New York, NY, United States (AHN) – Stocks were little changed on the open Tuesday as traders and investors continue to keep a cautious eye on the ongoing European sovereign debt crisis.

Just before 10 a.m., the Dow Jones Industrial Average was up 30 points, the Standard & Poor’s 500 Index was flat and the NASDAQ gained about 2 points.

Keeping investors jittery and on the sidelines was a downgrade warning from S&P issued late Monday for the European region.The U.S. credit rating agency put 15 eurozone states, including Germany and France, on credit watch.

The credit watch decision by S&P brought mixed reaction across Europe on Tuesday. However, the general agreement was that the warning would step up pressure for a comprehensive deal at Friday’s European Union summit.

Stocks in the U.S. also appeared to be shrugging off the downgrade and were eager to keep last week’s strong rally going.

Shares of BP, which accused Halliburton of hiding evidence regarding the Deepwater Horizon spill on April 20, 2010, were up 11 cents at $43.71, while shares of Halliburton were down more than 4 percent at $35.48.

Oil was off 18 cents at $100.96 a barrel. Gold lost $20, and was last trading $1,714.90 a troy ounce.

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Cairo, Egypt (The Media Line) – Europe’s seemingly intractable financial crisis is threatening to make itself felt across the Mediterranean in the economies of North Africa that can least afford another blow, economists say.

Struggling to recover from the chaos and uncertainty of the Arab Spring, Egypt and the other economies of North Africa now face new troubles as Europe’s debt woes threaten to hurt exports and investments. By contrast, the Gulf economies, which have largely been spared the upheavals of the Arab Spring, are enjoying growing oil revenues that insulate them from Europe’s problems.

“North Africa, which has had to resolve many of the issues raised by the so-called Arab Spring, now has something else to contend with,” Daniel Broby, chief investment officer for London-based Silk Investment, told The Media Line. “Growth is still reasonably robust across the region, but it is slowing.”

Shaken by regime change, the North African countries of Tunisia, Egypt and Libya are all expected to post negative economic growth this year and enjoy only a mild rebound in 2012 amid strikes, political uncertainty, declining tourism and, in Libya’s case, plunging oil revenues.

The economic fallout is almost certain to complicate the transition these countries are all trying to make toward more democratic rule by forcing governments to put off economic reform to keep a lid on unrest and unemployment and deterring investors.

Two weeks ago, the Washington-based Institute for International Finance forecast that the economies of oil-importing countries, which include Egypt, Tunisia, and Morocco, would contract 0.4% this year. By contract, it projected oil-exporting Gulf economies would gallop ahead at a rate of 6.5%. Next year, the gap will narrow, it said, but the rich will get richer: Oil importers will grow just 2.3% while Gulf economies expand 3.7%.

Now, the risk that Greece’s debt troubles will reverberate across Europe and push the continent into a slowdown or even recession may cause the gap to widen again next year. Even countries that have avoided the most severe unrest, like Morocco and Algeria, are likely to affected, economists say.

Chill winds from Europe are reaching North Africa in four ways – trade, tourism, workers remittances and foreign investment – according to a report by London-based Capital Economics.

The European Union is the main export market for Algeria, Morocco and Tunisia as well as the main source for foreign tourism, the report by Capital’s Said Hirsh and William Jackson noted. Europe is also a source for employment from these economies, which have suffered high levels of unemployment for years, forcing many to seek work in Europe and send home money to their families.

A slowing European economy will hurt all these revenue streams. In the latest sign of the continent’s problems, Germany reported on Monday that its industrial output fell; 2.7% in September, its biggest drop since February 2009. The German economy, which had been pacing Europe’s pre-crisis recovery, might shrink in the fourth quarter, some analysts warned.

The Arab Spring countries have already seen foreign investment dry up this year, but a troubled Europe will also be more hesitant to invest in the MENA region, the report said. Moreover, without foreign assistance, the Arab Spring governments will have trouble funding their swelling budget deficits as they pour subsidies and make-work programs on their constituents to douse political unrest.

Meanwhile, in the Gulf, Europe’s troubles seem far away. Asia is the leading export market for the Gulf countries and oil prices and production have remained high despite concerns about the global economy. On Monday, the price of benchmark Brent crude rose above $113 a barrel as hopes that a cold winter would spur demand outweighed concerns about Europe.

