U.S. markets slide on Cisco report
NEW YORK, Nov. 11 (UPI) -- U.S. markets turned sharply lower Thursday morning as Cisco Systems Inc. said its revenues growth was expected to slow.
Cisco reported profits up 8 percent in its fiscal first quarter compared to the same period a year ago. However, it said its television set-box business looked weak and Chief Executive Officer John Chambers described the business environment as "challenging," CNNMoney.com reported.
Investors were also uncertain what to expect on currency rate stabilization after a Group of 20 Nations summit in Seoul. Analysts expect whatever pact is signed will contain mostly a pledge of goodwill, rather than a significant breakthrough.
In late morning trading on Wall Street, the Dow Jones industrial average dropped 84.11 points, 0.83 percent, to 11,262.83. The Standard & Poor's 500 index lost 0.77 percent, 9.40, to 1,209.31. The Nasdaq composite index lost 1.33 percent, 34.40, to 2,544.38.
The benchmark 10-year Treasury note rose 4/32 to yield 2.648.
The euro fell to $1.3686 from Wednesday's $1.3779. Against the yen, the dollar rose to 82.38 yen from Wednesday's 82.32 yen
In Japan, the Nikkei 225 index added 0.31 percent, 30.94, to 9,861.46.
G20 pits trade-surplus v. trade-deficit
SEOUL, Nov. 11 (UPI) -- Leaders of surplus-positive nations at a Group of 20 Nations summit in Seoul Thursday resisted calls for policies that would re-balance international trade.
President Barack Obama met privately with China's President Hu Jintao and Germany Chancellor Angela Merkel to press for polices that would either measure trade imbalances or tie them to currency rate exchanges, The New York Times reported. China, however, sought wording in the agreement that would not tie it to currency manipulation, while Germany rejected calls for policies that would undermine its export-oriented economy.
Both countries have been critical of the Federal Reserve's decision last week to pump $600 billion into the economy through Treasury bond purchases, a move that weakens the dollar, putting imports at a disadvantage.
The international summit also included a meeting of leaders of the world's 120 top companies, which urged a balanced effort to promote freer trade and investment.
The call for a vigorous-but-careful approach to free trade and investment was among the 68 recommendations corporate leaders offered the G20 leaders before the official opening of the summit, South Korea's news agency Yonhap reported Thursday.
"Today in Seoul, we engaged in a rich exchange of views both among ourselves and with G20 leaders and policy-makers," Peter Brabeck-Letmathe, Nestle chief executive officer, said during a news conference.
In a joint statement, business CEOs also urged G20 leaders to "roll back protectionism at least to where it was at the start of the global financial crisis" and permanently include trade and investment on the G20 agenda.
G20 host Lee Myung-bak, president of South Korea, stressed the important role business plays in helping to overcome the global economic downturn.
"It is true the public sector has led the economic recovery through increased spending and other means, but there are limits to what governments can do," said Lee, one of 10 heads of state attending the business CEO meeting. "And that is why I believe eventually the business sector has to help create new engines of growth if we are to completely overcome the global crisis and achieve sustainable growth."
British Prime Minister David Cameron also stressed the necessity of a good exchange between business and political leaders, Yonhap said.
"All of the work we do is nothing unless it encourages businesses to grow and employ people. We want global growth, but you are the people who will deliver. Help us achieve those goals," Cameron said.
Business leaders called for self-imposing measures to reform the financial market, saying in a joint statement, "New standards for banking regulation and supervision must be sufficiently strong and responsive, while still encouraging growth and financial innovation."
FDIC targets executives of failed banks
WASHINGTON, Nov. 11 (UPI) -- The Federal Deposit Insurance Corp. said it put dozens of former U.S. bank officials on notice that bank failures under their watch now required some payback.
Los Angeles lawyer Jeffrey Tisdale told The Los Angeles Times letters sent to officials at five banks that he represents were "very detailed."
"I mean eight to 10 pages single-spaced of purported misdeeds," he said.
FDIC acting general counsel Richard Osterman said the letters threatening lawsuits in cases where settlements could not be reached were sent out "after careful investigation."
"We don't bring suit every time a bank fails," he said.
But the new wave of letters brings the number of legal challenges the FDIC is pursuing to 80 against former executives of banks that failed in the past two years.
The FDIC board expects to collect about $2 billion from the executives, many of whom claim they were as blindsided by the financial crisis as anyone else.
"The economy is the real culprit here. There was no way to plan for real estate values dropping 30 percent to 50 percent throughout California, Nevada and Arizona," Tisdale said.
Tim Hortons to close 36 New England stores
OAKVILLE, Ontario, Nov. 11 (UPI) -- Canadian coffee and doughnut retailer Tim Hortons said it would close 36 under-performing U.S. outlets despite rising revenues.
The retailer that operates 600 U.S. outlets said revenues in the latest quarter rose 9.8 percent with sales up 4.3 percent in its Canadian stores and 3.3 percent in the United States.
However, the firm said in a statement that it would take a $20.9 million asset impairment charge in the quarter in the New England region and close 34 stores in Providence, R.I., and Hartford, Conn., and two stores in Portland, Me.
"We are profitably growing our U.S. business in our core Northeast and Midwest U.S. markets and overall we are seeing sales develop consistent with our expectations and long-term views of success," said Horton's President and Chief Executive Officer Don Schroeder in a statement.
"The restaurants we are closing in the New England region have detracted from that performance," he said.
The firm also said it would use "approximately $400 million" out of the proceeds from sale of Maidstone Bakeries to buy back outstanding shares. The remaining $30 million from the sale would be turned over to company restaurants "to mitigate anticipated rising operating costs," due to new regulations, the company said.
