Actual finance blog

French President Nicolas Sarkozy on Monday shrugged off his country’s loss of its prized AAA debt rating, saying the downgrade by rating agency Standard & Poor’s would change nothing.

The comments, his first since S&P lowered its score on France and eight European other countries on Friday, followed a successful auction by France of euro8.6 billion ($10.9 billion) in short-term debt Monday. The yields, the interest rates charged by investors on the debt, fell _ a sign investors still see the country as a good bet.

France won a further small reprieve Monday, when the Moody’s agency confirmed that it would keep its top rating. However, the S&P decision could seriously impair Sarkozy’s bid for re-election this spring.

Sarkozy told reporters he was unconcerned with the opinions of ratings agencies.

“We have to react to this (the downgrade) with calm, by taking a step back,” he said at a news conference with the new Spanish Prime Minister Mariano Rajoy. “At the core, my conviction is that it changes nothing.”

Sarkozy won support from Rajoy for a new European tax on financial transactions being pushed by France and Germany. Rajoy’s center-right government took power last month, and had not previously stated its position on the tax.

The French president said the ratings agencies’ decisions would not affect his policies, though he did acknowledge that France has work to do, saying that its deficits and spending were too high and that its growth was too slow.

He also noted that two of the three major agencies still rate France at triple-A, the highest rating. Fitch confirmed the rating last week. The S&P move was especially brutal for France, one of the world’s biggest economies and a financier of bailouts for smaller, poorer eurozone countries.

There are more government auctions in Europe this week, including longer-term offerings from France on Thursday, so the European debt crisis will never be too far from investors’ minds.

The news conference began combatively when Sarkozy refused to answer a question about whether France’s downgrade would affect its ability to lead Europe out of the crisis and if it had any connection with the meeting between the French, Italian and German leaders scheduled for next week being postponed.

Sarkozy and German Chancellor Angela Merkel have taken the lead in proposing solutions to the crisis and major decisions are often hashed out at their meetings ahead of European summits.

“You don’t have the latest information,” Sarkozy blithely told the reporter, apparently referring to Moody’s decision on Monday. The reporter rephrased the question two more times, but Sarkozy again refused to answer totally free credit score.

Later on, in response to other questions, he confirmed that the three-way summit would take place in February and spoke about the S&P downgrade.

Earlier, Sarkozy met with Spanish King Juan Carlos, who said he’s confident France and Spain would help Europe find a way out of the crisis.

The king said the two nations were “struggling together for the advance of a unified and prosperous Europe in solidarity that confronts the crisis with strength.”

Rajoy’s Socialist predecessor also supported the financial tax championed by Sarkozy, but was ousted from office by Spaniards angry about the country’s hurting economy and high unemployment.

The European Commission has estimated that the tax could raise as much as euro57 billion ($72.2 billion) a year, funds that could be used to help reduce the substantial budget deficits crippling European economies.

For the tax to be successful, however, it needs to be adopted by as many countries as possible. Sarkozy has said it might be enough to enact it among the 17-nation euro countries. Italian Prime Minister Mario Monti prefers applying it across the full 27-nation European Union, but that would be more difficult because of U.K. opposition.

Part of the reason for the tax would be to raise funds at a time when governments are struggling with high debts.

Moody’s cited France’s economic strength as a reason for affirming its top rating but said bleak growth prospects in France and the region present “risks to the French government’s fiscal consolidation plans.”

“France, like other eurozone sovereigns, may face a number of challenges in the coming months. The need to provide additional support to other European sovereigns or to its own banking system cannot be excluded,” Moody’s warned.

Moody’s said Monday it “will update the market during the first quarter of 2012 as part of the initiative to revisit the overall architecture of our sovereign ratings in the EU.”

Sarkozy’s challengers for the presidency have seized on the S&P downgrade as evidence that his policies are wrong-headed and ineffective.

It will be a bruising election battle for Sarkozy, a dynamic leader who has a strong international profile but is widely disliked at home. Leftists say he has coddled the rich, while many of those who supported him in his 2007 campaign say he hasn’t fulfilled his promises.

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Italy’s borrowing costs fell for a second day Thursday but the country’s new premier said his government has more to do before it convinces financial markets it can manage the heavy debts that have made it the focus of the eurozone crisis.

Mario Monti said he was encouraged by bond auctions at which interest costs demanded by bond investors eased. He said his government of technocrats, in office for just a month and a half following the resignation of Silvio Berlusconi, was preparing a package of measures to get the Italian economy moving again, including efforts to boost competition and liberalize the labor market.

