_ Inflation at the consumer level rose 0.5 percent in July, the highest since March. It had fallen 0.2 percent in June.
_ Manufacturing has sharply weakened in the Philadelphia region, according to a report from the Federal Reserve. Manufacturing had been one of the economy’s strongest industries since the recession ended in 2009, but its growth has slowed this year.
_ The National Association of Realtors said the number of people who bought previously occupied homes dropped in July for the third time in four months.
The fresh signs of economic weakness underscore the challenge for the Federal Reserve as it tries to help the economy with prices rising and the job market weak, said Jack Ablin, chief investment officer at Harris Private Bank.
“Every time the economy got the sniffles, we had the Federal Reserve standing by with tissues,” Ablin said. “This time around, I think the box is empty, and we’re going to have to go through this alone. I think we can do it. It’s just not something we’re accustomed to.”
The Fed has already said it will keep short-term interest rates super-low into 2013. But the risk of further stoking inflation may keep it from taking additional steps, such as an additional round of massive bond-buying.
In the meantime, worries about European debt hang over the markets. A default by any country would hurt the European banks that hold European government bonds, plus American banks that have loans to their European counterparts.
“Europe is the big question in the market, and nobody really knows what happens from here,” said Scott Brown, chief economist at Raymond James.
On Thursday, stocks in industries that depend on a growing economy fell the most. Industrial stocks in the S&P 500 fell 5.4 percent, technology stocks 5.1 percent and financial stocks 4.6 percent.
Crude oil fell $4.11 per barrel to $83.47 on worries that a weaker global economy will mean less demand. Falling prices for crude oil should work their way to the gas pump, though, and bring household budgets at least some relief.
Asian markets started Thursday’s drop. Japan’s Nikkei 225 index fell 1.3 percent. South Korea’s Kospi stock index fell 1.7 percent, and India’s Sensex index fell 2.2 percent.
The declines extended to Europe. In London, the FTSE 100 index fell 4.5 percent after a report showed that growth in British retail sales slowed more than economists expected last month. Germany’s DAX index fell 6.5 percent.
Tempted to go bargain-hunting while the stock markets are still in flux? Here are a few tips to keep your portfolio from taking a hammering in the process:
Dish Network Corp.’s second-quarter net income climbed 30 percent, but its net subscribers declined partly because of rival’s discounts.
To remain competitive, the No. 3 pay TV company said Tuesday that it will be freezing prices through January 2013.
Dish reported net income of $334.8 million, or 75 cents per share, for the period ended June 30. That’s up from $257 million, or 57 cents per share, a year earlier.
Analysts expected earnings of 79 cents per share.
Revenue rose 13 percent to $3.59 billion from $3.17 billion, beating Wall Street’s estimate of $3.38 billion
Net subscribers fell by about 135,000 to approximately 14.1 million subscribers.
Dish Network recently purchased Blockbuster Inc.’s assets out of bankruptcy.
A NATO airstrike hit an area near Libyan leader Moammar Gadhafi’s compound in the capital again Tuesday, as military leaders voiced concerns about sustaining the operations if the alliance mission drags on.
A column of gray smoke could be seen rising from the area around Gadhafi’s Bab al-Aziziya compound shortly before dawn Tuesday. The concussion from the blast was felt at a hotel where journalists stay in the capital.
It was not clear what was targeted, and Libyan officials didn’t immediately comment.
East of the capital, alliance aircraft have begun dropping leaflets warning government troops to abandon their posts outside Zlitan, which lies just west of the rebel-held port city of Misrata.
Rebel forces have been advancing along the Mediterranean coast toward Zlitan, but say they have been instructed by NATO to withdraw ahead of expected bombing runs to old front lines in Dafniya.
The 3-by-5 inch leaflets intended for forces loyal to Gadhafi carry the NATO symbol and a picture of an Apache attack helicopter and burning tanks on one side. Green Arabic writing warns: “There’s no place to hide. It’s not too late to stop fighting. If you continue to threaten civilians, you will face destruction.” The message on the reverse urges soldiers to “stop and stay away from fighting now.”
An Associated Press reporter near the front line said NATO fighter jets were be heard overhead.
If the rebels take Zlitan, they would be within 85 miles (135 kilometers) of the eastern outskirts of Tripoli. A rebel official said opposition leaders in Zlitan have been meeting with their counterparts in Misrata, but he acknowledged they face challenges in advancing on the city.
“We need the people of Zlitan to push more courageously forward. They are dependent on our movements, but the problem is only a third of that city is with the rebels,” said Ibrahim Beatelmal, a rebel military spokesman in Misrata.
