Financial thoughts

Unemployment rates fell in a majority of U.S. cities in July, despite the weak economy that is producing few jobs.

The Labor Department says unemployment rates dropped in 193 large metro areas, increased in 118 and were flat in 61.

The biggest monthly decrease was in Morgantown, W.Va. A burst of hiring at the West Virginia University lowered the rate there from 6.6 percent in June to 5 percent in July. Yuma, Ariz., a farming hub, experienced the largest increase, from 27 percent in June to 30 percent in July cash advance. Metro unemployment data is not adjusted for seasonal changes, such as the start of the school year.

In July, the U.S. economy added 117,000 net jobs and the national unemployment rate fell to 9.1 percent.

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A tropical depression far out in the Atlantic is forecast to become a hurricane this week, but it’s too early to know if it’ll strike the U.S. or anywhere else.

The new depression is forecast to become Tropical Storm Katia _ the name that replaced Katrina in the rotating storm roster because of the catastrophic damage from the 2005 storm. That could come early Tuesday.

The U.S. National Hurricane Center in Miami said Monday the depression south of the Cape Verde Islands could reach hurricane strength Thursday, still far out in the Atlantic.

Hurricane Center spokesman Dennis Feltgen said it’s too early to know if it would hit the U.S.

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About three million homes and businesses were without power at dawn Sunday as Hurricane Irene continued to roar up the East Coast and charge north.

Winds of up to 115 miles per hour whipped across the Eastern Seaboard, ripping power lines from poles and snapping trees in half.

More than one million of the homes and businesses without power were in Virginia and North Carolina, which bore the brunt of Irene’s initial march. Then the storm knocked out power overnight to hundreds of thousands in Washington, Maryland, Delaware, Pennsylvania, New Jersey, the New York City area and Connecticut.

More than 480,000 New York City and suburban homes and businesses had lost power as the hurricane approached the metropolitan area.

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U.S. retailers who come to Canada face higher rents, a tighter market, and higher real estate taxes than they do in their home market, according to industry experts.

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World stock markets rose Thursday as worries eased that the U.S. might be slipping toward recession, while the resignation of Steve Jobs _ the creative force behind Apple Inc. _ sent ripples through the technology sector.

Oil prices hovered above $85 a barrel. The dollar fell against the euro but was up against the yen.

European shares rose in early trading. Britain’s FTSE 100 was 0.4 percent higher at 5,227.99 and Germany’s DAX gained 0.9 percent to 5,732.91. France’s CAC-40 rose 1.1 percent to 3,172.51.

Wall Street was set to open higher, with Dow Jones industrial futures up 0.2 percent at 11,288. S&P 500 futures rose 0.1 percent at 1,173.80.

Asian markets got a boost from U.S. data showing a surge in demand for cars and planes in July that offered an unexpectedly upbeat sign of life in the world’s biggest economy.

Japan’s Nikkei 225 climbed 1.5 percent to close at 8,772.36. Hong Kong’s Hang Seng was 1.4 percent higher to 19,744.50 as strong half-year earnings from China National Offshore Oil Corp. and Bank of China Ltd. on Wednesday boosted sentiment.

South Korea’s Kospi rose 0.6 percent to 1,764.58 and Australia’s S&P/ASX 200 was 1.1 percent higher at 4,212.80. Benchmarks in Singapore, Indonesia and Thailand also gained, while indexes in Taiwan, India and the Philippines dropped.

Shares of Asian technology companies that are direct competitors of Apple rose though the gains weren’t dramatically out of line with broader market movements.

Samsung Electronics Co. rose 2.4 percent following a court ruling in the Netherlands involving the company’s ongoing global patent fight with Apple over smartphone and tablet technology and news of Jobs’ departure. The court ruling Wednesday was seen as largely positive for Samsung.

Lee Min-hee, an analyst at Dongbu Securities in Seoul, said that Samsung could ultimately benefit from the departure of Jobs as it may erode Apple’s competitiveness in marketing and product development.

“I think it’s a good impact on Samsung Electronics in competition,” Lee said.

Samsung is both a supplier of components to Apple as well as a competitor in smartphones and tablet computers.

The resignation of Jobs, who is widely credited with turning an ailing Apple into a phenomenally successful technology company, appears to be the result of an unspecified medical condition for which he took a leave from his post in January online cash advance.

Apple’s chief operating officer, Tim Cook, was quickly named CEO of the company Jobs co-founded in his garage 35 years ago and which nowadays is known for hit consumer gadgets such as the iPhone and iPad.

