Orders for Big-Ticket Goods Drop

WASHINGTON (AP) -- Orders to factories for big-ticket manufactured goods fell in October for a third straight month, the longest stretch of weakness in nearly four years.

The Commerce Department reported that orders for durable goods declined 0.4 percent last month, a weaker showing than expected. The October decline followed even bigger decreases of 1.4 percent in September and 5.3 percent in August, raising worries that the steep plunge in housing is beginning to drag down other sectors of the economy.While economic growth roared ahead at a rate approaching 5 percent in the summer, many economists believe growth has slowed dramatically in the current quarter from the combined blows of the most severe housing slump in more than two decades, a serious credit crunch and rising energy prices.

The government will release its latest look at overall economic activity on Thursday and it is expected to show growth at an annual rate of around 4.9 percent in the July-September quarter. However, growth in the current October-December period is expected to slump to a barely discernible 1.5 percent or even less.

Many economists have raised the odds that the country could fall into an outright recession to as high as 40 percent although they believe that the Federal Reserve, which has already cut interest rates twice since September, will keep reducing rates if economic activity continues to falter.

In remarks Wednesday, Federal Reserve Vice Chairman Donald Kohn said that the Fed's monetary policies needed to be nimble to address current risks.

"The increased (financial market) turbulence of recent weeks partly reversed some of the improvement in market functioning over the late part of September and in October," Kohn said in remarks to the Council on Foreign Relations.

One of the troubling aspects of the report on durable goods was that orders for capital goods excluding aircraft, a category considered a good proxy for business investment, fell by 2.3 percent in October, the biggest decline since a 2.4 percent fall in February.

It had been hoped that business investment would offset part of the slump in housing. However, the October decline, if it continues, could show that businesses are cutting back on their plans to buy new equipment in the face of widening economic problems.

Excluding the volatile transportation category, durable goods orders fell by 0.7 percent in October, the biggest drop since a 1.7 percent fall in August.

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Siemens Q4 net profit surges on forex gains

MUMBAI, Nov 22 - Power equipment maker Siemens Ltd on Thursday reported a surge in net profit for the fourth quarter ending September aided by forex gains and profits from the sale of a subsidiary.

The company reported net profit of 3.1 billion rupees on net sales of 21.9 billion rupees, which rose 47 percent from year ago.

During the quarter it booked 1.5 billion rupees in forex gains, while the sale of its Information and Communication segment fetched 524 million rupees, Chief Financial Officer Patrick de Royer told reporters.

In the year to September it got new orders worth 101 billion rupees, most of it netted by its power business. The segment contributed 44 percent to turnover and the industry segment 27 percent.

At the end of September the outstanding order book was worth 94 billion rupees.

"I would like to have a similiar order growth in the current year as well, in order to sustain our growth target," Managing Director J. Schubert said.

In August Siemens AG Chief Executive Peter Loescher had said he aimed to double the sales of the Indian operations in the next three years.

The company plans to enter new sectors and geographies in India. "We will introduce new products and we will continue to participate in large infrastructure projects without compromising on profitability," Schubert said.

Exports contributed to 30 percent of revenues last year and the aim is to exceed that this year, Royer said.

Its German parent will be stepping up sourcing of products and services from India for the regional and global markets. "We are looking at industrial products and there is scope for other areas as well," Schubert said.

In order to add to the bottomline the strategy is to create low-cost products for India. "We need the right products for the local market, with the right features and cost position."

Shares in Siemens closed marginally down at 1,931.75 rupees in a weak Mumbai market.

Denmark to Hold New Referendum on Euro

COPENHAGEN, Denmark (AP) -- Denmark will hold a referendum on whether to adopt the euro and drop exemptions to closer cooperation with the EU on defense and law enforcement, the prime minister said Thursday.Danish voters rejected the European common currency in a 2000 referendum. The Scandinavian country has also opted out of other key areas of EU cooperation.

Prime Minister Anders Fogh Rasmussen said at a news conference it was time to reassess those exemptions, which Denmark was granted in the early 1990s.

"A lot has changed since," he said. "It is the right time to take a decision."

No date was set for a vote but it would be held during the next four years, said the prime minister, whose center-right government was re-elected last week.

It was not immediately clear whether there would be a separate vote for each of the exemptions.

Danes stunned fellow EU nations in 1992 by rejecting the Maastricht treaty on closer European cooperation.

A year later, Danish voters approved a revised treaty with clauses letting the Scandinavian country stay outside a single currency and banking system and refrain from joining a European defense structure or conform to EU citizenship laws and common law enforcement.

"We have always said that the Danish exemptions are a hindrance for Denmark," said Fogh Rasmussen, Denmark's prime minister since 2001.

He said the referendum would be held after Denmark had ratified the new EU reform treaty, which includes changes in decision-making rules designed to make the union function more effectively. The treaty replaces the failed EU constitution, which was rejected two years ago.

