US stocks bounced back somewhat from Friday's losses yesterday. Reuters reports:
The Dow staged a modest rebound on Monday from Friday's nearly 400-point drop, as concerns about consumer spending and the housing market were eased by better-than-expected sales figures from McDonald's Corp and a surprising gain in pending home sales.
Financial shares were among the worst-performing sectors, dragged down by Lehman Brothers which forecast a $2.8 billion second-quarter loss and unveiled a plan to raise $6 billion to strengthen its capital.
Lehman's troubles remind us that the worst may not be over.
In fact, in Japan, economic difficulty may be just starting. Notwithstanding a rebound in machinery orders in April reported today, the Japanese economy appears to be losing steam. From Reuters:
Japanese bank lending in May rose at its fastest annual pace in over a year, but firms were borrowing more to cover rising energy and material prices, and analysts said the increase did not signal a stronger economy...
The leading indicator rose 2.0 point, based on comparative historical data, the biggest rise in two years.
But the cabinet office figures showed the index has been declining since a peak in May 2006.
The coincident index fell 0.7 point in April, prompting the cabinet office to cut its assessment, saying the economy "may be facing a change in phase". Until March it had said "the economy was essentially flat"...
Separately, a sentiment index of Japanese service sector workers, called "economy watchers" for their proximity to consumer and retail trends, dropped to 32.1 in May from 35.5 in April, marking the second straight month of decline.