Taiwan’s FoxConn Technology Co., which makes the iPhone and iPad for Apple at a massive manufacturing campus in southern China, plummeted 7 percent.

Mainland Chinese shares saw their biggest gain in 10 months with the benchmark Shanghai Composite Index adding 2.9 percent to 2,615.26 while the Shenzhen Composite Index gained 1.9 percent to 1,166.79. Shares in financial, coal and real estate companies led the advance.

Property shares benefited from speculation that China’s central bank might raise down payment requirements on some home loans, which would reduce the risk of default.

“Real estate is still a good form of investment, so property companies gained today,” said Liu Kan, an analyst at Guoyuan Securities, based in Shanghai.

Poly Real Estate gained 5.4 percent while property industry leader China Vanke gained 3.4 percent.

In other sectors, mining shares were down as gold prices came off their recent highs amid improved economic news. Hong Kong-listed Zijin Mining Group, China’s largest gold miner, lost 2.7 percent. Australia’s Newcrest Mining Ltd. dropped 2 percent.

Stronger durable goods orders resulted in Wall Street reversing course to close with gains Wednesday.

The Dow added 1.3 percent to 11,320.71. The Standard & Poor’s 500 index rose 1.3 percent to 1,177.60. The Nasdaq rose 0.9 percent to 2,467.69.

The U.S. Commerce Department said orders for durable goods rose 4 percent in July, much better than the 2.4 percent increase economists had expected. The rise in orders was due to higher demand for autos and aircraft.

Benchmark oil for October delivery was up 45 cents to $85.62 in electronic trading on the New York Mercantile Exchange. Crude lost 28 cents to settle at $85.16 on Wednesday. In London, Brent crude for October delivery was up 71 cents to $110.86 on the ICE Futures exchange.

In currencies, the euro rose to $1.4457 from $1.4421 in late trading Wednesday in New York. The dollar was up at 77.06 yen from 77.01 yen.

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Nervous Nellies on Bay and Wall Streets pulled back a bit yesterday from their panic selling of recent weeks, which has seen the S&P/TSX Composite Index drop a total of 15.5 per cent in Canada from its previous peak, in March; and the benchmark Dow Jones Industrial Average fall a similar 15.2 per cent from its most recent peak, in May.

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With NATO’s bombing of Libya now in its sixth month, a new sense of urgency is gripping the alliance before two critical deadlines next month.

After months of combat stalemate, the insurgents have made dramatic gains in recent weeks. An offensive from their beleaguered enclave in the Nafuz Mountains resulted in the capture of the strategic Mediterranean town of Zawiya and put them within striking distance of Moammar Gadhafi’s capital of Tripoli.

The rapid advance offers NATO the chance to bring to a conclusion a campaign that has drawn increasing international criticism and caused serious rifts within the alliance.

NATO officials deny there has been a fundamental shift in tactics in recent days to provide close air support to the advancing rebels, saying they continue to be focused on the protection of civilian populations as mandated by a U.N. Security Council resolution.

But they acknowledge that in a new development, alliance bombers are pummeling Gadhafi’s troops holding defensive positions around government-held towns and villages under attack from the advancing rebel forces.

“The persistent and cumulative action of NATO is creating an obvious effect,” NATO spokesman Col. Roland Lavoie said Sunday. “Pro-Gadhafi forces are gradually losing their capabilities to command, to conduct and to sustain” their actions.”

A NATO official said that early in the campaign NATO airstrikes focused on preventing Gadhafi’s troops from reoccupying rebel-held towns. These rebel attacks on regime forces destroyed hundreds of tanks, armored vehicles and guns.

But within a few weeks, Gadhafi’s soldiers switched tactics, abandoning their vulnerable heavy weaponry in favor of civilian trucks armed with machine guns or recoilless rifles, which proved difficult to identify and destroy from the air.

“Now the rebel offensive has put them on the defensive, and they are again bringing out their tanks and heavy artillery,” said the official who could not be named under standing rules.

“This is why we’ve been attacking them even when they are trying to beat back rebel advances,” he said. “We’re still protecting civilians because as soon as the rebels push pro-Gadhafi forces from a town, his troops will turn around and shell the place.”

But analysts note that NATO’s continued claims of simply protecting civilians strains credulity, saying the direct tactical air support to the ragtag rebel forces is enabling their battlefield victories.

