Stocks Open Week on Sour Note

Jun 24, 2013 8:07am

Morning Business Memo…

It could be another wild and crazy week for investors. After last week’s rough ride, Wall Street is bracing for more volatility. Stock futures fell sharply this morning after the averages lost about 2 percent in value last week. Interest rates spiked to two-year highs with today’s quote for 10-year Treasury notes rising to 2.57 percent. The bond market faces a challenge this week from the sale of nearly $100 billion in Treasury debt. The credit crunch in China led to another drop for Asian shares overnight. The Shanghai market had its worst day since 2009 with a drop of more than 5 percent for the most widely quoted Chinese stock index. Goldman Sachs cut its annual growth target for China.

Housing numbers and an update on economic growth highlight the week’s economic data. The first significant reports of the week come tomorrow with the release of May durable goods orders and the S&P/Case-Shiller index of home prices for April.

The new owners of Hostess Foods say Twinkies are set to return to store shelves starting July 15. The company hopes for a sweet sales spike when its sugary treats are available. Hostess says the cakes will taste the same but that the boxes will now bare the tag line “The Sweetest Comeback In The History of Ever.” Hostess went bankrupt last year after a long dispute with its unionized workers.

The Federal Reserve and other central banks are being urged to cut their bond-buying programs and reduce efforts to stimulate the economy. The Bank of International Settlements–a body that represents many of the world’s top central banks–says policymakers should be mindful of the risks of maintaining ultra-loose monetary policies too long. The report warned governments, households and companies to reduce their high levels of debt. The Fed’s announcement last week that it expects to curtail bond-buying sent US markets into a tailspin.

Richard Davies Business Correspondent ABC News Radio abcnews.com Twitter: daviesabc

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