WASHINGTON (Reuters) - Republican presidential candidate Mitt Romney demanded President Barack Obama apologize on Friday for his campaign's assault over Romney's time at a private equity firm that outsourced U.S. jobs, as he tried to recover from a week-long pounding on the issue.
Romney went on a coordinated campaign, appearing on all U.S. television networks, to respond to charges from the Obama team that have again put the Republican in a defensive posture and kept him from focusing on Obama's handling of the U.S. economy and high 8.2 percent unemployment.
The presumptive Republican presidential nominee has appeared flatfooted in responding to the Democrats' accusations, so much so that some Republicans have said publicly Romney needs to move more quickly to avoid damaging his bid to oust Obama in the November 6 election.
What drew Romney's ire in particular was a charge from Obama deputy campaign manager Stephanie Cutter that Romney might have committed a felony by misrepresenting his position at the private equity firm Bain to the Securities and Exchange Commission.
'It's ridiculous,' Romney told Fox News in response to the charge. 'And of course it's beneath the dignity of the presidency and of his campaign.'
The Boston Globe reported that Romney did not quit running Bain Capital until 2002, three years after he has said he left the company.
Timing matters because Romney has said he left Bain in 1999 and thus was not responsible for bankruptcies and layoffs at Bain-owned businesses after that time, which Obama's re-election campaign have used to question the Republican's track record.
White House spokesman Josh Earnest, traveling with Obama in Virginia, declined comment on Romney's demand for an apology.
Romney told ABC News that Obama 'needs to rein in these people who are running out of control.'
'He (Obama) sure as heck ought to say that he's sorry for the kinds of attacks that are coming from his team,' Romney said.
Obama himself got into the act on Friday, saying Romney should answer questions about whether he worked for Bain longer than previously described.
Romney has said he left the firm in 1999, when he was tapped to lead the 2002 Salt Lake City Olympics. But the Boston Globe reported on Thursday that public records indicate he was still registered as a top manager at Bain for three more years.
Romney has used his time at Bain to argue that as a businessman he is best equipped to help trigger job growth in the United States.
'Ultimately Mr. Romney, I think, is going to have to answer those questions, because if he aspires to being president one of the things you learn is, you are ultimately responsible for the conduct of your operations,' Obama told ABC television affiliate WJLA in an interview.
Citing SEC documents, the newspaper said Romney remained Bain's 'sole stockholder, chairman of the board, chief executive officer and president' until 2002, when he and the firm finalized a severance deal.
(Editing by Alistair Bell and Lisa Shumaker)
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Friday, July 13, 2012
JPMorgan, Wells results boosted by mortgage business
(Reuters) - JPMorgan Chase & Co and Wells Fargo & Co reported strong growth in their mortgage lending businesses and lower loan losses on Friday, offering signs of improvement in the U.S. economy.
The banking giants cited increases in mortgage originations and a strong pipeline of applications, spurred by low interest rates and a government program intended to spur refinancing.
Wells, the largest U.S. mortgage lender, and JPMorgan, the largest U.S. bank, also said charge-offs for bad loans declined while demand for new debt, ranging from auto loans to commercial loans, increased. But the mortgage business was a particularly bright spot for both banks.
'We've seen increases in sales and pricing in markets throughout the country, even in some of the hardest-hit areas during the downturn,' said Wells Fargo Chief Executive John Stumpf.
Wells reported a 17 percent increase in quarterly profit, as mortgage originations more than doubled from a year ago, to $131 billion. The bank also cited record quarterly applications, and said it had 29 percent more unclosed loans in its pipeline than at the end of the previous quarter.
'The standout I'm seeing with Wells Fargo is the mortgage banking,' said Shannon Stemm, a banking analyst with Edward Jones. 'That has been such a driver for them over the long term, and refinancing is really pumping things up.'
The San Francisco-based bank posted mortgage banking income of $2.9 billion, up from $1.6 billion a year ago and up slightly from the first quarter.
