PetroChina Ltd., China’s biggest oil and gas company, saw its third-quarter profit jump 7.8 percent as higher crude oil prices and output helped to offset losses in its refining business.
The Beijing-based company reported Thursday a profit of 37.4 billion yuan ($5.9 billion) in July-September, compared with 34.7 billion yuan a year earlier.
PetroChina reported a refining loss of 41.5 billion yuan ($6.5 billion) as higher costs for imported crude oil outpaced the gains in prices for its products.
But weakness in the refining sector was offset by a 45 percent increase in crude oil prices over the same period a year earlier, to $103.78 per barrel. The company’s output in the first nine months of the year rose 5.1 percent, to 959 free credit score.3 million barrels of oil equivalent.
Like other Chinese energy and resource companies, it has actively sought access to resources overseas to help diversify its risks and ensure a steady supply of oil and gas needed to power China’s fast-growing economy.
PetroChina increased its refining by 10 percent in January-September, or about 2.7 million barrels a day. But it derives a larger share of its revenues from oil and gas production than rival Sinopec, which is mainly a refiner, helping to shield it from losses due to government controls on fuel prices.
As President Obama prepared to announce new measures Wednesday to help ease the burden of student loan debt, new figures painted a demoralizing picture of college costs for students and parents: Average in-state tuition and fees at four-year public colleges rose an additional $631 this fall, or 8.3 percent, compared with a year ago.
Nationally, the cost of a full credit load has passed $8,000, an all-time high. Throw in room and board, and the average list price for a state school now runs more than $17,000 a year, according to the twin annual reports on college costs and student aid published Wednesday by the College Board.
The large increase in federal grants and tax credits for students, on top of stimulus dollars that prevented greater state cuts, helped keep the average tuition-and-fees that families actually pay much lower: about $2,490, or just $170 more than five years ago. But the days of states and families relying on budget relief from Washington appear numbered. And some argue that while Washington’s largesse may have helped some students, it did little to hold down prices.
“The states cut budgets, the price goes up, and the (federal) money goes to that,” said Patrick Callan, president of the National Center for Public Policy and Higher Education. “For 25 years we’ve been putting more and more money into financial aid, and tuition keeps going up. We’re on a national treadmill.”
Nonetheless, President Obama planned to announce a series of steps to help with one of the consequences of rising college prices: student debt. This year total outstanding student loan debt has passed $1 trillion, now exceeding credit card debt. And concerns about student loan debt have been front and center with many of the Occupy Wall Street protesters.
Obama will use executive authority for two loan-relief measures. First, he will move up the start date _ from 2014 to 2012 _ of a plan Congress already passed that reduces the maximum repayment on federal student loans from 15 percent of discretionary incomes to 10 percent. The White House says about 1.6 million borrowers could be affected, and that remaining debt would be forgiven after 20 years, instead of 25.
The administration also will allow 5.8 million borrowers with outstanding loans from two federal programs _ direct lending the Family Education Loan Program _ to consolidate into a direct loan, potentially saving some borrowers hundreds of dollars per month.
Those changes may not help new borrowers much, but they could put cash in the pockets of millions still paying back their loans. They also could encourage more borrowers to take advantage of the income repayment options that are already in place, but not widely known. Finally, by consolidating into direct lending, more could qualify for that program’s public service loan forgiveness, which can forgive debts after just 10 years of repayments for people working in nonprofit or public service jobs.
In the College Board’s latest price report, some of the increase was driven by huge increases at public universities in California, which enrolls 10 percent of public four-year college students and whose 21 percent tuition increase this year was the largest of any state.
But even without California, prices would have increased 7 percent on average nationally _ an exceptional burden at a time of high unemployment and stagnant family incomes.
Terry Hartle, senior vice president at the American Council on Education, which represents colleges in Washington, said the cause of the price increases for the 80 percent of college students who attend public institutions is clear. State appropriations to higher education declined 18 percent per student over the last three years, the College Board found, the sharpest fall on record.
“To see increases of 20 percent, as we saw in California, to see gains of 15 percent in other states, is simply unprecedented,” Hartle said. “Tuition is simply being used as a revenue substitute in many states.”
