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Stories Report on Business is following today:
Dow closes below 10,000
The Dow Jones industrial average fell below 10,000 for the first time early February, slipping late in the day after surging higher earlier. The S&P 500 was down marginally, and the S&P/TSX composite also fell back from a hefty surge to close up just more than 25 points. The Canadian dollar closed just slightly higher than yesterday, at 93.58 cents U.S.
OECD warns on household debt
Bloated debts among Canadian families pose a threat to the economic recovery, the OECD warns in a new report today. In its semi-annual outlook for the developed countries in the Organization for Economic Co-operation Development, the Paris-based group says Canada's economy is rebounding strongly from the recession, buoyed by government spending and recovering trade. The jobless rate should continue to fall and inflation should remain tame, it added.
The OECD warned, however, that "the high rate of household indebtedness is a source of risk to the outlook." The report did not go into further detail, but consumers heavily in debt would no doubt pull back their spending to meet higher debt servicing costs, among other issues.
The group is not the first to warn about the high levels of consumer debt in Canada. Just recently, the Certified General Accountants Association of Canada said household debt now stands at $41,740 per person, or 2.5 times above 1989 levels. Debt hit a record $1.41-trillion in December, and, according to a survey, Canadians don't have a problem taking on still more.
While interest rates have been at historic lows as the Bank of Canada battled to bring the country out of recession, the central bank is expected to soon begin changing course, possibly raising rates as early as next week. Indeed, the OECD urged the central bank today to begin pulling back from its extraordinary recession-era measures "without delay."
While unemployment is projected to continue falling, higher rates could still be a problem for consumers who took on more debt than they can juggle should rates rise rapidly.
The OECD report today illustrates how the global economy is sitting on a razor-sharp knife edge. It said the economy is rebounding from the recession faster than anticipated, but the government debt hangover in some countries and the potential for overheating in others, such as China, puts the recovery at risk.
In its forecast for the world's developed economies, the OECD pegged global growth at 4.6 per cent this year and 4.5 per cent. And, in a particularly bright note, said unemployment may have topped out at about 8.5 per cent, well shy of its previous forecast.
Apple leaps past Microsoft
Apple Inc. today overtook Microsoft Corp. as the most valuable technology company in the world. The overall value of shares of the manufacturer of the iPod, iPhone, iPad and desktop and laptop computers put the company's market value atabout $222-billion (U.S.), while stock of Microsoft carried a value of $219-billion.
The New York Times noted that Apple's surge marks a remarkable comeback, given that the company was believed close to dead 10 years ago. It also illustrates how consumers, who have made the iPod and iPhone wildly popular, have surpassed businesses as the shapers of technology, the newspaper said.
Flaherty unveils plans for regulator
Finance Minister Jim Flaherty today unveiled details of a new national securities act, his blueprint for the creation of a new national regulator to replace the system of 13 different provincial and territorial commissions. The new regulator, opposed by Alberta, Quebec and Manitoba, would have greater powers to punish criminals and protect investors. "We need to lower barriers, not multiply them," Mr. Flaherty said in Ottawa. Read the story
EU unveils bank tax proposalReport Typo/Error