BW Communities

Sales Draw US ...

BW Online Bureau Nov 08, 2014

<?xml version="1.0" encoding="UTF-8"?><root available-locales="en_US," default-locale="en_US"><static-content language-id="en_US"><![CDATA[View Slide Show: Global Gloom US shoppers awoke early for post-Thanksgiving sales on Friday in a key test of the country's ability to withstand economic turmoil as sharp production declines in Asia gave fresh evidence of the global crisis. Fighting wore on in India's commercial capital, Mumbai, where Islamist militants launched attacks on Wednesday, while unrest in Thailand also underlined the political risks facing emerging markets already grappling with economic disarray. US. retailers opened early and offered steep discounts on the day after Thanksgiving known as "Black Friday," hoping for a strong start to a holiday shopping season that experts predict may be the worst since the early 1990s. "If you don't get a good Black Friday start, you've got an awful lot of ground to make up," said Marshal Cohen, chief retail analyst with NPD Group. In Europe, data showed inflation falling sharply and a steeper rise in unemployment than predicted -- factors that raise pressure on the European Central Bank to cut interest rates substantially next week. The shake-up of European banks continued as the British government acquired a majority stake in Royal Bank of Scotland and Germany's Commerzbank accelerated its takeover of Dresdner Bank. Chinese insurer Ping An provided a striking example of the turmoil's global nature when, a government source said, it asked China's government to help seek compensation from Belgium over losses in European financial group Fortis. The worst economic woes in decades also took more casualties beyond the financial sector, as Franco-Italian chipmaker STMicroelectronics cut its fourth-quarter outlook and German industrial conglomerate ThyssenKrupp warned it does not expect to reach its long-term financial targets. The US benchmark Dow Jones industrial average closed 1.2 per cent higher while other major US. indices rose as markets closed early for the holiday weekend. European shares also rose. Japan's Nikkei ended up 1.7 per cent. Black Friday Sales Many are looking for economic signals this weekend from the United States, where the crisis began with a collapse in the US. mortgage market that saddled banks throughout the world with bad debt. Black Friday sales provide a strong gauge of consumer confidence, a major driver of the US. economy, as the run-up to Christmas nets up to 40 per cent of retailers' annual sales. Shoppers rose before dawn to peruse bargains at stores from Wal-Mart to Macy's Inc and Best Buy Co Inc, some opening at 4 a.m. (0900 GMT) to lure bargain hunters. But store traffic appeared about 25 per cent lighter than a year ago, a top retail analyst said. The Standard & Poor's Retail index fell 1.6 per cent. Consumers are cutting spending on nearly everything but necessities as they endure a housing slump, mounting job losses and the credit crunch. "The recession is kicking in," said Tammy Williams, 36, as she waited to enter a New Jersey Kohl's Corp store. "I'm just looking for a bargain, anything to save a couple of dollars. I'll save the rest for food shopping." Japan announced a fall of 3.1 per cent in industrial output for October, more than expected. Household spending in the world's No. 2 economy also fell more than expected. Deeper, Longer The Japanese data surprised economists and suggested the economy was in for a deeper and longer recession than earlier thought. "Production is falling much faster than we had expected. Companies are adjusting their production very quickly," said Takumi Tsunoda, senior economist at Shinkin Central Bank Research. "The auto makers are the worst hit, but their turmoil is starting to spill over to other sectors, such as steel." South Korea, Asia's fourth-biggest economy, followed Japan's pattern in reporting a sharp drop in factory output in October, leading some analysts to expect a recession. India, like China a major contributor to global economic growth in recent years, reported better than expected growth of 7.6 per cent in the third quarter. But the economy lost momentum from the prior quarter's 7.9 per cent growth and prospects were clouded by the Mumbai attacks. Consumer price inflation in the Euro zone fell 1.1 per centage points, the biggest drop since the zone was created 10 years ago, to 2.1 per cent year-on-year. The continent's troubles were underscored in Sweden, which joined the growing number of nations officially in recession. Reflecting the gloom over the auto industry from Detroit to Tokyo, a top executive at Honda Motor Co told Reuters Japan's No. 2 automaker faced a "Herculean task" meeting its already downgraded profit goals for this year. (Reuters)