Finance & Business World

Global stocks gave up some of their recent gains Monday amid concerns over Italy’s ability to get a handle on its colossal debt pile, while the yen slid in the wake of another attempt by the Japanese monetary authorities to weaken the currency.

Last week, stocks enjoyed one of their best weeks in months as investors breathed a sigh of relief that eurozone leaders finally presented the broad outlines of a convincing anti-crisis strategy. The three-pronged strategy of boosting the bailout fund, getting private creditors to take a bigger hit on their Greek debt holdings and the banks to raise more capital was largely viewed favorably by the markets, though details need to be ironed out.

Many analysts, however, think that Europe will end up having to do more, especially if bond market investors continue to ask for more in return for buying up Italian debt _ a poorly received auction last Friday has fueled concerns over the country.

Italy is the eurozone’s third largest economy and only Greece has more debt as a percentage of national income. Its debts dwarf the euro1 trillion ($1.4 trillion) Europe’s bailout fund will have at its disposal if last week’s commitments are delivered.

“We remain sceptical that the plan will prove enough to restore financial market stability for long, with some signs of disappointment already starting to creep into the market as Italian 10 year yields continue to march above 6 percent,” said Lee Hardman, an analyst at The Bank of Tokyo-Mitsubishi UFJ.

Investors more cautious view of last week’s plan weighed on stock markets Monday.

In Europe, the FTSE 100 index of leading British shares was down 1.1 percent at 5,641 while Germany’s DAX fell 1.6 percent to 6,260. The CAC-40 in France was 1.1 percent lower at 3,282.

Wall Street was also poised for a lower opening _ Dow futures were down 0.8 percent at 12,070 while the broader Standard & Poor’s 500 futures fell 1 percent to 1,268.

Earlier, the main point of interest in financial markets was the Bank of Japan’s latest intervention to weaken the yen, which had hit a new post World War II high against the dollar.

The strong yen has dented earnings of Japanese corporations such as Nintendo Co. and Toyota Motor Corp. and hurt the economy’s recovery from the March 11 earthquake and tsunami. Finance Minister Jun Azumi said monetary authorities could continue intervening.

The dollar surged about 5 percent to above 79 yen for a while, before slipping back to 77.81 yen. Japan’s export sector _ whose fortunes are largely tied to the relative strength of the yen _ rose abruptly. Isuzu Motors Corp. jumped 3.7 percent. Canon Inc. rose 1 percent and Nikon Corp. added 1.8 percent. Nintendo Co. gained 1.5 percent.

Those gains helped limit the losses on Tokyo’s Nikkei 225 index. It closed 0.7 percent lower at 8,988.39.

Analysts are skeptical over whether the intervention will have a long-lasting impact. Previous efforts this year have provided short-term relief.

The intervention is likely to feature at a summit of leaders from the Group of 20 industrial and developing nations in Cannes, France, later this week. How to get the global economy moving again is likely to the main topic of debate.

There’s also a lot of U.S. economic data to digest this week, culminating in Friday’s monthly jobs report on Friday.

“This month is going to be another watershed insight into whether we are looking at a low growth environment or something worse,” said Ric Spooner, chief market analyst at CMC Markets in Sydney. “To maintain the low growth environment view, the market is going to want to see positive employment growth.”

The Federal Reserve and the European Central Bank also meet to decide on their monetary policies this week. Mario Draghi will on Thursday hold his first meeting and press conference as chief of the ECB and successor to Jean-Claude Trichet. Investors will be looking for signs that the bank is considering cutting interest rates and that it will continue its program to buy bonds. The program, used intermittently by the ECB, has helped keep bond yields down so far this year in Italy and Spain.

Elsewhere in Asia, mainland Chinese shares were mixed. The benchmark Shanghai Composite Index snapped a five-session winning streak by falling 0.2 percent to 2,468.25, while the Shenzhen Composite Index added 0.5 percent to 1,040.93.

In Sydney, shares of Australian flag carrier Qantas Airways Ltd. jumped 4.3 percent after a court ordered employees of the world’s 10th-largest airlines back to work. The airline had grounded its entire fleet on Saturday following weeks of strikes by its workers, but an arbitration court on Sunday ordered an end to the strikes and canceled the staff lockout.

Oil prices tracked equities lower, with the benchmark rate for December delivery down 49 cents at $92.85 a barrel in electronic trading on the New York Mercantile Exchange.