The gains came in spite of higher loss provisions for bad mortgages Wells Fargo repurchased from investors. The bank also set aside $175 million to resolve Justice Department allegations that it charged African-Americans and Hispanics higher rates and fees on mortgages during the housing boom.
JPMorgan's overall profits declined because of huge losses on risky derivatives trades in its investment division. But net income from the bank's retail financial services business, which includes mortgages, nearly quintupled to $2.3 billion.
JPMorgan's mortgage banking originations rose 29 percent, with its mortgage production and servicing business reporting net income of $604 million, compared with a net loss of $649 million a year earlier. Other indicators of loan demand, including credit card sales volumes, commercial banking loan growth and loan charge-offs, also showed improvement.
JPMorgan set aside $214 million for credit losses, compared with $1.8 billion a year ago.
Asked by an analyst about the 'disconnect' between JPMorgan's underlying loan growth trends and negative economic news, CEO Jamie Dimon said U.S. companies are faring relatively well.
'The fact is the underpinning(s) of the American economy aren't that bad,' Dimon said. 'Corporate America, Middle Market companies, small business are OK, a lot of liquidity. There's not a huge order book so sales aren't growing dramatically. We have slow, modest growth.'
Wells Fargo said it would not meet a previously stated cost-cutting target for the fourth quarter because it must pay more compensation than expected due to higher revenues, particularly in its mortgage business. The bank added more than 2,000 employees during the quarter as it scrambled to capture more loans.
'We will not pass up revenue opportunities in order to meet a specific expense target number,' said Chief Financial Officer Tim Sloan.
The bank previously said it expected expenses to fall to $11.25 billion by the fourth quarter as part of an efficiency push. On Friday, Wells said it would miss that target even though expenses would continue to trend down.
Overall, Wells Fargo said second-quarter net income was $4.6 billion, or 82 cents a share, compared with $3.9 billion, or 70 cents a share, a year earlier.
Analysts' average estimate was 81 cents a share, according to Thomson Reuters I/B/E/S.
Earnings benefited from the release of $400 million in reserves previously set aside for loan losses.
Revenue was $21.3 billion, up from $20.4 billion a year ago. Expenses totaled $12.4 billion, down slightly from a year earlier.
Operating losses, including litigation expenses, increased 22 percent to $524 million, including the settlement with the Justice Department.
The bank also set aside more reserves to handle requests by government-backed entities that Wells Fargo buy back soured mortgage loans sold off during the housing boom. That expense, primarily for loans sold between 2006 and 2008, climbed to $669 million in the second quarter from $430 million in the first quarter.
Wells Fargo's total loans increased by $8.7 billion from the first quarter to $775.2 billion, boosted mostly by $6.9 billion in business and foreign loans acquired from BNP Paribas and WestLB. In the past year, the bank has been active in buying portfolios from retrenching banks that are selling assets to boost capital.
JPMorgan reported net income of $4.96 billion, or $1.21 a share, including a $4.4 billion trading loss. That compared with $5.43 billion, or $1.27 a share, a year earlier.
Even as JPMorgan executives briefed analysts and reporters on the trading losses, they emphasized the strength in more traditional lending and deposit-taking, which Dimon attributed to modest economic growth and market share gains.
The bank reported its eight consecutive quarter of commercial loan growth, as well as the jump in mortgage originations and a 12 percent rise in credit-card sales volume.
JPMorgan's total loans rose by $6.6 billion in the quarter, to $727.6 billion. Consumer loan balances declined overall due to charge-offs, but that decline was offset by strong growth in wholesale loans.
(Reporting By Rick Rothacker in Charlotte, North Carolina, and Lauren Tara LaCapra in New York; editing by John Wallace)
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The banking giants cited increases in mortgage originations and a strong pipeline of applications, spurred by low interest rates and a government program intended to spur refinancing.
