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Morning Market Roundup: Geithner Hopeful, Italian Mayors Not Fans of Austerity, UPS Down


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

Geithner: Treasury Secretary Timothy Geithner is voicing confidence the Obama administration and Congress will avert a fiscal crisis.

Geithner tells "CBS This Morning" it would be "untenable" to defer critical spending and tax decisions when the economy is still struggling.

Asked what would happen if the Bush era tax cuts are allowed to expire as automatic budget cuts take effect, he replies, "It would cause a lot of damage to the economy."

Asked if that could cause another recession, Geithner says, "Many people look at this say, yes, you would get a recession out of this."

But he says he's optimistic the government won't trip over the so-called "fiscal cliff" because, "I also think you're seeing people show more realism about what is necessary" to avoid a fiscal crisis.

Italian Mayors vs. Austerity: Mayors from across Italy, holding up flags and wearing their tricolor sashes, demonstrated in front of the Italian Senate on Tuesday against spending cuts planned by the government.

"We have reached our limits," said Mayor Andrea Marchi of the northern town of Ostellato, echoing big city Mayor Gianni Alemanno of Rome about threats to public services.

The mayors planned to meet with Senate President Renato Schifani and the Cabinet minister for relations with parliament Piero Giarda.

Graziano Delrio, president of the association of Italian cities, says the cuts will be "lethal" for many cities and that it's not too late for the legislature to modify the government decree.

Oil: The price of oil stabilized on Tuesday, after sliding the day before on Europe's deepening debt turmoil, as a survey suggested a recovery in China's manufacturing is taking hold.

Benchmark crude for September delivery was down 6 cents at $88.08 a barrel by midday European time in electronic trading on the New York Mercantile Exchange.

The contract had tumbled $3.69, or 4 percent, on Monday to settle at $88.14 per barrel after Spain's borrowing costs surged, raising the risk that it will require a financial bailout.

Those fears persisted on Tuesday, but their impact on the market was tempered by better economic data on China's manufacturing.

UPS: UPS lowered its earnings expectations for the year on Tuesday as economic weakness and uncertainty persist around the globe.

United Parcel Service Inc. lowered its full-year forecast by 25 cents per share to $4.50 to $4.75. The world's largest package delivery company said its customers are worried about the global economy weakening in the second half of the year. Their skittishness was also felt in the second quarter, where UPS missed analysts' expectations for both earnings and revenue.

The stock fell about 4 percent in premarket trading after the results were released.

U.S. Futures: U.S. stock futures fell Tuesday for a second day on weak quarterly results from corporations in the industrial and tech sectors.

Dow Jones industrial futures gave up 14 points to trade at 12,631. The broader S&P futures fell 2.5 points to 1,341.20. Nasdaq futures slid 1.3 points to 2,573.50.

Companies like DuPont are taking a hit on slowing business in Europe and Asia. The chemical maker posted a 3 percent decline in net income for the second quarter and revenue was short of Wall Street expectations. Shares edged lower in premarket trading Tuesday, as did shares of UPS.

The United Parcel Service cut its earnings expectations and shares slid 4 percent. Like DuPont, UPS is seeing global economic weakness and says its customers fear a downturn later this year.

The Associated Press contributed to this report.

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