The College Board reports roughly 56 percent of 2009-2010 bachelor’s degree recipients at public four-years graduated with debt, averaging about $22,000. At private nonprofit universities, the figures were higher _ 65 percent and around $28,000. Those figures are likely to rise, though private borrowing _ usually more dangerous than government loans _ has been falling.
“Psychologically, practically, it’s a big number, and it will inform important choices, like when and whether you buy a home, start a family, save for retirement or take the risk of starting a new business,” said Lauren Asher, president of The Institute for College Access and Success, who also applauded the Obama announcement.
And Asher and other experts emphasize that the types of loans students take out can be as important as the amount. In general, a college degree remains a good investment.
Other slivers of what passes for good news: While several states had double-digit percentage increases, there were wide variations, and Connecticut and South Carolina held under 3 percent. Roughly half of students are enrolled in nonprofit colleges attend institutions charging under $10,000, and fewer than 1 in 10 attend institutions listing prices over $36,000.
Meanwhile, both community colleges and private four-year colleges reported lower tuition inflation than public universities.
At nonprofit private four-year colleges, tuition and fees were up 4.5 percent to $28,500. Factoring in aid, the average total net cost, including room and board, was about $22,970 _ lower than five years ago. At community colleges, where list prices rose 8.7 percent nationally to just under $3,000, net costs also are lower than five years ago, and aid generally covers the whole price.
Still, while net costs are important to note, they don’t tell the whole story. They don’t cover living costs, which for many students are a higher obstacle than tuition, especially if they can’t work as much while enrolled.
And the aid dollars that help lower the average net price don’t always go to the neediest students.
Colleges award merit scholarships. Federal Pell Grants do support the neediest, and spending on them has nearly doubled in the last two years to around $35 billion (9.1 million students got grants averaging $3,828).
But the latest College Board figures highlight a rapid recent increase in indirect government support through tuition and other tax credits, which have reached almost $15 billion. Around 12 million people are now taking advantage of tax benefits averaging more than $1,200. And while recent changes make low-income families better able to take advantage of those credits, a growing proportion of the benefit goes to families earning more than $100,000.
The tax credit program, dramatically expanded in 2009, “really changes the story of how the federal government subsidizes students,” said Sandy Baum, the economist who directs the College Board’s reports. The credit is “not so much a middle-income benefit as we’re used to thinking about it.”
Some states are not only cutting their appropriations but not even paying what they’ve promised. Illinois is late on payments worth $500 million to nine campuses this year.
The percentage increases in California, once widely considered to have the best-value public universities in the world, are so high in part because the base prices of past years were low. Prices there still aren’t high by national standards, but this year for the first time, California’s tuition and fee rates were above the national average. That in 2011 California’s public universities would be cost more than the national average would have been unimaginable to most experts a decade ago.
Hartle and others say this year’s sharp increases came despite the last chunks of stimulus dollars from Washington used to plug holes in education spending. Looking forward, state budgets remain broken and there’s little indication Washington will come riding to the rescue.
“I’m not exactly sure where higher education in the United States is going,” he said. “But I have a feeling California is going to get there first.”
Also, on Tuesday, an Education Department official testified to a House subcommittee that personal details of as many as 5,000 college students were temporarily visible to other students on the departments’ direct loan web site earlier this month.
The episode lasted six or seven minutes on Oct. 12 and happened during a reconfiguration of data on 11.5 million borrowers to improve website performance times, said James Runcie, the Education Department’s federal student aid chief operating officer. Students who logged on during that window saw other students’ personal details. Those who were exposed were notified and offered credit monitoring services. The department said it had no reason to believe any students’ information was misused.
Forecasters say Rina has quickly strengthened into a hurricane off the coast of Honduras.
The U.S. National Hurricane Center in Miami said Monday that Rina was a Category 1 hurricane with top winds of 75 mph (120 kph) and was centered about 195 miles (314 kilometers) southwest of Grand Cayman.
Forecasters say the storm could become a major hurricane with winds topping 111 mph (179 kph) by late Tuesday quick cash.
The storm is forecast to bring at least 2 inches of rain over the Cayman Islands.