Wells, the largest U.S. mortgage lender, and JPMorgan, the largest U.S. bank, also said charge-offs for bad loans declined while demand for new debt, ranging from auto loans to commercial loans, increased. But the mortgage business was a particularly bright spot for both banks.
'We've seen increases in sales and pricing in markets throughout the country, even in some of the hardest-hit areas during the downturn,' said Wells Fargo Chief Executive John Stumpf.
Wells reported a 17 percent increase in quarterly profit, as mortgage originations more than doubled from a year ago, to $131 billion. The bank also cited record quarterly applications, and said it had 29 percent more unclosed loans in its pipeline than at the end of the previous quarter.
'The standout I'm seeing with Wells Fargo is the mortgage banking,' said Shannon Stemm, a banking analyst with Edward Jones. 'That has been such a driver for them over the long term, and refinancing is really pumping things up.'
The San Francisco-based bank posted mortgage banking income of $2.9 billion, up from $1.6 billion a year ago and up slightly from the first quarter.
The gains came in spite of higher loss provisions for bad mortgages Wells Fargo repurchased from investors. The bank also set aside $175 million to resolve Justice Department allegations that it charged African-Americans and Hispanics higher rates and fees on mortgages during the housing boom.
JPMorgan's overall profits declined because of huge losses on risky derivatives trades in its investment division. But net income from the bank's retail financial services business, which includes mortgages, nearly quintupled to $2.3 billion.
JPMorgan's mortgage banking originations rose 29 percent, with its mortgage production and servicing business reporting net income of $604 million, compared with a net loss of $649 million a year earlier. Other indicators of loan demand, including credit card sales volumes, commercial banking loan growth and loan charge-offs, also showed improvement.
JPMorgan set aside $214 million for credit losses, compared with $1.8 billion a year ago.
Asked by an analyst about the 'disconnect' between JPMorgan's underlying loan growth trends and negative economic news, CEO Jamie Dimon said U.S. companies are faring relatively well.
'The fact is the underpinning(s) of the American economy aren't that bad,' Dimon said. 'Corporate America, Middle Market companies, small business are OK, a lot of liquidity. There's not a huge order book so sales aren't growing dramatically. We have slow, modest growth.'
Wells Fargo said it would not meet a previously stated cost-cutting target for the fourth quarter because it must pay more compensation than expected due to higher revenues, particularly in its mortgage business. The bank added more than 2,000 employees during the quarter as it scrambled to capture more loans.
'We will not pass up revenue opportunities in order to meet a specific expense target number,' said Chief Financial Officer Tim Sloan.
The bank previously said it expected expenses to fall to $11.25 billion by the fourth quarter as part of an efficiency push. On Friday, Wells said it would miss that target even though expenses would continue to trend down.
Overall, Wells Fargo said second-quarter net income was $4.6 billion, or 82 cents a share, compared with $3.9 billion, or 70 cents a share, a year earlier.
Analysts' average estimate was 81 cents a share, according to Thomson Reuters I/B/E/S.
Earnings benefited from the release of $400 million in reserves previously set aside for loan losses.
Revenue was $21.3 billion, up from $20.4 billion a year ago. Expenses totaled $12.4 billion, down slightly from a year earlier.
Operating losses, including litigation expenses, increased 22 percent to $524 million, including the settlement with the Justice Department.
The bank also set aside more reserves to handle requests by government-backed entities that Wells Fargo buy back soured mortgage loans sold off during the housing boom. That expense, primarily for loans sold between 2006 and 2008, climbed to $669 million in the second quarter from $430 million in the first quarter.
Wells Fargo's total loans increased by $8.7 billion from the first quarter to $775.2 billion, boosted mostly by $6.9 billion in business and foreign loans acquired from BNP Paribas and WestLB. In the past year, the bank has been active in buying portfolios from retrenching banks that are selling assets to boost capital.
JPMorgan reported net income of $4.96 billion, or $1.21 a share, including a $4.4 billion trading loss. That compared with $5.43 billion, or $1.27 a share, a year earlier.
