Today Stock Market News

If Hurricane Gustav proves to be as strong as is forecast, it could overtop some floodwalls and levees in New Orleans, according to analysts at Risk Management Solutions.

HONG KONG (MarketWatch) — Hong Kong’s purchasing managers index remained below the breakeven threshold of 50 for a second straight month in August, as output in the private sector fell at its fastest pace in more than five years, according to data released Monday by index compiler Markit Group Ltd. The index fell to 48.5 in August from 49.4 in July, signaling an overall contraction in the economy for only the second time since December 2004. A reading above 50 indicates the economy is expanding, while a reading below that indicates a contraction. The fall in the index was the fastest since May 2003. “Companies blamed the decline in output primarily on falling levels of incoming new orders, linked to the current global economic slowdown,” Markit said in a summary of its findings. The calculation of the PMI is derived from data tracking changes in output, new orders, employment, suppliers’ delivery times and stocks of goods purchased.

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Once again, an ambitious ex-chancellor of the exchequer takes over for a retiring prime minister and is hit by economic malaise. For Gordon Brown, it will be a slow process, and the outcome, unfortunately for him, seems likely to be agonizing.

HONG KONG (MarketWatch) — The CLSA China Purchasing Managers Index, a measure of nationwide manufacturing activity, slumped to its lowest level since November 2005, reflecting a downtrend in manufacturing activity, but also a one-off disruption from Olympic-related factory closures, Hong Kong brokerage CLSA Asia-Pacific Markets reported Monday. The CLSA PMI fell to 49.2 in August from 53.3 in July. A reading above 50 indicates expansion, while a reading below 50 generally indicates contraction. Stripping out the effect of the Olympics-related factory closures, the reading would still have been lower than the previous month’s, but would likely have remained about the break-even threshold, CLSA’s Head of Economic Research Eric Fishwick said. “The sharp month-on-month drop in the PMI should not therefore be regarded as an indication of things to come,” said Fishwick. “Manufacturing activity in China is slowing but nowhere near as rapidly as the drop in the August PMI suggest.”

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HONG KONG (MarketWatch) — Microsoft’s Japanese unit will cut the cost of its Xbox 360 game console by nearly 30% in an effort to win market share from Nintendo Co’s more popular Wii console, according to a Japanese media report Monday. Microsoft will cut the price of the Xbox 360 Arcade model to 19,800 yen ($183), a reduction of 8,000 yen, according to a report by the Nikkei newspaper. Nintendo’s Wii, the market leader by sales, currently retails for 25,000 yen.

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Asian markets drop, with regional exporters such as Honda and LG Electronics taking a hit on worries about the impact on demand from a slowing global economy.

The state-run Korea Development Bank hasn’t abandoned its efforts to buy a stake in Lehman Brothers, according to a report Sunday.

HONG KONG (MarketWatch) — Asian markets dropped early Monday in the wake of a sharp pre-weekend fall on Wall Street, with Japanese stocks led lower by exporters such as Canon Inc. and Honda Motor Co. . The Nikkei 225 Average dropped 1% to 12,939.43, and the broader Topix index fell 1.4% to 1,237.20. South Korea’s Kospi declined 1.3% to 1,455.07, and New Zealand’s NZX 50 index slipped 0.4% to 3,339.89, while Australia’s S&P/ASX 200 dipped 0.7% to 5,098.80.

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It is hard not to be impressed by the jaw-dropping half-year profits reported by mainland Chinese banks last week. But was this just a cycle high or simply evidence that providing financial services to the world’s fastest growing economy is a great business?

The U.S. presidential race draws more than the usual amount of interest in India, after Barack Obama says he will ’stop giving tax breaks to corporations that ship jobs overseas.’

British home prices fell for the eleventh straight month in August, dropping 0.9% from July and 5.3% below the level seen in the same month last year, the lowest level since the survey began in 2001, real-estate data firm Hometrack reported Monday.

SAN FRANCISCO (MarketWatch) — The state-run Korea Development Bank of South Korea has not abandoned its efforts to buy a stake in Lehman Brothers , according to a report in the online edition of the Korea Economic Daily on Sunday, citing anonymous Korean government officials. One senior Korean government official told the newspaper that KDB has not folded its hand but is continuing to evaluate Lehman’s ability to survive and the synergy from a potential buyout, all the while monitoring public sentiment. While officially, KDB executives are mum on the bank’s interest in Lehman, they believe that Lehman provides an excellent opportunity for KDB to gain a foothold in the global financial market, according to Korean media reports. Furthermore, Governor Euoo-Sung Min of KDB is a former Lehman man, having served as the investment bank’s chief executive in Korea prior to taking up his current post which prompted speculations that he is keen on a deal between the two banks.

