Business news for Mon, 17 Dec 2007 & with word prices. 53 news.

NEW YORK (Reuters) - Stocks tumbled on Monday on concerns that a persistent housing slump, combined with surging prices, posed the threat of 1970s-style stagflation.

NEW YORK -- Wall Street extended last week's losses Monday as investors remained concerned about flagging growth and rising prices, and were skeptical that a special Federal Reserve credit auction will be a solution.

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 - worsening food price inflation.

LONDON led the biggest drop in United Kingdom home values for at least five years this month as higher mortgage costs and the prospect of further declines in prices kept away buyers, a report by Rightmove Plc showed. The average UK asking price fell 3.2 percent to 232,396 pounds (US$473,437) from November, the largest decline since the survey of real-estate agents' listings began in 2002, Britain's most-used property Website said yesterday. London home costs dropped 6.8 percent, also the most recorded by Rightmove. "The market is tough out there," Miles Shipside, the company's commercial director, said in an interview with Bloomberg News. "We see a flat outlook for next year, with no price rises, as we work our way through this liquidity crisis." The Bank of England this month cut the benchmark interest rate for the first time in two years, citing the threat of an economic slowdown. Confidence among British real-estate agents has slumped as pricier mortgages

CONSUMER spending on China's hotel and catering industry hit record highs last month, as the hotel industry develops, and food prices rise. Domestic hotels and restaurants generated record sales of 110 billion yuan (US$14.9 billion) for November, an increase of 21.6 percent from a year earlier, the Ministry of Commerce said on its Website yesterday. The growth is 3.9 percent higher than the same period last year, and 0.2 percent higher than in October. Spending on hotels and restaurants for the first 11 months rose by 18.9 percent to 1.11 trillion yuan, accounting for 13.9 percent of total retail sales during the period. Analysts say part of this can be attributed to the rise in food prices since the beginning of this year. In November, China's consumer prices, a main gauge of inflation, jumped 6.9 percent from a year earlier, close to 11-year record of seven percent set in December 1996. Sales revenue was recorded at 134.7 billion yuan. About 862 foreign-funded hotels

CHINA will eliminate export tax rebates on major grains as part of a series of measures to ensure domestic supplies are adequate and to control rising food prices. Tax rebates on wheat, rice, soybeans and corn will be eliminated from December 20, according the Website of the central government yesterday. China's food costs gained 18.2 percent last month, pushing inflation to the highest in 11 years. The government has sold corn and vegetable oil from state reserves and asked local authorities to boost emergency stockpiles to ensure stability, according to Bloomberg News. "This is bearish for local wheat and corn markets as it adds a few million tons to supply," said Zhao Qiang, research manager at Tianqi Futures Co in Harbin. "The effect on global markets will be small as China's exports are limited." China shipped 4.9 million tons of corn and 1.2 million tons of rice overseas in the first 11 months of this year.

CONSUMER prices in China are expected to fall significantly next year while consumption may replace export and investment to become a major driver of the country's economy, Deutsche Bank said. In a report released yesterday, the bank maintains the forecast of a modest slowing in the nation's gross domestic product to 10.4 percent in 2008 from 11.5 percent this year, according to its December issue of Asia Economics Monthly. "We expect CPI (consumer price index) inflation to fall visibly to an average of 3.8 percent next year, down from the 6.5 percent year on year in October and an average 4.6 percent in 2007." The German bank made its projection based on several trends highlighted recently by the National Development and Reform Commission: - Inflation has been mainly driven by food items and is structural in nature, although international and cost factors also played a role. - This year's domestic wheat and rice output has grown and will be sufficient to meet

THE Chinese mainland will let its commercial banks invest in UK stocks and funds in the first expansion of the country's international investment program outside Hong Kong. The nation reached an agreement with the UK financial regulator for investments by the banks under the qualified domestic institutional investor, or QDII, program, the China Banking Regulatory Commission said on its Website yesterday. The government is loosening restrictions on overseas investment to counter inflows from a record trade surplus that have driven up local stock and property prices, Bloomberg News said. The mainland will "soon" come to a similar agreement with the United States authorities, the regulator said. "Expanding the number of markets that QDII funds can invest in helps raise banks' investment and risk management capacities, and also helps investors diversify their risk," the statement said, without providing further details. The release didn't say when QDII funds

ASIAN stocks fell the most in four months, led by Samsung Electronics Co and HSBC Holdings Plc, on concern accelerating inflation will limit interest-rate cuts, threatening global growth. Samsung declined the most in three weeks. HSBC and Cheung Kong (Holdings) Ltd paced losses in Hong Kong, where interest rates track those set by the Federal Reserve, after United States consumer prices rose the most since 2005. Centro Properties Group plummeted 76 percent in Sydney after the owner of US shopping malls said it was struggling to refinance debt. "Sentiment in the region is getting worse," said David Ng, who helps manage US$954 million at Hwang-DBS Asset Management Sdn in Kuala Lumpur. "First we had slowing US growth; now add on inflation fears. That makes for a bad combination." The MSCI Asia Pacific Index lost 2.9 percent to 152.28 as of 6:49pm in Tokyo, its sharpest decline since August 17, Bloomberg News said. The benchmark is set for its lowest annual gain

