U.S. Reports Grim Data, EU Vows to Shield Economy (
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U.S. banks reported losses and other companies painted a negative outlook for the U.S. economy as EU government leaders led by French President Nicolas Sarkozy vowed to shield EU industries from the global crisis. Sarkozy intends to meet with President George Bush this weekend to push for an international overhaul solution.NEW YORK (Reuters)
- Major U.S. banks reported huge losses and other companies painted a
grim outlook for the battered U.S. economy on Thursday as European
leaders vowed to shield their industries from the global crisis.
French President Nicolas Sarkozy, representing the EU on the world
stage, said he would meet U.S. President George W. Bush on Saturday to
push for an overhaul of the international financial system.
U.S. investment bank Merrill Lynch reported net write-downs of $5.7
billion from toxic assets and Citigroup reported a quarterly net loss
of $2.8 billion.
Famous motorcycle maker Harley-Davidson Inc said a slowdown in sales
had spread from the United States to Europe and cut its earnings
forecast for the year.
U.S. industrial production posted its biggest drop in 34 years in September, and a volatile Wall Street fell nearly 4 percent.
European stocks were down 4 percent.
A Reuters poll of economists said the world's richest nations are in
or close to recession, with a sharp deterioration in the outlook for
the United States.
In Brussels, EU leaders said they were determined to take whatever
steps necessary to support jobs and the economy, and Sarkozy said the
auto sector may need help given that the United States was making cheap
loans to its carmakers.
"If we can bring coordinated answers to the financial crisis, can we
not bring coordinated answers to the economic crisis?" Sarkozy asked.
Central banks in Europe renewed efforts to free up liquidity and
unblock frozen lending, with further action from Switzerland, Britain
and the European Central Bank.
Switzerland's two largest banks -- UBS and Credit Suisse -- became
the latest to say they were receiving emergency funding as the
country's government and other investors moved to shore them up.
Japan's prime minister, Taro Aso, said Washington may need to push
yet more cash into its banks to restore investor confidence, shattered
by a crisis that began with a U.S. housing market collapse and now
threatens economies worldwide.
"The markets are selling off stocks because investors still think
the steps by U.S. authorities are not sufficient," Japan's Aso said.
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