“The oil-rich Gulf Cooperation Council (GCC) states’ close links to Asia and healthy balance sheets should help to counteract the drop in hydrocarbon revenues next year,” Hirsh and Jackson said in the report. “Meanwhile, the near term economic prospects for the rest of the MENA countries are poor.”

The Saudi central bank’s net foreign asset reserves have climbed steadily to a record high of 1.879 trillion riyals ($500 billion) in August. The country has enough cash to have allocated some $130 billion to boost in social spending, equal to nearly 30 percent of gross domestic product. Except for Bahrain, a tiny country with little oil and ridden with sectarian conflicts that spilled over into violence earlier this year, all will enjoy big fiscal surpluses this year and next.

“If there is a big decline in the economic conditions of Europe… it will affect all nations including the kingdom to some degree, but I stress that the impact would be very limited because we have the appropriate means to limit the negative effect on the kingdom’s economy,” Saudi Finance Minister Ibrahim told state news agency SPA last week..

Indeed, the financial position of the Gulf countries is so strong that indebted European financial institutions have been seeking fresh funding as they seek a cushion against their Greek and other troubled investments. A Qatari investment group with links to the state’s royal family will take over KBC’s private banking unit and BIL, a part of Dexia and last month France’s BNP Paribas was reported to be seeking a capital infusion from Gulf investors.

In the same vein, Arab solidarity will mitigate some of the impact, noted Brody. Egypt has received some $8 billion in financing from the Gulf countries to help it through its economic crisis. “In that respect, the GCC’s strong fundamentals are playing to the advantage of the North African states,” he said.

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Washington, D.C., United States (AHN) – U.S. President Barack Obama is scheduled to meet French President Nicolas Sarkozy and German Chancellor Angela Merkel prior to engaging in official agenda of G20 Summit in Cannes, France on Thursday according to the White House officials.

Addressing journalists Ben Rhodes, the deputy national security advisor for strategic communications announced that President Obama would have two bilateral meetings, “first with President Sarkozy of France, and then with Chancellor Merkel of Germany.”

Citing them as “important meetings for him (President Obama) to have consultations with these leaders before the G20 commences,” Rhodes said the president would also meet the same day, “L20, the international labor leaders who will be in Cannes as a part of the G20 program.”

Although the Obama Administration officials did not announce any bilateral meeting with Chinese leadership, the focus beyond the Eurozone crisis would be on the Chinese currency.

Joining Rhodes at the White House briefing on Monday, Lael Brainard, the Treasury Department’s under secretary for international affairs told journalists, “In China and other surplus emerging-market economies, allowing exchange rates to appreciate to reflect market forces is the most powerful near-term tool to accelerate the shift to domestic consumption, while countering inflationary pressures.”

Brainard urged emerging economies including China, “to shift to domestic consumption-led growth, rather than relying on an outdated growth model based on net exports to advanced economies where demand is likely to be weak for some time.”

“The exchange rate plays the most powerful potential near-term role as a lever in helping that shift,” added Brainard.

On the question of dealing with the Wall Street fiasco, Brainard said, “With regard to discussions about getting the financial sector to bear their fair share of the burden, we’re very much in sync with Europe on their goal of ensuring both that the financial sector — large financial institutions — bear their fair share of the burden, but also that they’re discouraged from taking the kind of risky behavior that led to the crisis.”

Elaborating Brainard said, “The President has also put forward a financial crisis responsibility fee that would be directed at the largest financial institutions that really impose the greatest costs on the economy.”

Calling these proposals as “pretty well designed to both deter the kind of risky behavior that led to the crisis, and to ensure that these large financial institutions and not retail investors bear their fair share of the burden,” Brainard said, “We put forward the fee because we think it’s more important to put the burden on the largest financial institutions rather than shifting it to retail investors.”

On the domestic political situation accompanying President Obama on his G20 trip, Carney last week acknowledged “gridlock” with Republican leaders as the lawmakers dragged their feed on Obama’s ambitious $447 billion jobs bill, and slow progress at a bipartisan congressional committee shouldering the responsibility to cut at least $1.2 trillion in additional spending.

Sounding a positive note, Carney, however added, “The president’s message to the Europeans and broadly to all the members of the G20 is that we need to work individually as countries and collectively together to ensure that we sustain and continue the global economic recovery and to put our people broadly speaking back to work.”

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Washington, D.C., United States (AHN) – The White House on Monday gave a boost to Occupy Wall Street protestors as President Barack Obama embarked on his bus tour of North Carolina and Virginia.

