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NEW YORK | Fri Jul 30, 2010 2:34pm EDT
NEW YORK (Reuters) – Stocks fell on Friday, rebounding for a second day in a row from more substantial losses, as concerns about slower economic growth held trading to a tight range.
Stocks were down by 1 percent early in the session after the release of data showing U.S. gross domestic product growth slowed in the second quarter. A separate report later showed business activity in the U.S. Midwest grew more than expected this month, spurring buying that helped equities rebound.
The S&P 500 Index has found support in the 1,088 to 1,090 range as economic data have come in mixed but earnings have shown strength.
“We’re reading through each piece of data to see if we’re on the upper end or the lower end of the trading range,” said Joseph Battipaglia, market strategist with Stifel Nicolaus in Yardley, Penn.
Cheap money means big borrowing by America’s largest corporations. A $450 million bond issue by McDonald’s (MCD) Wednesday will pay a record low 3.5% yield on 10-year debt, and other companies are also getting in on the low interest charged by the current capital markets.
According to The Wall Street Journal, corporate borrowing is surging even as investors see lower yields. Corporate debt issues are already at $1.4 trillion worldwide. That’s less than the $2.1 trillion worth of issues for the same period a year ago, but the European debt crisis had put the brakes on borrowing for most of May and June.
Although many U.S. companies are cash rich, low interest rates are spurring many to refinance existing debt, pushing down yields for bond investors.
Below is a list of the 12 largest bond issues so far this year.
People in the UK continue to be plagued by debt problems, new figures have suggested.
According to Credit Action’s monthly statistics, total UK personal debt currently stands at £1,457 billion, while the 12-month growth remained at 0.8 per cent.
It means individuals still owe more than the whole countries produces in a year.
Moreover, the report showed total lending in June increased by £0.6 billion.
It forecast 391 individuals will be declared insolvent or bankrupt every day of the year, which works out at one person every 51 seconds of the working day.
And in England and Wales, Citizen Advice Bureaus dealt with 9,562 new debt problems every 24 hours.
According to the report, 1,000 consumers are looking to gain some form of debt rescheduling during each working day, while UK residents saved an average of just £2.76 per diem.
The average household debt now stands at £8,650 excluding mortgages, but escalates to £57,809 when property repayments are taken into consideration.
It means the average owed by every adult across the nation is £29,928 – including mortgages – which equates at 127 per cent of average earnings.
Interest repayments on personal debt in Britain were £67.3 billion in the last 12 months, with the average amount paid by each household calculating at approximately £2,669 each year.
Furthermore, consumer borrowing via such means as credit cards and retail finance deals rose to £4,478 per UK adult at the end of June.
Recent figures from the Insolvency Service showed bankruptcy among women to be of growing concern, as the amount of females who found themselves in this situation swelled by 28 per cent last year.
WASHINGTON | Sun Jul 25, 2010 3:01pm EDT
WASHINGTON (Reuters) – What’s odd about this scenario?
German business confidence is soaring while U.S. consumer sentiment sinks.
Britain’s second-quarter economic growth was almost twice as fast as expected, the strongest in four years.
Meanwhile, economists have steadily marked down forecasts for Friday’s U.S. gross domestic product report.
What happened to Europe being the weak link in the global economic recovery?
Whatever the explanation and despite the divergence, there are signs that both regions will cool down in the second half of the year.
The U.S. “economy entered the second quarter with plenty of momentum but exited with very little,” said IHS Global Insight economist Brian Bethune.
Economists polled by Reuters think U.S.
At first I thought Kevin Drum was re-branding “laissez faire” into “economic nihilism.“ But after reading the linked article, which blames deficits 100% on Republican tax-cutting rather than either Democratic or Republican free spending, I suppose he is really equating the policy of opposing tax increases to economic nihilism. For this to be true, given the definition of nihilism, it means that all meaning, purpose, and everything of intrinsic value flows from the government. Denying government more money = nihilistic negation of reality.