China considers same tax rate for domestic, overseas firms (AFP)
AFP - Chinese lawmakers have mulled a draft law that would impose a 25 percent income tax on both domestic and foreign firms, eliminating the preferential rate for overseas companies, according to state media.
Stocks tumble on Fannie, Freddie worries (Reuters)
2008.08.19By Steven C. Johnson 17 minutes ago
NEW YORK (Reuters) - U.S. stocks sank on Monday as the prospect of more losses from the mortgage crisis hurt the shares of banks and the two biggest home finance providers, pushing all three major indexes down about 1.5 percent.
Fannie Mae (FNM.N) and Freddie Mac (FRE.N) shed more than 20 percent each after Barron's reported that the U.S. Treasury may need to bail out the home finance giants, which could wipe out shareholders and effectively nationalize the government-sponsored enterprises.
The Treasury Department responded by saying it had no plans to use its authority to backstop either of the two companies, which own or guarantee about half of outstanding U.S. mortgages. Fannie Mae shares fell to their lowest level in nearly 20 years.
Shares of Lehman Brothers fell 7 percent after the Wall Street Journal reported analysts are bracing for the investment bank to report a third-quarter loss of at least $1.8 billion.
U.S. crude oil futures fell 90 cents to settle at $112.87 per barrel, although investors said its price fluctuations were taking a back seat to financial concerns.
"What we're learning is that the financial crisis is far from over and that earnings estimates are probably too high," said Jim Awad, chairman of W.P. Stewart Asset Management in New York. "When oil and the stock market go down together, you know there's real reason to worry."
The Dow Jones industrial average tumbled 180.51 points, or 1.55 percent, to 11,479.39. The Standard & Poor's 500 Index lost 19.60 points, or 1.51 percent, to 1,278.60. The Nasdaq Composite Index slid 35.54 points, or 1.45 percent, to 2,416.98.
For the Dow and the S&P, Monday was the worst day since August 7, while the Nasdaq chalked up its biggest daily decline since July 28.
The Standard & Poor's Financial Index was down 3.6 percent, reversing two consecutive sessions of gains.
Fannie Mae shares slid 22.3 percent to $6.15, while Freddie Mac shares plummeted 25 percent to $4.39, both on the New York Stock Exchange. Merrill Lynch slashed its price target on Freddie Mac to $5.75.
Adding to market anxiety was a report showing that home builder sentiment remained at a record low in August, depressed by ever-tightening lending conditions and a flood of foreclosed homes.
"We are still in the throes of the credit crisis," said Steve Goldman, market strategist at Weeden & Co in Greenwich, Connecticut. "There's risk that Fannie Mae and Freddie Mac may require capital from the government."
Lehman Brothers shares slid 7.1 percent to $15.03 on the NYSE. According to the Wall Street Journal, if losses keep piling up, Lehman could need to raise additional capital beyond the $6 billion it got in June.
Shares of Bank of America (BAC.N), the No. 2 U.S. bank, dropped 4.6 percent to $29.30 on the NYSE, while No. 1 U.S. bank Citigroup (C.N) fell 5 percent to $17.62. Both were among the top drags on the S&P.
Aluminum producer Alcoa (AA.N) was a top weight on the Dow, falling 2.2 percent to $31.11.
On Nasdaq, shares of Google (GOOG.O), the Web search company, fell 2.3 percent to $498.30.
Trading volume was light on the New York Stock Exchange, with about 984.31 million shares changing hands, sharply below last year's estimated daily average of roughly 1.90 billion, while on Nasdaq, about 1.68 billion shares traded, also well below last year's daily average of 2.17 billion.
Declining stocks outnumbered advancing ones by about 2.5 to 1 on the New York Stock Exchange, while on the Nasdaq, decliners beat advancers by a ratio of about 2 to 1.
(Additional reporting by Ellis Mnyandu; Editing by Jan Paschal)
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China says to continue stable monetary policy (Reuters)
Reuters - China's central bank said on Monday that it would continue to take steps to keep investment and credit growth in check, while pressing ahead with efforts to make the value of its currency more market-driven.
Reuters - China's central bank said on Monday that it would continue to take steps to keep investment and credit growth in check, while pressing ahead with efforts to make the value of its currency more market-driven.
Economic growth concerns drag down indexes (Reuters)
Reuters - U.S. stocks dropped on Friday as concerns about slowing economic growth persisted, causing investors to sell shares of bellwether companies such as plane maker Boeing Co. and leaving all three major indexes in the red for the week.
Reuters - U.S. stocks dropped on Friday as concerns about slowing economic growth persisted, causing investors to sell shares of bellwether companies such as plane maker Boeing Co. and leaving all three major indexes in the red for the week.
Russia tax office files suit vs PWC on YUKOS audit (Reuters)
Reuters - Russian tax authorities have filed a suit against the local branch of PricewaterhouseCoopers (PwC) accusing it of producing a false audit for fallen oil company YUKOS, the auditor said on Monday.
Reuters - Russian tax authorities have filed a suit against the local branch of PricewaterhouseCoopers (PwC) accusing it of producing a false audit for fallen oil company YUKOS, the auditor said on Monday.
Japan keeps view that economy is recovering (Reuters)
Reuters - The Japanese government kept its assessment of the economy unchanged in a monthly report on Monday, after downgrading it for the first time in almost two years last month.
Reuters - The Japanese government kept its assessment of the economy unchanged in a monthly report on Monday, after downgrading it for the first time in almost two years last month.