Fogh Rasmussen's Liberal-Conservative coalition won the Nov. 13 snap election with support from its nationalist ally, the Danish People's Party, and a smaller centrist group.

Denmark, a country of 5.4 million people, has held five referendums on EU-related issues since it joined the bloc in 1973.

In the latest one, on Sept. 28, 2000, Danes voted 53.1 percent to 46.9 percent against replacing the Danish krone with the euro. Recent opinion polls have shown a narrow majority of Danes now favor switching to the euro.

Oil Prices Rise Above $94 a Barrel By Pablo Gorondi, Associated Press Writer

Oil prices rose Friday amid expectations that global crude supplies will remain tight despite a U.S. oil inventory report that showed a surprising increase in domestic crude stockpiles.

Light, sweet crude for December delivery on the New York Mercantile Exchange rose 70 cents to $94.13 a barrel in electronic trading by midday in Europe. The contract expires at the end of Friday. It fell 66 cents on Thursday.In London, January Brent crude futures gained 56 cents to $90.79 a barrel on the ICE Futures exchange.

"The outlook for pricing remains strong based on tight supply-demand fundamentals," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore. "Because of growth in developing countries, global oil demand growth is going to continue at a good pace."

A U.S. government report said Thursday that crude oil inventories rose by 2.8 million barrels last week. Analysts surveyed by Dow Jones Newswires, on average, had expected a decline of 300,000 barrels.

The higher inventories were "largely the result of a 830,000 barrel per day increase in imports," said Vienna's PVM Oil Associates.of crude imports showed no "no strong impact from the Mexican weather disruptions" of weeks past.

The U.S. Energy Information Administration's report also said gasoline supplies rose by 700,000 barrels while inventories of distillates, which include heating oil and diesel fuel, fell by 2 million barrels.

Nymex heating oil futures rose 2.39 cents to $2.5826 a gallon while gasoline prices added 0.98 cent to $2.3460 a gallon. Natural gas futures gained 6 cents to $7.760 per 1,000 cubic feet.

Crude prices have been volatile this week, falling more than $3 on Tuesday and rising more than $2 on Wednesday after hitting a record of $98.62 a barrel last week. But some analysts say tight supplies and increasing demand will continue to drive prices higher.

"What's really supportive of strong pricing is that global demand growth is still exceeding supply growth, and that has eaten into the commercial inventories of consuming nations," Shum said.

Currently, oil producers are turning out about 85 million barrels a day, while the U.S. Department of Energy says consumption is between 85 million and 86 million barrels a day.

The Organization of Petroleum Exporting Countries has been under pressure to ease the supply tightness, with U.S. Energy Secretary Samuel Bodman saying earlier this week that he asked OPEC to increase production.

OPEC Secretary General Abdalla Salem el-Badri was quoted as saying in a report Thursday that the group was ready to increase oil production "if that will contribute to lower the (crude) price."

The cartel also reduced its forecast for fourth-quarter demand for oil, saying it would rise 1.97 percent, down from expectations of a 2.1 percent increase a month ago. The revision was due in part to the effect high prices are having on demand.

"Late winter in North America along with the high price of transport fuels appears to be reducing regional oil consumption in the fourth quarter, leading to a downward revision of (100,000) barrels a day for that quarter," OPEC said in its monthly oil market report.

Shum noted that prices were also held up by the limits of OPEC's spare capacity, which left little cover for any supply disruptions, such as the oil pipeline attack in Nigeria reported Thursday that's expected to reduce production by 50,000 barrels a day. The pipeline feeds one of Royal Dutch Shell PLC's two main oil export terminals in the nation's south.

Oil prices could quickly approach $100 a barrel again if a future inventory report shows an unexpected decline in supplies, if new conflict develops in the Middle East or another oil producing region or if there's a late season hurricane or prolonged cold snap in the U.S.

Associated Press writer Gillian Wong in Singapore contributed to this report.

Asian Markets Fall Sharply By Chisaki Watanabe, Associated Press Writer

TOKYO (AP) -- Asian markets fell sharply Monday as traders took their cues from Wall Street, where shares dropped Friday amid renewed concerns about U.S. mortgage problems.

Hong Kong's benchmark index declined as much as 4.6 percent, while Japan's main index lost as much as 3.8 percent and South Korea's Kospi fell as much as 4.5 percent."Basically, the supbrime loan issue still drags on, and there is no prospect of what can end the problem," said Shinichi Ichikawa, chief strategist at Credit Suisse.

"As for the U.S. economy, the risk of recession is increasing toward the next year," which, combined with higher oil prices, prompts players to sell the dollar, he said.

On Friday, the Dow Jones industrial average fell 1.7 percent after major banks warned of further losses in their debt portfolios, raising investor concerns that the credit market slump shows no sign of abating.

Japanese traders on Monday sold exporter issues on a strengthening yen, which is at its highest levels against the dollar since May 2006.