“We absolutely don’t consider the market turbulence to be over,” he said at a news conference after the Italian treasury tapped investors for around euro7 billion ($9.2 billion).

The most keenly awaited result from Thursday’s batch of auctions was the euro2.5 billion ($3.3 billion) sale of ten-year bonds at an average yield of 6.98 percent.

That’s lower than the record 7.56 percent it had to pay at an equivalent auction last month, when investor concerns over the ability of the country to service its massive debts became particularly acute.

However, the country’s borrowing rate on the key 10-year bond remains uncomfortably close to the 7 percent level widely considered to be unsustainable in the long run. Greece, Ireland and Portugal all had to request financial bailouts after their 10-year bond yields pushed above 7 percent. In the secondary markets, Italy’s yield continues to hover around the 7 percent mark.

The 17 countries that use the euro are struggling with a crisis over heavy levels of government debt in several countries. Fears of default on those debts mean that bond investors demand ever higher interest. If a country can no longer borrow affordably to pay off bonds that are maturing, it winds up needing a bailout or defaulting.

Markets had grown fearful over the past few months over Italy’s massive debt burden of euro1.9 trillion ($2.5 trillion). Next year alone, the eurozone’s third largest economy has some euro330 billion ($431 bill.

That means Italy has far to go before it convinces markets it will avoid a disastrous default that could cause another banking crisis and sink the European and global economies.

Italy also sold euro2.54 billion ($3.3 billion) of 3 year bonds at an average interest rate of 5.62 percent, far lower than the 7.89 percent rate it had to pay last month. It also raised euro803 million ($1.05 billion) in the 7-year auction at a rate of 7.42 percent and euro1.18 billion ($1.54 billion) in nine-year bonds at a yield of 6.7 percent.

Thursday’s results come a day after Italy raised euro10.7 billion ($14 billion) in a pair of auctions, again at sharply lower rates than those it was forced to pay just a month ago.

The sharp decline in Italy’s borrowing costs over the past couple of days suggests that commercial banks from the 17 countries that use the euro may have diverted some money they tapped from emergency loans from the European Central Bank last week to buy the bonds of heavily indebted governments.

It may also suggest rising investor confidence in Italy’s recent efforts to reduce its long-term debt through tax increases, pension changes and spending cuts.

Monti’s technocratic government got parliamentary approval last week for more spending cuts and tax increases intended to save the country from financial disaster. One of the most controversial aspects of the austerity package is reform of Italy’s bloated pension system.

Economists say the long term problem is the country’s weak growth, since stronger growth both increases tax revenues and shrinks the size of debt relative to the economy. European Central Bank head Mario Draghi has said Italy must undertake deeper economic reforms to improve its economic performance.

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Developers asked the Ballwin Board of Aldermen Monday for help financing a development at the old Rothman Furniture location at Manchester Road and Seven Trails Drive.

The board has approved the development of a Wendy’s fast food restaurant and U-Gas at 14799 Manchester Road.

Project Manager William Biermann asked the city for financial support through a tax-increment financing district. Biermann said the taxes raised would be used to pay to remove dirt and materials excavated from the site payday loans for bad credit. He said the cost of the work had been miscalculated by up to $700,000.

The board may consider support in the future. Biermann said the project was going to be completed despite the cost mistake.

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Asian stocks fell Wednesday after the U.S. government revised its economic growth estimate downward and climbing yields on Spanish bonds magnified worries over Europe’s debt load.

Hong Kong’s Hang Seng index fell 1.7 percent to 17,941.62. South Korea’s Kospi lost 1.7 percent to 1,795.81 and Australia’s S&P ASX 200 index lost 1.2 percent to 4,082.40.

Japanese stock markets were closed for a public holiday.

Stocks on Wall Street slipped Tuesday after a government report showed the U.S. economy grew at a 2 percent annual rate from July through September, down from an initial estimate of 2.5 percent. Economists had expected the figure to remain the same.

The Dow Jones industrial average lost 0.5 percent to close at 11,493.72. The Standard & Poor’s 500 fell 0.4 percent to 1,188.04. The Nasdaq composite fell 0.1 percent to 2,521.28.

Higher borrowing costs for Spain, meanwhile, renewed worries about Europe’s debt crisis. The higher rates suggest that investors are still skeptical that the country will get its budget under control despite a new government coming to power this week.

