Business news for Sun, 16 Dec 2007 & with word united. 12 news.

UNITED States stocks have had the biggest weekly decline in a month after a Federal Reserve interest-rate cut and the biggest coordinated effort since 2001 to provide banks with cash failed to assuage concern that the economy will contract. Washington Mutual Inc led banks, brokerages and other financial firms to the steepest decline among 10 industries in the Standard & Poor's 500 Index. Circuit City Stores Inc, Sears Holdings Corp and Amazon.com Inc retreated on speculation that holiday sales at retailers will fall short of estimates, Bloomberg News said. Shares declined even after central bankers in North America joined those in Europe to inject money into the financial system and alleviate gridlock in credit markets. Reports that showed accelerating inflation caused concern that the Fed will be unable to cut interest rates more to prop up growth. "A recession is in the works," Andy Engel, who helps run the US$1.81 billion Leuthold Core Investment Fund that has

ASIAN stocks fell last week, dragging a key stock index to its biggest decline in four months as a United States interest-rate cut failed to ease concern that the world's largest economy will slide into a recession. Mitsubishi UFJ Financial Group Inc, Japan's biggest bank by market value, and Samsung Electronics Co, South Korea's largest exporter, led the decline after the Federal Reserve said the US economy is slowing. BHP Billiton Ltd, the world's largest miner, dropped after metal prices fell. "Market sentiment has been shaken," said Yang Haeman, who manages the equivalent of almost US$1 billion at NH-CA Asset Management in Seoul. "A US slowdown is already quite certain and investors now are also worried that this will result in a global slowdown." The MSCI Asia Pacific Index last week plunged 4.7 percent to 156.78. The drop was the most since the week ended August 17. Concern that losses tied to the US subprime market will derail global growth prompted

CITIGROUP Inc Chief Executive Officer Vikram Pandit's decision to bail out seven subprime-infected investment funds with US$49 billion in assets may increase the chance of a dividend cut at the largest United States bank. The rescue package erodes the bank's capital buffer against loan losses, Bank of America analyst John McDonald has written in a report. The move adds pressure on the bank to reduce its quarterly 54-cent-a-share payment to investors, said Meredith Whitney, an analyst at CIBC World Markets. "The risks continue to mount for this already vulnerable financial giant," Whitney said in a report. Citigroup's SIV plan "will further imperil its fragile capital ratios going into the fourth quarter and surely pressure the company to continue to raise capital, sell assets and cut its dividend." Citigroup has tumbled more than 40 percent this year on the New York Stock Exchange as the collapse of the subprime mortgage market led to at least US$9 billion of

THE difference in yield between Japanese and US 10-year bonds climbed last week to the widest in a month on signs inflation is a bigger threat in the United States than in Japan. The extra yield investors demand to hold Treasuries instead of Japanese notes climbed as high as 2.696 percentage points on Friday, after a Labor Department report showed the biggest increase in US producer prices in 34 years. Japan's bond yields rose less than US debt after confidence among the Asian nations' largest manufacturers slumped more than forecast, cementing speculation the Bank of Japan will delay raising interest rates. "JGBs are a better buy than Treasuries at the moment," Xinyi Lu, chief strategist at the international treasury division at Mizuho Corporate Bank Ltd in Tokyo, told Bloomberg News. "Nobody believes very firmly that there will be inflation here again." The yield on the 1.5-percent bond due December 2017 fell two basis points last week to 1.545 percent at

EUROPEAN government bonds declined for a third week, their worst performance in six months, amid signs inflation in the euro region is accelerating. German bunds fell after a government report showed consumer-price inflation in Europe's largest economy quickened to the fastest pace in 12 years last month. United States Treasuries dropped after data this past week showed the steepest producer-price gains in 34 years and higher-than-forecast retail sales, said Bloomberg News. "The economic data just isn't favoring bonds," said Wilson Chin, a European bond strategist for ING Bank NV in Amsterdam. "The US data helped reverse sentiment in the market." The yield on the 10-year bund, Europe's benchmark, rose 12 basis points in the past week to 4.31 percent. The price of the 4.25 percent security due July 2017 slipped 0.89, or 8.9 euros per 1,000 euro (US$1,451) face amount, to 99.50. Bond prices move inversely to yields. The yield on the two-year note climbed 14

