BUSINESS BRIEFS
JPMorgan Chase shares down almost 10 percent
Associated Press
NEW YORK — JPMorgan Chase & Co. shares tumbled nearly 10 percent yesterday as the bank's disclosure about escalating losses in its mortgage portfolio set off new concerns about the health of the overall financial sector. An analyst's lowering of the bank's earnings estimates and price target contributed to the decline.
JPMorgan Chase plunged $3.88, or 9.3 percent, to close at $38.01. It has traded between $29.94 and $49.95 in the past 12 months.
In a filing with the Securities and Exchange Commission late Monday, the bank said turbulence in the credit markets have caused it to lose about $1.5 billion, after hedges, in its mortgage-backed securities and loans to date in the July-to-September quarter. That's more than the $1.1 billion in losses JPMorgan incurred in its investment bank's portfolio during the second quarter.
SOFTWARE-WRITING REVOLUTION TOUTED
HONG KONG — Microsoft Corp. Chairman Bill Gates said yesterday that the dramatic growth of the Internet would eventually spark a software-writing revolution.
Gates, speaking at a forum to mark the 10th anniversary of the software giant's Asian research arm, said technology currently being developed would expand the way people use computers "to encompass all interactive techniques," including touch and speech.
"People often talk about this as the Internet service revolution," Gates told a gathering of 1,600 researchers and academics in Hong Kong. "That will eventually lead to machines that have lots of server capacity, lots of low-cost computing, low-cost storage. And that will let us write software in an even more ambitious way, eliminating the last constraints we have."
Microsoft Research Asia employs more than 350 researchers and engineers, funds student fellowships and partners with more than 100 university and institutions in the region with the goal of helping Microsoft innovate and develop products.
BUDGET DEFICIT SWELLED IN JULY
WASHINGTON — The federal budget deficit soared in July, pushed higher by economic stimulus payments and $15 billion in outlays to protect depositors at failed banks.
The Treasury Department reported yesterday that the deficit for July totaled $102.8 billion, nearly triple the $36.4 billion deficit recorded in July 2007. The deficit outstripped the $97 billion gap that Wall Street economists had been expecting.
The Treasury said outlays were pushed up by $15 billion because of payments the Federal Deposit Insurance Corp. made to depositors at failed banks.
The Treasury report did not identify the banks but federal regulators seized the assets of California-based IndyMac Bank, the largest regulated thrift to fail in U.S. history.
JAPAN HIT HARD BY HIGH OIL PRICES
TOKYO — Japan's GDP contracted in the second quarter as the world's second-largest economy succumbed to high oil prices and the prospects of a global slowdown.
Japan's gross domestic product, or the total value of the nation's goods and services, in the April-June period shrank at an annual pace of 2.4 percent, a sharp downturn from 4.0 percent growth registered in the first quarter, the Cabinet Office said today. The last time GDP turned negative was in April-June 2007.
The data provided further evidence that Japan has ended its six-year expansion, and may now be perilously close to a recession.
The GDP numbers followed yesterday's report that Japan's corporate goods prices rose at their fastest pace in more than 27 years, pushed up by surging oil and commodities prices.
Higher wholesale costs may mean that the consumer price index will climb even further, as domestic companies pass on their increasing business costs to consumers.
Japan's index for domestic corporate goods prices rose 7.1 percent in July from a year earlier to 112.0, growing at the fastest pace since an 8.1 percent gain in January 1981. Then, as now, high oil prices were driving inflation.