Even as JPMorgan executives briefed analysts and reporters on the trading losses, they emphasized the strength in more traditional lending and deposit-taking, which Dimon attributed to modest economic growth and market share gains.
The bank reported its eight consecutive quarter of commercial loan growth, as well as the jump in mortgage originations and a 12 percent rise in credit-card sales volume.
JPMorgan's total loans rose by $6.6 billion in the quarter, to $727.6 billion. Consumer loan balances declined overall due to charge-offs, but that decline was offset by strong growth in wholesale loans.
(Reporting By Rick Rothacker in Charlotte, North Carolina, and Lauren Tara LaCapra in New York; editing by John Wallace)
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Obama takes Romney's economic credentials to task
President Barack Obama has defended taking Mitt Romney's economic record to task, suggesting his Republican rival's success in business does not necessarily mean he would create jobs if elected, according to comments released Friday.
Romney, a former entrepreneur who made a fortune at his firm Bain Capital, has played up his experience in the private sector in a bid to oust Obama on November 6, arguing it makes him qualified to put more Americans back to work at a time when US unemployment is at 8.2 percent.
Obama, however, said close scrutiny of Romney's overall record was merited because his opponent was using his business background and ability to become 'Mr Fix-It on the economy,' as 'his main calling card.'
'I do not think at all it disqualifies him,' Obama told broadcaster CBS in an interview taped Thursday, justifying his jabs at Romney's career.
'I think it is entirely appropriate to look at that record and see whether, in fact, his focus was creating jobs and he successfully did that. And when you look at the record, there are questions there that have to be asked.'
Obama's comments came after his campaign launched a fierce attack on Romney Thursday, accusing the former governor of Massachusetts of lying about how long he remained head of Bain Capital.
His team seized on a Boston Globe report citing government records that appear to show he stayed in control of the private equity firm for three years beyond the 1999 date during which he said he had stepped down.
What followed was a withering assault on Romney, with his campaign warning the challenger may have committed a felony if he misrepresented his position at Bain to federal regulators.
The 1999 date could be important, as Bain Capital is alleged to have invested in firms that moved workers overseas after that year and Obama supporters are attempting to paint Romney as a destroyer of jobs.
'The point I've made there in the past is, if you're head of a large private equity firm or a hedge fund, your job is to make money,' Obama said in the same CBS interview, again addressing Romney's tenure at Bain Capital.
'It's not even to create a successful business. It's to make sure that you are maximizing returns for your investor.'
The latest attacks by Democrats follow others lashing out at the multimillionaire for only releasing his tax returns for 2010 -- in addition to an estimate for 2011 -- amid speculation about his offshore accounts.
Former president Bill Clinton, a big-hitter in the Obama camp, weighed in on the issue Friday, telling broadcaster NBC he was 'a little surprised' that Romney had not released more returns.
'That kind of perplexed me because this is the first time in, I don't know, more than 30 years that anybody running for president has only done that,' he said.
Romney's wealth, estimated to be around $250 million, has repeatedly surfaced as an issue during the campaign as Obama tries to paint his rival as out of touch with ordinary Americans.
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Romney, a former entrepreneur who made a fortune at his firm Bain Capital, has played up his experience in the private sector in a bid to oust Obama on November 6, arguing it makes him qualified to put more Americans back to work at a time when US unemployment is at 8.2 percent.
Obama, however, said close scrutiny of Romney's overall record was merited because his opponent was using his business background and ability to become 'Mr Fix-It on the economy,' as 'his main calling card.'
'I do not think at all it disqualifies him,' Obama told broadcaster CBS in an interview taped Thursday, justifying his jabs at Romney's career.
'I think it is entirely appropriate to look at that record and see whether, in fact, his focus was creating jobs and he successfully did that. And when you look at the record, there are questions there that have to be asked.'
Obama's comments came after his campaign launched a fierce attack on Romney Thursday, accusing the former governor of Massachusetts of lying about how long he remained head of Bain Capital.