THE pound declined for a third week against the dollar as money-market rates for the British currency failed to respond to combined action by central banks to ease a year-end credit squeeze. The cost of borrowing pounds for three-months fell one basis point to 6.5 percent, the British Bankers' Association said, one percentage point more than the Bank of England's benchmark lending rate. "Concerns about the high level of Libor rates in the United Kingdom and euro zone and the essential failure of the central banks' liquidity additions" account for some of the pound's decline, said Adrian Schmidt, a senior foreign-exchange strategist at Royal Bank of Scotland Plc in London. More currency weakness is priced into the United States and "going forward the risks are greater in the UK and Europe." The pound fell 0.5 percent last week to US$2.0210. It was at 71.43 pence per euro and weakened to 228.96 against the yen, said Bloomberg News. Bank of England policy

THE dollar rose to the highest levels in more than a month against the euro and yen as accelerating inflation reduced speculation that the Federal Reserve will lower borrowing costs next year. The dollar gained against the 16 most-actively traded currencies last week after consumer and wholesale prices increased last month. The United States currency posted the biggest weekly advance against the euro since August. A government report this week is forecast to show a price gauge closely tracked by the central bank gained in November. "The data suggested the Fed probably will be less aggressive to cut rates from now on," said Hidetoshi Yanagihara, senior currency trader at Mizuho Corporate Bank in New York. "The dollar is getting a short-term boost." The dollar rose to US$1.4429 per euro on Friday, from US$1.4658 on December 7, erasing its 0.2-percent loss a week earlier. The US currency gained to 113.27 yen over the same period, from 111.68, the third straight

THE yuan is expected to remain flat this week after appreciating quite rapidly last week. The Chinese currency ended at 7.3715 to one United States dollar last Friday, up from 7.4030 a week earlier. The yuan rose for five trading days through Thursday. The yuan is likely to hover around 7.37 for the rest of the year, said traders. Economists expect the yuan to quicken its pace of appreciation in 2008 amid a "tight" monetary policy. The yuan has already appreciated about 10 percent since its decade-long peg to the greenback in July 2005 was scrapped. The yuan has risen about six percent this year. Stephen Green, a Standard Chartered Bank senior economist, expects the yuan to touch 6.84 against the greenback at the end of 2008, from a previously forecast of 7.00.

THE United States Senate has passed legislation that would make Federal Housing Administration loans available to subprime borrowers facing foreclosure, clearing the way for President George W. Bush's expected signature. The Senate plan would lower the downpayment required of low- and middle-income home buyers taking out federally-insured loans, and also allow larger loans, Bloomberg News said. It also would make it easier for homeowners with adjustable-rate loans due to reset to get FHA-backed loans. "This legislation is the perfect example of the kind of help Americans are looking for," Senator Charles Schumer, a New York Democrat who co-sponsored the bill, said on the Senate floor. "It is definitely and desperately needed." The bill, passed on a 93-1 vote, is the first part of a package of efforts that the government is considering to address the two-year housing slump. The House passed similar legislation in September. On December 6, Bush announced a

UNITED Kingdom commercial real estate returns have fallen by a record amount last month as higher interest rates and a drop in bank lending pushed prices down, according to Investment Property Databank Ltd, a London-based research firm. The total return on investments, after taking rental income and growth into account, slumped 3.6 percent in November. That's twice the size of the last record decline, a 1.8-percent fall in returns in May 1990, IPD said in an e-mailed statement. The value of shops, offices and warehouses plunged four percent in November after a 1.9-percent decline in October, Bloomberg News said. Four straight monthly falls in property returns have cost investors 1.8 percent of their money this year. Commercial property is set to break its streak of being the only UK asset to have made money for investors every year since 1992 as appraisers mark down prices in the wake of the credit squeeze.

Wheat prices surged above $10 a bushel for the first time ever Monday amid concerns that strong demand globally could result in a grain shortage in the United States next year.

The United States is to pay compensation to the European Union rather than allow European online gaming companies into the American gambling sector.