© 2024 Blaze Media LLC. All rights reserved.
Morning Market Roundup: Spain Weighs on Europe, McDonald's Sales Slow, Futures Down

Morning Market Roundup: Spain Weighs on Europe, McDonald's Sales Slow, Futures Down

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

Spanish Bonds: Spain's market regulator says it has temporarily banned short-selling of shares on its stock indexes owing to volatility in Spanish and European markets.

The country's CNMV stock market watchdog said the measure would be kept in place for three months. It noted that Italy took similar steps Monday.

In a short sale, investors sell stock that they do not own, betting that they can buy it back at a lower price. The investor seeks a profit by betting that the price of certain shares will fall.

Short-selling of shares has been blamed for driving down markets during the financial crisis.

EU Worries: Europe is on the brink again. The crisis over too much debt in the 17 countries that use the euro flared dangerously on Monday.

Fears that Spain was next in line for a full-blown government bailout intensified following a weekend of bad news about Europe's fourth-biggest economy. Madrid's borrowing costs on its 10-year bonds - an indicator of market confidence in a country's ability to manage its debt - hit an alarming record of 7.45 percent during morning trading, pushed up by reports that the country's indebted regions might join its banks in requesting expensive bailouts.

Stocks slid continent wide. Germany's DAX fell 1.7 percent. Britain's FTSE was off 1.7 percent. The French CAC 40 was off 2.0 percent. The euro fell to $1.2118.

McDonald’s: McDonald's Corp. said its net income slipped 4 percent in the second quarter as a result of unfavorable currency exchange rates and a slowing global economy.

The world's biggest hamburger chain says global sales at restaurants open at least a year rose 3.7 percent for the quarter, with gains in every region of the world. But like other U.S. companies, McDonald's is finding itself pressured by the strong dollar.

When the U.S. dollar is rising against the other world currencies, companies that do business internationally take a hit when converting local currencies back into the dollar.

On Monday, McDonald's said that revenue in July from restaurants open at least a year had slowed. The metric is a key indicator because it strips out the impact of newly opened or closed locations.

For the three months ended June, McDonald's says it earned $1.35 billion, or $1.32 per share. That's down from $1.4 billion, or $1.35 per share, in the year-ago period. McDonald's said unfavorable currency exchange rates hit its results by 7 cents per share.

Total revenue for the quarter was $6.92 billion, up slightly from $6.91 billion a year ago. When stripping out the impact of exchange rates, the company said revenue rose 5 percent.

U.S. Futures:  U.S. stocks are opening sharply lower as fear surges over the European debt crisis.

In the opening minutes, the Dow Jones industrial average is down 185 points at 12,637. The Standard & Poor's 500 index is down 17 at 1,345. The Nasdaq composite index is off 61 at 2,864.

Strong selling has also rattled European markets because of fear that Spain will need a sovereign bailout. The main stock indexes are down more than 7 percent in Greece, 3 percent in Spain and Germany and more than 2 percent in France and Britain.

The Associated Press contributed to this report.

Want to leave a tip?

We answer to you. Help keep our content free of advertisers and big tech censorship by leaving a tip today.
Want to join the conversation?
Already a subscriber?