Investors have been worried that Spain could become the next country to need financial support from its European neighbors if its borrowing rates climb to unsustainable levels.

Greece was forced to seek relief from its lenders after its long-term borrowing rates rose above 7 percent on the bond market. The rate on Spain’s own benchmark 10-year bond is dangerously close to that level, 6.58 percent.

But fears of the debt crisis spreading elsewhere in Europe were allayed somewhat after the International Monetary Fund announced a plan to provide quick cash on flexible terms to countries facing sudden financial stress.

Concerns remain that Europe’s debt crisis is pushing the region toward recession, which would slow industrial activity in Europe and in countries around the world that export to Europe.

Benchmark oil for January delivery fell 65 cents to $97.36 per barrel on the New York Mercantile Exchange. The contract rose $1.09 to finish at $98.01 per barrel on the Nymex on Tuesday.

In currency trading, the euro fell to $1.3466 from $1.3509 late Tuesday in New York. The dollar rose slightly to 76.99 yen from 76.97 yen.

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Searching for help, President Barack Obama lobbied the skeptical leaders of Russia and China on Saturday for support in keeping Iran from becoming a nuclear-armed menace to the world, hoping to yield a “common response” to a crisis that is testing international unity.

Yet Obama’s talk of solidarity with Russian President Dmitry Medvedev and Chinese President Hu Jintao was not publicly echoed by either man as Iran moved anew to the fore of the international stage _ and to the front of the fierce U.S. presidential race.

Obama, at home in Hawaii and holding forth on a world stage, also sought to show aggressiveness in fixing an economy that has weakened his standing with voters. He pushed Hu about American impatience with China’s economic policy, touted the makings of a new pacific trade zone and showered attention on the lucrative Asia-Pacific export market.

The United States’ vast worries about Iran grew starker with a report this week by the U.N. atomic agency that asserted in the strongest terms yet Iran is conducting secret work with the sole intent of developing nuclear arms. The U.S. claims a nuclear-armed Iran could set off an arms race among rival states and directly threaten Israel.

Russia and China remain a roadblock to the United States in its push to tighten international sanctions on Iran. Both are veto-wielding members of the U.N. Security Council and have shown no sign the new report will change their stand.

With Medvedev on the sidelines of an Asia-Pacific summit here, Obama said the two “reaffirmed our intention to work to shape a common response” on Iran.

Shortly after, Obama joined Hu, in a run of back-to-back diplomacy with the heads of two allies that hold complicated and at times divisive relations with the United States. Obama said that he and the Chinese leader want to ensure that Iran abides by “international rules and norms.”

Obama’s comments were broad enough to portray a united front without yielding any clear indication of progress. Medvedev, for his part, was largely silent on Iran during his remarks, merely acknowledging that the subject was discussed. Hu did not mention Iran at all.

White House aides insisted later that Russia and China remain unified with the United States and other allies in preventing Iran from developing nuclear weapons, and that Obama, Hu and Medvedev had agreed to work on the next steps. Deputy national security adviser Ben Rhodes said the new allegations about Iran’s programs demand an international response, and “I think the Russians and the Chinese understand that. We’re going to be working with them to formulate that response.”

As the president held forth on the world stage in his home state, Republicans vying to compete against Obama for the presidency unleashed withering criticism in a debate in South Carolina. It was a rare moment in which foreign policy garnered attention in a campaign dominated by the flagging U.S. economy.

“If we re-elect Barack Obama, Iran will have a nuclear weapon. And if you elect Mitt Romney, Iran will not have a nuclear weapon,” said Romney, the former Massachusetts governor. Minnesota Rep. Michele Bachmann warned that Iran’s attempt to develop a nuclear weapon is setting the table “for worldwide nuclear war against Israel.”

Iran has insisted its nuclear work is in the peaceful pursuit of energy and research, not weaponry.

U.S. officials have said the report by the International Atomic Energy Agency was unlikely to persuade China and Russia to support tougher sanctions on the Iranian government. But led by Obama, the administration is still trying to mount pressure on Iran, both through the United Nations and its own, for fear of what may come should Iran proceed undeterred.

More broadly, Obama sought Saturday to position the United States as a Pacific power determined to get more American jobs by tapping the explosive potential of the Asia-Pacific.

For businesses, he said, “this is where the action’s going to be.”

“There is no region in the world that we consider more vital than the Asia-Pacific region,” he told chief executives gathered for a regional economic summit.