Stressful economic periods lead to stressful family finances, which in turn can lead to bankruptcy filings.
Bankruptcy is not a panacea to lift up all your financial troubles and put a smile on your face, as late-night television commercials would have you believe. But in case it turns out to be the only answer, you should have a full understanding of available choices and potential repercussions.
Personal bankruptcies in the U.S. declined 8 percent in the first half of this year compared with the year-earlier period, according to the American Bankruptcy Institute. Chapter 7 bankruptcies fell 9 percent, while Chapter 13 filings were down 3 percent. Sounds good, but it may not be.
“The decline in personal bankruptcies isn’t an indication that the economy is vastly improving, but rather an indication that people can’t afford to file,” said Doug Erickson, vice president in strategic programs for the nonprofit CredAbility (www.CredAbility personal business card.org) counseling service in Atlanta. “It isn’t cheap to file for bankruptcy, with a Chapter 7 bankruptcy costing you anywhere from $1,000 to $2,500 (in court and attorney fees), and payment is due up front.”
Chapter 7 is the more prevalent personal bankruptcy, providing liquidation of a debtor’s property and distribution by the bankruptcy trustee of proceeds to creditors. There is no repayment plan.
Chapter 13 bankruptcy, also known as the “wage earner’s plan,” allows people with regular incomes to develop a plan to repay all or part of their debts.
“If you don’t have a source of income, you will not qualify to file Chapter 13,” explained Erickson. “If you are unemployed but can make mortgage and car payments, you can file Chapter 7.”
While you can keep your house in Chapter 7, unsecured debt such as credit card debt will be discharged, he explained. However, debt acquired within 90 days of filing can’t be discharged
The leaders of South Korea and Japan agreed Wednesday to expand the size of a currency swap deal and push to resume stalled free trade negotiations, as Tokyo returned looted Korean royal documents in a goodwill gesture.
Seoul and Tokyo have close economic ties and are key U.S. allies in Asia, but many older Koreans still harbor deep resentment against Japan over its 35-year colonial occupation of Korea that ended in 1945. Ties suffered this year because of a territorial dispute and differences over the occupation.
On Wednesday, the leaders of the two countries agreed in a meeting in Seoul that they would expand the size of their total currency swap arrangements to $70 billion from the current $13 billion as a backstop against global economic turmoil. The measures consists of dollar-local currency and bilateral won-yen arrangements.
Swaps allow one central bank to borrow a currency from another, offering an equivalent amount of its own as collateral.
“We reached the agreement … based on a belief that we should strengthen our financial and currency cooperation to preemptively stabilize the financial market as the world’s economic uncertainty is deepening,” South Korean President Lee Myung-bak said at a news conference with Japanese Prime Minister Yoshihiko Noda.
Lee and Noda said they also agreed to bolster efforts to resume stalled negotiations on signing a free trade agreement.
The two countries began free trade talks in 2003, but the negotiations remain stalled over trade barriers on agriculture and fish. The South Korea-Japan deal drew renewed attention after the U.S. Congress ratified a free trade accord with South Korea this month. That deal still needs approval from South Korea’s parliament fast payday loan.
In an effort to improve ties, Noda repatriated five volumes of Korean royal documents that his country took away during its rule.
“The return should be seen as a gift with a political intention,” Seoul National University international relations professor Park Cheol-hee said.
The documents are part of 1,205 historical volumes that Japan agreed to give back to South Korea when Noda’s predecessor, Naoto Kan, met with Lee last year. A Japanese official traveling with Noda told reporters in Seoul that Tokyo is to return the remaining books by Dec.10. The official declined to be named because of office policy.
Noda told Lee that he would seek to return the remanning books at an appropriate time, according to South Korea’s presidential office.
The books’ return came two months after South Korea banned three conservative Japanese lawmakers from entering the country after they arrived at a Seoul airport with a plan to travel near islets at the center of territorial and historical disputes between the countries.
The two countries are also at odds over Seoul’s offer to hold talks on Japan’s compensation of Korean women forced into sexual slavery for Japan during its colonial rule. Japan declined, saying the matter was settled by a 1965 treaty that normalized ties between Japan and South Korea.
