Sears and Kmart to close up to 120 stores on poor sales
Shares in US retail giant Sears fell 27% by the end of the day in Wall Street after announcing plans to close up to 120 Sears and Kmart stores.
Sears Holdings, the department store group which owns the two major retail chains, blamed falling sales.
In the eight weeks to Christmas Day, sales at Kmart fell 4.4% and by 6% at Sears.
The company, which has 2,200 outlets in the US, says the closures should raise up to $170m (£108.5m; 130m euros).
It added that it expected fourth-quarter earnings to be less than half of last year's amount.
Retail analyst Howard Davidowitz told the BBC that the news came as no surprise: "Sears took their cash flow and used it to buy back shares instead of enhancing their offer to the customer. This has proven to be a disastrous investment that was made even though the company has been losing market share every single quarter for the past four years."
Both Sears and Kmart have experienced a decline in demand for consumer electronics, amid fears of another US recession.
Kmart has also reported a decline in clothing sales over the same period.
Chief executive Lou D'Ambrosio said: "Given our performance and the difficult economic environment, especially for big-ticket items, we intend to implement a series of actions to reduce on-going expenses, adjust our asset base, and accelerate the transformation of our business model."
The results point to "deepening problems at this struggling chain and renewed worries about Sears survivability," said Gary Balter, an analyst at Credit Suisse.
"The extent of the weakness may be larger than expected, but the reasons behind it are not. It begins, and some would argue ends, with Sears' reluctance to invest in stores and service."
The firm's third quarter sales saw the company post a loss due to weakness in its Canadian stores, soft electronics sales and struggles in clothing and pharmaceutical sales at its Kmart unit.
Stocks end mostly flat amid mixed economic reports
U.S. stocks ended a listless session little changed Tuesday as investors weighed reports on consumer confidence and home prices.
The Dow Jones industrial average (INDU) eased 3 points, or less than 0.1%, to end at 12,291. The S&P 500 (SPX) added less than 1 point to 1,265. The Nasdaq (COMP) gained 6 points, or 0.2%, to 2,625.
Trading volumes were well below average, with many market participants taking time off this week for the holidays. Stock markets in the United States and Europe were closed Monday for the Christmas holiday.
Stocks opened lower after a report said home prices fell 1.2% in October compared with September. But the market turned higher following a stronger-than-expected report on consumer confidence.
"Consumers are definitely showing a ray of hope here," said Peter Cardillo, chief market economist at Rockwell Global Capital.
U.S. stocks have been supported recently by signs of improvement in the economy, including declines in weekly claims for unemployment benefits and an uptick in new home construction.
5 Worst Market Calls of 2011
But investors say the market remains vulnerable as the debt crisis in Europe continues to threaten the outlook for the global economy and financial markets.
While many investors have already closed their books for the year, the next few trading days could determine whether the major indexes end 2011 with gains or losses.
On Friday, investors pushed the S&P 500 back into positive territory for 2011 and the Dow up 6% for the year.
"I think we've got a decent chance of ending the year in positive territory, if not close to it," on the S&P 500, said Bruce McCain, chief investment strategist at Key Private Bank.
Still, the bigger question is whether the stock market can continue moving higher in 2012 as economies in Europe and Asia appear to be slowing down, he added.
"The trends developing overseas are negative enough that it will be hard for the U.S. economy to entirely avoid a slow down in the global economy," said McCain.
Meanwhile, oil prices jumped 1.5% after a top Iranian official warned that the nation could block the Strait of Hormuz, a key transit point for oil exports from the Middle East.
The warning, from Iranian vice president Mohammad Reza Rahimi, came as the United States and the European Union have been ratcheting up sanctions on Iran's oil industry in response to the nation's nuclear program.
Companies: Sears Holdings (SHLD, Fortune 500) on Tuesday reported a sharp drop in holiday sales compared to a year ago, and said the results will force it to close 100 to 120 Sears and Kmart stores. Shares plunged 27%.
On Monday, Sony (SNE) said it would end its joint venture in liquid crystal display panels with Samsung Electronics.