THE Japan Bank for International Cooperation, the government's main overseas lender, is to lend US$3 billion to the Abu Dhabi National Oil Co to secure a stable supply for Asia's biggest economy, which imports most of its oil needs. The bank raised about a third of the loan amount from the Mizuho Financial Group Inc and other Japanese banks, Bloomberg News said. Abu Dubai Oil, known as ADNOC, will use the loan for oil exploration and building pipelines as well as facilities to boost crude output "With the UAE's oil structured into the loan, crude supplies to Japan are more assured," Hidetoshi Shioda, a senior energy analyst at Mizuho Securities Co, said. "It also benefits the UAE, as Japan will take steady supply for a longer period of time." Japan wants to map out a supply plan after crude prices set a record last month. The loan agreement will be signed this week, when ADNOC's Chief Executive Officer Yousef Omair Bin Yousef is in Tokyo, together with Abu

WHEAT rose above US$10 a bushel for the first time yesterday, leading other grains and oilseeds higher in a food price spiral that threatens global economic growth. Chicago wheat futures jumped as much as 30 US cents, or 3.1 percent, to US$10.09 as dry weather threatened crops in Argentina, renewing concern that the world's farmers may not be able to grow enough to meet rising demand for bread, pasta and livestock feed. Rice also advanced to a record, while soybeans reached the highest price in 34 years and corn reached a nine-month peak, said Bloomberg News. Rising prices of food and fuel are stoking inflation and making it more difficult for central bankers to lower interest rates. Kellogg Co, the largest United States cereal maker, General Mills Inc, Nissin Food Products Co and Kikkoman Corp are among companies that have raised prices. "We are seeing a broad-based increase in cost pressures," Brian Redican, senior economist at Macquarie Group Ltd, said from

CONSUMER confidence is falling, the odds of a recession have risen, analysts predict the worst holiday shopping since 2002 - and retail-industry executives are buying their companies' shares like never before. Limited Brands Inc Chief Executive Officer Leslie Wexner and eight other executives bought a record amount of stock last month after prices fell to a four-year low. Dillard's Inc director Warren Stephens made the biggest insider purchase ever as shares of the Arkansas-based department store chain headed for the steepest decline since at least 1980. Cambiar Investors LLC, Royce & Associates LLC and Becker Capital Management Inc say insider buying foreshadows a rebound. The last four times executives added to their holdings, the Standard & Poor's Supercomposite Retailing Index rose an average 9.9 percent in the next three months, topping a 6.2-percent average rise in the S&P 500 Index. Retail company officials increased their investments by US$346.4 million since the start

SINGAPORE'S exports unexpectedly dropped for the first time in six months in November as shipments by electronics companies and pharmaceutical manufacturers slumped. Non-oil domestic exports sank 3.4 percent from a year earlier following a revised 6.5 percent gain in October, the government's trade promotion agency said. The median estimate in a Bloomberg News survey of 12 economists was for a 4.5-percent increase. Singapore's electronic shipments have declined each month since February as a global inventory glut caused prices for memory chips and microprocessors to fall. "We don't see a lot of impetus for an early recovery in electronics, especially given the uncertainty over the outlook for the global economy," said Ho Woei Chen, an analyst at United Overseas Bank Ltd in Singapore. "The volatility in exports and production in the pharmaceutical sector remains." Exports dropped a seasonally adjusted six percent last month from October, when they fell a

EUROPE'S manufacturing and service industries grew at the slowest pace in more than two years this month because of increases in energy and food prices and borrowing costs. Royal Bank of Scotland Group Plc said yesterday a preliminary estimate of its composite index fell to 53.3 from 54.1 in November. That's the lowest since August 2005 and lagged behind the 53.7 median of 15 forecasts in a Bloomberg News survey. A reading above 50 indicates growth. Europe's economy is heading for its slowest growth in three years in 2008 due to a near-record level for the euro, a 50 percent increase in crude oil prices, and higher lending costs. While the European Central Bank this month cut its forecast for economic growth next year, it's held off reducing interest rates as the inflation rate reached a six-year high. "The index is consistent with below-trend growth in the euro zone and this will continue until at least the second quarter 2008," Marco Valli, an economist at

AFP - Oil prices fell on Monday as market participants fretted over the outlook for the US economy amid fears a potential economic slowdown could dampen oil demand.

Dramatic rises in international food prices are threatening millions of people in poor countries, the UN warns.

Record prices for major agricultural commodities and a reduction in the volume of food aid means there is a serious risk that global hunger will worsen next year

NEW YORK - Oil prices fell Monday when an OPEC official said the cartel may increase production, calming concerns about tight supplies.