Money Daily Brief: US service sector expands
Major Asian stock indexes fell on concerns about weak US labor markets.
Updated 11:05 a.m. (15:05 UTC)
• US service sector expands: For the first time in a year, more service firms are expanding than contracting. The ISM non-manufacturing index hit 50.9 percent in September, up from 48.4 percent in August, even though job losses as a whole spiked to 263,000 last month. Many analysts predicted a more modest rise to 50 percent.
• Jobs report fallout: Asian markets closed mostly down, chilled by Friday’s weak US unemployment report, which caused investors to question the strength and speed of the global economic recovery. Crude oil was trading down for a second day in a row on similar concerns. European stocks were up in late morning trading after three down sessions, buoyed by speculation that a forthcoming report would show US services industries stabilized.
• Watchdog criticizes US Treasury: Bailout inspector general Neil Barofsky said Treasury Department officials, eager to stabilize the markets a year ago, painted too rosy a picture about the health of financial firms that got federal bailouts. Then-Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke were concerned about the finances of some of the nine banks the government bailed out, according to the audit. But the watchdog found no evidence that they pressured Bank of America to go through with its purchase of Merrill Lynch, despite big losses at the trading firm that weren't made public.
• Telecom merger: Norway's Telenor ASA and Russian conglomerate Alfa group announced a merger of their telecommunications operations in Russia and the Ukraine, ending a five-year feud over control of the mobile companies.
• HSBC sells property: Europe's largest bank sold its New York headquarters building for $330 million. HSBC announced earlier this year that it might sell its London, New York, or Paris headquarters, raising up to $4 billion in funds to offset losses at its US consumer-lending arm.
• In my backyard: Bank of America will select an emergency CEO this week who would take over if legal troubles forced Ken Lewis to step down before year-end, the Wall Street Journal reported. The contingency planning was spurred by a federal judge’s rejection of the bank's proposed settlement with the Securities Exchange Commission and news that New York's attorney general might file civil securities fraud charges against Mr. Lewis.
-- Husna Haq is a Monitor correspondent based in Boston. For a look at the recession's toll on state and local governments, click on Not safe from layoffs in this recession: the public sector.