The president went so far as to saying the United States had grown “a little bit lazy” in trying to attract business to the United States.

Obama’s aides said he was blunt with Hu in expressing concern about China’s undervalued currency, which keeps its exports cheaper and U.S. exports to China more expensive.

Deputy National Security Adviser Mike Froman said Obama made it clear that Americans are growing “increasingly impatient and frustrated” with the state of change in China economic policy. China had a $273 billion trade surplus with the U.S. last year and U.S. lawmakers say the imbalance hurts American manufacturers and taken away American jobs.

Underscoring the search for some good economic news ahead heading toward a re-election vote, Obama announced the broad outlines of an agreement to create a transpacific trade zone encompassing the United States and eight other nations. He said details must still be worked out, but said the goal was to complete the deal by next year.

“The United States is a Pacific power and we’re here to stay,” Obama said.

The eight countries joining the U.S. in the zone would be Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam. Obama also spoke with Japanese Prime Minister Yoshihiko Noda about Japan’s interest in joining the trade bloc.

In a sign of potential tension with China, Froman shrugged off complaints from China that it had not been invited to join the trade bloc.

He told reporters that China had not expressed interest in joining and said the trade group “is not something that one gets invited to. It’s something that one aspires to.”

Addressing the European debt crisis, Obama said he welcomed the new governments being formed in Greece and Italy, saying they should help calm world financial markets. Obama’s ever increasing attention to the Asia-Pacific is driven in part by Europe’s own financial woes and the U.S. need to get more aggressive in tapping its export options.

Obama will be in Honolulu through Tuesday, when he leaves for Australia before ending his trip in Indonesia.

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Banks and homebuilders pulled the stock market higher Tuesday, overriding early jitters about a potential stalemate in Europe over a bailout for Greece.

Bank of America Corp. rose 7 percent in early afternoon trading after it beat Wall Street earnings expectations for third quarter thanks to accounting gains and the sale of a stake in a Chinese bank. Goldman Sachs rose 2 percent, even after reporting only its second quarterly loss since going public in 1999.

There was also positive news in the housing sector, which has rattled banks since the real estate collapse.

A survey of U.S. homebuilders showed they are less pessimistic about the struggling market. The National Association of Home Builders said its index of builder sentiment this month rose from 14 to 18, the highest level since May 2010. But any reading below 50 reflects overall pessimism.

Building company stocks jumped on the news. D. R. Horton Inc. soared 9 percent. Lennar Corp. and PulteGroup Inc. both gained more than 8 percent.

The Dow Jones industrial average was up 54 points, or 0.5 percent, to 11,451 at 12:15 Eastern. International Business Machines tugged on the Dow average, falling 5 percent, the most of any Dow stock by far.

The Standard & Poor’s 500 index rose 10, or 0.8 percent, to 1,210. The Nasdaq composite rose 14, or 0.6 percent, to 2,629.5

Markets wavered in early morning trading after some disappointing corporate earnings reports and concerns that France and Germany may not reach an agreement on additional support for Greece.

Moody’s said late Monday that the stable outlook for France’s top-notch credit rating is under pressure. On Tuesday, that country’s finance minister said that the French economy will likely grow a rate of less than 1.5 percent next year. France is Europe’s second-largest economy.

Investors were troubled by reports that France and Germany remain divided on a plan to provide more support for Greece. An agreement between the two countries, the two largest economies that use the euro, is seen as the bedrock for a rescue package that can pass all 17 countries that share the euro.

The Greek government is widely expected to go through some kind of default or restructuring of its debt. European banks could face big losses on Greek government bonds and that could ripple overseas, jolting global credit markets.

Tuesday brought full day of corporate earnings reports in the U.S.

UnitedHealth Group Inc.’s fell 4 percent after its third-quarter profit dipped. The country’s largest health insurer by sales said medical costs climbed and more patients visited their doctors’ office.

Coca-Cola Co. lost 0.6 percent after narrowly beating Wall Street’s earnings estimates. Johnson & Johnson rose 0.2 percent after posting a 6 percent in decline in third-quarter profit, roughly in line with analyst expectations.

Apple Inc. and Intel will report their results from the last quarter after the market closes.

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Gannett Co.’s new CEO took over just in time to discuss third-quarter earnings, which are expected to reflect depressing trends facing the largest U.S. newspaper publisher. The numbers are due out before the stock market opens Monday.