“I stated several times that moving toward the future without forgetting history is the basis of South Korea-Japan relations,” Lee said.
Noda told reporters the issue of sex slaves wasn’t discussed during Wednesday’s meeting.
President Barack Obama is targeting vital North Carolina and Virginia this week, as he kicks off a three-day bus tour that is as much about campaigning for his jobs bill as it is shoring up support in two southern states he wrested from Republican control when he won the White House.
Obama’s 2008 victories in North Carolina and Virginia were due in large part to the states’ changing demographics and his campaign’s ability to boost voter turnout among young people and African-Americans. But nearly three years after his historic election, the president’s approval ratings in both states are sagging, in line with the national trend.
A Quinnipiac University poll out earlier this month put Obama’s approval rating in Virginia at 45 percent, with 52 percent disapproving. The same poll showed 83 percent of Virginians were dissatisfied with the direction of the country. In North Carolina, Obama has a 42 percent approval rating, according to an Elon University poll conducted this month. Most national polls put Obama’s approval rating in the mid- to low-forties.
The president’s bus tour comes as the battle in Washington over his jobs plan enters a new phase. While Obama had demanded lawmakers pass the $447 billion measure in its entirety, Senate Republicans have blocked those efforts, leaving the president and his Democratic allies to fight for the bill’s proposals piece by piece.
Since announcing his plan for putting Americans back to work last month, Obama has been traveling the country trying to build public support for his initiatives. The president’s itinerary has focused heavily on swing states, underscoring the degree to which what happens with his job bill is linked to his re-election prospects.
Obama starts his bus tour with a speech in Asheville, N.C., Monday morning and he will speak again later that day at a high school in Millers Creek, N.C. He’ll also speak Tuesday at a community college in Jamestown, N.C., and make stops in the southern Virginia cites of Emporia and Hampton, before wrapping up the bus tour Wednesday at a firehouse in North Chesterfield, Va.
While Obama won handily in Virginia in 2008, he barely squeaked out a victory in North Carolina, winning the state by less than a percentage point. John Davis, a longtime political analyst in North Carolina, said Obama won there in part because his campaign identified the state as a potential battleground early and established a dominant ground game, while the Republican nominee, Sen. John McCain, was focused elsewhere.
But with North Carolina now firmly on the political establishment’s radar, Davis said thinks Obama will have a much harder time holding the state next November.
“This time I think Obama loses the advantage of a surprise like he pulled off in 2008,” he said.
The president faces significant obstacles in Virginia as well. While Democrats had hoped Obama’s victory signaled Virginia’s shift to a blue state, momentum has since strongly turned back in favor of Republicans, most notably with Gov. Bob McDonald’s win in 2009.
That shift has some Virginia Democrats, especially state legislators running in next month’s General Assembly elections, less than thrilled about Obama heading to their state this week. In coal-mining southwestern Virginia, Democratic state Sen. Phil Puckett has flatly renounced the president. With Republicans running television ads and erecting billboards showing Puckett campaigning for Obama in 2008, Puckett said in a television interview he would not support Obama in 2012.
The White House insists the president is focused more on the economy than elections. With the nation’s unemployment rate stuck at 9.1 percent, Obama’s goal this week will be to convince the public that his jobs plan will put out-of-work teachers, police officers and firefighters back on the job, while also repairing crumbling roads and bridges.
By breaking up elements of the plan into individual bills, the White House wants to force Republicans to voice their opposition one by one _ part of the Obama administration’s strategy of hanging blame for any eventual failure of the president’s economic policies on GOP obstructionism.
“Each time we’re going to ask Republicans to support the bill,” Obama said last week. “And if they don’t want to support the bill, they’ve got to answer not just to us, but also the American people as to why they wouldn’t.”
White House spokesman Josh Earnest said Obama would use his stops this week to challenge Congress to get to work this week passing proposals in the bill, starting with initiatives that the administration says would prevent teacher layoffs. Obama will also call for lawmakers to prioritize his call for $50 billion in infrastructure spending.
Despite the president’s call for urgency, it could be November at the earliest before lawmakers take up the proposals in the bill, due to debate scheduled this week on appropriations bills and a planned vacation at the end of this month.
