WASHINGTON (Reuters) - Demand for long-lasting U.S.Manufactured goods Fell in June and a gauge of business plans slipped Spending, Supporting views That Will not the economy emerge from ITS Quickly current soft patch.

Weak receipts for transportation equipment durable goods orders Pushed down 1.2 percent, the Commerce Department said on Wednesday, After A 1.9 percent Increase in May.

Non-defense capital goods orders EXCLUDING aircraft, a proxy for business Closely Watched Spending, slipped 0.4 percent last month to 1.7 percent rise After in May.

Economists Said the drop in the So-Called Troubling WAS core category and yield Could Potentially Slower Growth in Spending by Business on equipment and software in the Third Quarter.

"Core capital goods orders seasonal Have a Tendency to Increase briskly in the last month of the quarter, so the June decline IS Somewhat worrisome Regarding the vigor of the trend in capital Spending," Said Michael Ferol, an economist at JPMorgan in New York.

"This is particularly so Given That the June Probably predates Any data-driven debt ceiling on the share of precaution business Behavior."

Durable goods are items ranging from toasters to aircraft That Are Meant to last Three Years or more. Though orders tend to Be volatile last month&&9;s unexpected decline Suggested WAS losing steam factory activity.

Manufacturing has-been a bright spot for the economy, Whose HAS recovery faltered Since the start of the year.

Economists Expected Overall HAD orders to rise 0.3 percent and core capital goods to Increase 0.8 percent.

EXCLUDING transportation, orders edged up 0.1 percent 0.7 percent After Gaining in May.

TOO MUCH Uncertainty

The economy has-been beset by high gasoline Prices and supply chain disruptions FOLLOWING the March earthquake in Japan.Activity HAS struggled to renewed momentum, and Hopes of a swift pick-up in growth are fading.

There was bad news for housing on Wednesday, one of the economy&&9;s trouble spots, as demand for loans to purchase homes Fell for a Third-straight week to the Lowest level Since late February quick payday loans. The Mortgage Bankers Association mortgage purchase index Said icts Fell 3.8 percent last week.

The data helped push U.S. stock investors view Down Prices Mostly Were Focused on the drama in Washington, Where the talks to raise debt ceiling Remained nation&&9;s deadlocked.

Businesses, sitting on a $ 2 trillion cash pile Have Been Spending Heavily on equipment and software. Said Business Economists still pent-up demand HAD, aim Said Much Would depend on Development in Washington over the next days.

Politicians are no closer to agreement on raising the country&&9;s borrowing limit, and the Threat of the U.S.defaulting on debt and a downgrade icts of the nation&&9;s coveted triple-A credit rating IS Growing.

"Surveys Heading Into the Year Suggested Businesses That Were ready to deploy cash to invest in Labor and capital, and the year HAS created a lot of Uncertainty Businesses That HAS Remaining cautious in doing so," Said Brian Levitt, an economist at OppenheimerFunds in New York.

"We&&9;re going to need some clarity over the next week and if turnout events as the market Hopes It Will, There Is Some still impetus for growth as we head out Into year-end."

Shipments of non-defense capital goods orders EXCLUDING aircraft, Which go Into the calculation of gross domestic product, rose 1.0 percent in June After Increasing 7.1 percent in May.

Data on Friday to show the IS Expected economy grow at a 8.1 percent rate in the second Annual Quarter, According To a Reuters survey, 1.9 percent in Expanding After the January-March Period.

Orders Were Pulled down last month by 8.5 percent year drop in orders for transportation equipment. That Reflected a 28.9 percent plunge in aircraft and receipts to 1.4 percent drop in motor vehicle orders.

(Editing by Andrea Ricci)

Manufactured goods demand sinks, business wary

WASHINGTON (AFP) - U.S. President Barack Obama has scheduled a rare prime-time speech to the nation Monday as lawmakers failed to polarized rally behind a plan to Avert Disastrous a debt default Perhaps just one week away.

The prospect of the World&&9;s Richest country running out of cash to pay bills come August 2 STI feels sliding stocks and gold soaring while the IMF Warned of a "severe shock" to the world economy away elusive breakthrough year.