WHAT TO WATCH FOR: Gannett’s results will be broken down by Gracia Martore, who was named the company’s CEO earlier this month after Craig Dubow resigned for health reasons. The biggest concern for investors is whether its long-running slump in print advertising worsened during the July-September period. The owner of USA Today and more than 80 other dailies has already warned investors that advertising revenue in its newspaper division fell in the quarter, extending a decline that began in 2006.

It will be a bad sign if the decline is worse than the 7 percent year-over-year decline that the company’s newspapers suffered in the April-June period.

Gannett’s situation isn’t unusual. As advertisers continue to spend more on the Internet, most major newspaper publishers have struggled. Newspapers have garnered some digital advertising, but those gains haven’t come close to making up for losses on the print side.

Gannett has more of a cushion than some of its peers because it also owns 23 television stations.

To help offset the sharp drop in advertising, Gannett and other newspaper publishers have resorted to layoffs and furloughs.

WHY IT MATTERS: Gannett, which is based in McLean, Va., will be the first major U.S. newspaper owner to report its third-quarter results, giving investors a better sense how the industry is holding up as the economy sputters.

WHAT’S EXPECTED: Analysts polled by FactSet expect Gannett to earn 44 cents per share on revenue of $1.28 billion.

LAST YEAR’S QUARTER: Gannett earned $101 million, or 43 cents per share, on revenue of $1.31 billion.

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Debra Fox lost her management job at a St. Louis technology company in February, more than a year after the recession officially ended. As far as she’s concerned, it’s still going on.

Fox is among 6 million Americans who have been out of work for six months or more, a group that seems in jeopardy of becoming a permanent underclass if the job market doesn’t turn around soon.

It’s not the first time she’s been unemployed, but Fox, 55, of Creve Coeur, says this is by far the most difficult job search she’s undertaken. She believes employers are pickier simply because they can be.

“If there are 10 attributes they are looking for and you have eight of the 10, you won’t make the cut,” she says. “It’s the whole cyclical thing. It’s something that needs to get kick-started somehow.”

But how? That’s the question being asked as Congress considers President Barack Obama’s proposal for an $447 billion jobs program. Some Democrats say it should be bigger, while Republican leaders say it will just inflate the budget deficit without creating many jobs.

Much of the debate is partisan posturing, but it also involves a difficult economic question. Does today’s 9.1 percent unemployment reflect long-lasting structural changes, like the housing downturn that has cost legions of construction workers their jobs, or is it just a cyclical problem that can be cured by faster economic growth?

David Andolfatto, a vice president and economist at the St. Louis Federal Reserve Bank, believes it’s probably a bit of both. The debate, he says, is between Humpty Dumpty and a deflated balloon.

Deflated-balloon thinkers attribute the economy’s ills to a severe lack of demand. If the government could just stimulate more spending, the balloon would reinflate.

The Humpty Dumpty hypothesis holds that the economy is badly broken, and stimulus won’t work until we’ve repaired the structural issues.

The severe financial crisis that accompanied the recession certainly did leave parts of the economy looking shattered. General Motors and Chrysler laid off thousands of people as they went through bankruptcy. When the housing bubble collapsed, so did the job market for construction workers.

Growing industries, like health care, don’t have much use for the specialized skills of an auto worker or a carpenter. A worker displaced by structural change may need to retrain, accept a much lower wage or wait out a long stretch of unemployment - or all three.

The story also has a geographic element. Normally, we’d expect workers to move from areas where jobs are scarce, like Michigan, to states where unemployment is low, like North Dakota. Moving becomes difficult, though, when a lot of people are locked into mortgages that exceed their houses’ worth.

Conventional policy measures, like stimulus spending by the government or monetary easing by the Federal Reserve, may not help workers much in such an environment. “The Fed can’t train a construction worker to become a nurse,” Andolfatto says.

The best evidence for the Humpty Dumpty hypothesis may be a couple of numbers from the Bureau of Labor Statistics: Between July 2009 and July 2011, employers reported 52 high risk personal loans.8 percent more job openings, but they increased hiring by just 8.7 percent. In other words, companies are having a hard time matching the skills they need with the workers who are available.

“It’s not a slam dunk, but it certainly does suggest that perhaps structural factors are playing some role,” Andolfatto says.

Data on business confidence, however, support the deflated-balloon story. A survey by the National Federation of Independent Business says that more companies expect their sales to fall than to rise in the months ahead.

