Golden Fibonacci

July 2 (Bloomberg) — U.S. stocks tumbled, sending the Dow Jones Industrial Average to its biggest drop since April 20, as a worse-than-projected decrease in jobs added to concern that rising unemployment will prolong the recession. Treasuries rose, while oil retreated to a five-week low.

Home Depot Inc., Alcoa Inc. and Travelers Cos. lost at least 3.8 percent after the Labor Department said payrolls shrank by 467,000 jobs last month, 102,000 more than the average economist estimate. Lear Corp., the second-biggest maker of automotive seats, plunged 52 percent on plans to file for bankruptcy. Europe’s Dow Jones Stoxx 600 Index slid 2.6 percent, the most in almost two weeks, following the jobs report.

“It’s ugly out there,” Jack Ablin, who oversees $60 billion as chief investment officer at Harris Private Bank in Chicago, told Bloomberg Television. “We were trying to gain a little bit of traction on the jobs front, to get less bad numbers on a monthly basis. Clearly this month’s report is a setback.” Continue

July 2 (Bloomberg) — Asian stocks climbed as commodity prices rose and on speculation stimulus measures are helping to bolster consumer demand.

Lihir Gold Ltd., Australia’s second-largest listed gold miner, rose 2.4 percent, while nickel producer Pacific Metals Co. jumped 4.2 percent as Merrill Lynch & Co. boosted its share price target. Electronics retailer K’S Holdings Corp. gained 4 percent in Tokyo after the Nikkei newspaper reported government policies helped profit rise about 40 percent last quarter.

“Investors are feeling the global economy is getting better, but the hazy outlook means they can’t totally buy into this recovery story,” said Mitsushige Akino, who oversees the equivalent of $522 million at Ichiyoshi Investment Management Co. “We have no reason to sell but no definitive clue to buy.” Continue

June 30 (Bloomberg) — American International Group Inc., the insurer bailed out by the U.S., has an “excellent chance” of repaying the government, outgoing Chief Executive Officer Edward Liddy said today at the company’s annual meeting.

AIG plans to reduce its debt under a Federal Reserve credit line by $25 billion by handing over stakes in two non-U.S. life insurance units, the insurer said last week. The New York-based company has tapped about $40 billion from the line.

AIG has received four bailouts, totaling $182.5 billion, after agreeing in September to turn over a majority stake to the U.S. when the company was overwhelmed by losses on bets tied to the housing market. In addition to a $60 billion credit line, the rescue includes $52.5 billion to buy mortgage-linked assets owned or insured by the company, and an investment of as much as $70 billion. Continue

June 30 (Bloomberg) — Crude oil rose for a second day, climbing above $72 a barrel in New York after Nigerian militants shut a field operated by Royal Dutch Shell Plc, disrupting supply from Africa’s largest producer.

Crude oil for August delivery gained as much as 76 cents, or 1.1 percent, to $72.25 on the New York Mercantile Exchange. It was at $72.17 at 9:01 a.m. in Singapore. Yesterday, the contract gained $2.33, or 3.4 percent, to settle at $71.49 a barrel, the highest close since June 12.

To contact the reporter on this story: Ann Koh in Singapore at akoh15@bloomberg.net

June 29 (Bloomberg) — Japan’s industrial output rose at a pace that matched the steepest increase in 56 years as companies rebuilt inventories and the economy started to climb out of its deepest postwar recession.

Production climbed 5.9 percent in May from a month earlier, the Trade Ministry said today in Tokyo, the same rate as the previous month, which was the biggest gain since 1953. Economists surveyed by Bloomberg predicted a 6.9 percent rise. Factories were still producing 29.5 percent less than last year.

The report adds to evidence the economy resumed growing in the three months ending tomorrow, following record contractions in the previous two quarters. Some $2.2 trillion in government stimulus worldwide propped up demand for Japanese exports and leaner stockpiles allowed manufacturers to raise output. Continue

June 26 (Bloomberg) — Consumer spending rose in May as benefits from the Obama administration’s stimulus plan spurred a jump in American incomes, a sign that efforts to revive the economy are starting to pay off.

