By James Langton
(June 7 – 09:00 ET) – There is no major economic data out in the U.S. today. However Statistics Canada is reporting that April building permits issued dropped by 8.9% to $2.9 billion, pushed down by a large decline in residential intentions. Economists were expecting a drop of about 2.5% so this number shows a much faster slowdown that predicted.
StatsCan also reported that first quarter industrial capacity utilization rates reached 87.6%, slightly above the 87% expected. Surging exports and robust domestic demand drove the growth.
In May the Help-wanted index increased by 1.2%. The index increased or remained the same in all provinces except New Brunswick and Nova Scotia. This report was on target with expectations.
In the U.K. this morning the Bank of England held interest rates at 6% as expected. Although many traders are still expecting the European Central Bank to add a quarter point, and assorted hawkish comments from U.S. Federal Reserve Board are also darkening the mood. Governor Laurence Meyer wondered, “whether slowing the economy to trend alone will get the job done or whether we need a period of below-trend growth.”
All the talk has put stock traders into a dark mood. London’s FTSE is down 44 points to 6502. France’s CAC 40 has dropped 100 points to 6490. Germany’s DAX is off 69 points to 7290.
British Airways PLC has confirmed it’s having talks with rival KLM Royal Dutch Airlines NV. Royal Philips Electronics NV says it will spin off ASM Lithography Holding NV in a US$2.87 billion public offering
In a local deal Mitel Corp. is buying Vertex for $300 million in stock.
Nortel Networks is joining IBM and several other technology companies to launch a global business-to-business Internet exchange called e2open.com.
In Asia stocks were quiet. The Nikkei slipped 25 points to 17144. The Hang Semg returned to trading with a 38 point rise to 15900.