Italy’s benchmark 10-year borrowing rate has jumped above the 7 percent level widely considered unsustainable over the longer term, a day after Italian Premier Silvio Berlusconi announced he would resign after Parliament passes new austerity measures.
The announcement failed to calm markets, with stocks and bonds sliding.
The 7 percent threshold is psychologically important for traders because Greece, Ireland and Portugal asked for bailouts when it became clear the rate wasn’t coming back down from that level.
Berlusconi agreed to leave office after a routine vote confirmed he’d lost his majority in Parliament. What comes next remains unclear.
Berlusconi wants new elections with his hand-picked successor as a candidate. Before that can happen, Italy’s president must decide an interim government and if it will be led by politicians or technocrats.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.
ROME (AP) _ Italian Premier Silvio Berlusconi confirmed he won’t run again for office and said Wednesday his hand-picked successor Angelino Alfano will be his party’s candidate when Italy holds new elections.
Italian borrowing costs jumped higher a day after Berlusconi promised to resign after Parliament passes new austerity and reform measures. While Berlusconi’s majority was hampered in pushing through reforms, the makeup of Italy’s next government remains a looming question.
Berlusconi said he would leave office after a routine vote in Parliament revealed he no longer had the majority he needs to push through policy. He said he would step aside once Parliament passes economic reforms demanded by the European Union to prevent Italy from being swept up further into Europe’s debt crisis.
No date has been set, but earlier indications suggested it would happen next week.
Despite the move, Italy’s financial markets deteriorated on Wednesday. The yield on Italy’s 10-year bonds jumped another 0.37 of a percentage point Tuesday to 6.95 percent. The main Milan stock index was trading 3.6 percent lower at 15,097. Shares in Berlusconi’s Mediaset empire were battered, trading down 9.8 percent at euro2.262.
Once Berlusconi resigns, President Giorgio Napolitano must begin consultations to form a new government _ possibly with the conservative leader from Berlusconi’s party, or if consensus can’t be reached, a technical government may be sought.
Berlusconi is pressing for new elections in early 2012.
“I won’t run, actually I feel liberated,” Berlusconi was quoted as telling the La Stampa daily. “It’s Alfano’s turn.”
Berlusconi tapped Alfano, his former justice minister, to head his People of Liberties Party a few months ago. At 41, Alfano represents a new generation of politicians after 17 years of Berlusconi leadership.
Mario Monti, a former EU competition commissioner who now heads Milan’s prestigious Bocconi University, has been widely tipped as a candidate to head a technical government.
Berlusconi conceded it was up to Napolitano to decide how to proceed once he steps down.
It’s not clear that Napolitano would want to subject Italy to elections any time soon given the need to calm markets. He may try to sound out politicians about the possibility of forming either a government of technocrats or a broad-based government that could hold a majority in parliament.
A judge on Monday blocked a federal requirement that would have begun forcing tobacco companies next year to put graphic images on their cigarette packages to show the dangers of smoking.
U.S. District Judge Richard Leon ruled that it’s likely the cigarette makers will succeed in a lawsuit claiming the images violate the free speech amendment to the Constitution. He stopped the requirement until the lawsuit is resolved, which could take years.
Leon held a hearing on the case in September and questioned the Justice Department about whether the nine graphic images approved by the Food and Drug Administration in June convey just the facts about the health risks of smoking or go beyond that into advocacy _ a critical distinction in a case over free speech.
The images include a cloud of cigarette smoke within inches of a baby’s face; a pair of healthy lungs next to the diseased lungs of a smoker and a warning that smoking causes fatal lung disease; a smoker’s stained teeth and a lip diseased by cigarettes; and a dead smoker on an autopsy table with surgical stitches in his chest and the words “Smoking can kill you.”
The FDA requirement said the labels were to cover the entire top half of cigarette packs, front and back and include a number for a stop-smoking hotline. The labels were to constitute 20 percent of cigarette advertising, and marketers were to rotate use of the images.
The Justice Department argued the images coupled with written warnings were designed to communicate the dangers to youngsters and adults. The FDA declined to comment on the judge’s ruling.
Tobacco companies are increasingly relying on their packaging to build brand loyalty and grab consumers. It’s one of few advertising levers left to them after the government curbed their presence in magazines, billboards and TV, and the graphic labels could cost them millions in lost sales and increased packaging costs.
