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Posted: 22 Sep 2011 05:51 PM PDT

NEW YORK, Sept 22 (Reuters) U.S. stocks plunged on Thursday, extending a selloff to four days, as policymakers' failure to arrest global economic stagnation sent markets spiraling downward.

The heavy volume of Thursday's plunge signaled investors are selling in anticipation of more losses. Wall Street's "fear gauge," the CBOE Volatility Index, jumped 12 percent, giving the index its biggest 2day percentage spike in a month as investors protected against more losses to come.

Energy and materials shares were among the hardest hit areas on worries of slowing worldwide demand. Signs of a slowdown in China fed those fears.

"It's tough to find anything that is a positive catalyst for the market, either domestically or internationally," said TD Ameritrade Chief Derivatives Strategist J.J. Kinahan.

The Dow Jones industrial average dropped 391.01 points, or 3.51 percent, to 10,733.83.

The Standard & Poor's 500 Index lost 37.20 points, or 3.19 percent, to 1,129.56.

The Nasdaq Composite Index slid 82.52 points, or 3.25 percent, to 2,455.67.

Declining stocks outnumbered advancing ones on the NYSE by 2,724 to 343, while on the Nasdaq, decliners beat advancers 2,230 to 353.

Weak data from China followed an unsettling outlook about the U.S. economy from the Federal Reserve on Wednesday in stoking recession fears.

The previous session's losses were sparked after the Fed said it saw "significant downside risks" facing the economy.

China's oncebooming manufacturing sector contracted for a third consecutive month, while the euro zone's dominant service sector shrank in September for the first time in two years.

Those searching for positive market signs could point to the benchmark S&P 500 index holding above 1,120, seen as a key technical support level which could trigger more selling if broken.

"We haven't seen the market completely tilt just yet, so that does show there is some resilience.

There is some fresh capital on the sideline and people aren't necessarily hitting the panic button," said Joseph Greco, managing director at Meridian Equity Partners in New York.

"If we tested 1,100 that is where we could see a really sharp decline from there."

Volume of about 13.24 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq was well above the daily average of 7.8 billion and the highest since Aug. 10.

U.S. crude crude oil futures tumbled more than 6 percent, the biggest oneday percentage drop in six weeks.

The PHLX oil service sector index tumbled 6.6. Schlumberger slid 6 percent to 61.22.

The S&P materials index fell 5.5 percent, with miner FreeportMcMoRan Copper & Gold Inc off 9.7 percent to $32.14.

Banks also lost ground with the KBW bank index off 2.7. Citigroup shares were down 6.1 percent to $23.96.

The Fed's plan to lower longterm rates will compress margins for banks that borrow at shortterm rates and lend at longerterm rates. The declines also came a day after Moody's cut debt ratings for big lenders.

FedEx Corp, considered to be an economic bellwether, slumped 8.2 percent to $66.58 after the world's No. 2 package delivery company pared its outlook for the full year.

In addition to the statement on Wednesday, the U.S. central bank detailed additional stimulus measures to help push down longterm rates.

Investors worried the latest plan would have little effect on lending and that there appeared to be few solutions to sluggish worldwide demand.

Near the close, traders exchanged about 1.10 million option contracts in the S&P 500 Index as 2.69 puts were in play for each call, according to Trade Alert. That puttocall ratio was higher than the 22day moving average of 1.77.

Overnight Reuters reported Recession fears spark stock, commodities rout

NEW YORK, Sept 22 (Reuters) World stocks and commodities tumbled on Thursday as weak data from China crystallized investor fears of a global recession one day after a grim economic outlook from the U.S. Federal Reserve.

Stocks tumbled more than 4 percent and commodities took a beating. The U.S. dollar climbed to a sevenmonth high against major currencies as investors fled risky assets. Private sector business activity in Europe and China declined sharply this month, pushing investors to the safety of U.S. government bonds, where benchmark yields again touched lows not seen in 60 years.

Data showing contraction in China's manufacturing sector for a third straight month helped drive down oil prices by more than 4 percent in London and sent the price of copper to a oneyear low.

Gold, a traditional safe haven, dropped nearly 5 percent to its lowest in nearly one month as the dollar strengthened.

Thursday's market meltdown came after weeks of worries that Europe's debt crisis could freeze the global financial system, and a day after the Federal Reserve disappointed markets with its latest effort to boost the economy by lowering longterm borrowing costs.

The Fed also spooked investors with a particularly stark assessment of the U.S. economic outlook.

"Global growth worries today are even more prominent than the sovereign crisis, and that's not because sovereign crisis risk has diminished, it's because global growth worries have clearly increased," said Patrick Moonen, equity strategist at ING Investment Management.

World stocks as measured by MSCI hit a 13month low and were last down 4.7 percent, bringing the yeartodate loss to 16.3 percent.

The decline also came amid concerns that the U.S. government is headed for another budget fight.

The House of Representatives unexpectedly defeated a bill that would fund the federal government past Sept. 30.

"Here we are, likely facing yet another recession, lacking in confidence, with limited jobs opportunity, hanging our star on a president and Congress that can't agree on what day it is, while offering very little hope of anything meaningful in terms of a jobs solution or a fix for the housing market," said Kevin Giddis, managing director of fixed income at Morgan Keegan in Memphis, Tennessee.