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World markets: European stocks closed mixed. The DAX (DAX) in Germany added 0.1% and France's CAC 40 (CAC40) ended flat. London's market remained closed.
Asian markets ended mixed. The Shanghai Composite (SHCOMP) fell 1.1% and Japan's Nikkei (N225) fell 0.5%. Hong Kong's market was closed.
Currencies and commodities: The dollar lost strength against the euro, the British pound and the Japanese yen.
Gold futures for February delivery lost $10.90 to $1,595.10 an ounce.
Bonds: The price on the benchmark 10-year U.S. Treasury edged higher, with the yield easing to 2.01% from 2.03% late Friday.
Japan's industrial output dips 4% on yen and flooding
Japan's industrial production fell in November, pulled down by a strong yen and weak global demand, and after flooding in Thailand damaged many suppliers.
Production fell 4% in November from the same month a year earlier, the Ministry of Economy, Trade and Industry said. It was 2.6% lower than in October.
Japan is one of the world's biggest exporters.
However, weak demand saw it cut growth forecasts for this year and the next.
Last week, the government said Japan's economy will shrink by 0.1% in the year to the end of March, down from a previous forecast of 0.5% growth.
The government also said that in the 2012 fiscal year growth would be 2.2%, down from its earlier target of as much as 2.9%.
Japan has been hit by a number of issues that are hurting expansion.
Thailand's worst flooding in 70 years closed a number of Japanese companies and their suppliers.
At the same time, the yen has hit levels that exporters say make their goods uncompetitive and too expensive for foreign buyers.
And finally, the continuing economic problems in the eurozone were identified by the Bank of Japan Governor Masaaki Shirakawa last week as being a continuing threat to the country's economy.
Unemployment set to rise in 2012, suggests CIPD
UK unemployment is set to keep rising to 2.85m in 2012 and peak in 2013, says a report by the Chartered Institute of Personnel and Development (CIPD).
The think tank, which specialises in employment, warns the private sector will fail to offset the 120,000 job losses in the public sector in 2012.
But is does not detect signs of widespread new redundancies in the private sector.
A government spokeswoman said the labour market was stabilising.
Government measures should also stop the numbers of young and long-term jobless getting worse, the CIPD says.
"As long as there is a relatively benign outcome to the eurozone crisis we expect the 2012 jobs recession to be milder than that suffered in 2008-9," said John Philpott, chief economic adviser at the CIPD.
"But unemployment in the coming year will be rising from a much higher starting point, so the UK jobs market in 2012 will be weaker than at any time since the recession of the early 1990s."
In response, a spokeswoman for the Department for Work and Pensions said: "There has obviously been an unwelcome increase in unemployment since the summer but the latest unemployment figures show some signs that the labour market is stabilising.
"The number of people in employment is higher than last month's published figure and the number of unemployed people is steadying."
She added that "the increase in those claiming Jobseeker's Allowance has slowed and our welfare reforms are having a positive impact with overall benefit claimant numbers falling by around 40,000 in the last 18 months."
However, shadow work and pensions minister Ian Austin said it was "crystal clear that this government is failing to get people off benefits and into work".
"With unemployment continuing to rise, the benefits bill is going up too - and that's making the deficit harder to bring down."
Record joblessness
The forecast is more downbeat than estimates published by the Office for Budget Responsibility (OBR) in November.
The OBR, which was set up by the government to provide independent assessments of the UK economy, expects unemployment to peak at 8.7% of the total workforce in the final quarter of 2012. The CIPD believes the unemployment rate will hit 8.8% in 2012.
Official figures showed that the UK unemployment hit its highest level since 1994 in the three months to October, when it rose by 128,000 to 2.64 million.
The Office for National Statistics (ONS) said the jobless rate for the three months to October was 8.3%, up from 7.9% in the same period last year.
Youth unemployment rose to 1.027 million, the highest since records began in 1992.
US house prices fall in October despite low rates
US home prices have fallen further in October despite record low mortgage interest rates, according to new data.