Addressing a friendly gathering in Asheville, N.C., at the first stop of his trip, President Obama lambasted the Republicans for defeating his jobs plan and then presenting a sketchy plan of their own,

Drawing boos in support of his point, President Obama explained that the Republicans’ plan, “turns out the Republican plan boils down to a few basic ideas: They want to gut regulations; they want to let Wall Street do whatever it wants.”

Further along the tour, President Obama is expected to express solidarity with Occupy Wall Street protestors as he has earlier accepted their cause as identifying Americans’ economic frustrations.

Addressing journalists en route to N.C., White House press secretary Jay Carney said abroad Air Force One that Occupy Wall Street protestors are reflecting the fight the president has launched.

Asking journalists to pay attention to words of President Obama, Carney said, “President has expressed, an understanding of the frustration that the demonstrations manifest and represent.”

Linking the two, Carney explained: “There is a link between two things: One, the frustrations that regular folks — middle-class Americans feel about the state of the economy, the need for growth to improve, and certainly the need for job creation to improve.”

“There is a related frustration that a lot of Americans feel about the idea that Wall Street in the past played by different rules than mainstream, and now we have a situation where — and yet was, for good reasons, was assisted by the federal government to prevent the financial sector from collapsing,” added Carney.

Highlighting the Republican efforts to nullify the reforms pushed by the Obama Administrations, Carney said, There is frustration now I believe with the efforts by some to roll back the protections the President fought so hard to put into place through the Wall Street reform act that was passed and signed into law.”

Carney said that American public did not support the idea of rolling “back Wall Street reforms and we need to adopt the kind of economic policies that led to the worst recession since the Great Depression.”

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New York, NY, United States (AHN) – How low will it go?

That is the question facing analysts, traders and investors Wednesday as the Standard & Poor’s 500 Index hit a new low for the year.

In early afternoon trading, the S&P 500 lost 1.3 percent to dip under 1,238. While corporate earnings for the quarter continued to be strong, it wasn’t enough to appease the markets. Economic uncertainty has many investors on edge.

Gold continues to reach new highs, the dollar continues its descent, and oil was also treading lower. Economic woes persist and market trends all point lower for the moment.

Traders were looking for support in the 1,240-1,245 range on the S&P, but that range was touched and broken. Now traders are simply looking for a bottom.

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Tokyo, Japan (AHN) – Wednesday saw stocks rebound as trading in Tokyo markets ended for the day following two days of sell-offs caused by concern over damage caused by Friday’s earthquake.

Losses over Monday and Tuesday had totaled over 16 percent, the largest two-day loss in 23 years.

However, by the end of the trading day on Wednesday the Nikkei 225 index recovered some of those losses, rising 489 points, or 5.7 percent.

Investors were concerned over the long-term effects of damage caused by the 9.0 earthquake and the devastating tsunami that followed, as well as problems with the nuclear power plant in Fukushima Daiichi.

The quake was the fifth largest since records began. The tsunami produced a wall of water that was up to 30 feet high in some places. It swept many houses out to sea and obliterated entire towns.

Japan was not the only market to show gains.

In Seoul, South Korea, the main Kospi index rose 1.8 percent.

Germany led gains in European markets with the Dax index rising 1 percent, while in Australia shares rose a more modest 0.7 percent by the end of trading.

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Sacramento, CA, United States (KaiserHealth) – Blue Shield of California’s surprising announcement that it will cap profits at 2 percent and issue millions in policyholder refunds sparked hopes that other health insurers would follow suit, but many experts said yesterday that was unlikely.

The company, which made the announcement Tuesday, is better positioned than most to make that move. For one thing, as a nonprofit, it has more leeway to cap profits than its for-profit cousins who have to meet Wall Street earnings targets, says Peter Kongstvedt, a managed care consultant in McLean, Va.

The insurer, a major force in the California market with more than 3 million policyholders, also has substantial reserves and posted a profit margin of 3.1 percent last year, including income derived from its investments.

That’s more than the typical 2 percent to 3 percent margin typical of nonprofit insurers, says Uwe Reinhardt, a health economist at Princeton University.

“It’s an unbelievably good public relations measure,” Reinhardt said of the company’s decision, which includes refunding $167 million to policyholders.

While most insurers won’t embrace such an overt cap on profits, some nonprofits may try to “step up and match these rebates” as a way of improving their public image and attract new business, said Sheryl Skolnick, a financial analyst for CRT Capital Group in Stamford, Conn.