The president will be ditching Air Force One for much of his trip this week, traveling instead on a $1.1 million bus purchased by the Secret Service. The impenetrable-looking bus is painted all black, with dark tinted windows and flashing red and blue lights. Obama first used the custom-made bus during a similar road trip in August, when he traveled through Minnesota, Iowa and Illinois.
Obama’s time on the road will take him through small towns and rural swaths of both Virginia and North Carolina. In addition to his scheduled speeches, the president is sure to make unannounced visits to local restaurants or stop to greet supporters gathered along the road to watch his motorcade pass.
The effect is a campaign-style trip that allows the president to engage in a little retail politics, while also garnering the national media coverage typically afforded only to a sitting president.
A New York businessman called a “mini-Madoff” because he was arrested weeks after the billion-dollar swindler was sentenced Friday to 25 years in prison and ordered to pay $179 million in restitution _ money he doesn’t have.
Nicholas Cosmo, who apologized as he was sentenced, has had a gambling problem since high school, his lawyer said. He was arrested in January 2009 and pleaded guilty last year to mail and wire fraud.
“I’m going to be working until they put me in the grave,” said one of the victims, Ellen Gabriel, of Yaphank, N.Y., who did not address the court but wept throughout the hearing. The hairdresser said she lost $130,000 _ “my entire life savings.”
Gabriel added that she had researched before investing: “It’s not like we were stupid.”
Four victims did address the court.
“Everything that these people said about me, for the most part, is true,” said Cosmo, the former head of the Long Island-based Agape World and Agape Merchant Advance in New York City.
Agape solicited investors to fund short loans to help companies get temporary financing. Cosmo promised up to 80 percent returns but admitted using investors’ money for personal investments.
“It wasn’t my intention to ever hurt anyone. But I hurt them and I stand here as a guilty man,” Cosmo told the court. “I am truly sorry from the bottom of my heart. I know that probably falls on deaf ears. There’s not a day that goes by that I am not ashamed for what I have done.”
Unlike the more notorious Bernard Madoff, who admitted cheating charities, celebrities and institutional investors out of billions, Cosmo targeted mainly blue-collar workers.
“He preyed on people’s personal relationships and trust,” said Assistant U.S. Attorney Demetri Jones, who had urged a 40-year term. “The victims are everyman _ generations of families.”
The more than 4,000 victims include teachers, police officers, firefighters, nurses and construction workers, Jones said. “They’re not banks. They’re not corporations. They’re people.”
Investors believed they would make returns as high as 80 percent a year from interest collected on short-term loans to businesses. But an investigation revealed that “much of the money paid back to investors … was actually money provided by subsequent investors” _ a Ponzi scheme.
Cosmo also spent 21 months in federal prison for a 1999 mail fraud conviction.
He had been free on $1.25 million bail until October 2009, when U.S. District Judge Denis Hurley revoked bail after finding Cosmo had violated bail conditions barring him from access to any computer or the Internet.
Cosmo “will bend the rules if he feels it will serve his interests,” the judge said at the time. “He is unlikely to abide by any condition or conditions of his release.”
The Belgian state will buy the national subsidiary of embattled bank Dexia for euro4 billion ($5.4 billion) as part of a wider bailout of the lender, the first banking victim of a new squeeze in European credit markets.
The part-nationalization of Franco-Belgian Dexia, announced Monday, was triggered by other banks’ increasing reluctance to lend to it due to its exposure to highly indebted eurozone states like Greece and Italy and to struggling municipalities in the United States.
Banks depend on loans to one another for a large part of their daily financing, but can quickly withhold them if they sense there is a danger that a counterpart might collapse and not repay the money. Such fears intensified last week, pushing Dexia to need rescuing from the government.
Belgium’s caretaker prime minister Yves Leterme said the nationalization was necessary to insulate the Belgian retail bank from the risks of the wider group, Dexia SA. He said support from the state ensures that all of Dexia’s clients “can be sure and certain that their money is in full security.”
On top of the nationalization, the governments of Belgium, France and Luxembourg together will provide an additional euro90 billion ($121 billion) in funding guarantees for the bank for up to 10 years.
