Morning Market Roundup: Massive Toyota Recall, Italy Eases Up, China Auto Sales Down

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

Toyota: Toyota Motor Corp. is recalling 7.43 million vehicles in the U.S., Japan, Europe and elsewhere around the world for a faulty power-window switch -- the latest, massive quality woes for Japan's top automaker.

The recall announced Wednesday affects more than a dozen models produced from 2005 through 2010. The power-window switch on the driver's side didn't have grease applied evenly during production, causing friction in the switch and sometimes smoke, according to Toyota.

No crashes or injuries have been reported related to the defect. But more than 200 problems were reported in U.S. and a fewer number of problems were reported elsewhere, including 39 cases in Japan, Toyota spokesman Joichi Tachikawa said.

Recalled in North America are the Yaris, Corolla, Matrix, Camry, RAV4, Highlander, Tundra, Sequoia and Scion models xB and xD, spanning 2.47 million vehicles.

The sprawling recall also applies to cars in Australia, Europe, China, and elsewhere in Asia and the Middle East.

China vs. Japan: China's auto sales shrank in September as a territorial dispute with Tokyo prompted buyers to avoid Japanese brands, hurting already weakening demand.

Sales of passenger vehicles declined 0.3 percent from a year earlier to 1.32 million units, the state-sanctioned China Association of Automobile Manufacturers said Wednesday.

The group blamed the tensions with Japan but the decline also reflects the impact of China's deepest economic slowdown since the 2008 global crisis. Sales in some cities have been hurt by local measures to control congestion by liming new registrations.

Sales growth in the world's biggest auto market by vehicles sold has declined from June's 15.8 percent to 11 percent in July and 3.7 percent in August.

Toyota Motor Corp. said its sales in China declined 48.9 percent from a year earlier. Nissan Motor Co. said sales slid 35.3 percent while Honda Motor Co.'s were down 40.5 percent.

Italy: Italian Premier Mario Monti's government has announced a cut in income taxes for low wage earners, an unexpected move aimed at easing austerity measures being enforced to reduce public debt.

The government said the tax cut is part of a draft budget that will allow it to balance the budget in 2013 but also give some relief to low income families and support economic activity and employment.

Among the measures were a cut in the personal income tax rate to 22 percent from 23 percent for revenues up to €15,000 a year and to 26 percent from 27 percent for revenues between €15,000 and €28,000.

The value added tax will increased July 1 by one-percentage point to 22 percent instead of the earlier planned two points.

The government also announced an additional €3.5 billion in spending cuts and a new tax on financial transactions it said was being introduced in 10 other eurozone countries, including Germany and France.

U.S. Futures: Stock futures are mixed a day after the U.S. earnings season kicked off.

Dow Jones industrial futures are down 7 points to 13,405. The broader S&P futures are up 1.1 points to 1,437. Nasdaq futures have tacked on 2.25 points to 2,736.25.

Stocks are under pressure due to a forecast from the International Monetary Fund on Tuesday, which said that the global economy continues to weaken and that the recession in Europe could extend to developing nations.

Shares of Alcoa are lower Wednesday after the aluminum maker cut its demand expectations for the year, largely because of a slowdown in China.

At 10 a.m. Eastern, economists expect the Commerce Department to report that U.S. wholesale businesses appear to be more optimistic that sales will turn around.

The Associated Press contributed to this report.