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

Video Miami Cubans Divided on New US Policy

While older, more conservative Cuban Americans have promoted anti-Castro political movement for years, younger generations say economically, it is time for change More

2014 Sees Dramatic Uptick in Boko Haram Abductions

Militants suspected in latest mass kidnapping of over 100 people in Gumsuri, Nigeria on Sunday More

Video Cuba Deal Is Major Victory for Pope

Role of Francis hailed throughout US, Latin America - though some Cuban-American Catholics have mixed feelings 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.
Sudan School Becomes Target of Aerial Attacksi
X
December 19, 2014 12:45 AM
The school dropout rate is at an all-time high in Sudan's South Kordofan state because many schools have been destroyed during the three-year civil war between the government and SPLA-N rebel forces. Adam Bailes visited Sudan's Nuba Mountains' region and reports many children are simply too scared to go to school
Video

Video Sudan School Becomes Target of Aerial Attacks

The school dropout rate is at an all-time high in Sudan's South Kordofan state because many schools have been destroyed during the three-year civil war between the government and SPLA-N rebel forces. Adam Bailes visited Sudan's Nuba Mountains' region and reports many children are simply too scared to go to school
Video

Video VOA Reporter Tours Devastated Peshawar School

Islamist militants wearing military uniforms and strapped with explosives attacked a military run school Tuesday in the northwestern Pakistani city of Peshawar. At least 141 people were killed in the horrific attack, most of them young students. VOA reporter Ayaz Gul visited the devastated school and attended the funeral of the principal who courageously tried to save her students from the deadly attack.
Video

Video Nigerians Fleeing Boko Haram Languish in Camp Near Capital

In its five-year effort to impose Islamic law in northeastern Nigeria, the Boko Haram extremist group has killed thousands of people and forced hundreds of thousands to flee. Some of those who ran for their lives now live in squalor on the edges of the capital, Abuja. Chris Stein reports for VOA.
Video

Video Putin Says Russian Economy Will Emerge Stronger

Russian President Vladimir Putin has said his country's sinking economy will not only recover but also become stronger, despite falling oil prices and Western sanctions over Ukraine. VOA's Daniel Schearf reports.
Video

Video Detained Turkish Journalists Follow Teachings of US-Based Preacher

The Turkish government’s jailing of critical journalists has sparked international condemnation and is being seen as an effort to undermine the followers of an ailing Turkish preacher based in the United States. VOA religion reporter Jerome Socolovsky has more.
Video

Video ‘Anti-Islamization’ Marches Increase Tensions In Germany

Anti-immigrant rallies in Germany have been building in recent weeks, peaking Monday night in the city of Dresden where tens of thousands of people turned out to demonstrate against what they call the ‘Islamization’ of the West. Germany has offered asylum to more Syrian refugees than any other country, and this appears to have set off the protests. Henry Ridgwell reports from London.
Video

Video Aceh Rebuilt Decade After Tsunami, But Scars Remain

On December 26, 2004 there was an earthquake in the Indian Ocean so powerful it caused the Earth’s axis to wobble a few centimeters. Onshore on the island of Sumatra, the resulting tsunami was devastating. A decade later, VOA Correspondent Steve Herman reports from Banda Aceh, Indonesia, where although there is little remaining evidence of the physical devastation, the psychological scars among survivors remain.
Video

Video Refugees Living in Kenya Long for Peace in the Home Countries

Kenya is host to numerous refugees seeking safe haven from conflict. Immigrants from Somalia face challenges in their new lives in Kenya. Ahead of International Migrants Day (December 18) Lenny Ruvaga has more for VOA News from the Kenyan capital.

All About America

AppleAndroid

World Currencies

EUR
USD
0.8143
JPY
USD
119.23
GBP
USD
0.6390
CAD
USD
1.1596
INR
USD
63.304

Rates may not be current.