Swiss Reinsurance Co. is expecting a capital injection of $2.6 billion from Warren Buffet’s Berkshire Hathaway, after losses are expected to be $869 million for the Swiss company. Frank Jordans for Associated Press reports that Swiss Re, which based its expected net loss on preliminary figures, said it will seek a further 2 billion francs on the capital markets.
In Europe, the European Central Bank has halted their campaign of interest rate cuts, leaving their benchmark rate at 2%, says Pan Pylas and George Frey for Associated Press. The ECB is concerned about inflationary pressures that are possible by rate cutting. The Bank of England, however, cut their rate by half a point, taking their rate to 1%, as they try and shore up the British economy. Both governments are trying to stem the bleeding from the thousands of layoffs, reduced work hours and factory shutdowns across the continent.
iShares S&P Europe 350 Index (IEV) gives exposure to France, Italy, Switzerland and the United Kingdom. It is down 4.3% for the week, and 14.8% for the month.
More economic news in the U.S. includes:
- January retail sales are down, with a sharp decline for the month, and hit the broad spectrum, from The Gap (GPS) to Saks (SKS) to The Children’s Place (PLCE). Anne D’Innocenzio for Associated Press reports that Wal-Mart (WMT) was the only retailer with numbers not in the red. The need for cheap groceries is what analysts believe help the chain beat their expectations.
- Places such as Macy’s (M) and Wal-Mart beat the analysts expectations for January sales, and the stocks were not-so-disappointing, giving markets a ray of hope. Madlen Reed and Tim Paradis for Associated Press report that while the numbers are grim, economic readings for specific stores did alright, which is great news in this economic climate.