Two of the larger nonprofit insurers that operate in Virginia, Maryland and the District — CareFirst BlueCross BlueShield and Kaiser Permanente – declined to comment. Robert Zirkelbach, spokesman for the industry trade group America’s Health Insurance Plans, said insurers are “doing everything they can to keep coverage affordable,” but he did not speculate on whether others would join Blue Shield.

The announcement by Blue Shield comes as insurers nationwide are enjoying healthy profits, fueled in part by lower-than-expected use of medical services last year, as recession-stung consumers held off on seeking medical care.

At the same time, new rules are going into effect that put insurers’ profits and spending under closer scrutiny. The federal health overhaul law requires insurers to spend at least 80 percent of their revenue on medical care, leaving 20 percent for administrative costs, including profits. Insurers that don’t meet that target must issue rebates to policyholders next year.

And, starting in September, the law also requires government scrutiny of rate increases of 10 percent or more among policies sold to individuals and small businesses.

It does not, however, grant federal or state regulators the power to reject such increases. That authority lies with the states, about half of which currently give regulators that power over some types of insurance.

In California, lawmakers are debating a proposal to give that authority to regulators, who currently review increases, but can’t block them. The legislation – opposed by many insurers and one of the state’s largest physician groups — narrowly passed the Assembly, but its fate in the state’s Senate remains uncertain. Blue Shield’s announcement was immediately seized upon by supporters of the proposal, including Insurance Commissioner Dave Jones, who told reporters that it showed insurers are making excessive profits.

The nonprofit insurer has been in the news lately, both for premium increases and the $4.6 million salary it pays Bruce Bodaken, the firm’s chairman and chief executive.

The insurer will increase premiums for its small business policyholders 9 to 11 percent later this year. A plan to raise rates even more for some individuals in HMO plans was withdrawn earlier this year.

Under its rebate plan announced Tuesday, consumers will get credits ranging from $25 to $415, while business customers will see $110 to $130 per employee, according to a Blue Shield release.

Doug Heller, executive director of the left leaning Consumer Watchdog, was not impressed, saying the average policyholder saw rates jump about 30 percent in the past two years. “It doesn’t make you feel much better,” he said.

And capping profits is expected to have little effect on how much customers will pay in the future, because the biggest chunk of a premium increase is tied to underlying health costs, with profits a much smaller portion, economist Reinhardt said.

“I don’t think the average American realizes how small profits are as a percent of premium.”

jappleby@kff.org

– Provided by Kaiser Health News.

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Tulsa, Oklahoma, United States (AHN) – Dollar Thrifty on Monday said it had told shareholders to reject an offer from Hertz for $72 for all outstanding shares.

The Tulsa, Oklahoma-based company’s board unanimously recommended that shareholders not tender their shares in the proposal, which consists of 80 percent, or $57.60, in cash and 20 percent in Hertz common stock.

It was the second time Dollar has refused an offer from Hertz. Last September, Dollar shareholders rejected a proposal for $50 a share, a price that was raised from $41 in 80 percent cash and the remainder in common stock.

Dollar’s board had urged shareholders to approve a Hertz merger, saying that Avis had proposed a better offer but had issued little assurance if this offer would be completed soon or would gain clearance from the Federal Trade Commission.

Hertz renewed its bid to acquire Dollar last month, offering a better deal than one proposed by rival Avis, which is being reviewed by federal regulators. Its current offer represents a 26 percent premium to Dollar’s 90-day average share price, and a 24 percent premium to the propopsal from Avis.

The offer from Avis had relied on a timetable that required clearance from the FTC by early April.

Avis has been seeking regulatory approval for more than a year. It received guidance from the FTC only last week. The company is reviewing whether it can comply with the antitrust requirements, including divestitures, and is expected to make a counter-offer in the coming weeks.

“Given the uncertainty surrounding the length and outcome of the regulatory process as Hertz and Avis Budget work towards antitrust clearance, the Board is recommending that Dollar Thrifty shareholders take no action with respect to the Hertz exchange offer,” Dollar chief executive and president, Scott Thompson, said in a statement on Monday.

“We will be monitoring the antitrust regulatory process and other circumstances carefully, and our Board will reconsider its recommendation if the situation warrants,” he added.

Hertz, the world’s largest airport car rental company, wants to acquire Dollar’s $1.6 billion business, which caters to leisure travelers in 81 countries. The New Jersey-based company began meeting with the FTC last month about the divestiture of its Advantage brand to ensure that a merger with the Dollar would be completed “on an accelerated timetable.”

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