The cigarette makers that sued the FDA are R.J. Reynolds Tobacco Co. of Winston-Salem, N.C., Lorillard Tobacco Co. of Greensboro, N.C., Commonwealth Brands Inc. of Bowling Green, Ky., Liggett Group of Mebane, N.C., and Santa Fe Natural Tobacco Co. of Santa Fe, N.M.
Mining company Anglo American has gained a controlling interest in diamond miner De Beers, paying $5.1 billion for the 40 percent of De Beers shares held by the Oppenheimer family.
The deal potentially raises Anglo American’s stake to 85 percent. The government of Botswana, however, has pre-emption rights to buy one-fourth of the Oppenheimer shares at the time the transaction closes, potentially increasing its stake to up to 25 percent.
“This has been a momentous and difficult decision as my family has been in the diamond industry for more than 100 years and part of De Beers for over 80 years,” said Nicky Oppenheimer, representing the Oppenheimer family interests which are held by CHL Group.
Anglo American shares were up 3.4 percent in midmorning trading in London.
Buses, metro trains, trams and taxis were not running in the Greek capital Friday, snarling traffic as public transport workers striked for a second day in an unrelenting barrage of protests against government austerity measures.
Finance Minister Evangelos Venizelos criticized the repeated strikes and protests, which have included the take-over of government buildings and risk slowing reforms the country needs to qualify for bailout loans.
“This is a challenge at the heart of democracy,” the minister said in Parliament, adding that “the image there has been in the last few weeks is one of lawlessness,” and that blackmail was different from fighting for people’s rights.
Venizelos said the government was prepared to assume the political cost of pushing through unpopular but necessary austerity measures.
Taxi drivers on Friday joined the second day of a 48-hour public transport strike, leaving private cars and motorcycles as the only form of transport in the Greek capital, while lawyers walked off the job until Oct. 19 and customs officers for 10 days. On Thursday, power company unionists occupied the electricity company’s billing facility in an effort to prevent the issuing of electricity bills which include a new property tax.
A wave of strikes is expected next week, with seamen leaving ferries tied up at ports for two days from Monday and hospital doctors and teachers also walking off the job. The labor action is to culminate in a two-day nationwide general strike on Oct. 19-20. The second day will coincide with a vote in Parliament on new budget cuts, which includes reforms to the labor law.
The government has been imposing repeated rounds of austerity measures as it struggles to meet the requirements to qualify for funds from a euro110 billion ($151 billion) international bailout loan that is preventing it from defaulting on its debts. Its international debt inspectors have said the country will likely receive the next euro8 billion installment of the loans in early November.
Athens has said it only has enough money to pay salaries and pensions until mid-November.
Public servants are the main targets of the latest reforms that include across-the-board salary cuts and the suspension of 30,000 workers on the state payroll with reduced salaries. Pensioners will also see more cuts and salary earners will pay higher taxes, while parliament has already approved an emergency property tax to be charged starting this month through household and business electricity bills.
The new measures have led to widespread criticism not only from labor unions and opposition parties, but also from within the governing Socialist party, with some deputies implying they will not vote in favor of the bill on Thursday unless changes are made.
Venizelos said the country found itself in an “economic war.”
“We must defend ourselves,” he said. “Yes, unfortunately we must cut salaries and pensions, … yes, unfortunately we must impose greater taxes.”
Markets and analysts believe that a default by Greece is inevitable eventually, and some have raised the prospects of the country leaving the European Union’s joint currency, the euro. Both Greek and European officials have repeatedly insisted this is not on the cards.
Venizelos said such a prospect would be disastrous.
“An exit from the euro leads to poverty and the jungle,” he said in Parliament, and called on the opposition parties to support the government’s efforts to pull the country out of its crisis.
“We have an obligation to tell the people the truth about how dangerous, fluid, unclear the situation is,” he said. “We must be united when there is danger in order to be secure and sovereign.”
Venizelos criticized the repeated strikes and protests, which have included takeovers of government buildings, saying that “the image there has been in the last few weeks is one of lawlessness,” and that blackmail was a different thing from fighting for people’s rights.
The finance minister said the government was prepared to assume the political cost of pushing through unpopular but necessary austerity measures, and repeated that authorities were cracking down on tax evasion.
MEMC Electronic Materials Inc., based in O’Fallon, Mo., said its SunEdison unit sold 33 megawatts of solar energy projects in Spain and Italy to KGAL GmbH & Co., a German investment company.
The transaction follows the sale of 20 megawatts of solar projects to KGAL in the second quarter.