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The personal computer industry, already reeling from depressed demand, has been dealt another setback: Massive flooding in Thailand has curtailed production of a critical component

TORONTO

WASHINGTON

The Associated Press emphasized its efforts to strengthen state news reports and investigative and accountability journalism in its annual presentation to media executives Thursday.

AP leaders told the members of the Associated Press Media Editors that the news cooperative continues to beef up state news reports, despite staff reductions and budget pressures shared with the industry.

The news cooperative is continuing its “Broken Budgets” multimedia series launched this year. The joint reporting project with AP members expands statehouse coverage to explore cutbacks in state budgets. The series has examined dozens of aspects of state finances, from spending on roads and schools to the nuts-and-bolts of how states borrow and spend.

The AP has also changed staffing in some areas to expand early morning news.

“We have to take that breaking news and drive it faster than we ever had before,” said Kathleen Carroll, executive editor and a senior vice president for the AP.

The AP also told media executives that the company has expanded state photo reports and reaffirmed its commitment to investigative journalism, highlighting an award-winning “Aging Nukes” series that detailed problems at U.S. nuclear plants.

AP leaders said the company has never placed a higher priority on accountability journalism, putting a greater emphasis on seeking public records and fact-checking claims by political candidates and public officials. Across the company, AP staffers filed some 1,500 requests for public documents last year, said Kristin Gazlay, AP vice president and managing editor for financial news and global training.

Political editor Liz Sidoti said the AP is bulking up analysis pieces to check statements by politicians, at times assigning a dozen reporters to scrutinize facts at a single presidential debate fast cash advance loan. She told news executives to expect more analysis to guide political coverage, especially as politicians step up claims about the economy.

Sidoti said the cooperative considers its top assignment over the coming to year to cover “the economy intersecting with the presidential campaign.”

She predicted a lively year.

“We’re all going to have a very competitive presidential race to cover next year,” Sidoti said.

AP Director of Photography Santiago Lyon told the executives that increased cooperation has meant many more photos in the U.S.

Lyon said domestic photo transmissions were up 9 percent in the second quarter of this year. He also said AP is better sharing photo coverage plans with members to avoid overlap.

“We continue to make good progress toward increasing the quality, and the volume, of the state photo reports,” he said.

AP also presented a good-natured look at its famed AP Stylebook, created in 1953 and the definitive style guide for publishers in all formats. AP in the last year added a new guide on food and recipes to its 2011 Stylebook, and quizzed media executives on some of the year’s style changes.

Every hand in the room went up to identify the correct style on “email.” The editor of the AP Stylebook, David Minthorn, said it was the best-known style change of the year.

“It was the dropped hyphen heard by copy editors around the world,” he said.

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The European Central Bank says it spent euro14.3 billion ($20.6 billion) last week buying government bonds to keep the eurozone’s debt crisis at bay.

The amount disclosed on Monday was short of the previous week’s figure of euro22 billion ($32 billion) but close to market expectations.

Buying Italian and Spanish bonds on financial markets has driven down borrowing rates that were threatening those two countries with financial ruin fast cash.

European officials want the eurozone’s bailout fund to take over the purchases, but national parliaments will not give their approval to that move until this fall.

That has left the central bank with the main burden of fighting off market turmoil.

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European stocks fell again Thursday as concerns over the financial health of French banks reignited, and any optimism over Wall Street’s open dissipated.

The wild swings on a daily basis and across time zones highlights how febrile markets are at the moment amid concerns over the global economy and the levels of debt in both the U.S. and Europe.

France’s banks bore the brunt of the selling once again, just a day after rumors over Societe Generale’s financial health, sent investors scuttling out of the sector. Concern over Europe’s ability to tackle its debt crisis _ which now threatens to engulf large economies like Italy and Spain and is hampering growth in France _ made wider waves and shares in many European banks fell.

After an early rebound, bank shares across Europe were down, some sharply, including Societe Generale, which has followed up Wednesday’s 15 percent decline with another 8 percent drop.

As a result, France’s CAC-40 underperformed its peers, trading 2.8 percent lower at 2,920. The FTSE 100 index of leading British shares was down 0.7 percent at 4,975 while Germany’s DAX fell 1.2 percent to 5,545.

