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Morning Market Roundup: Feds Discuss More Easing, FedEx Earnings Slump, G-20's Plan for Growth

Business

Here’s what’s important in the business world this morning:

Fed Easing: The Federal Reserve is meeting this week at a time of high alert - over the slumping U.S. economy, the aftermath of the Greek elections and the shaky financial markets.

Whether that means it will announce any new action when its two-day meeting ends Wednesday isn't certain. But many analysts think the struggles of the U.S. economy and the threats from Europe will compel the Fed to say or unveil something to try to boost confidence.

A major issue is Europe's debt crisis. Do Fed officials think the Greek election results will help steady Europe's economy because Greece now seems likely to remain in the euro currency union? Or do they worry that Europe's crisis remains unresolved and could tip the global economy into recession?

Those concerns have flared just as U.S. employers have reduced hiring. U.S. retail sales and manufacturing output have weakened. The housing market is still far from healthy. Investors are edgy.

FedEx: FedEx says higher costs and slow global growth will crimp its earnings results over the next 12 months.

The world’s second-largest package delivery company is reporting lower results for the fiscal fourth quarter ended in May due to a charge for retiring some planes.

FedEx earned $550 million or $1.73 per share in the last quarter, compared with $558 million, or $1.75 per share, a year earlier. Revenue rose to $11 billion from $10.55 billion.

Without the charge, FedEx Corp. would have earned $1.99 per share, 4 cents better than Wall Street estimates.

G-20: The leaders of the world's largest economies will portray themselves as united behind efforts to boost growth and job creation in order to repair a global economy roiled by fears over the European financial crisis, according to a draft of the statement to be released Tuesday at the end of the Group of 20 annual meeting.

It's far from certain, however, that the reassuring words will sooth markets whose harsh judgment of the official response to the crisis appears to be pushing Europe closer to catastrophe by the day. On Monday, less than 12 hours after a Greek election quelled fears that the country could make a devastating exit from the Euro, fears about Spain drove that massive economy's borrowing costs dangerously close to the level where it would need a bailout.

The statement by the G-20 leaders includes language that appears aimed at easing the Spanish crisis by reassuring investors that Spain's treasury won't end up eating the costs of the up to 100 billion euro rescue of Spain's banks announced this month. Fears that the responsibility of paying back the bailout would fall on its government helped drive Spain's borrowing costs above the dangerously high 7 percent level.

More Single-Family Homes: U.S. builders started work on more single-family homes in May and requested the most permits to build homes and apartments in three and a half years. The Commerce Department said Tuesday that builders broke ground on 3.2 percent more single-family homes in May, the third straight monthly increase.

Overall housing starts fell 4.8 percent last month to a seasonally adjusted annual rate of 708,000. But that was entirely because of a 21.3 percent plunge in apartment construction, which can be volatile from month to month.

The government also said April was much better for housing starts than first thought. The government revised up the figures to 744,000 - the fastest building pace since October 2008.

Even with the gains, the rate of construction and the level of permits requested remain roughly half the pace considered healthy. Yet the increases add to other signs that the home market may finally be starting to recover nearly five years after the housing bubble burst.

The Associated Press contributed to this report.

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