US & World News

Oil prices have come down sharply on Tuesday on the New York market, signing their second straight session of declines and displaying the entire month of August, their first monthly decline since May.

The October contract on the U.S. light crude ended down $ 2.78, or 3.72%, to $ 71.92 a barrel on the New York Mercantile Exchange.

At the time of closing in New York, a barrel of Brent crude fell by $ 2.11, or 2.75%, to 74.49 dollars.

Throughout the month, a barrel of crude oil shows a decline of 7.03 dollars, or 8.9%, the largest decline in percentage terms since May

Oil prices are hurt by concerns about slowing growth, weak demand and rising inventories.

"The volatility associated with the end of the month has lowered future today," said Mark Waggoner of Excel Futures.

Traders now await the figures of the American Institute of Petroleum on a weekly inventory in the U.S. that must be disclosed in the evening.

The economic recovery in the euro area slowed slightly in August but companies are more optimistic for the months to come despite differences between countries in the region, show the first results of Monday's monthly survey Markit.

The PMI services, calculated on the basis of responses from purchasing managers of nearly 2,000 firms in the euro area fell slightly to 55.6 against 55.8 last month, but it is slightly better that 'expected as economists polled by Reuters had expected the average to 55.5.

It is over for the twelfth consecutive month the 50 between expansion and contraction of activity.

If growth slows, firms in the services sector, dominant in the 16 countries using the euro as their currency, appear rather more optimistic about the future, the business expectations index falling up to 68 1 after 66.5 in July.

"The recovery still has some momentum but we will witness a slowdown from the exceptional figures observed in the second quarter," warns Rob Dobson of Markit.

France and Germany, the two largest economies in the euro area, strongly rebounded in the second quarter, but this trend was not found in Spain and Italy.

"THE TAKEOVER COULD BEGIN TO SLOW DOWN"

Activity in the industrial sector has also slowed.The PMI manufacturing index is indeed stood at 55.0 in the first estimate in August against 56.7 in July, while economists polled by Reuters had expected 56.2.

The sub-index of production rose from 58.7 in July to 57.2 in August.

The composite index combines the two sectors, fell to 56.1 against 56.4 expected and 56.7 in July.

"The PMI decline in August in the euro area is a sign that the recovery could begin to slow," said Jennifer McKeown of Capital Economics.

"The decline was mainly driven by declines in the index of the manufacturing sector, particularly in Germany, suggesting that the weakening global demand could affect the resumption of exports, as was feared."

If companies continue to recruit, the pace of hiring slowed slightly from July, as the index of employment in manufacturing rose from 51.1 last month to 51.0 in August.

Economic growth in the euro zone came out at 1.0% in the second quarter, more than expected, but it should slow to 0.4% for the period July to September and 0.3% for the three months year.

ADDICTION TO GERMANY AND FRANCE

Especially, the growth differences between countries in the region have increased compared to previous periods.

"We note that (growth) is highly concentrated in the major nations, it has not extended to other peripheral nations and, in many respects, this gap is widening," said Rob Dobson.

"It's the same as in the second quarter, which saw a solid growth, particularly in Germany and to a lesser extent in France, marking a certain imbalance in relation to performance rather mixed for the Spain, Italy and Greece.So, apart from the two main countries, the situation is average. "

The PMI flash Germany show an acceleration of activity in services and a slowdown in the manufacturing sector, quite contrary to that exhibited by France.

In the euro area, the sub-index of producer prices reached its highest level since October 2008, at 50.3 against 49.4 in July. It is only the second time since October 2008 this indicator appears above 50.

This suggests that companies are now able to pass some of their higher costs to their customers.

Crude prices have come down on Wednesday after the announcement of an unexpected rise in crude inventories in the U.S. and very cautious statements of the President of the U.S. Federal Reserve on the economic situation.

On the New York Mercantile Exchange, crude for delivery in September ended a decline of $ 1.02, or 1.31%, to 76.56 dollars a barrel.

U.S. crude reserves rose 400,000 barrels last week, when economists expected a drop instead of 1.4 million barrels.

In addition, the chairman of the Fed Ben Bernanke said Wednesday that the Fed was ready to take additional measures as necessary to sustain growth given the high level of uncertainty.

Aon Corp., the world's first insurance broker, announced Monday it would buy the company for HR services to Hewitt Associates, about 4.9 billion dollars (3.9 billion euros) in cash and stock.

The offer represents Aon Hewitt $ 50 per share, a premium of 41% over its closing price Friday.