A complete turnaround in Wall Street futures has added to the unease _ Dow futures were down 1.2 percent at 10,595 while the broader S&P 500 futures fell 1.5 percent to 1,106. For much of the European session, they had been trading an equivalent rate higher.

“We are seeing the same reaction now that we have seen in recent days _ the rally has stalled with many traders unwilling to believe that this is anything more than just another dead cat bounce,” said David Jones, chief market strategist at IG Index.

Thursday’s volatility came after Wednesday’s hammering of stocks in Europe and the U.S. Any investor cheer to the news that the Federal Reserve was keeping its super-low interest rates until the middle of 2013 dissipated as they interpreted that stance to mean that the U.S. economy will not improve substantially by 2013.

Worries over Europe’s debt crisis spreading have also not been calmed by a more active role in the bond markets from the European Central Bank.

“Modest monetary easing from the Fed and ECB purchases of Italian and Spanish debt have failed calm investor fears that the global economy is heading into a renewed recession driven by the escalating eurozone sovereign debt crisis,” said Lee Hardman, an analyst at the Bank of Tokyo-Mitsubishi UFJ.

Though stock markets are swinging wildly, there’s been a measure of calm in the bond markets of Spain and Italy in the wake of the ECB’s purchase of their bonds. The yield, or interest rate, on Spanish and Italian 10-year bonds remained stable at around 5 percent. That rate is considered manageable for now and is over a percentage point lower than where they were trading a week ago.

However, analysts think that they will have to get even lower to really dampen worries that Europe’s debt crisis will ensnare the eurozone’s third and fourth largest economies.

“The reality is they will need to buy an awful lot more to get them down to sustainable levels well below 5 percent,” warned Michael Hewson, market analyst at CMC Markets.

Earlier, Asian markets were under pressure following Wednesday’s big reverse on Wall Street.

Hong Kong’s Hang Seng index fell 1 percent to 19,595.10, but China’s main index in Shanghai rose 1.3 percent to 2,703.90.

Japan’s Nikkei 225 index slipped 0.6 percent to close at 8,981.94 as a strengthening yen, clobbered Japan’s crucial export sector. Honda Motor Corp. and Nissan Motor Corp. each lost 3.5 percent.

By early afternoon London time, the dollar was 0.3 percent lower at 76.58 yen, not far above the level last week that prompted the Bank of Japan to intervene in the markets.

Meanwhile, the euro inched up 0.1 percent to $1.415.

In the oil markets, prices retreated alongside equities. The main New York fell 60 cents to $82.29 a barrel, after earlier trading above at $84.

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Pamela Sampson in Bangkok contributed to this story.

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Writing the obituary for their own newspaper, News of the World’s journalists prepared their final edition Saturday as Britain’s media establishment reeled from the expanding phone-hacking scandal that brought down the muckraking tabloid after 168 years.

Small clues gave the tone of the London newsroom away _ from a commemorative T-shirt bearing a “Goodbye, cruel News of the World, I’m leaving you today” worn by one staffer, to editors typing tributes to the tabloid’s journalistic victories into newspaper text boxes.

Rupert Murdoch, whose media empire owns the paper, will arrive in London on Sunday on a scheduled visit, a person familiar with his itinerary told The Associated Press on condition of anonymity because of the sensitivity of the matter.

He is facing a maelstrom of criticism and outrage over the sequence of events set off by allegations the paper’s journalists paid police for information and hacked into the voicemails of young murder victims and the grieving families of dead soldiers.

The recent revelations culminated in the decision to close the paper and put 200 journalists out of work.

The paper’s editor, Colin Myler, offered words of encouragement and sympathy to his staff on a “very difficult day.”

“It’s not where we want to be and it’s not where we deserve to be,” he said in a memo to staff seen by Britain’s Press Association. “But I know we will produce a paper to be proud of.”

The contents of the front page were privy to “only a special few,” according to Helen Moss, a news and features editor who offered refreshments to journalists camped outside the tabloid’s headquarters in a bizarre death watch of sorts.

“I expect it’ll be a massive tribute to 168 years of history ending today,” she said, describing an “extremely emotional” newsroom.

Much of the emotion continued to focus on New International _ a subsidiary of Murdoch’s News Corp. _ which took the decision to jettison the paper on Thursday after the new allegations sparked a fierce backlash and the flight of advertisers.