The 0.3 percent increase in purchases was the first gain in three months, the Commerce Department said today in Washington. Earnings climbed 1.4 percent, the most in a year, driving the savings rate to a 15-year high. Another report showed consumer sentiment rose in June to the highest level since February 2008.

Government efforts to restore the flow of credit and prop up incomes are making it possible for consumers to spend even as unemployment climbs to levels last seen in the early 1980s. At the same time, the wealth destruction caused by the housing slump may force households to keep rebuilding savings, indicating an economic recovery will be slow to develop. Continue

By Masaki Kondo and Toshiro Hasegawa

June 26 (Bloomberg) — Japanese stocks rose after prices for oil and metals jumped, raising the earnings outlook for resource-related companies.

Mitsubishi Corp., a Japanese trading company that gets more than half its sales from commodities, climbed 1.8 percent. Mitsui Mining & Smelting Co. jumped 2.1 percent. Nippon Electric Glass Co. gained 5.8 percent after increasing its earnings target. Bridgestone Corp., the world’s largest tiremaker, was set to jump after narrowing its loss estimate.

The Nikkei 225 Stock Average climbed 32.21, or 0.3 percent, to 9,828.29 as of 9:05 a.m. in Tokyo. The broader Topix index rose 6.43, or 0.7 percent, to 926.20.

“Uncertainty over the global economy has receded,” said Kazuhiro Takahashi, a general manager at Tokyo-based Daiwa Securities SMBC Co. “Business conditions aren’t as bad as some have feared and I’m expecting companies to lift their targets.” Continue

June 24 (Bloomberg) — The Federal Reserve refrained from increasing its $1.75 trillion bond-purchase program, said the pace of economic contraction is slowing and predicted inflation will remain “subdued for some time.”

“Substantial resource slack is likely to dampen cost pressures, and the Committee expects that inflation will remain subdued for some time,” the Federal Open Market Committee said in a statement after a two-day meeting in Washington where it also kept the benchmark interest rate between zero and 0.25 percent. The rate will stay at “exceptionally low levels” for an “extended period.”

Chairman Ben S. Bernanke is watching to see how quickly the economy can recover from the deepest recession in five decades: Orders for durable goods unexpectedly rose in May, a government report showed today, while unemployment continues to climb. The Fed also wants to quell concerns that the $1 trillion expansion in its balance sheet will fuel inflation, pushing bond yields higher and crippling any rebound in the economy. Continue

By Shani Raja

June 24 (Bloomberg) — Asian stocks rose, led by commodity producers, as higher oil and copper prices in New York boosted earnings prospects.

Rio Tinto Group, the world’s third-largest mining company, gained 2.5 percent in Sydney, while Inpex Corp., Japan’s largest oil explorer, climbed 2 percent in Tokyo. Showa Shell Sekiyu KK, a Japanese refiner and solar-equipment maker, surged 8.1 percent after saying it will build solar power plants in Saudi Arabia with state-owned Saudi Arabian Oil Co.

The MSCI Asia Pacific Index gained 0.3 percent to 99.95 as of 9:37 a.m. in Tokyo. The gauge retreated by the most since May 14 yesterday as a World Bank forecast for a deeper global recession triggered a sell-off in commodities. Stocks in the gauge traded at 22.83 times estimated earnings yesterday, the lowest level since May 26, according to Bloomberg data. Continue

By Shani Raja

June 23 (Bloomberg) — Asian stocks extended a slump in the U.S. and Europe, led by mining companies and automakers, on concern the global economic recovery will falter.

BHP Billiton Ltd., the biggest mining company globally, sank 3.8 percent in Sydney after the World Bank’s forecast of a deeper recession sparked a slump in commodity prices. Japan’s Mitsubishi Corp., a trading company that gets almost half its sales from resources, lost 5.5 percent. Honda Motor Co., which gets 45 percent of its sales from North America, sank 2.7 percent in Tokyo.

“The World Bank has ostensibly poured a big jug of ice- cold water over those looking for a bounce in economic growth globally,” said Tim Schroeders, who helps manage $1 billion at Pengana Capital Ltd. in Melbourne. “Given the muted growth outlook, the focus will now switch onto the appropriateness of valuations.” Continue