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The events on the Gulf Coast are forcing Sen. John McCain to rethink his strategy for the Republican National Convention, but the GOP’s standard bearer still will have many of the same hurdles to cross.

Republicans scale back plans for their nominating convention as Hurricane Gustav heads for the Gulf Coast, threatening lives and property.

Hurricane Gustav strengthens rapidly on Sunday as it passes over Cuba and entered the Gulf of Mexico, taking deadly aim at the U.S. Gulf Coast. Gustav went from a tropical storm overnight into Saturday to a violent Category 4 hurricane on the Saffir-Simpson scale, forcing residents from Florida to Louisiana to prepare to evacuate, and oil and gas companies and hotel-casinos in the region to shut down.

ST. PAUL (MarketWatch) — Sen. John McCain suspended most of the events scheduled for the first day of the Republican convention, as Hurricane Gustav was set to bear down on the U.S. Gulf Coast. The convention will open at 3 p.m. Central time and last unitl about 5:00 or 5:30 p.m. Central time Monday. McCain’s campaign manager Rick Davis told reporters the Republicans are making plans “day by day” about the convention’s events. The convention is scheduled for Sept. 1-4.

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If someone supporting a family of four on about $35,000 a year in pricey San Francisco can manage to save a big chunk of income, what’s stopping the rest of us from saving more?

BOSTON (MarketWatch) — Back-to-school time is about preparing for the year ahead, sparking the memory and finishing the summer reading list, getting ready for the next challenge.

NEW YORK (MarketWatch) — Retail unleaded gasoline prices rose one cent to an average of $4.00 a gallon in the last day, up from $3.99 on Saturday, according to the Daily Fuel Gauge Report from AAA. A month ago, gasoline cost an average of $4.14 a gallon. A year ago, the price was $3.25 a gallon.

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The grim outlook for the labor market has been leading more workers to reassess their career options. And it’s tempting many to contemplate a return to school to buff up skills or gain completely new ones.

LONDON (MarketWatch) — Write-downs of more than 3 billion euros were enough to make the sale of Dresdner Bank AG a top priority for Allianz SE, but murmurs of discontent had been around since the very start of a seven year marriage that never quite delivered on its promise.

NEW YORK(MarketWatch) — More than 90% of of oil production in the Gulf of Mexico has been shut-in due to Hurricane Gustav, the U.S. Minerals Management Service said Sunday in an afternoon update. Approximately 96.26% of the oil production in the Gulf had been shut-in, according to operator reports as of 12:30 p.m. Eastern, reported the MMS, a bureau in the U.S. Department of the Interior. The Gulf produces about 1.3 million barrels of oil per day, according to the agency. About 82.3% of natural-gas production is shut-in, the federal bureau said.

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Israel stocks on Sunday drop for a fourth day, led by holding company Israel Corp. and the major banks.

Hurricane Gustav strengthens rapidly on Sunday as it passes over Cuba and entered the Gulf of Mexico, taking deadly aim at the U.S. Gulf Coast. Gustav went from a tropical storm overnight into Saturday to a violent Category 4 hurricane on the Saffir-Simpson scale, forcing residents from Florida to Louisiana to prepare to evacuate, and oil and gas companies and hotel-casinos in the region to shut down.

The Republican National Convention is supposed to begin on Labor Day in St. Paul, Minn., Monday, but Hurricane Gustav could dramatically change the tone, if not the attendance, of the GOP gathering.

SAN FRANCISCO (MarketWatch) — More than three-quarters of of oil production in the Gulf of Mexico has been shut-in due to Gustav, the U.S. Minerals Management Service said in its latest update. Approximately 76.77% of the oil production in the Gulf had been shut-in, according to operator reports as of 12:30 p.m. Eastern Saturday, the MMS reported. The Gulf produces about 1.3 million barrels of oil per day, according to the agency. About 37.16% of natural-gas production is shut-in, it said. Another update was expected at 2 p.m. Eastern.

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Stocks will enter the month of September amid worries over Hurricane Gustav’s impact on oil price and the Gulf Coast, the possible resurgence of financial jitters, and key economic data culminating with the August employment report due Friday.

The United Steelworkers said the union and ArcelorMittal USA have reached tentative agreement on a new four-year contract.

Even as summer tans fade across Wall Street, analysts are pondering some surprisingly bright data released during the final days of August.

Stocks will enter the month of September amid worries over Hurricane Gustav’s impact on oil price and the Gulf Coast, the possible resurgence of financial jitters, and key economic data culminating with the August employment report due Friday.

