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90 seconds at 9 am: US and UK to release oil stocks; IMF approves €28 bln Greek bailout; S and P 500 above 1,400 for 1st time in 4 years
Gareth Vaughan wraps up the key news overnight in 90 seconds at 9 am including news Britain will cooperate with the United States on a release of strategic oil stocks within months in an attempt to prevent fuel prices choking economic growth during a US election year, Reuters reported.
A formal request from the US to UK to team up in a release of oil from government-controlled reserves is expected "shortly" after a meeting in Washington between President Barack Obama and Prime Minister David Cameron.
Other countries, including Japan, may also be approached by Washington to contribute, Reuters said.
Rising world oil prices have pushed petrol price in the US up sharply, threatening to stall economic recovery ahead of Obama's bid for re-election in November. With tension between the West and major oil producer Iran, Brent Crude has risen more than 15% since January to a peak of over US$128 a barrel.
According to the BBC, Swift, the group that handles global banking transactions, will cut Iran's banks out of the system on Saturday to enforce sanctions. This will make it almost impossible for money to flow in and out of Iran via official banking channels. The US and allies accuse Iran of trying to develop nuclear weapons, something Iran denies. Last week Iran agreed to hold talks with six other countries about its nuclear programme, but no date or venue has yet been set.
The International Monetary Fund has approved a €28 billion bailout for Greece as part of a broader international rescue package for the debt-strapped euro zone country. The IMF says it will immediately disburse €1.65 billion to Athens, in a deal aimed at helping keep Greece funded until 2014.
Meanwhile, Bloomberg reports that delaying Greece’s debt restructuring by more than a year reduced banks’ potential losses as they cut their holdings with most of the risk shifting to European taxpayers.
Back in the US the S&P 500 index hit 1,400 for the first time in four years thanks to a strong run of economic data. Shares in iPad maker Apple led the way, hitting a new all time high above US$600. The 1,400 mark is the highest level for the S&P 500 since June 2008. The rise came after US Labor Department data showed new claims for unemployment benefits fell to a four-year low last week, and producer prices, excluding food and energy, were contained.
However, Goldman Sachs’ market capitalisation fell by about US$2 billion after departing executive Greg Smith’s outburst against the investment bank via a New York Times article where he labeled Goldman Sachs’ culture toxic and destructive, something Goldman gas refuted.