Concerns about sovereign debt in Europe has a dampening effect on Asian stock markets.
Asian Investors Remain Cautious
The European debt crisis had a chilling effect on Asian markets Wednesday, The Wall Street Journal reports. Investor caution led to an incremental rise on Japan’s Nikkei Stock Average and Australia’s S&P/ASX 200 gained 0.7 percent, while the New Zealand NZX-50 was flat and the South Korea Kospi Composite fell 1.1 percent.
Spain Faces Rating Risks
Spain faces the risk of a downgrade to its credit rating by Fitch Ratings, Bloomberg News reports. Fitch gives Spain a credit rating of AA+ with a “negative” outlook due to slowing economic growth and the failure of regional governments to keep to a schedule to reduce deficits. Moody’s investors Service gives the country an Aa2 rating and Standard Poor’s rates it AA.
Chase Warns of Declining Revenue
JP Morgan Chase has warned investors that it expects third-quarter trading revenue to be 8 percent below a year ago, The New York Times Reports. The trading slowdown stems from extreme market volatility that kept many companies and investors on the sidelines through the summer. Investment banking income for the third quarter is expected to drop by about 33 percent year-over-year.
Bank of America, Citigroup, Goldman Sachs and Morgan Stanley are also expected to have weak third-quarter results.
Magellan Fund Gets New Leadership
Fidelity Investments has announced a change in leadership for its flagship Magellan fund, which was once the world’s largest mutual fund with $110 billion in assets, but now holds $17.4 billion, USA Today reports. Jeffrey Feingold, manager of Fidelity’s Trend fund, will take over for Henry Lange, who has run Magellan since 2005. The fund has underperformed its large-cap growth rivals in the past six years. Key missteps included a large holding in American International Group stock during the financial crisis and hanging onto its largest holding, Nokia, after the company had lost ground to smartphone competitors.
Internet Sales Undermine Best Buy
Best Buy Co. has reported a 30 percent drop in quarterly profits and a decline in in-store sales for the fifth consecutive quarter. The retailer said it gained a larger share of the hot smartphone and tablets market, but the gains did not offset declines in computers and televisions, The Wall Street Journal reports. Best Buy’s big-box strategy appears to be undermined by cost-conscious shoppers seeking bargains online.
Google Adds Flight Search to Its Services
Google introduced a flight search service on Tuesday, a move that competes directly with such travel search engines as Orbitz and Kayak, The New York Times reports. The move has been anticipated since Google acquired ITA Software in an effort to provide a new open-ended travel search. Tuesday’s offering is a first step toward that goal. Google introduced another travel offering, hotel search, in July.
Missoni Craze Overwhelms Target
Target’s website crashed Tuesday following the launch of online sales of its “Missoni for Target” products, USA Today reports. The limited collection, which includes clothing and home furnishings, is the result of a partnership with the big box retailer and the Italian luxury knitwear designer. The company website read, “Woof! We are suddenly extremely popular. You may not be able to access our site momentarily due to unusually high traffic. Please stay here and we’ll try to get you in as soon as we can!”