Fresh Plan for Europe Crisis Germany and France presented a broad plan to better coordinate economic policy in the euro zone amid news that economic growth had stalled across much of Europe in the second quarter. The proposals outlined Tuesday from French President Nicolas Sarkozy and German Chancellor Angela Merkel were immediately criticized by investors as falling short of what was needed. U.S. stocks initially rose as investors saw signs of broader cooperation in the euro zone, but fell after Mr. Sarkozy said increasing the size of the euro-zone fund to bail out weaker countries wasn’t in the cards. Demand for U.S. Treasurys surged and the price of gold also rose, as did the cost of insuring euro-zone sovereign debt against default.
(Chart from NBF Financial)
Growth in Emerging Parts of Europe Slows Growth in Central Europe’s emerging markets is slowing significantly as the recovery in the neighboring euro zone loses steam. Hungary, the Czech Republic and Romania on Tuesday all reported preliminary figures showing that the pace of economic expansion in the second quarter was weaker than in the first three months of the year.
Vital Signs: Manufacturing Picks Up The Federal Reserve’s manufacturing production index rose 0.6% from June, boosted by a jump in motor-vehicle output as supply-chain disruptions from Japan eased. The Fed’s overall index of industrial production rose a sharper 0.9% as oil and gas companies stepped up drilling and utility output soared as hot weather spurred demand for air conditioning.
Wal-Mart Frets Over Uncertainty Wal-Mart Stores Inc. joined the chorus of retailers saying that uncertain economic conditions in the U.S. are making shoppers reluctant to spend.
Dell Lowers Sales Forecast Dell Inc. said its second-quarter profit jumped 63% on strong demand from corporate customers, but slowing sales to consumers and the U.S. government prompted the company to lower its full-year revenue target. It expects revenue to rise between 1% and 5% for the year, lower than its previous range of between 5% and 9%, as it faces a challenging sales environment.
Euro-Zone Inflation Eases Consumer prices fell by 0.6% from June, but were up 2.5% from July 2010. Core inflation fell by 1% from June, to leave the annual rate of increase at 1.2%, down from 1.6% in the previous month.
U.K. Unemployment Rate Jumps The U.K.’s unemployment rate jumped to 7.9% in June from 7.7% and the number of people claiming the jobless benefit posted its largest rise in more than 18 months in July as the labor market increasingly reflects the stagnating economy.