Markets stumble Thursday
NEW YORK, Dec. 8 (UPI) -- U.S. markets headed lower Thursday as concern over the fate of the eurozone came into sharper focus with a summit in Europe getting under way.
The meeting in Brussels is being billed as one that could determine the fate of the euro, the currency shared by 17 nations that is struggling with several of the member states coming close to default on their sovereign debts.
Concerns overpowered news that the European Central Bank had lowered its key lending rate to 1 percent from 1.25 percent to provide liquidity in financial markets. It also outweighed a U.S. Labor Department report that 381,000 first-time jobless benefit claims were filed last week, 23,000 fewer than the previous week.
In early afternoon trading on Wall Street, the Dow Jones industrial average lost 179.71 points or 1.47 percent to 12,016.66. The Standard & Poor's 500 index lost 22.90 points or 1.82 percent to 1,238.11. The Nasdaq composite index shed 41.69 points or 1.57 percent to 2,607.52.
The benchmark 10-year treasury note rose 13/32 to yield 1.991 percent.
The euro fell to $1.332 from Wednesday's $1.3413. Against the yen, the dollar was lower against the yen, trading at 77.73 yen from Wednesday's 77.68 yen.
In Tokyo, the Nikkei 225 index lost 0.66 percent, 57.59, to 8,664.58.
Geithner endorses Sarkozy-Merkel debt plan
BRUSSELS, Dec. 8 (UPI) -- U.S. Treasury Secretary Timothy Geithner endorsed a plan offered by France and Germany to resolve the eurozone debt crisis Thursday.
The plan, offered by French President Nicolas Sarkozy and German Chancellor Angela Merkel, would reshape the eurozone through tough budget discipline, the British newspaper The Guardian reported.
"We are very encouraged with the progress that is being made," Geithner said after meeting with French Finance Minister Francois Baroin.
Ahead of a crucial European Union summit Thursday and Friday in Brussels, Geithner said eurozone governments were capable of putting in place the economic reforms needed to restore growth.
Ahead of the summit, German and French officials said they doubt the meeting would create a comprehensive EU-wide accord.
"I am more pessimistic than I was last week that there will be an overall agreement," a senior German official told reporters, speaking on condition of anonymity. "A lot of the protagonists still have not understood how serious the situation is."
The two-day Brussels summit of leaders of all 27 EU members, scheduled to begin Thursday night, was billed as the last chance to save the euro. A more likely summit result, a senior French official said, is that a deal will be reached only within the 17-nation eurozone.
The 10 EU states not using the euro, including Britain, have expressed concern such a deal would institutionalize a "two-speed Europe" that would give the eurozone outsized power to make decisions for the entire 27-nation economic and political union.
Germany has said any interested country would be welcome to adopt the eurozone changes.
Merkel and Sarkozy outlined their vision for European reform in a letter delivered Wednesday to European Council President and summit Chairman Herman Van Rompuy.
Besides demanding a new euro rulebook aimed at establishing "fiscal union" among the eurozone countries, Merkel and Sarkozy proposed the eurozone's 17 finance ministers, known as the Eurogroup, hold monthly summits during the crisis, install a permanent president and create a ministerial structure to run the group.
They also called for a new legal framework empowering the Eurogroup to forge ahead with a 0.1 percent securities-transaction tax. The European Commission has said the small tax could raise a minimum $43 billion a year. Britain opposes the tax.
Merkel and Sarkozy also called for a host of other policies on financial regulation, labor markets, corporation tax principles and a "more efficient" use of the EU budget in the eurozone.
Many of the proposed ideas would require significant treaty changes, which officials said would require national legislative approvals and possibly national referendums.
Van Rompuy offered a fast-track alternative, seeking to exploit arcane EU protocols to revise the treaty and still accomplish what Merkel and Sarkozy proposed.
Britain said Van Rompuy's idea would still require at least parliamentary ratification. Britain said it would demand special protections if any treaty changes are made.
Report: Companies' IT security too lax
MONTREAL, Dec. 8 (UPI) -- The majority of Canadian companies aren't budgeting enough for adequate IT security amid a burst of new mobile technology, Ernst & Young said Thursday.
In its Global Information Security Survey released in Montreal, the company said 83 percent of Canadian companies are concerned with heightened security risks, but 63 percent reported they don't have sufficient budget to appropriately secure their IT infrastructure.
"The introduction of personal smartphones and tablets, combined with the increasing demand for access to social media has opened up several new attack vectors for Advanced Persistent Threats, which are a well-resourced, highly capable and relentless class of hacker," said National Leader for IT Security Advisory services, Gaetan Houle. "Given the rapid evolution of APTs, most companies would probably be better off outsourcing the monitoring of their Internet traffic to the pros."
Many executives reported they were particularly concerned with employees' use of social media, which Ernst & Young recommended not be dealt with by blocking, which could impede competitiveness.
"The lack of an integrated information security policy for both access to and use of social media may prevent companies from keeping pace with competitors and may be creating a sense of mistrust with employees."
Instead, Houle said companies should be monitoring employees' activity on social media as part of the security regimen.
First-time jobless claims drop by 23,000
WASHINGTON, Dec. 8 (UPI) -- First-time jobless benefit claims fell by 23,000 in the week ended Saturday with 381,000 claims filed, the U.S. Labor Department said.
It was eighth weekly decline in the past nine weeks. The four-week rolling average for first-time claims filed as of Saturday was 393,250, down 3,000 from the previous revised average, the department said.
The Labor Department said November's unemployment rate was 8.6 percent, down from 9 percent in October.
For the week ending Nov. 26, Wisconsin posted the largest increase in first-time claims with 8,172 additional claims filed. California posted the largest decrease in first-time claims with 27,440 fewer claims filed.