Air France-KLM SA may, as soon as next week, buy a 20%-25% stake in a “new” Alitalia, the company which should emerge next week from the remains of the collapsed Italian flag carrier Alitalia SpA, according to published reports.

Stocks will enter the month of September amid worries over Hurricane Gustav’s impact on oil price and the Gulf Coast, the possible resurgence of financial jitters, and key economic data culminating with the August employment report due Friday.

Residents of Louisiana’s coastal areas are beginning to evacuate, New Orleans is boarding up and the residents of the Florida keys are watching for storm dangers as Hurricane Gustav, which strengthened to a Cat. 3 hurricane overnight, continues on its threatening path into the Gulf of Mexico toward the U.S.

Stocks will enter the month of September amid worries over Hurricane Gustav’s impact on oil price and the Gulf Coast, the possible resurgence of financial jitters, and key economic data culminating with the August employment report due Friday.

U.S. stocks decline, with the indexes tallying monthly gains and weekly losses, with a July drop in personal income and a worse quarter than forecast for Dell Inc. supporting a bearish view ahead of the long weekend.

In case you missed them, here are the top 10 Personal Finance stories from MarketWatch for the week of Aug. 25-29:

It has been said before and it’s worth repeating. There are few cars on the road that are as much fun to drive as a Mini.

Recent heat from Congress and regulators, along with public speculation, over whether commodity prices are being manipulated has also reached gold pits, where the debate was stirred by a surge in bets last month that gold prices would fall.

As investors, they fly solo. As market observers, they don’t lead or follow as much as go their own way. It’s tempting to dismiss their Cassandra-like warnings as overly pessimistic and hopelessly out of step, but their track records show that can be a costly mistake.

New Orleans residents observe the third anniversary of Hurricane Katrina’s devastation on Friday with solemn ceremonies and community events. And then they go to board up their homes and businesses and possibly prepare to evacuate as they await the onslaught of Hurricane Gustav.

The dollar’s plunge helped make U.S. companies cheaper and more appealing to foreign investors, but its recovery from recent lows could eventually present another obstacle to funding some cross-border mergers and acquisitions.

The recent strengthening of the U.S. dollar could signal a danger in the third quarter for many technology companies that have been enjoying a strong boost from currency exchange rates so far this year.

SAN FRANCISCO (MarketWatch) — Among the companies whose shares are expected to see active trade in Tuesday’s session are Donaldson Co., Google Inc., and Boeing Co.

When John McCain introduced his surprise choice for running mate, Alaska Gov. Sarah Palin, he told the audience in Dayton, Ohio that his goal is to “make government stand on your side, not in your way.”

Minneapolis-St. Paul long has been known as that city where Mary Tyler Moore threw her beret in the air, where the football team seems to always fall just short of winning it all and where it’s cold — really cold.

BOSTON (MarketWatch) — Leo Leydon of Financial Focus Advisory Services in Pembroke, Mass., says that the stock market has been oversold and is “due for a pretty good bounce.”

The Republican National Convention will begin on Labor Day in St. Paul, Minn., Monday, but one might argue Sen. John McCain informally convened the quadrennial gathering at least three days ahead of schedule from Ohio when he picked Alaska Gov. Sarah Palin on Friday to be his running mate.

SAN FRANCISCO (MarketWatch) — Integrity Bank of Alpharetta, Ga., with $1.1 billion in assets and $974 million in deposits, was closed Friday by the Georgia Department of Banking and Finance and the Federal Deposit Insurance Corp. was named receiver. This marks the 10th U.S. bank failure so far this year. All deposit accounts have been transferred to Regions Bank of Birmingham, Ala. and depositors of Integrity Bank will automatically become depositors of Regions Bank for the full amount of their deposits. Regions Bank will pay a total premium of 1.012% for the failed bank’s deposits and will purchase about $34.4 million of Integrity Bank’s assets.

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A weekly roundup of MarketWatch’s top news reports and analysis, commentary pieces, and personal-finance stories.

SAN FRANCISCO (MarketWatch) — U.S. holdings of foreign securities totaled $7.21 trillion at the end of 2007, according to a preliminary result of a survey released by the Treasury Department Friday. Out of the total, $5.2 trillion was held in foreign equities, $1.6 trillion in foreign long-term debt securities, and $400 billion in foreign short-term debt securities. Final results will be reported on Oct. 31. The survey was jointly conducted by the Treasury, the Federal Reserve Bank of New York, and the Board of Governors of the Federal Reserve System.

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