The Standard & Poor's Case-Shiller index of 10 major metropolitan areas fell 1.1% from a month earlier and its 20-city index fell 1.2%.
Atlanta was one of the worst performing cities, down 5% month-on-month.
Last week, government-sponsored mortgage agency Freddie Mac said average 30-year mortgage rates had fallen to a record low of 3.91%.
Chicago, Cleveland, and Minneapolis all posted monthly declines of 1% or more.
For the year, average home prices across the US were down 3.4% in the three months to October compared to the same period in 2010.
Americans have been reluctant to enter the housing market in the face of high unemployment and weak job growth.
But the house price index is see as a lagging indicator of the market, as it is published with a two month dealy, and is based on an average of the preceding three months.
In contrast, separate data released before Christmas suggest that there may have been an improvement in the US housing market in more recent months.
Home sales volumes rose in November, as did confidence among builders, who have been restarting building projects.
This other data rallied investors, who believed a recovery in the housing market was on the way.
"In light of the more positive housing numbers we've seen in the last week or so, this [Case-Shiller data] might be a bit of a disappointment," said Omer Esiner, chief market strategist at Commonwealth Foreign Exchange in Washington.
Brazil to be world's fifth-largest economy in less than 4 years
Brazil will overtake France to become the world's fifth-largest economy in less than four years, the country's Finance Minister Guido Mantega said Tuesday.
"The International Monetary Fund says Brazil will be the world's fifth-largest economy by 2015, but I think that it will happen earlier," he said.
He made the forecast after the Center for Economics and Business Research (CEBR) said Monday that Brazil will overtake Britain as the world's sixth-largest economy in 2011.
Brazil registered a 7.5-percent gross domestic product (GDP) growth last year and was the world's seventh-largest economy, after the United States, China, Japan, Germany, France and Britain.
Mantega said Brazil's GDP is growing twice as fast as those of European countries, and thus it is natural that it will manage to overtake Britain, France, and maybe even Germany in the near future.
Mantega predicted that the Brazilian economy would grow 3 to 3.5 percent this year, and may even see growth of 4 to 5 percent in 2012.
Brazil is on the right path, he said, highlighting the country's recent accomplishments, such as its high job generation and stable inflation rate.
"We will grow more in 2012 than in 2011, the exchange rate will be better and credit will be cheaper," Mantega said.
However, Mantega warned that Brazil's living standards are still below those of developed countries, and it would take years for it to reach the per capita income levels registered in developed nations.
North Korea begins two-day Kim Jong-il memorial
North Korea is to begin two days of funeral services for its late leader Kim Jong-il, with hundreds of thousands expected to attend in Pyongyang.
Few details are known and there will be no foreign delegations but a procession is expected on Wednesday, echoing that for Kim's father, Kim Il-sung, in 1994.
As then, the funeral is expected to be used to cement the succession of new leader Kim Jong-un.
Kim Jong-il died of a heart attack on 17 December, aged 69, state media said.
He has been lying in state since then.
'Memorial service'
If the funeral does mirror 1994, there will be much pomp and military might, with tens of thousands of weeping North Koreans.
Kim Jong-il was not in the funeral motorcade for his father's death and observers will be watching to see how prominent a role Kim Jong-un - who is Mr Kim's third son - plays.
Kim Jong-un's name is first in the list of members of the "national funeral committee" published by the main North Korean news agency, and the funeral committee did take part in Kim Il-sung's funeral.
Kim Jong-il's two other sons are not members of the committee and have not been seen during the mourning period.
South Korean media have suggested a start time of about 01:00 GMT, with a 24-gun military salute followed by a march of troops through the centre of the capital.
There will probably be a large photograph of the late leader, smiling, on prominent display.
Citizens will line the streets, with many of the women in traditional black dresses.
There have been many images of distraught citizens released by state media since the death. Early on Wednesday it broadcast more footage of weeping mourners paying their respects to Kim Jong-il.
Thursday is expected to feature a three-minute silence at noon local time, followed by trains and ships sounding horns.
The national memorial service will then begin.
State media have portrayed Kim Jong-un as leader since his father's death. He is thought to be in his late 20s and has very little political experience.
