Monday, February 25, 2013

Asian Stocks Fall on Italian Election Concern; Yen, Oil Decline

Asian stock indexes fell on concern Italy’s elections will lead to renewed turmoil in European markets. The yen weakened, following its biggest gain since May 2010, and oil declined.
The Nikkei 225 Stock Average (NKY) dropped 1.4 percent from its highest close since September 2008 as of 11:34 a.m. in Tokyo, while Hong Kong’s Hang Seng Index lost 0.4 percent. The yen slid 0.7 percent to 92.48 per dollar after surging 1.6 percent yesterday. Standard & Poor’s 500 Index futures added 0.2 percent. Crude slid 0.6 percent in New York, while gold rose for a fourth day. Ten-year Treasury yields advanced two basis points to 1.88 percent, after declining 10 basis points yesterday.
Demand for U.S. government bonds strengthened yesterday as early results suggested Italy’s election would result in a hung parliament, leading to another vote. Democratic Party leader Pier Luigi Bersani, having campaigned to maintain budget rigor, won control of the lower house but not the Senate and rival Silvio Berlusconi called for a recount. U.S. Federal Reserve Chairman Ben S. Bernanke is due to testify before lawmakers today and tomorrow.
“Uncertainty about the Italian election result has sparked fears that they may abandon their austerity drive, possibly sparking another bout of volatility in Europe,” said Matthew Sherwood, head of investment market research in Sydney at Perpetual Investments, which manages about $25 billion. This may “make governing and implementing much-needed economic reforms almost impossible,” he added.
About three stocks dropped for each that rose on the MSCI Asia Pacific Index (MXAPJ), with materials producers leading declines. Australia’s S&P/ASX 200 Index fell 0.5 percent and South Korea’s Kospi lost 0.2 percent.

Yen, Oil

The S&P 500 sank 1.8 percent yesterday, after recording its first weekly loss of the year in the period ended Feb. 22. U.S. data scheduled for this week includes the Institute for Supply Management’s factory index as well as official reports on durable goods orders, household spending and fourth-quarter economic growth.
The yen fell 1 percent to 121.13 per euro after gaining 2.8 percent yesterday as investors pared holdings of European assets. The euro rose 0.2 percent to $1.3083 after yesterday touching $1.3048, the weakest since Jan. 10.
Oil futures declined as much as 1.3 percent to $91.92 a barrel, the lowest intraday price since Jan. 4, before trading at $92.43. An Energy Department report tomorrow will probably show crude supplies gained a sixth week, the longest run of increases since May, according to a Bloomberg News survey. Iran resumes international talks on its nuclear program today after an eight-month lull.

U.S. Data

Spot gold advanced 0.3 percent to $1,598.4 an ounce, set for its longest winning streak since the four days ended Jan. 17.

Yahoo Orders Home Workers Back to the Office

Since Marissa Mayer became chief executive of Yahoo, she has been working hard to get the Internet pioneer off its deathbed and make it an innovator once again.

She started with free food and new smartphones for every employee, borrowing from the playbook of Google, her employer until last year. Now, though, Yahoo has made a surprise move: abolishing its work-at-home policy and ordering everyone to work in the office.

A memo explaining the policy change, from the company’s human resources department, says face-to-face interaction among employees fosters a more collaborative culture — a hallmark of Google’s approach to its business.

In trying to get back on track, Yahoo is taking on one of the country’s biggest workplace issues: whether the ability to work from home, and other flexible arrangements, leads to greater productivity or inhibits innovation and collaboration. Across the country, companies like Aetna, Booz Allen Hamilton and are confronting these trade-offs as they compete to attract and retain the best employees.

Bank of America, for example, which had a popular program for working remotely, decided late last year to require employees in certain roles to come back to the office.