His team seized on a Boston Globe report citing government records that appear to show he stayed in control of the private equity firm for three years beyond the 1999 date during which he said he had stepped down.
What followed was a withering assault on Romney, with his campaign warning the challenger may have committed a felony if he misrepresented his position at Bain to federal regulators.
The 1999 date could be important, as Bain Capital is alleged to have invested in firms that moved workers overseas after that year and Obama supporters are attempting to paint Romney as a destroyer of jobs.
'The point I've made there in the past is, if you're head of a large private equity firm or a hedge fund, your job is to make money,' Obama said in the same CBS interview, again addressing Romney's tenure at Bain Capital.
'It's not even to create a successful business. It's to make sure that you are maximizing returns for your investor.'
The latest attacks by Democrats follow others lashing out at the multimillionaire for only releasing his tax returns for 2010 -- in addition to an estimate for 2011 -- amid speculation about his offshore accounts.
Former president Bill Clinton, a big-hitter in the Obama camp, weighed in on the issue Friday, telling broadcaster NBC he was 'a little surprised' that Romney had not released more returns.
'That kind of perplexed me because this is the first time in, I don't know, more than 30 years that anybody running for president has only done that,' he said.
Romney's wealth, estimated to be around $250 million, has repeatedly surfaced as an issue during the campaign as Obama tries to paint his rival as out of touch with ordinary Americans.
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China data buoys stocks, euro under pressure
LONDON (Reuters) - World stocks and oil rose on Friday after China GDP data soothed worries of a drastic hit to the world's No. 2 economy, while the euro hovered near two-year lows against the dollar after Moody's downgrade of Italy added to pressure on the single currency.
Brent crude oil futures rose $1 to above $102 a barrel after second-quarter Chinese GDP data came in line with expectations, offsetting concerns that a bigger slowdown could undermine fragile global growth.
Fresh attempts by the United States to crack down on Iranian crude exports also helped support Brent.
While the 7.6 percent annual increase data confirms China is growing at the slowest pace in three years, it increases hopes for more stimulus policies.
'China has enough room for stimulation now and that is important for equity markets,' Achim Matzke, European stock indexes analyst at Commerzbank, said. 'China's CPI and PPI is coming down so that gives room for interest rate reduction and that is more important for equity markets going forward.'
Analysts and traders said market sentiment had improved across the commodities complex after Chinese GDP came in. On metal markets, copper, seen as a key growth barometer, saw 3-month futures rallying to a one-week high.
That helped the main world equity index <.MIWD00000PUS> recoup some of the previous session's 1 percent losses, gaining 0.32 percent. The index nevertheless looked set to end the week 1.7 percent down.
On European equities, markets opened stronger with the FTSE Eurofirst 300 index of top shares <.FTEU3> up 0.65 percent at 1030 GMT. Emerging market equities <.MSCIEF> rose 0.82 percent. The China growth data also boosted the Australian dollar, which benefits from growth in its biggest export market.
Wall Street also looked set to a higher open on Friday.
Focus is shifting now to the big U.S. corporate results for the second quarter, with JP Morgan, Wells Fargo and Google reporting results on Friday.
U.S. corporate outlooks are at their most negative in nearly four years and companies that have already reported so far this season have shown lacklustre growth, many of them citing Europe's woes as a prime concern.
ITALY CUT
Despite the surprise two-notch downgrade by Moody's, Italy managed to auction three-year debt at lower borrowing costs, helping the euro hold steady on the day at $1.2202.
The single currency stayed within sight of a two-year trough of $1.2166 hit on trading platform EBS the previous day and was on track for its second straight week of losses. It fell to $1.2181 in the Asian session after Moody's cut.
'The auction was not too bad but the bigger news is the double notch downgrade rather than an auction that has gone okay,' said Derek Halpenny, European head of FX research at Bank of Tokyo Mitsubishi.
