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Economy Briefs: Stock indexes drift lower, ending a two-day rally
Question of the Day
NEW YORK — A two-day rally that sent stocks soaring last week fizzled out Monday.
European leaders vowed Thursday and Friday to keep the continent’s monetary union intact, and investors sent stock markets shooting higher. But stocks were little changed Monday as investors waited to see if they would back up their words with action.
The Dow Jones industrial average sank 2.65 points to close at 13,073.01. JPMorgan Chase led the Dow lower, falling 2 percent to $36.14.
U.S. Treasury Secretary Timothy F. Geithner met separately with Germany’s finance minister and the head of the European Central Bank, Mario Draghi, on Monday. Mr. Draghi’s pledge to do whatever is needed to protect the euro set off a market rally last week. The Dow rose back above 13,000 for the first time since May and is now up 1.5 percent for the month.
Hopes are high that Mr. Draghi will announce plans to support the euro when the central bank meets Thursday, said David Brown, the CEO and chief market strategist at the research firm Sabrient.
Investors are also looking toward the Federal Reserve’s meeting this week. Many in the financial markets think the Fed will take new steps to stimulate the economy in coming months.
Chrysler posts $436M second-quarter profit
DETROIT — Chrysler’s almost total reliance on buyers in North America used to be a huge weakness, one that sent the company into bankruptcy protection.
Now it’s a major strength. The region is generating profits for the company while losses in Europe and slowing sales in South America and China are drains on other carmakers.
Chrysler, which sells almost 90 percent of its cars and trucks in the U.S. and Canada, made a $436 million profit in the second quarter. It was a huge turnaround from a year earlier, when the company lost $370 million, mainly because it refinanced government bailout loans.
The automaker, now majority owned by Italy’s Fiat SpA, also backed an earlier profit forecast of about $1.5 billion for the year. Such a performance would have been unthinkable three years ago, when Chrysler nearly ran out of cash and needed a government bailout to survive.
Chrysler Group LLC has emerged from bankruptcy protection with far lower costs, and it has saved money by using Fiat parts and expertise to engineer new models. Since exiting Chapter 11, it has rolled out a revamped Jeep Grand Cherokee, a highly profitable vehicle which saw sales rise almost 40 percent in the first half of the year.
Coalition government wrestles with new cuts
ATHENS — The three parties in Greece’s young coalition government failed Monday to finalize a major new package of budget savings that rescue lenders are demanding as a condition for continued bailout funds the country needs to avoid getting forced out of the eurozone.
But junior coalition partners said the meeting under conservative Prime Minister Antonis Samaras reached an agreement on the debt-crippled country’s “overall strategy” — including that it should obtain a two-year extension on its austerity and reform deadlines.
Finance Minister Yannis Stournaras told journalists that the government is still working to precisely identify what kinds of spending cuts to include in the new $14.1 billion package for 2013-14, although the three coalition partners have signed off on the bulk of the plan.
But Mr. Stournaras stressed that the final decisions should not hamper the country’s efforts to seek a renegotiation of its harsh bailout terms, “and, above all, [should] not annul our country’s ability to remain within the eurozone.”
• From wire dispatches and staff reports
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