SunEdison said it will continue to monitor, maintain and operate all of the projects under long-term agreements. Other terms of the sales weren’t disclosed.
Sheila Mauricette was at work when a door-to-door seller came to her home. Now she
The Toronto stock market tumbled almost 400 points Tuesday, continuing a big two-day slide as nervous rumblings persist that another global recession could be coming.
The S&P/TSX composite index lost 362.66 points or 3.22 per cent to 10,889.17 as the possibility of a Greek debt default continued to rattle investors. The index had already hit its lowest level since last summer on Monday with a 375-point slide.
The junior TSX Venture Exchange fell 64.93 points to 1,324.46.
Investors have been concerned over the last couple of months about the slowing pace of economic revival, and the possibility that Greece might not be able to make key debt payments
Asian stock markets tumbled Monday as sentiment took a hit from a weakening economic picture in Europe and Greece’s admission it won’t meet its deficit reduction target despite austerity.
Oil prices fell to near $78 a barrel while the dollar strengthened against the euro but slipped against the yen.
In Tokyo, the Nikkei 225 slumped 2.3 percent to 8,493.24 _ well below the close of 8,605.15 on March 15 in the aftermath of a destructive earthquake and tsunami that wiped out Japan’s northeastern coast. A government survey showing an improvement in business confidence among Japanese manufacturers did little to nudge stocks back to life.
Hong Kong’s Hang Seng dived 5 percent to 16,722.46 by the end of the morning session _ its lowest level this year.
Australia’s S&P/ASX 200 fell 2.6 percent to 3,904.40. Benchmarks in Singapore, Taiwan, Indonesia, the Philippines and Thailand were all sharply lower. Markets in mainland China and South Korea are closed for national holidays.
Francis Lun, a Hong Kong-based analyst, said governments have been mishandling their economies since the 2008 financial meltdown. Greece was not given the support it needs from other countries that use the euro currency to ward off the prospect of defaulting on its debts.
Greece will run out of cash in two weeks if it does not met the criteria set down by a group of international lenders for the next installment of a financial rescue package. A default could undermine banks with significant holdings of Greece’s bonds and cause domino-style defaults in other indebted countries such as Italy.
Meanwhile, a deeper-than-expected recession prevented Greece from meeting the 2011-2012 fiscal year’s deficit target of 7.8 percent of gross domestic product, the government said. Greece’s deficit for 2011-2012 is expected to reach 8.5 percent of GDP, or euro18.69 billion ($25.2 billion).
“I think Europe really could have done it better. They should have come out much earlier and said they are going to stand by Greece no matter what,” Lun said. “Their procrastination really hurt market sentiment.”
In the U.S., too much aid went to big corporations, Lun said. The government and the central bank threw money at the economic problems but missed the main target: helping to lower the high unemployment rate and getting people back to work payday loans for bad credit.
“America spent the money incorrectly,” he said. “To save the Wall Street fat cats, people are much poorer than before. The economic malaise is really caused by unemployment and unemployment is the result of a lack of personal consumption. When you don’t have personal consumption, then your economy is going to fall into a tailspin.”
Shares were down in raw materials, industrial companies and banks, which would be hit hard if the global economic picture worsens.
Hong Kong-listed Agricultural Bank of China, the country’s largest rural lender, plunged 9.3 percent. Anhui Conch Cement Co. plunged 13 percent. Japanese heavy equipment maker Komatsu Ltd. lost 5.2 percent. Australia’s Fortescue Metals Group Ltd. lost 6.6 percent. India’s Tata Steel fell 4 percent.
Tumbling energy prices sent oil shares lower. Hong Kong-listed China National Offshore Oil Corp. dropped 7.5 percent, while PetroChina Co. slid 3.1 percent.
The U.S. is also at risk of another recession, mainly because of Europe’s struggles and signs of weakness in developing countries like China that have been driving global economic growth.
On Wall Street on Friday, stocks fell broadly. The Dow Jones industrial average dropped 2.2 percent to 10,913.38. The broader S&P 500 index shed 2.5 percent to 1,131.42. The Nasdaq composite index fell 2.6 percent to 2,415.40.
Benchmark oil for November delivery was down $1.03 to $78.19 per barrel in electronic trading on the New York Mercantile Exchange.
The contract closed down $2.94, or 3.6 percent, to $79.20 per barrel on Friday in New York. Prices haven’t finished that low since Sept. 29, 2010.
Crude peaked near $114 a barrel in May of this year but has since fallen 31 percent as worries grow about the global economy.