'Disappointing economic growth, coupled with fragile investor confidence and high peripheral yields remain ahead for the rest of the year. Our target is for the euro to drift to $1.15 in three to six months time.
The downgrade serves as a potent reminder that despite recent efforts by euro zone policymakers, the single currency bloc and especially its periphery, remain mired in debt. The yield difference between 10-year Italian government bonds and their German equivalent remained at around 480 basis points.
Ten-year Italian government bond yields rose 9 basis points to 6.001 percent.
The Moody's downgrade also boosted appetite for safe-haven German Bunds, with bund futures up 23 ticks to 145.07 compared with 144.84 at Thursday's settlement. Italian BTP futures slipped 64 ticks to 99.24.
(Additional reporting by Sujata Rao, Emelia Sithole-Matarise and Anirban Nag; editing by Philippa Fletcher)
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Brent crude oil futures rose $1 to above $102 a barrel after second-quarter Chinese GDP data came in line with expectations, offsetting concerns that a bigger slowdown could undermine fragile global growth.
Fresh attempts by the United States to crack down on Iranian crude exports also helped support Brent.
While the 7.6 percent annual increase data confirms China is growing at the slowest pace in three years, it increases hopes for more stimulus policies.
'China has enough room for stimulation now and that is important for equity markets,' Achim Matzke, European stock indexes analyst at Commerzbank, said. 'China's CPI and PPI is coming down so that gives room for interest rate reduction and that is more important for equity markets going forward.'
Analysts and traders said market sentiment had improved across the commodities complex after Chinese GDP came in. On metal markets, copper, seen as a key growth barometer, saw 3-month futures rallying to a one-week high.
That helped the main world equity index <.MIWD00000PUS> recoup some of the previous session's 1 percent losses, gaining 0.32 percent. The index nevertheless looked set to end the week 1.7 percent down.
On European equities, markets opened stronger with the FTSE Eurofirst 300 index of top shares <.FTEU3> up 0.65 percent at 1030 GMT. Emerging market equities <.MSCIEF> rose 0.82 percent. The China growth data also boosted the Australian dollar, which benefits from growth in its biggest export market.
Wall Street also looked set to a higher open on Friday.
Focus is shifting now to the big U.S. corporate results for the second quarter, with JP Morgan, Wells Fargo and Google reporting results on Friday.
U.S. corporate outlooks are at their most negative in nearly four years and companies that have already reported so far this season have shown lacklustre growth, many of them citing Europe's woes as a prime concern.
ITALY CUT
Despite the surprise two-notch downgrade by Moody's, Italy managed to auction three-year debt at lower borrowing costs, helping the euro hold steady on the day at $1.2202.
The single currency stayed within sight of a two-year trough of $1.2166 hit on trading platform EBS the previous day and was on track for its second straight week of losses. It fell to $1.2181 in the Asian session after Moody's cut.
'The auction was not too bad but the bigger news is the double notch downgrade rather than an auction that has gone okay,' said Derek Halpenny, European head of FX research at Bank of Tokyo Mitsubishi.
'Disappointing economic growth, coupled with fragile investor confidence and high peripheral yields remain ahead for the rest of the year. Our target is for the euro to drift to $1.15 in three to six months time.
The downgrade serves as a potent reminder that despite recent efforts by euro zone policymakers, the single currency bloc and especially its periphery, remain mired in debt. The yield difference between 10-year Italian government bonds and their German equivalent remained at around 480 basis points.
Ten-year Italian government bond yields rose 9 basis points to 6.001 percent.
The Moody's downgrade also boosted appetite for safe-haven German Bunds, with bund futures up 23 ticks to 145.07 compared with 144.84 at Thursday's settlement. Italian BTP futures slipped 64 ticks to 99.24.
(Additional reporting by Sujata Rao, Emelia Sithole-Matarise and Anirban Nag; editing by Philippa Fletcher)
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Thursday, July 12, 2012
Asia stocks rise as China growth slows as expected
SINGAPORE (AP) - Asian stock markets were mostly higher Friday after China said its economy grew in the second quarter at its slowest pace since 2009, numbers in line with analyst expectations.