The transaction will allow Aon to gain a foothold in the area of human resources and benefits outsourcing and compete and Mercer, a subsidiary of Marsh and McLennan rival.

Aon plans to merge Hewitt with his own business consulting and outsourcing and expects an annual turnover of 4.3 billion dollars for the new entity to be called Aon Hewitt.

Russ Fradin, CEO of Hewitt, Hewitt will lead Aon.

Aon expects the transaction will have a positive impact on its performance in 2011 and 2012 and expects about $ 355 million of cost reductions in 2013, mainly administrative.

It is the second major operation in a year in the area of the board after the merger between Towers Perrin and Watson Wyatt for $ 3.5 billion, which gave birth to the number one global human resources consulting.

Aon intends to fund the acquisition with a bridge loan of 1.5 billion dollars and a bank loan of one billion dollars.

The action of Hewitt jumped more than 30% before the official opening of trading after closing Friday at 35.40 dollars at the NYSE. Aon closed at 38.34 dollars.

PSA Peugeot Citroen announced a 16.9% jump in sales of vehicles in the first half, including a one-point increase its market share in Europe, which should increase over the year.

The first French car manufacturer and number two in European sales confirmed, however, anticipate a decline of about 9% of European car market, while China is expected to grow at double-digit pace in Latin America with a number.

PSA sales totaled 1.856 million units in the first half, including 1.618 million for assembled vehicles (+16.8%)

In Europe, PSA registrations rose 7.7% to 1.214 million units in the first half, giving a market share of 14.6%, up one point.

The group estimates that the global auto market grew 13% over the period, with leaps of 27% in China and 11% in Latin America contrasts with a fall of 27% in Germany, while France fared with an increase of 6%.

Automakers are preparing an overall drop in sales in the second half, with the gradual disappearance of scrap premiums and caution potential buyers respond to economic uncertainty.

In France, the new car registrations fell in May and June, marking the last stages of the effect of scrappage, reduced on 1 January 1000 to 750 euros and reduced to EUR 500 this month .

PSA, which will publish its interim results on July 28, said in April anticipate a largely positive EBIT in the first six months of the year instead of a simple return to the green before.

The group, whose sales growth has exceeded expectations in the first quarter, however, had warned that the environment might be difficult in Europe in the second half.

Renault will release its own trade performance Thursday.

PSA Action closed up 3.63% to 21.56 euros on Tuesday, giving a market capitalization of 5.05 billion euros. It lost 8.9% since the beginning of the year after surging 95% in 2009.

Bank of China, one of China's four largest banks, announced its intention to undertake a capital increase, the amount could reach 60 billion yuan (7.0 billion euros).

The bank offers to shareholders to obtain up to 1.1 Right to subscribe for 10 shares held.

"All the products of this rights issue (…) should enhance the bank's balance sheet and improve the ratio of financial solvency of the bank," she says in a statement.

This announcement does not specify whether the parent Public Bank, Central Huijin, subscribe to this offer.

In Hong Kong, under the BoC was trading at 3.97 Hong Kong dollars Wednesday, and he treated at 3.4 yuan in Shanghai on Friday before the suspension of trading.

MASSIVE CAPITAL RAISING

The bank, which raised 4.7 billion euros last month by issuing convertible bonds in Shanghai, is looking like its main rival China to strengthen its balance sheet and to comply with the stringent requirements of regulators in terms of ratios solvency.

Agricultural Bank of China (AGBANK), China's third largest bank, has launched its next capital increase of almost 16 billion euros via an IPO in Shanghai and Hong Kong.

According to local press, Chinese authorities have given their approval to raise capital totaling 287 billion yuan (33.6 billion euros) for the four largest banks.

In recent months, Industrial and Commercial Bank of China and China Construction Bank have also announced increases in capital.

Bank of Communications, the fifth-largest bank, raised its next 2.0 billion euros in Shanghai.

Action BP lost nearly 7% Wednesday to the London Stock Exchange after falling to its lowest level in 14 years, investors feared that the British oil giant is forced to raise more funds to finance the cost of oil spill that pollutes the Gulf of Mexico.

BP said it had already spent $ 2.35 billion (1.92 billion euros) to contain the spill.

Meanwhile, five-year CDS BP, financial instruments used by investors to hedge against default risk on the group's debt rose 19 basis points to 555 points, according to Markit data.

Some traders also explain the fall in BP by bad weather looming over the Gulf of Mexico that could complicate the fight against oil spills.

At 9.45 am GMT, BP lost 6.55% to 303 pence in London Stock Exchange.