Knight Capital, a financial-services firm, obtained a $400 million bailout from a consortium of Wall Street firms after faulty software produced wild swings in some share prices on the New York Stock Exchange. Knight's own share price fell off a cliff after the Aug. 1 incident, which cost it $440 million. The consortium that rescued it, which includes such financial titans as Jefferies and TD Ameritrade, will end up with about 70 percent of Knight.
Japan Airlines said it would re-list on the stock market in an initial public offering next month, after three years in bankruptcy protection. During that time it has cut its workforce, slashed pay, trimmed pensions and reduced the number of its flights, all of which helped it turn a record profit for the year ending in March. Its target of raising $8.5 billion would make it Asia's biggest IPO this year.
Rio Tinto reported a 34 percent drop in underlying profit for the first half of the year, to $5.2 billion. The mining corporation's business depends on selling iron ore to China, which is buying less as its economy cools. Xstrata, a rival, posted a 23 percent fall in attributable profit, to $2.2 billion, also in part because of the downturn in commodity prices.
BHP Billiton took a writedown of $2.8 billion against shale-gas assets it acquired in America last year. Since then a glut of natural gas has caused prices to plunge. Marius Kloppers, BHP Billiton's boss, will forgo his bonus because of the charge.
Pfizer, a big American drug company, was fined more than $60 million under America's Foreign Corrupt Practices Act for bribing foreign officials. Its punishment was light, by American standards, because it cooperated with the investigation.
Sharp had another dismal quarter. The Japanese electronics company sold about half as many LCD televisions as it did during the same period a year ago, and forecast a whopping annual net loss of $3.2 billion, more than its market value. Hon Hai, a Taiwanese contract manufacturer better known as Foxconn, said it would renegotiate the terms of a deal to buy a 10 percent stake in Sharp.
Hewlett-Packard wrote down its technology-services business by $8 billion, an admission that its 2008 purchase of Electronic Data Systems, an IT outsourcing company, for $13.9 billion has not worked out well.
Political economyThe Bank of England drastically reduced its growth forecast from the one it gave only three months ago. The central bank now thinks output in the British economy will not return to its pre-crisis levels until 2014, and projects GDP to rise by 2 percent.
Indonesia's economy, the biggest in southeast Asia, grew by 6.4 percent in the second quarter. The figure was better than had been expected, given the decline in the country's exports of raw materials, and was boosted by the spending power of Indonesia's burgeoning middle class and by public and private investment, which is growing at its fastest pace since the late 1990s.
The troika consisting of officials from the European Union, the European Central Bank and the International Monetary Fund left Greece reporting "good progress" and promising to come back in September to finish their work. A bond payment falling due before then will be covered by short-term debt.
Police in Macau raided casinos and hotels, arresting 150 people in connection with an outbreak of violence among gangs. Macau has overtaken Las Vegas as the world's biggest gambling center.
Palaniappan Chidambaram, India's new finance minister, made some reformist noises about removing "any apprehension or distrust" toward foreign investors. India's government has been criticized for being less than enthusiastic about opening its markets to foreign competition. Chidambaram, who served a previous stint as finance minister between 2004 and 2008, also called for more transparency in India's tax policies.
Police in Colombia arrested John Ericson Vargas Cardona, known as "Sebastian," the leader of a criminal outfit that was once associated with Pablo Escobar, the infamous then-boss of the Medellin drug cartel. Vargas Cardona's gang is conducting a turf war in the city. His arrest was described as a "big blow against criminality" by President Juan Manuel Santos.