The scandal exploded this week after it was reported that the News of the World had hacked the mobile phone of 13-year-old murder victim Milly Dowler in 2002 while her family and police were desperately searching for her. News of the World operatives reportedly deleted some messages from the phone’s voicemail, giving the girl’s parents false hope that she was still alive.

That ignited public outrage far beyond any previous reaction to press intrusion into the lives of politicians and celebrities, which the paper has acknowledged and for which it has paid compensation to some prominent victims, including actress Sienna Miller.

Revelations that journalists paid police for information added fuel to the fire, prompting calls for a boycott and causing dozens of companies to pull their advertising from the paper amid fears they would be tainted by association.

James Murdoch _ tipped by many as a likely successor to his father _ then announced Thursday that this Sunday’s edition of the tabloid would be its last and all revenue from it will go to “good causes free credit score.”

The closure was seen by some as a desperate attempt by the media conglomerate to stem negative fallout and thus save its 12 billion-pound ($19 billion) deal to take over satellite broadcaster British Sky Broadcasting.

But the British government has signaled that deal will be delayed because of the crisis and the scandal has continued to unfold with the announcement of three arrests linked to the matter on Friday.

Andy Coulson _ a former News of the World editor and ex-communications chief to Prime Minister David Cameron _ was arrested Friday, as was Clive Goodman, an ex-News of the World royal reporter, and an unidentified 63-year-old man. All three have since been released on bail.

The developments have turned up the heat on Britain’s media industry amid concerns a police investigation won’t stop with the News of the World.

It has also cast new scrutiny on the cozy relationship between British politicians and the powerful Murdoch empire, putting the media baron’s company on the defensive.

Many journalists and media watchers have expressed astonishment that Rebekah Brooks, who was editor of News of the World when some of the hacking allegedly occurred, was keeping her job at head of News Corp.’s U.K. newspaper operations while the paper’s 200 employees were laid off.

She told lawmakers she had “no knowledge whatsoever” of the Milly Dowler hacking or any other case while she was editor, according to a letter published by Britain’s home affairs select committee on Saturday.

“I also want to reassure you that the practice of phone hacking is not continuing at the News of the World,” she said in response to the committee’s request for new evidence. “For the avoidance of doubt, I should add that we have no reason to believe that any phone hacking occurred at any other of our titles.”

While she has been portrayed as a villain in the unfolding story, Brooks _ with strong connections to British politics and decades of experience behind her _ has insisted she is the right person to lead News International through the crisis.

Upping the ante, the Church of England threatened to pull nearly 4 million pounds of investments from News Corp. “if does not hold senior executives to account … for the gross failures of management at the News of the World.”

The church’s ethical investment advisory group said Sunday it wrote to News Corp. saying closing News of the World was not a “sufficient response” to the “utterly reprehensible and unethical” practices uncovered at the tabloid.

Murdoch has opted to remain largely silent amid the fallout, issuing one official statement that made clear Brooks would remain at the helm.

He spoke briefly to reporters in Sun Valley, Idaho on Saturday, where he was attending a media conference. When asked whose decision it was to close the paper he said, “It was a collective decision.”

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Julie Jacobson contributed to this report from Sun Valley, Idaho.

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Despite the collapse last week of a tax credit bill designed to help them build a cargo hub in St. Louis, Chinese airline officials are still heading here to talk about flights.

So said Steve Stone, a Clayton attorney and member of St. Louis’ negotiating team with China Cargo Airlines. Stone confirmed the visit is still on after a talk this morning about the cargo project to a group of local construction contractors in Des Peres. The Chinese delegation is set to arrive Tuesday. But, he said, the visit was to be largely technical in nature and may not directly advance negotiations over flights.

Local officials pushing the hub had hoped to have the $360 million so-called Aerotropolis tax credit package in hand when the Chinese team arrived Tuesday. The measure died last week in an impasse between Missouri lawmakers over a broader economic development bill.

Developer Paul McKee, who with Stone was one of the original architects of the hub project, shared the podium with Stone. He used the opportunity to urge the audience of approximately 150 to call their state lawmakers and Gov. Jay Nixon and urge them to hold a special session to finish the economic development bill - something Nixon has said he won’t do without “broad consensus” from the House and Senate.

“We need to do this,” McKee said. “If we’re negotiating with the Chinese, we can’t come to the table without any chips.”

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When Ben Bernanke makes history Wednesday as the first Federal Reserve chief to begin a series of regular news conferences, his tasks will be simple. That doesn’t mean they’ll be easy:

Make no unintended news. Defuse critics of Fed policymaking. Say nothing that might spook investors.