Kim Jong-il was in the process of formalising him as his successor when he died but the transition was not complete, leaving regional neighbours fearful of a power struggle in the nuclear-armed pariah state.
The Rodong Sinmun newspaper has described Kim Jong-un as the head of the Workers' Party Central Committee, meaning that he now controls one of the country's highest decision-making bodies.
The newspaper earlier gave him the title of "supreme commander" of the armed forces.
Analysts say he will be surrounded by a group of experienced military insiders and relatives, as the Pyongyang elite attempts to hold on to power.
Iran Threatens to Block Gulf Oil if Sanctions Applied
Iran has threatened to block the flow of oil through the Strait of Hormuz if Western governments attempt to impose sanctions on its petroleum exports in their dispute over its nuclear ambitions.
The official Iranian news agency IRNA quoted Vice President Mohammad Reza Rahimi as saying that if Iranian oil is banned “then not a drop of oil will pass through the Strait of Hormuz.”
Rahimi was quoted as saying Iran does not want hostilities but that Westerners are not willing to give up “their plots.”
The blunt warning came as Iran's naval forces continued a 10-day exercise in the Strait and nearby waters that began Saturday.
In Washington, U.S. State Department spokesman Mark Toner dismissed the threat as “bluster.” He called the comments “another attempt to distract attention from [Iran's] continued noncompliance with international nuclear obligations.”
Iran contends its uranium enrichment program is for civilian purposes, but a United Nations report issued last month said Tehran appears to be secretly working on designing an atomic weapon and missile delivery system.
European Union ministers have said that a decision on further economic sanctions – including the question of whether to boycott Iranian oil – would be made in the coming weeks. The vast majority of Iran's foreign revenue comes from oil exports.
More than one-third of the world's tanker-borne oil supply passes through the Strait of Hormuz.
Powerful quake hits Russia's Siberia, no casualties reported
An earthquake measuring 6.6-magnitude on the Richter scale jolted Russia's southeastern Siberian republic of Tuva on Tuesday, said local emergency center.
The Siberian regional center of the Russian Emergency Situations Ministry said information available showed there was no damage or casualties in the quake-hit region.
"Everything is all right. Our dispatchers work round the clock and they did not receive any calls on any destruction," a spokesman for the regional center was quoted by RIA Novosti news agency as saying.
The spokesman also said local residents were warned about the possibility of aftershocks and were advised to leave their homes.
The geophysical service of the Russian Academy of Sciences said the quake, with its epicenter registered at a depth of 10 kilometers some 120 km to the east of Kyzyl, capital city of the Tuva republic, occurred at 19: 21 Moscow time (1521 GMT).
The Kremlin press service said Russian Emergency Situations Minister Sergei Shoigu had reported to President Dmitry Medvedev about the quake and the situation in the region.
"Rescue teams were working at the scene and relief work was continuing," the Kremlin said, adding that all necessary assistance has been provided to people.
Earlier, the U.S. Geological Survey said the quake hit the region with its epicenter at a depth of 6.90 km.
China wins women's chess champion worlds
China beat India 2.5-1.5 in the last round of the 2011 World Women Chess Team Championship (WWTC) on Tuesday to win the title in Mardin province of southeastern Turkey.
Russia finished second and Georgia third.
For Chian-India match, three games ended in draws and Zhao Xue defeated Tania Sachdev on the third board.
"India wanted to make quick match draw with us, but our players hoped to fight. Zhao Xue eagered a win particularly and she made it," said China coach Yu Shaoteng.
Zhao Xue said:" I lost a game yesterday and I really want to win today."
In other matchups, Russia made a quick draw with Armenia to secure medals, Vietnam also drew with Ukraine, Greece beat South Africa and Georgia ousted Turkey.
Following are the final standings:
1. China - 16 points
2. Russia - 13 points
3. Georgia - 12 points
4-5. India, Ukraine - 11 points
6-7. Armenia, Vietnam - 9 points
8. Greece - 5 points
9. Turkey - 4 points
10. South Africa - 0 point.