In currencies, the euro fell to $1.3317 from $1.3424 late Friday in New York. The dollar slipped to 77.04 from 77.08 yen.
Pioneer Hi-Bred, the Dupont-owned seed maker, unveiled a new production plant about 160 miles south of St. Louis on Friday, the largest in its growing seed business.
Pioneer, based in Des Moines, Iowa, has been gaining market share in the corn and soybean business, presenting Creve Coeur-based Monsanto, the world’s largest seed company, with a growing challenge in the increasingly competitive seed market.
The production facility, which will produce genetically modified commercial soybean seed, will start off with 55 employees, eventually growing to 65 bad credit personal loan lenders. The company spent roughly $60 million on the facility’s construction, which began in May of last year.
The plant will be one of 50 Pioneer-owned commercial and “parent” seed production facilities in the U.S., and the company’s largest worldwide.
“Our strategy is to serve our customers,” said Alejandro Munoz, vice president of Pioneer’s Americas Group & Global Production. “Our market share numbers have been going up
The football season just started, but Doritos is already thinking about the Super Bowl.
The snack chip brand is going to have its sixth annual “Crash the Super Bowl” contest, which allows viewers to submit their own Doritos commercials and fans to vote on their favorites to appear during the big game.
If the ads score well on the USA Today Ad Meter, which measures the popularity of Super Bowl commercials, contestants win cash prizes of up to $1 million.
This year, Doritos has added a twist: It has enlisted Andy Samberg, a comedian on the popular “Saturday Night Live” program, and The Lonely Island, a creative team that consists of Samberg and two childhood friends, to create an ad to compete in the contest.
If their ad wins, they’ll donate the prize money to charity. If they don’t, they’ll work with the winners on a future yet-to-be-determined Doritos project.
“I see this year as really us raising the stakes a little bit,” said Tony Matta, vice president of marketing. Instead of just cash and recognition, he says winners will get “a career-changing opportunity.”
The Super Bowl is advertising’s largest showcase; the football championship garnered a record 111 million viewers when it aired on Fox in February, according to Nielsen.
In order to get more bang for their buck _ a Super Bowl ad costs about $3 million per 30 seconds _ marketers are increasingly seeking ways to promote their advertising online and get publicity before and after the big game.
“The challenge for marketers today is to really engage consumers using both traditional and new forms of media,” said Tim Calkins, Clinical Professor of Marketing at the Kellogg School of Management at Northwestern University.
“Crash the Super Bowl” has been Doritos’ way to create buzz. The brand, which is made by PepsiCo Inc.’s Frito-Lay division, saw video submissions for the contest increase 38 percent to 5,600 for the most recent game played earlier this year. The contest finalists’ videos were viewed 22 million times. Doritos also saw a 30 percent increase in Twitter activity and a 25 percent increase in Facebook activity during the contest high quality business cards.
This year, they’re amping it up by teaming with the partnership The Lonely Island. The team, which also includes Akiva Schaffer and Jorma Taccone, wrote, directed and appeared in a series of popular digital shorts for “Saturday Night Live” with Justin Timberlake. The team also wrote and shot a music video for a song called “I’m on a Boat,” which was nominated for a Grammy.
Samberg said The Lonely Island agreed to work on the campaign in part because the Super Bowl is “such a large stage,” and he added “we just thought it was cool that young filmmakers get an opportunity to get that break.”
So far, winners of the contest have garnered some commercial work but there has been no breakout success story yet. The winners from the telecast earlier this year, Tess Ortbals and J.R. Burningham, started their own company, Mythmakers Entertainment, to pursue commercial work after creating an ad that took the stop spot on the Ad Meter.
That ad, “Pug Attack” shows a man mocking a dog with a bag of Doritos through a glass door. The pug then knocks down the door and eats the chips.
The first $1 million winners, Joe and Dave Herbert, brothers who won the contest in 2009, have gone on to direct several beverage spots and have shot several Web commercials. They’re also developing a feature film.
Matta said the goal is to one day launch a winner who can capitalize on the break and become a big-name director. “I would love in two or three years from now for the winner of this year’s program be directing or producing major motion picture film, that is true success,” he said.
Participants can enter the contest this year by submitting a 30-second Doritos ad at http://www.crashthesuperbowl.com between Oct. 3 and Nov. 21. Five finalists will be announced in January 2012, ahead of NBC’s Feb. 5, 2012 Super Bowl XLVI broadcast.
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