“If he succeeds, he will not make any impact whatsoever” on bonds, stocks or the dollar, says Timothy Duy, an economist at the University of Oregon who writes a blog on the Fed.

The historic news conference, the first of three this year, is part of a long-standing Bernanke campaign to make the central bank more transparent and publicly accessible. His efforts have included town-hall meetings and appearances on “60 Minutes.” The chairman’s public appearances have followed criticism that the Fed, an independent government agency, was for too long secretive and unaccountable.

After giving an opening statement, Bernanke is scheduled to take reporters’ questions for 45 minutes. He’ll do so less than two hours after the Fed issues a statement outlining its latest policies on interest rates and the economy. The Fed is expected to say that its benchmark rate will remain near zero and that its $600 billion Treasury bond-buying program will end in June as planned.

By helping to keep downward pressure on interest rates, the bond-buying program was intended to encourage spending and boost growth. But critics say all that spending has raised the risk of high inflation.

Under Bernanke, the Fed’s policies have run into criticism from some of the Fed’s own regional bank presidents. They say the central bank should stop trying to stimulate growth and start fighting inflation by raising interest rates from super-low levels before the year ends. They point to the run-up in gasoline and food prices. Higher interest rates could slow spending and make inflation less likely.

Bernanke and a majority of Fed officials counter that those higher prices are temporary and, apart from energy and food, won’t lead to substantially higher prices overall. The news conference “gives Bernanke a nice opportunity to present the Fed’s case frankly in his own words without a lot of spin,” says Alan Blinder, a Princeton University economist and a former Fed vice chairman.

At the same time, Bernanke must take care not to let unguarded comment unnerve financial markets.

“The press conference is not supposed to add volatility or uncertainty,” says Marc Chandler, head of global currency strategy at Brown Brothers Harriman.

On the other hand, Bernanke will likely try to steer clear of the jargon and bland generalities with which his predecessors once shrouded Fed policy.

“He would not like it if the post-mortems said all he did was blow smoke and speak gobbledygook,” Blinder says.

Bernanke has shown he can field questions deftly in public settings. A former longtime economics professor at Princeton, he is fond of deconstructing complex subjects. He also has plenty of experience handling hostile queries from critics in Congress and on “60 Minutes.”

To prepare for his news conference, Bernanke has watched tapes of how his counterparts in Europe _ Jean-Claude Trichet, president of the European Central Bank and Mervyn King, head of the Bank of England _ have performed at news conferences. Two months ago at a meeting of finance officials in Paris, Bernanke pulled aside Trichet and King to quiz them on how they manage their encounters with reporters.

Despite Bernanke’s experience and preparation, answering questions live in public isn’t without risk. Financial markets can misinterpret or overreact to a stray comment.

“Markets are panic-prone,” Blinder says. “They’re ready to panic at the slightest provocation.”

Bernanke has stumbled in the spotlight before.

Just months into his new job as Fed chairman in 2006, he rattled Wall Street because investors thought he sent them contradictory signals about interest rates. Bernanke complained to CNBC’s Maria Bartiromo at a Washington dinner that investors had misinterpreted recent remarks he made before Congress as a signal that the Fed was preparing to end a two-year effort to tighten credit.

CNBC reported Bernanke’s conversation, and stocks slumped in response. Weeks later, Bernanke told members of Congress that he’d suffered a “lapse of judgment” by speaking to the CNBC anchor.

In theory, the Bernanke news conferences _ four will be scheduled each year _ give him a chance to better control the Fed’s message. He can make himself heard above some of the Fed’s outspoken inflation hawks.

At the same time, any war of words with dissenters could escalate and create public confusion about Fed policy.

“Lack of a consistent message is a problem,” said Ken Thomas, a lecturer in finance at the University of Pennsylvania’s Wharton School. “That is a big fear.”

Joseph Gagnon, a former Fed official who is now senior fellow at the Peterson Institute of International Economics, says he thinks the anti-inflation dissenters at the Fed are drawing too much publicity. They lack the votes to make a difference inside the Fed. Bernanke’s easy-money policies have been approved unanimously this year by the Fed’s policymaking committee.

By talking to the media, Bernanke can “get out there before other guys start to spin it their way,” Gagnon says. “Why should they get all the attention?”

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