“It was inevitable that the mission would spiral and the interpretation of U.N. resolutions would widen,” said Barak Seener, a Middle East expert at the Royal United Services Institute, a British military think tank. “Thus, NATO has bombed government targets, paving the way for rebels to reach Zawiya.”

“Protecting civilian populations now means getting rid of Gadhafi,” Seener said.

Alliance military planners are racing against a deadline next month, when member states must vote on a second three-month extension of the mission. This extension may prove problematic, since support for the bombing campaign has eroded among allies who say it detracts resources from NATO’s main mission, the 10-year war in Afghanistan.

Also in September, the U.N. General Assembly is due to take up the airstrikes, with many members blaming NATO for overstepping the original U.N. mandate in March which only authorized a no-fly zone and the protection of civilians caught up in the civil unrest.

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The stock market went back into a lull Friday as investors waited for the next signals on the economy _ and whether it’s headed for another recession.

The major indexes were fluctuating in a narrow range after Thursday’s 419-point plunge in the Dow Jones industrial average. There was little news to help investors determine their next moves _ and market analysts said many were taking the day off.

Thursday’s plunge followed a stream of disappointing economic news that added to investor concerns that the economy is stalling. The most notable economic news Friday came from JPMorgan Chase & Co. The bank joined other financial firms and cut its forecast for economic growth during the fourth quarter. It’s now predicting growth of 1 percent, down from an earlier forecast of 2.5 percent.

The Dow fell 51 points, or 0.4 percent, to 10,939 in early afternoon trading. The Standard & Poor’s 500 index fell 2, or 0.2 percent, to 1,138. The Nasdaq composite index less than a point to 2,381.

The Dow’s drop was largely due to Hewlett-Packard Co., which plunged 21 percent. The company said Thursday that it will close its mobile business, sell or spin off its PC business and pay $10 billion for a business software company.

Investors weren’t, for the moment, seeking the safety of U.S. Treasurys. The yield on the benchmark 10-year Treasury note rose to 2.10 percent from late Thursday’s 2.06 percent. It fell below 2 percent Thursday for the first time as heavy demand sent its price sharply higher.

Earlier this week, the market took a pause after the wild swings of the previous week. Economic and corporate news then was more encouraging, including a batch of merger announcements on Monday. Friday’s pause seemed to be the result of exhaustion.

“People decided to throw their hands up and go to the beach,” said Kim Caughey Forrest, senior equity analyst with Fort Pitt Capital Group in Pittsburgh.

Overseas stock markets had larger drops than in the U.S. European banking stocks fell near two-and-a-half-year lows, dragged down by rumors about banks’ potential losses on bonds issued by heavily-indebted governments. The selling in the U.S. has come in part because of fears that U.S. banks would be hurt if European countries default on their debt. Another concern: weakening European economies will hurt growth in the U installment payday loans.S.

Earlier Friday, Asian shares fell sharply, with major indexes in China and Japan losing more than 2.5 percent. However, some of those losses reflected selling in response to the drop in the U.S. Thursday.

As the selling continued overseas, gold rose as high as $1,881 an ounce. Oil prices fell as traders feared a global slowdown that would cut demand for crude.

A possible recession remains the focus of the markets. A recession is traditionally thought of as two consecutive quarters of negative economic growth, measured by a country’s gross domestic product. But with expectations of growth in the U.S. already low, investors worry that the economy can’t withstand another unexpected event like the earthquake in Japan or the string of bad weather that ravaged the South earlier this year.

JPMorgan analyst Michael Feroli said Friday that business sentiment, household wealth and global growth all look worse than just a few weeks earlier. That will keep economic growth nearly flat in the first quarter of 2012, he said.

On Thursday, economists with Morgan Stanley said that the U.S. and Europe are “dangerously close to recession,” adding, “it won’t take much in the form of additional shocks to tip the balance.”

Stocks also fell Thursday on news of another drop in home sales, weaker manufacturing in the mid-Atlantic states and a jump in inflation at the consumer level to its highest level since March. There also was bad news on the job market: an increase in the number of people who applied for unemployment benefits.

Thursday’s numbers joined a series of reports pointing to a slowing economy. The government reported on July 29 that growth in the first half was much weaker than expected _ and that the economy barely grew in the first quarter. Since then, the combination of disappointing numbers in the U.S. and worries about Europe’s debt problems have set off waves of selling.

The Dow is down 13.6 percent since stocks began falling on July 21. That has drained billions from American’s retirement savings and other investment accounts. And the stock market’s drop can itself help move the country toward recession.

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