China's gross domestic product expanded 7.6 percent in the April to June period from the same period a year earlier, down from 8.1 percent growth in the first quarter. China also reported that retail sales and factory output growth slowed in June.
Equities in Asia had mostly fallen the previous few days amid speculation that China's growth may have slowed more than the consensus 7.6 percent forecast. Some analysts say expected interest rate cuts and fiscal stimulus spending by China should spur lending, investment and stronger economic growth in the second half of the year.
'All this should be positive for GDP growth in the next few quarters,' said Mark Williams, chief Asian economist with Capital Economics. 'Much of the impact of stronger lending over the next few months will be felt in 2013.'
Williams said he expects China's economy to grow 8 percent this year and next.
Japan's Nikkei 225 index was down 0.1 percent to 8,715.79 while Hong Kong's Hang Seng rose 0.2 percent at 19,068.54.
South Korea's Kospi gained 0.5 percent to 1,794.67. Australia's S&P/ASX 200 advanced 0.6 percent to 4,090.70 and China's Shanghai Composite slid 0.1 percent to 2,182.82.
Other analysts expect Chinese growth to continue to slow as consumer demand fails to keep up with industrial production capacity. China's GDP will likely average about 6 percent growth a year during the next five to 10 years, said Anil Gupta, a professor at the Smith School of Business at the University of Maryland.
'The days of 8 percent GDP growth in China are over,' said Gupta, who is a visiting professor at the INSEAD business school in Singapore. 'There is massive overcapacity in a lot of industries such as cement, steel and autos because the government kept providing cheap capital and everybody assumed that the 8 plus percent growth rate will go on forever.'
On Thursday, the Dow Jones industrial average closed down 0.3 percent at 12,573.27. The Standard & Poor's 500 fell 0.5 percent at 1,334.76. The Nasdaq composite was down 0.8 percent at 2,866.19.
Benchmark oil for August delivery was down 12 cents at $85.96 a barrel in electronic trading on the New York Mercantile Exchange. Crude rose 27 cents to settle at $86.08 on Thursday in New York.
In currencies, the euro was little changed at $1.2200 from $1.2195 late Thursday in New York. The dollar was steady at 79.34 yen from 79.31 yen.
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China's gross domestic product expanded 7.6 percent in the April to June period from the same period a year earlier, down from 8.1 percent growth in the first quarter. China also reported that retail sales and factory output growth slowed in June.
Equities in Asia had mostly fallen the previous few days amid speculation that China's growth may have slowed more than the consensus 7.6 percent forecast. Some analysts say expected interest rate cuts and fiscal stimulus spending by China should spur lending, investment and stronger economic growth in the second half of the year.
'All this should be positive for GDP growth in the next few quarters,' said Mark Williams, chief Asian economist with Capital Economics. 'Much of the impact of stronger lending over the next few months will be felt in 2013.'
Williams said he expects China's economy to grow 8 percent this year and next.
Japan's Nikkei 225 index was down 0.1 percent to 8,715.79 while Hong Kong's Hang Seng rose 0.2 percent at 19,068.54.
South Korea's Kospi gained 0.5 percent to 1,794.67. Australia's S&P/ASX 200 advanced 0.6 percent to 4,090.70 and China's Shanghai Composite slid 0.1 percent to 2,182.82.
Other analysts expect Chinese growth to continue to slow as consumer demand fails to keep up with industrial production capacity. China's GDP will likely average about 6 percent growth a year during the next five to 10 years, said Anil Gupta, a professor at the Smith School of Business at the University of Maryland.
'The days of 8 percent GDP growth in China are over,' said Gupta, who is a visiting professor at the INSEAD business school in Singapore. 'There is massive overcapacity in a lot of industries such as cement, steel and autos because the government kept providing cheap capital and everybody assumed that the 8 plus percent growth rate will go on forever.'
