North American Gem Inc V.NAG

RE: Anyone know why ..

[Perform4u]

U.S. Stocks Drop on German Short Restrictions, Foreclosures



By Whitney Kisling
May 19 (Bloomberg) -- U.S. stocks slid for a second day as Germany’s ban on certain bearish investments and a jump in mortgage foreclosures to a record triggered a flight from equities.
Boeing Co., Caterpillar Inc. and 3M Co. slid more than 2 percent to lead declines in the Dow Jones Industrial Average. American Apparel Inc. slumped 24 percent after saying it anticipates it won’t be in compliance with debt covenants. Principal Financial Group Inc. fell 1.8 percent after it was downgraded by Barclays Plc.
The Standard & Poor’s 500 Index fell 0.8 percent to 1,111.99 at 11:02 a.m. in New York after sliding 1.4 percent yesterday. The Dow Jones Industrial Average lost 85.1 points, or 0.8 percent, to 10,425.85.
“We’re watching Europe confront some of these headwinds,” said Lawrence Creatura, a Rochester, New York-based fund manager at Federated Investors Inc., which oversees $350 billion. “People are worried about another step down in global demand. We’re all one big world now, and there is fear that economic difficulties there may infect us on this side of the Atlantic.”
U.S. stocks tumbled yesterday after Germany’s announced its ban on naked short-selling. German Chancellor Angela Merkel said she will lobby governments to introduce a tax on financial markets, and for ratings companies to come under European supervision so governments regain “primacy” over markets. The euro is at risk and Europe may be facing its greatest challenge since the founding of the European Union, Merkel said.
‘Protect the Euro’
Belgium’s market regulator said it’s consulting the Committee of European Securities Regulators and the country’s government about whether to extend an existing ban on uncovered short positions in shares of financial companies to credit- default swaps on euro-area government bonds.
“Policymakers are determined to protect the euro zone, and they have identified the financial markets as the key obstacle for stability, which implies risks of further regulation,” Erik Nielsen and Dirk Schumacher, economists at Goldman Sachs Group Inc., wrote in a report.
U.S. equities extended losses after a report showed a record share of U.S. mortgages were in foreclosure in the first quarter as job losses caused homebuyers to fall behind on monthly payments, thwarting government efforts to stem property seizures. The inventory of homes in foreclosure rose to 4.63 percent from 4.58 percent in the fourth quarter, the Mortgage Bankers Association said.
Retreat From High
The S&P 500 has lost about 8.5 percent from its high for the year on April 23 as credit-ratings downgrades of Greece, Portugal and Spain added to concern that European governments will struggle to fund budget deficits.
Bundesbank President Axel Weber said he’s concerned of “dramatic” developments in financial markets on May 24 unless German lawmakers agree on May 21 to support an aid package to support the euro. He spoke in a parliamentary hearing in Berlin.
The euro rebounded from a four-year low on speculation the European Central Bank will take further steps to shore up its currency.
“There’s speculation that the ECB will be having an announcement,” saidDavid Lutz, managing director of equity trading at Stifel Nicolaus & Co. in Baltimore. “I believe it’s going to be more of a sovereign-fiscal issue as opposed to an interest-rate issue.”
The cost of living in the U.S. unexpectedly dropped in April for the first time in more than a year, signaling the world’s largest economy is recovering without causing prices to flare. The 0.1 percent fall in the consumer price index was the first decrease since March 2009, figures from the Labor Department showed today in Washington. Excluding food and fuel, the so-called core rate was unchanged, capping the smallest 12- month gain in four decades.
American Apparel
American Apparel, the operator of about 280 retail stores in 20 countries, said it anticipates it won’t be in compliance with its covenant with its second-lien lender at mid-year. The shares slid 24 percent to $2.08.
Principal Financial, the life insurer, was cut to “equal weight” from “overweight” at Barclays Plc. The shares slid 1.7 percent to $28.16.
A group of industrial companies in the S&P 500 dropped 2 percent, with Boeing, the world’s second-largest commercial- plane maker, dropping 2.4 percent to $66.09. 3M Co. slid 1.7 percent to $82.12.
To contact the reporters on this story: Whitney Kisling in New York [e-mail].
Last Updated: May 19, 2010 11:04 EDT