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| Market Watch - February 26, 2010 |
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U.S. consumer confidence falters amid job worries; markets choppy on mixed news. Big picture
U.S. consumer confidence falters amid job worries
A monthly poll showed U.S. consumer confidence fell sharply in February amid rising job worries. The decline followed three months of improvement and raises concerns about the economic recovery, as consumer spending accounts for 70% of U.S. economic activity. Greece’s potential credit downgrade continues to rattle the eurozone, but analysts fear that Spain is an even bigger threat to the 16-nation currency. The eurozone’s No. 4 economy, Spain, has 19% unemployment, a deflating housing bubble, massive debt and a gaping budget deficit.
Canadian corporate profit was up 7.9% in the fourth quarter of 2009, compared to the previous quarter, marking the second straight quarter of strong growth. India forecasts 8.8% growth in 2010 while the European Commission kept its growth forecast for 2010 unchanged at 0.7%, saying the economy is recovering but “still facing headwinds.”
Markets
Markets choppy on mixed news
Markets were volatile during the week, responding to positive news such as the Federal Reserve’s renewed commitment to keep U.S. interest rates exceptionally low for an extended period, and negative news such as another rise in first-time U.S. jobless claims, along with the underlying current of sovereign debt worries in Europe. Steel prices will jump in 2010 as the cost of raw materials is expected to surge 70% because of emerging markets demand. Bombardier inked an $11-billion train contract with France’s national rail service, and scored a deal with Republic Airways in the U.S. for at least 40 jetliners.
Syncrude announced plans to expand oilsands production by 21% within a decade, while Suncor continued to divest non-core assets by selling its natural gas assets in Trinidad and Tobago. Reporting quarterly profits up 32%, Tim Hortons raised its dividend and announced a $200-million share repurchase program. Walmart announced it will add 6,500 jobs in Canada, opening 35 to 40 super centres across the country this year. Sears Canada reported earnings up 30% in the fourth quarter, marking its best quarter in three years. General Motors will scrap the Hummer after a Chinese deal stalled. Coca-Colawill buy the North American operations of its biggest bottlerfor $15-billion in a bid for cost savings and more flexibility in distribution.
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