When you’re pessimistic about future orders, you’re likely to put any hiring plans on hold. That may be why employers, as Fox says, are being picky.

Are they being rational, though? That’s a key question, Andolfatto says: If they are, and they’re reacting to deep-seated problems like the federal budget deficit, then a government spending spree won’t help.

If, on the other hand, employers are succumbing to emotion and panic, the government should make investments that will help break the cycle of fear.

Ken Matheny, an economist at Macroeconomic Advisers in Clayton, acknowledges that some structural factors are at work, but he thinks unemployment is mostly stuck in “a long and severe cycle that takes a long time to overcome.”

Obama’s proposed American Jobs Act would have some benefits, but they’d be temporary, Matheny says. His firm’s base forecast is for unemployment to fall slowly, to 8.9 percent next year and 8.4 percent in 2013. If all of the president’s stimulus measures are enacted, Matheny says, the jobless rate would drop faster, to 8.6 percent in 2012 and 8 percent in 2013.

For the long-term unemployed, such slow improvement is cold comfort. Ruth Ann Edwards, 58, was laid off from a health care call center last October, and she doesn’t think her job skills are out of date. She enrolled in a community college program to earn a certificate as a health-information professional, but she’s landed only three job interviews in 11 months.

“I don’t think there are very many opportunities out there,” she says.

D.C. Cooper, 50, has been out of work even longer: He was part of an AT&T downsizing in December 2008. Cooper’s résumé features a four-year-old master’s degree and a recently earned certificate in Lean Six Sigma, a quality-improvement discipline, but he says his long spell of unemployment seems to count against him.

“If you’ve been out for over six months, companies won’t interview you,” he says. They feel as though you’ve been out that long, so there must be something wrong with you.”

In reality, the flaw is with the economy itself. Whether it’s a deflated balloon or a shattered egg is open to debate, but either way, the repairs are going to take a very long time.

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LONDON — World stocks and the euro fell sharply on Monday as investors feared a messy Greek default within weeks unless Athens implements the austerity measures demanded by its international lenders.

International lenders told Greece on Monday that it must shrink its public sector and improve tax collection to secure a vital 8 billion euro rescue payment next month.

After a rare four-day rally in world stocks last week, markets fear the crisis is worsening again after Greece’s prime minister cancelled a U.S. trip to chair an emergency cabinet meeting at home and German Chancellor Angela Merkel suffered a regional election loss.

EU finance ministers also failed to make progress on the debt crisis at the weekend, and the focus is now shifting to a conference call between Greece and its international lenders at 1600 GMT to see how Greece plans to make up its budget shortfall and avoid a disorderly default.

With the gloom so widespread, investors took little comfort from expectations that the Federal Reserve would introduce new measures to stimulate the U.S. economy later this week.

“It’s no more a link between markets and economics, but a link between markets and politics. The politicians should have seen the crisis coming and done more, but the problem is they are not proactive,” said Koen De Leus, strategist at KBC Securities, in Brussels.

“We are just going from one crisis to another. It’s a nightmare for the markets.”

The MSCI world equity index fell 1.1 per cent on the day, after posting its biggest weekly gain since early July last week in buying largely driven by short-term players.

Long-term asset managers have been either staying on the sidelines, or steadily cutting back on exposure to risky assets. The MSCI index is around 5 per cent above its one-year low hit earlier in September.

European stocks lost nearly 2 per cent, led by sharp losses on the banking sector, while emerging stocks dropped nearly 2.2 per cent. U.S. stock futures pointed to a weaker open on Wall Street later.

The euro fell more than 1 per cent to $1.3632.

POLICY RISKS

Events this week promise a heavy dose of policy action.

Finance ministers of the BRIC emerging economies — Brazil, Russia, India and China — meet later this week to discuss steps to offer support to the euro zone.

Market sentiment may change if they buy euro-denominated bonds, as suggested in preliminary talks, after the European Central Bank’s 70 billion euro bond-buying spree over the last five weeks or so failed to stop the crisis from spreading to Spain and Italy.

Investors will also be watching U.S. President Barack Obama’s deficit-reduction plan on Monday aimed at covering the cost of his recent jobs bill.

U.S. crude oil was down 1.4 per cent to $86.76 a barrel.

Bund futures rose 78 ticks.

The dollar gained 0.7 per cent against a basket of major currencies, supported by expectations that new Fed measures would be focused on the maturities of the debt it buys rather than on expanding its already swollen balance sheet.

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CHARLOTTE, N.C.,