Automaker Honda fell 3.58 percent and rival Toyota shed 2.76 percent. Sony dropped 2.61 percent.

At the close, Japan's benchmark Nikkei 225 index was at 15,197.09 points, down 2.48 percent. It dipped as low as 14,998.51 points during the session, its first time below 15,000 since July 2006.

Meanwhile, Hong Kong's Hang Seng Index was down 3.7 percent at 27,724.07 in afternoon trade after dropping to as low as 27,468.00 during the early session.

Bank HSBC shed 3.2 percent to HK$136.50 on subprime exposure woes.

Chinese financial shares also were lower after China's central bank raised the reserve requirement for banks by 50 basis points to 13.5 percent at the weekend.

Bank of China was down 3.46 percent at HK$4.47. China Construction Bank fell 3.95 percent to HK$7.54.

In Seoul, the Korea Composite Stock Price Index, or Kospi, fell 67 points, or 3.4 percent, to close at 1,923.42 in afternoon trading. The index had declined as much as 4.5 percent earlier.

Steelmaker Posco fell 4.1 percent to 562,000 won. Hyundai Heavy Industries Co., the world's biggest shipbuilder, fell 4.1 percent to 481,000 won. Samsung Electronics Co., South Korea's largest corporation, declined 2.2 percent to 528,000 won.

In Tokyo currencies, the dollar was trading at 110.34 yen at 2:50 p.m. Monday, down from 111.07 yen late Friday in New York. The euro fell to $1.4634 from $1.4673.

Stocks Fall on More Credit Writedowns By Joe Bel Bruno, AP Business Writer

NEW YORK (AP) -- Wall Street extended its slide in early trading Friday after Wachovia Corp. warned it will take quarterly loan losses, raising investor concern the credit slump shows no sign of abating.The nation's fourth-largest bank said in a filing with the Securities and Exchange Commission that credit market volatility could cause a $1.1 billion writedown for October alone. The problem stems from its asset-backed securities, such as collateralized debt obligations, that have lost value on sinking investor demand.

Investors also were rattled by speculation that Barclays PLC was about to announce a $10 billion writedown. Though the British bank denied the rumors, it demonstrated that Wall Street continues to worry that the summer's credit turmoil shows no signs of abating, and has a broader impact globally.

Further worries about the continuing credit market slump kept investors on edge a day after Federal Reserve Chairman Ben Bernanke said he expect the economy to "slow noticeably" this quarter. His comments added to the week's declines -- contributing to a slide this week on concerns about continuing credit woes, a weakening dollar and rising oil prices.

He also said the greenback's problems "may have some effect on import prices" -- which was confirmed Friday in new government data. The Commerce Department reported U.S. import prices soared last month at their fastest pace since early last year while export prices jumped at more than a decade high.

The Dow Jones industrials fell 144.37, or 1.09 percent, to 13,121.92 in the first hour of trading.

The Standard & Poor's 500 index was off 19.26, or 1.31 percent, at 1,455.51, while the Nasdaq composite index tumbled 54.91, or 2.04 percent, to 2,641.09.

Bonds rose, with the yield on the benchmark 10-year Treasury note falling to 4.25 percent from 4.27 percent late Thursday. Meanwhile, both gold and the dollar were lower.

Light, sweet crude oil fell 30 cents to $95.16 a barrel on the New York Mercantile Exchange.

Investors were also uneasy about tech stocks after Qualcomm Inc., the nation's second-biggest maker of chips that run mobile phones, predicted that heightened competition and legal troubles will cause 2008 results to fall 4 percent to 7 percent below Wall Street projections.

Qualcom fell $2.45, or 6.2 percent, to $37.31.

Wireless high-speed Internet provider Clearwire Corp. and Sprint Nextel Corp. announced before the bell they scrapped an agreement to jointly build a nationwide WiFi network. Clearwire also reported its third-quarter loss widened more than expected. Clearwire plunged $4.03, or 22.3 percent, to $14, while Sprint shed 19 cents to $16.35.

Merck & Co. said it will pay $4.85 billion to settle thousands of lawsuits over its painkiller Vioxx -- a move considered to be the biggest drug settlement ever. The offer was finalized early Friday as Merck and the plaintiffs met with three of the four judges overseeing the claims. Merck rose $1.70 to $56.49.

Walt Disney & Co. shares fell 60 cents to $33.03 after the entertainment company said late Thursday fiscal fourth-quarter profit rose 12 percent, driven by sports network ESPN and turnout at its U.S. theme parks. However, executives remain concerned about a Hollywood writers strike that began this week.

Overseas, Japan's Nikkei stock average closed down 1.19 percent and Hong Kong's Hang Seng index rose 0.08 percent. In afternoon trading, Britain's FTSE 100 fell 0.66 percent, Germany's DAX index rose 0.50 percent, and France's CAC-40 shed 0.96 percent.

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