News / Economy

Stocks Rally on US Debt Deal, Briefly

Employees of a foreign exchange firm monitor screens, with a television news reports that President Barack Obama announced US debt limit deal, in Tokyo, August 1, 2011
Employees of a foreign exchange firm monitor screens, with a television news reports that President Barack Obama announced US debt limit deal, in Tokyo, August 1, 2011

Multimedia

Global Investors breathed a collective sigh of relief, following news that U.S. politicians had reached tentative agreement on raising the government's debt limit - avoiding a possible default.  Financial markets around the world reacted positively.  But, the euphoria did not last long.

In Asia, key indexes from Hong Kong to Japan were up sharply after the U.S. announcement.
Gold prices dropped more than $15, oil saw its biggest gains in two months and the dollar strengthened against the euro and the yen.

But investment analyst Martin Hennecke said the optimism was not likely to last.

"The immediate reaction is positive in the Asian markets so the markets are up," said Hennecke. "However, before one becomes overly euphoric, we would caution that increasing the debt limit means increasing the debt - and too much debt was the problem in the first place in the United States."

On Wall Street the euphoria quickly gave way to reality.  The Dow Jones Industrial Average - up nearly 150 points before the opening bell - plunged into the red again for a seventh consecutive day Monday -- after a key manufacturing index showed U.S. factory production at the slowest pace in two years.  Earlier gains in Europe also evaporated.

Societe General's Marc Lansonneur says all this talk of the U.S. debt appears to be highlighting problems closer to home.

"More issue [concerns] in U.S. debt market will increase the euro zone threat," said  Lansonneur. "Also, what's next?  I mean, you know, you have Japan, which is not in good shape from a government debt point of view, and even China.  I mean, China is also in debt in the public sector."

New economic reports show Chinese factory output fell to a three-year low last month as manufacturers grappled with credit shortages and slowing global demand.

China economic consultant Andrew Leung says the slowdown comes as the country's inflation is rising.

"China, like the rest of the world, is at a crossroads, a very, very important point in the world's development," said Leung. "And China is trying to go for a slower, but more sustainable model of growth."

Projected spending cuts contained in the U.S. debt deal could further slow growth in many export-driven economies as American consumer spending slows down.  Investors say they will be watching the latest U.S. data for clues to the state of the U.S. economy.  One of the key indicators - the Labor Department's monthly employment report - comes Friday.

You May Like

Hezbollah Chief Says Does Not Want War But Ready for One

VOA's Jerusalem correspondent reports that with an Israeli election looming and Hezbollah's involvement in Syria, neither side appears interested in a wider conflict More

Multimedia VOA SPECIAL REPORT: Despite Danger, Best US Minds Battle Deadly Virus

Scientists at America's premier biological research center race in military confinement to find effective drugs, speedier tests and a safe vaccine amid the deadliest outbreak of Ebola in history More

Kurdish Poet Battles to Defend Language, Culture

Kawa Nemir's work is an example of what he sees as an irreversible cultural and political assertiveness among Kurds in Turkey More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Egypt's Suez Canal Dreams Tempered by Continued Unresti
X
Heather Murdock
January 30, 2015 8:00 PM
Egypt plans to expand the Suez Canal, raising hopes that the end of its economic crisis may be in sight. But some analysts say they expect the project may cost too much and take too long to make life better for everyday Egyptians. VOA's Heather Murdock reports.
Video

Video Egypt's Suez Canal Dreams Tempered by Continued Unrest

Egypt plans to expand the Suez Canal, raising hopes that the end of its economic crisis may be in sight. But some analysts say they expect the project may cost too much and take too long to make life better for everyday Egyptians. VOA's Heather Murdock reports.
Video

Video Threat of Creeping Lava Has Hawaiians on Edge

Residents of the small town of Pahoa on the Big Island of Hawaii face an advancing threat from the Kilauea volcano. Local residents are keeping a watchful eye on creeping lava. Mike O’Sullivan reports.
Video

Video Pro-Kremlin Youth Group Creatively Promotes 'Patriotic' Propaganda

As Russia's President Vladimir Putin faces international pressure over Ukraine and a failing economy, unofficial domestic groups are rallying to his support. One such youth organization, CET, or Network, uses creative multimedia to appeal to Russia's urban youth with patriotic propaganda. VOA's Daniel Schearf reports.
Video

Video Mobile Infrared Scanners May Help Homeowners Save Energy

Mobile photo scanners have been successfully employed for navigational purposes, such as Google Maps. Now, a group of scientists from the Massachusetts Institute of Technology says the same technology could help homeowners better insulate their houses and save some money. VOA’s George Putic has more.
Video

Video Filmmakers Produce Hand-Painted Documentary on Van Gogh

The troubled life of the famous 19th century Dutch painter Vincent van Gogh has been told through many books and films, but never in the way a group of filmmakers now intends to do. "Loving Vincent " will be the first ever feature-length film made of animated hand-painted images, done in the style of the late artist. VOA’s George Putic reports.
Video

Video Issues or Ethnicity? Question Divides Nigeria

As Nigeria goes to the polls next month, many expect the two top presidential contenders to gain much of their support from constituencies organized along ethnic or religious lines. But are faith and regional blocs really what political power in Nigeria is about? Chris Stein reports.
Video

Video Rock-Consuming Organisms Alter Views of Life Processes

Scientists thought they knew much about how life works, until a discovery more than two decades ago challenged conventional beliefs. Scientists found that there are organisms that breathe rocks. And it is only recently that the scientific community is accepting that there are organisms that could get energy out of rocks. Correspondent Elizabeth Lee reports.
Video

Video Paris Attacks Highlight Global Weapons Black Market

As law enforcement officials piece together how the Paris and Belgian terror cells carried out their recent attacks, questions are being asked about how they obtained military grade assault weapons - which are illegal in the European Union. As VOA's Jeff Swicord reports, experts say there is a very active worldwide black market for these weapons, and criminals and terrorists are buying.
Video

Video Activists Accuse China of Targeting Religious Freedom

The U.S.-based Chinese religious rights group ChinaAid says 2014 was the worst year for religious freedom in China since the end of the Cultural Revolution. As Ye Fan reports, activists say Beijing has been tightening religious controls ever since Chinese leader Xi Jinping came to office. Hu Wei narrates.
Video

Video Theologians Cast Doubt on Morality of Drone Strikes

In 2006, stirred by photos of U.S. soldiers mistreating Iraqi prisoners, a group of American faith leaders and academics launched the National Religious Campaign Against Torture. It played an important role in getting Congress to investigate, and the president to ban, torture. VOA's Jerome Socolovsky reports.
Video

Video Former Sudan 'Lost Boy' Becomes Chess Master in NYC

In the mid-1980’s, thousands of Sudanese boys escaped the country's civil war by walking for weeks, then months and finally for more than a year, up to 1,500 kilometers across three countries. The so-called Lost Boys of the Sudan had little time for games. But one of them later mastered the game of chess, and now teaches it to children in the New York area. VOA’s Bernard Shusman in New York has his story.
Video

Video NASA Monitors Earth’s Vital Signs From Space

The U.S. space agency, NASA, is wrapping up its busiest 12-month period in more than a decade, with three missions launched in 2014 and two this month, one in early January and the fifth scheduled for January 29. As VOA’s Rosanne Skirble reports, the instruments being lifted into orbit are focused on Earth’s vital life support systems and how they are responding to a warmer planet.

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More

All About America

AppleAndroid

World Currencies

EUR
USD
0.8845
JPY
USD
117.71
GBP
USD
0.6643
CAD
USD
1.2669
INR
USD
62.019

Rates may not be current.