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Higher gas prices fuel sentiment drop

posted 25 Mar 2011, 16:53 by Mpelembe Admin   [ updated 25 Mar 2011, 16:55 ]
Summary of business headlines: Consumer sentiment fell in the U.S. to lowest in over a year; Research in Motion loses one-tenth of its value; Mixed results at EU meeting; Dow sees best weekly gain since July.
USA-USCLOSE - Higher prices at the pump are taking their toll on American wallets and consumer psyches. Consumer sentiment tumbled in late-March to its lowest level in over a year, according to a Thomson Reuters-University of Michigan survey. Higher food prices were also to blame for the drop in sentiment.

Meanwhile, the U.S. economy grew faster than previously thought in the fourth quarter thanks to solid business spending.

There was little confidence in Research in Motion. Investors are worried about sluggish demand for the once ubiquitous BlackBerry device and slower profit growth as the company ramps up spending for the launch of its PlayBook tablet. At the same time - Apple is riding high, after crowds like this one in Australia, flocked to stores for the international launch of the iPad 2. Shares of Research in Motion lost more than one-tenth of their value.

European leaders agreed on the mechanics of a permanent crisis safety package, but delayed finalizing an increase in a temporary bailout fund. Portugal overshadowed much of the meeting after its debt was downgrade by two ratings agencies. EU leaders, however, say they will stand by Portugal for the good of the single currency.

Greek Prime Minister George Papandreou.

GREEK PRIME MINISTER GEORGE PAPANDREOU SAYING:

"The challenge now is that Europe as a whole sends a very strong and convincing message to the international markets that it is supporting a stable euro and is supporting all euro zone countries."

Looking at market reaction - stocks closed higher across Wall Street in a low volume trading day.

But it was the best week for the Dow and Nasdaq since July.

As for Europe - investors put the finishing touches on the strongest weekly gain in six months.

Conway Gittens, Reuters

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