On Thursday, the Dow Jones industrial average closed down 0.3 percent at 12,573.27. The Standard & Poor's 500 fell 0.5 percent at 1,334.76. The Nasdaq composite was down 0.8 percent at 2,866.19.
Benchmark oil for August delivery was down 12 cents at $85.96 a barrel in electronic trading on the New York Mercantile Exchange. Crude rose 27 cents to settle at $86.08 on Thursday in New York.
In currencies, the euro was little changed at $1.2200 from $1.2195 late Thursday in New York. The dollar was steady at 79.34 yen from 79.31 yen.
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Wednesday, July 11, 2012
Asian stocks fall amid China's slowing economy
Japan's Nikkei 225 index was down 1 percent to 8,765.38 while Hong Kong's Hang Seng plunged 1.8 percent at 19,065.66.
South Korea's Kospi slipped 0.7 percent to 1,813.76. Australia's S&P/ASX 200 dropped 0.5 percent at 4,075.70 and China's Shanghai Composite slid 0.9 percent to 2,155.43.
Europe's debt crisis and signs of weak growth in the United States are undermining demand for Chinese exports and have investors concerned that a slowdown in the world's second-largest economy could be worsening.
China is scheduled to announce GDP results for the April to June period Friday, and growth likely slowed to 7.9 percent, the worst reading since the aftermath of the 2008 global financial crisis, Singapore's DBS Bank said. China's economy grew 8.1 percent in the first quarter.
'Growth momentum in China has been clearly decelerating in the second quarter,' DBS said in a report. 'Lingering woes in Europe and downward revisions in U.S. growth projections of late point to more challenges ahead for exports.'
Equity markets in Asia also fell because the U.S. central bank gave no indication it plans to soon implement another round of Treasury bond purchases known as quantitative easing. The Federal Reserve released the minutes from its last meeting Wednesday, and investors were looking for signs that the Fed will take action to boost flagging economic growth.
Traders will be closely watching for any changes to Japan's monetary policy after its central bank ends a two-day meeting later Thursday. Bank of America Merrill Lynch said it expects the Bank of Japan to leave its benchmark lending rates unchanged as it waits for the Fed to decide about more quantitative easing.
On Wednesday, the Dow Jones industrial average closed down 0.4 percent at 12,604.53. The Standard & Poor's 500 was steady at 1,341.45. The Nasdaq composite was down 0.5 percent at 2,887.98.
Benchmark oil for August delivery was down 18 cents at $85.63 a barrel in electronic trading on the New York Mercantile Exchange. Crude rose $1.90 to settle at $85.81 on Wednesday in New York.
In currencies, the euro rose to $1.2237 from $1.2228 late Wednesday in New York. The dollar dropped to 79.53 yen from 79.67 yen.
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Japan Azumi: hope BOJ's 1 percent inflation target hit soon
TOKYO (Reuters) - Japanese Finance Minister Jun Azumi expressed hope on Thursday that the Bank of Japan will take measures to achieve its 1 percent inflation target at an early date.
'Japan will draw closer to exiting deflation if the BOJ offers financial support (to the economy) and tries to achieve its 1 percent inflation goal at an early date,' Azumi told a parliamentary committee meeting.
The central bank is expected to keep monetary policy on hold at a policy meeting ending on Thursday, convinced that robust domestic demand will help the country's economy resume a recovery.
(Reporting by Leika Kihara; Editing by Michael Watson)
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'Japan will draw closer to exiting deflation if the BOJ offers financial support (to the economy) and tries to achieve its 1 percent inflation goal at an early date,' Azumi told a parliamentary committee meeting.
The central bank is expected to keep monetary policy on hold at a policy meeting ending on Thursday, convinced that robust domestic demand will help the country's economy resume a recovery.
(Reporting by Leika Kihara; Editing by Michael Watson)
This news article is brought to you by DATING - where latest news are our top priority.
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