On Monday, NATO said attack helicopters struck two of Gadhafi’s military boats off the coast of Misrata, as well as military vehicles and equipment concealed beneath trees in Zlitan.
NATO’s nearly three-month air campaign has grounded Gadhafi’s air forces and weakened his military capabilities. But there are signs the pace of operations has put a strain on the trans-Atlantic alliance.
In London, the head of the Royal Navy warned that the British fleet _ a key contributor to the Libya mission _ will be unable to maintain the pace of operations if the mission drags on until the end of the year.
Adm. Mark Stanhope told reporters Monday he was comfortable with NATO’s decision to extend the Libya operation to the end of September, but said that beyond that the government would need to make “challenging decisions payday loan.”
“If we do it longer than six months we will have to reprioritize forces,” he said.
Elsewhere, a senior NATO official said coalition resources would become “critical” if intervention in Libya continues.
“If additional resources are needed, this of course will need a political decision,” said the official, Gen. Stephane Abrial, Supreme Allied Commander Transformation.
U.S. Defense Secretary Robert Gates last week publicly rebuked the United States’ European allies and said NATO’s operations in Libya have exposed the alliance’s shortcomings. France and Britain have carried most of the load since NATO began the Libya mission March 31.
In western Libya, Gadhafi’s troops were bombarding opposition forces controlling a key border crossing with Tunisia, according to Omar Hussein, a spokesman for rebels in the western Nafusa mountains.
He said government forces were targeting rebels holding the road that leads toward the Dehiba border crossing. Dehiba is a key supply point for the rebels who wrested control of a string of Nafusa mountain towns from Gadhafi’s forces earlier this month.
Canada on Tuesday joined a growing list of countries to recognize the Libyan rebels as the legitimate government of the country.
Foreign Affairs Minister John Baird made the announcement in Parliament as it opened a day-long debate on extending Canada’s military commitment to the NATO-led mission in Libya. Prime Minister Stephen Harper’s government plans to extend an initial three-month commitment to the end of September.
Monday night, Gadhafi troops fired grad missiles at Qasr Ahmed’s industrial zone near Misrata’s port, hitting an electrical transformer and destroying it and damaging an office building.
“I got up on top of our roof and saw fire coming from the oil refinery’s transformer,” said Nidal Suleiman, an engineer who works at a steel factory near the refinery.
He said the fire was quickly extinguished and employees went to work as usual this morning at the refinery. It was not immediately clear if anyone was injured.
NATO, meanwhile, reported it had carried out 62 airstrikes on Libya Monday, hitting military targets in Tripoli and four other cities in Gadhafi controlled territory. The alliance has considerably stepped up the pace of air attacks over tjhe past several days.
Spain’s National Police say hackers blocked its website briefly in apparent retaliation for the arrest of three suspected members of the international activist group Anonymous.
Police said Monday the attack happened around 2 a.m. (0000 GMT) Sunday but did not disrupt police computer operations and that Anonymous claimed responsibility for it.
On Friday police announced the arrest of three alleged members of the Spanish chapter of Anonymous, which has attacked corporate and government websites around the world.
Police said one of the suspects had a server used to hack into Sony’s online Playstation store but the three detainees were not involved in an April cyber intrusion which affected millions of PlayStation Network users.
European Union agriculture ministers are assessing whether farmers will be able to recoup from EU coffers up to 30 percent of the cost of vegetables that cannot be sold because of the German E.coli contamination crisis.
Two officials said Tuesday that the EU Commission has come up with the proposal as a base for negotiations at a special emergency meeting of farm ministers dealing with the economic impact of the crisis. The officials spoke on condition of anonymity because of the sensitivity of the negotiations.
Earlier Tuesday, the EU health chief warned Germany against premature _ and inaccurate _ conclusions on the source of contaminated food that have spread fear all over Europe and cost farmers in exports.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.
BERLIN (AP) _ Germany’s national disease control center says a further 94 people have been sickened by the deadliest E guaranteed high risk personal loans.coli outbreak in modern history.
The Robert Koch Institute said the number of registered infections in Germany rose to 2,325 Tuesday, with those in other European countries still standing at about 100.
The institute adds the latest figures indicate that the number of new cases is declining _ a sign that the epidemic that might have reached its peak. But it cautions that it is not certain whether the latest decrease will continue in the coming days.
It said the number of people suffering from a serious complication that may lead to kidney failure among those sickened rose by 12 to 642.
The outbreak has killed a total of 22 people across Europe within a month.
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