Thursday, 17 March 2011

US housing starts plunge, stocks sink

There was bad news for the US economy on Wednesday. Bloomberg reports:

Housing starts in the U.S. plunged to the lowest level in almost a year in February and wholesale prices rose more than forecast, hurdles for a recovery that the Federal Reserve said yesterday is on a “firmer footing.”

Home construction dropped 23 percent to a 479,000 annual rate, while building permits slumped last month to a record low, Commerce Department figures showed today in Washington. The producer-price index jumped 1.6 percent in February, the most since June 2009, the Labor Department said. The gain exceeded the highest forecast in a Bloomberg News survey.

But markets remain fixated on the situation in Japan. Again from Bloomberg:

U.S. stocks sank, erasing the 2011 gain for the Standard & Poor’s 500 Index, and Treasuries rallied as Japan’s nuclear crisis worsened. The yen rose to a post-World War II high versus the dollar on speculation investors will buy the currency to fund rebuilding projects.

The S&P 500 lost 2 percent to 1,256.88 at 4 p.m. in New York, leaving it down 0.1 percent on the year. Futures on the index slumped 0.9 percent at 6:02 p.m., and contracts on the Nikkei 225 Stock Average traded for 8,205, or 8.3 percent less than the closing level of 8,950 in Singapore. Ten-year Treasury yields fell 10 basis points to 3.20 percent, the lowest since December. The yen appreciated against all 16 major peers, rising to as strong as 79.24 per dollar...

The Nikkei 225 rebounded 5.7 percent in today’s trading in Tokyo after plunging 16 percent on March 14 and 15, the worst two-day drop since 1987...

The Stoxx Europe 600 Index slid 1.6 percent, erasing an earlier gain, as banks and auto companies declined...

But while much of the world's attention has been on Japan's nuclear crisis, rescue of people directly hit by the earthquake and tsunami also took an unfortunate turn on Wednesday. From Reuters:

Heavy snow blanketed Japan's devastated northeast on Wednesday, hindering rescue workers and adding to the woes of the few, mainly elderly, residents who remained in the area worst hit by last week's massive earthquake and tsunami.

In some parts of Sendai city, firefighters and relief teams sifted through mounds of rubble, hoping to find any sign of life in water-logged wastelands where homes and factories once stood.

But, as they did in most other towns, rescuers just pulled out body after body, which they wrapped in brightly colored blankets and lined up neatly against the grey, grim landscape.

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