The Fed's statement that the U.S. economy faces "significant downside risks" and worry that the U.S. central bank's $400 billion program would be insufficient to jumpstart growth brought fears of another global recession to the forefront.

Investors, already worried about a possible Greek debt default and the euro zone's intractable debt crisis, see governments unable to respond to the problems.

U.S. stocks headed for their biggest drop in more than a month, extending losses for a fourth straight session, and European shares slumped to a 26month closing low.

Emerging markets stocks slid 6.5 percent. Overnight in Asia, Japan's Nikkei fell 2.07 percent.

Friday's early developments

* Australian shares dropped 2 percent on Friday, tracking Wall Street lower, after a grim economic outlook from the U.S. Federal Reserve triggered falls in world stocks and commodities.

Among the biggest losers, global miners Rio Tinto fell 5.2 percent, after losing 10.8 percent in London and BHP Billiton fell 3.7 percent, after falling 8.3 percent overnight, on concerns about slowing demand for minerals demand.

* New Zealand's benchmark NZX 50 index slipped 1.4 percent to 3,266.8 in morning trade.

* Seoul shares opened sharply lower on Friday as concerns about global economic stagnation deepened on debt problems in Europe and an increasingly grim U.S. and Chinese economic outlook.

Falls were led by crude oil refiners and shipbuilders, with SK Innovation , the country's top refiner, down 6.3 percent and Hyundai Heavy Industries , the world's top shipyard, tumbling 7.1 percent.

The Korea Composite Stock Price Index was down 3.43 percent at 1,738.86 points as of 0003 GMT

Soros makes Forbes Top 10 rich list

Posted: 22 Sep 2011 05:45 PM PDT

SINGAPORE: Microsoft founder Bill Gates has retained his top spot on the Forbes 2011 ranking of the richest people in America with US$59bil.

The number two spot went to Warren Buffett with US$39bil and Larry Ellison (No. 3) with US$33bil.

George Soros (pic), in seventh spot, joins the Top 10 for the first time, with US$22bil, and is one of the 27 hedge fund managers – 7% of the Forbes 400 – featured in Hedged Fortunes.

This year, entrepreneurs dominate the ranks, comprising an all-time high of 70% of the Forbes 400 members.

Enthusiasm for popular brands, like Starbucks and Forever 21, has helped boost some fortunes, while the spread of social media has sparked others.

The combined wealth of America's richest is US$1.5 trillion, with an average net worth of US$3.8bil, reflecting a 12% uptick from 2010.

Wealth was up for 262 members of this year's list, while 72 members saw a decline.

The Forbes 400 welcomed 18 new members in 2011 (Fresh faces), including Sean Parker (No. 200) who rocked the music industry with Napster and helped build Facebook (agent of disruption), John Henry (No. 375), majority owner of the Boston Red Sox and Liverpool FC, Jeffrey Skoll (No. 139) whose Participant Media's most recent release, "The Help", has grossed nearly US$143mil to date and Forever 21's Jin Sook & Do Won Chang (No. 88).

Every member of the Top 20 gained wealth this year, with the exception of Buffett, down US$6bil from 2010, the largest dollar amount loss of any 400 member.

The year's biggest dollar gainer is Mark Zuckerberg (No. 14), who cracked the Top 20 with a gain of US$10.6bil.

Among the 42 women on the list are media mogul Oprah Winfrey (No. 139) newcomer Gayle Cook (No. 96) and Meg Whitman (No. 331). – Bernama

Foster’s CEO defends sale of brewer

Posted: 22 Sep 2011 05:42 PM PDT

SYDNEY: Foster's executives defended the decision to approve a takeover for the iconic Australian brewer that will put it in foreign hands for the first time in its 150-year history.

The beer giant, which produces VB and Crown Lager, has agreed to an improved offer worth A$9.9bil, or A$5.10 per share, from Anglo-South African brewer SABMiller.

It follows Foster's rejection of a hostile bid from the same company, whose brands include Grolsch and Miller Lite, of A$9.51bil in August.

Shares in the Australian brewer gained 7.57% to close at A$5.26, while Moody's placed the company's rating on review for possible upgrade.

Foster's chief executive officer John Pollaers said the deal would open up new opportunities and he did not expect opposition from the government or regulators.

"Ultimately this is a great deal for a company and frankly a great deal for the staff and our customers," he told ABC television.

But not everyone is happy that the firm, whose origins in Melbourne date back to the 1850s, was falling into foreign hands.

Former Foster's chief John Elliot said he was aghast and hit out at management.

"It is a disaster. One of the great Australian icons is now gone because of exceptionally bad management and an exceptionally bad board," he told The Australian newspaper.

With Lion Nathan already in the hands of Japanese brewer Kirin, the Foster's takeover will leave Coopers as the biggest Australian-owned beer company with around 4% of the market.

There had been concern that Foster's head-office would not remain in Australia but Pollaers said "you can't really move a brewery making VB anywhere else". - AFP

Kredit: www.thestar.com.my

Khamis, 22 September 2011

The Star Online: Business

The Star Online: Business

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