Belgium will provide 60.5 percent of these guarantees, 36.5 percent will come from France and the remaining 3 percent from Luxembourg.
At the same time, Dexia’s board is in negotiations with French banks Caisse des Depots et Consignations and La Banque Postale to find a solution to the financing of French local authorities, in which Dexia plays an important role.
Dexia said backing from the Caisse des Depots would reduce its short-term funding requirement by almost euro10 billion.
The announcement followed marathon negotiations between the three governments and the bank’s management.
Officials were worried that a collapse of the bank would exacerbate an already tight funding environment for banks in Europe, as analysts warn of a credit crunch similar to the one that followed the collapse of Lehman Brothers.
At the same time, the Belgian and French governments were concerned that putting up more money for bank bailouts would threaten their credit rating and drive up interest rates on their bonds.
On Friday, Moody’s Investors Service placed Belgium’s Aa1 rating on review for a possible downgrade, due in part to the expected expense of guaranteeing that Dexia’s depositors will lose no money.
Belgian finance minister Didier Reynders said that the bailout would lift the country’s debt from around 97 percent of economic output to about 98 percent.
The French government, too, was under acute pressure to save Dexia as the bank is one of the country’s largest lenders to towns and cities.
France and Belgium already became part owners of the bank during a euro6.4 billion bailout in 2008.
Last week Dexia announced it was in negotiations with a group of international investors interested in buying its Luxembourg subsidiary.
At a news conference Monday, the bank’s management blamed the renewed problems on the risks that were piled up before they took over in 2008.
“We realized very quickly that we found ourselves in front of a very difficult mission,” said Chairman Jean-Luc Dehaene. Efforts to strip down Dexia’s balance sheet and shift funding from short-term to long-term were taken quickly, but management did not have enough time to get the lender back on track before it was slapped hard by the government debt crisis, Dehaene added.
The chairman insisted that Dexia faces a crisis of liquidity, not solvency _ meaning it is not bankrupt, but just doesn’t have the ready cash it needs in the short-term. That is why the bank managed to pass pan-European stress tests just this summer, Dehaene said.
Chief executive Pierre Mariani added that a threat to downgrade the bank’s credit worthiness by rating agency Moody’s last Monday, exacerbated by rumors during the week, “put some pressure on group funding.”
Dexia’s stock remained suspended Monday morning following steep losses early last week.
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Associated Press writer Don Melvin contributed to this story.
A security court in Bahrain on Wednesday sentenced 19 people, including a 16-year-old Iraqi soccer player, to up to five years in prison for taking part in Shiite-led protests against the Gulf nation’s Sunni rulers.
The decision brings the total number of people sentenced this week to at least 81, as Bahrain’s authorities step up prosecutions of hundreds of people arrested in the crackdown on dissent. Bahrain’s majority Shiites claim they face widespread discrimination. More than 30 people have been killed since February in Bahrain’s unrest, which was inspired by uprisings elsewhere in the Arab world.
On Wednesday, the court sentenced 13 people to five years in prison, and six people to one year terms for alleged attacks during the unrest, including trying to torch a police station, the Information Affairs Authority said in a statement. The verdicts can be appealed.
Family members, journalists and human rights activists attended the hearing, which took place in the Al-Khamees police station, according to the statement.
The detention of the Iraqi teenager, Zulfiqar Naji, sparked angry demonstrations in Iraq and as far away as Canada calling for his release Payday advance. It also prompted the Iraq government to make a plea to Bahrain on his behalf. Naji played for a local soccer club in Bahrain until his arrest.
The player’s father, Abdulameer Naji, said in July that his son was taken into custody from their Bahrain home in April on suspicion of participating in protests. The father has since fled to Iraq but the boy’s mother and several of his siblings have remained in Bahrain.
At least six players for Bahrain’s national soccer team were detained _ many of them beaten and tortured _ during months of political turmoil. One of them was sentenced to two years in prison.
Shiite Muslims represent about 70 percent of Bahrain’s 525,000 citizens, but claim they face widespread discrimination such as being blocked from high-level political and military posts. Protesters demand the 200-year-old ruling Sunni dynasty give up its hold on power and allow a freely elected government.
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.
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