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With our investment news briefs, Money Morning provides investors with a quick overview of the most important investing news stories from all around the world.
Gov't Spending Spurs China Manufacturing; "Clunkers" Program Fuels Auto Sales; Existing U.S. Home Sales Rise Again; EBay Selling Skype to Private Investors; India's Exports Fall for 10th Month; Eurozone Unemployment Hits 10-Year High; Australia's Central Bank Holds Rates; Billionaire: Goldman and Morgan Stanley Got it Wrong;
- Fresh off one of its worst monthly stock performances in years, China's manufacturing – as measured by the Purchasing Managers' Index – expanded in August at its fastest pace in 16 months. The uptick was driven by record lending in the first half of the year, Bloomberg News reported, citing two surveys.
- U.S. auto sales likely hit a 20-month high as a result of the U.S. government incentives, namely the now-expired "Cash for Clunkers" program. About 16 million vehicles were sold in August under the clunkers program, Reuters reported, citing a note from Barclays PLC (NYSE: BCS) analyst Brian Johnson. "We expect sales for the remainder of the year to fall well below August results, but believe momentum from the program as well as the stabilization in the economy and improvement in consumer confidence could boost sales above the 9.5 million average seen in the first half," Johnson wrote.
- Pending sales of existing homes rose 3.2% in July, the sixth consecutive monthly increase, as low prices and tax credits lured buyers back into the real estate market. According to the National Association of Realtors, the pending home sales index is 12% above July 2008, MarketWatch reported.
- EBay Inc. (NASDAQ: EBAY) plans to sell Skype, its Internet calling division, to a group of private investors for about $2 billion, The New York Times reported. The group likely includes Andreessen Horowitz, a venture capital firm lead by Netscape co-founder Marc Andreessen, as well as venture capital firm Index Futures and private equity firm Silver Lake Partners. Skype is on track to pocket more than $600 million in revenue this year, the Times reported.
- The global financial crisis has caused India's exports to decline for the tenth straight month. Merchandise shipments fell 28.4% in July from a year earlier to $13.6 billion, as the financial crisis continued weakening demand from its largest trading partners – the United States and Europe, Bloomberg reported.
- Eurozone unemployment rose to 9.5% in July, the highest level in more than 10 years, according to Eurostat, the European Union's statistical service. As long as unemployment remains high, the roof will be low for economic recovery. Nearly 22 million people are out of work, Eurostat said, and Spain's 18.5% unemployment rate topped all E.U. nations, The New York Times reported.
- Australia's Reserve Bank opted to keep interest rates unchanged for the fifth consecutive month. The bank's governor left the overnight cash rate at 3.0%. "They aren't in a rush" to raise borrowing costs, Adam Carr, a senior economist at ICAP Australia Ltd. in Sydney, told Bloomberg. "They want to wait and see whether the economy holds up. That rules out October for a hike."
- Goldman Sachs Group, Inc. (NYSE: GS) and Morgan Stanley's (NYSE: MS) declarations of economic recovery were wrong, said Paul Tudor Jones, a billionaire hedge-fund manager. Jones' , Clarium Capital Management LLC and Horseman Capital Management Ltd. believe government spending may be stalling another economic slowdown and market selloff, Bloomberg reported.