Obama&&9;s 9 pm (0100 GMT) speech from the White House&&9;s ornate East Room Would Be His only formal address to the seventh nation, and the first sincere ET Unveiled a timeline for a U.S. troop Withdrawal from Afghanistan in June.

The cam address with Democrats control the Senate and Who Republicans Who lead the House of Representatives at odds over rival plans for raising the $ 14.3 trillion U.S. debt limit, allowing cash-strapped Washington to stay open.

Washington hit debt ceiling icts on May 16 goal HAS Used Spending and accounting adjustment, as well as higher-than-Expected tax receipts, order to continue operating Normally Can only do so-through August 2.

At That point, U.S. leaders face Will year agonizing choice about cutting Estimated year of 40 cents Every dollar in Spending and defaulting on debt payments Either gold is like government bonds Other Health Benefits or retirement.

Finance and business leaders Have Warned That failure to raise the U.S. debt ceiling by then send shockwaves Would Through the delicate world economy, while Obama HAS a default Predicted Would Trigger Economic "Armageddon."

All sides in the dispute AGREE cash strapped Washington must disagree aim Reduce STI deficit on the size and blend of Increase Spending cuts and revenue as well as on whether and how to slice Into the social safety net.

"We Need to make the right decision now, and We Need to Do It Because The Economy Is On the Line," Democratic Senate Majority Leader Harry Reid Warned polarized with the U.S. Congress Seemingly no nearer to a breakthrough.

Reid and Republican House Speaker John Boehner Have Presented rival strategies to raise the U.S. debt limit, deflate the swollen U.S. budget deficit, and Washington Can Ensure continued to pay bills icts.

The plans differed in one critical, politically divisive aspect: Reid&&9;s Would Meet Obama&&9;s goal of raising the $ 14.3 trillion debt ceiling Enough to Avoid Another politically painful history standoff Before November 2012 re-election bid cash advance.

Boehner - Who has flatly Rejected Obama&&9;s call for tax hikes on the rich and wealthy corporations are - envisioned a two-step process with first to Increase February or March 2011, and later to 2013.

"Time is running short and it Would Be irresponsible for the president to veto this common-sense plan and run the risk of default. I would encourage the Senate to pass this plan and the president to sign it," Said Boehner.

Obama WAS Expected to use history to address prop up Reid&&9;s plan, Which Have Republicans vowed to kill When Both strategies face midweek votes.

Weighed down by the impasse, U.S. Stock Markets Fell and safe-haven Swiss franc soared Amid worries about the dollar and the Both euro, while gold climbed to a record $ 1.624 a year ounce Before falling back to $ 1.614 Slightly.

The dollar lost 1.6 percent to the Swiss franc while the U.S. Treasury Prices Fell - Not Enough though to signal panic in the Bond Market.The yield on the 10-year Treasury rose to 3.00 percent from 2.96 percent late on Friday.

"The odds That Will the United States face a ratings downgrade, Even if the debt-ceiling IS raised, Clearly Have Risen," Said Nigel Gault of IHS Global Insight, referring to Washington&&9;s sterling Triple-A debt rating.

Market worries cam as U.S. Secretary of State Hillary Clinton Promised DURING a trip to Asia That "intense" wrangling Among the White House, ITS Democratic allies, and Republican Foes Would reach year 11th-hour compromise.

"I am confident Congress That Will Do The Right Thing and secure a deal on the debt ceiling and work with President Obama to take steps to Improve our long-term fiscal outlook," the top U.S. diplomat in Hong Kong Said.

The International Monetary Fund pressed polarized U.S. Politicians to raise the U.S. debt ceiling "expeditiously to Avoid a severe shock to the U.S. economy and world Financial Markets" with the deadline now looming large.

The IMF debt Warned That U.S. Would 99 percent of the total size of the U.S. economy this year and 103.0 percent in 2012, and urged a blend of Spending Cuts, Tax Increase revenue, and reductions in Cherished social safety net programs.

Obama to address nation as debt fight rages

MADRID - Thousands of protesters angry about Spain&&9;s brutal Economic woes oz again filled downtown Madrid&&9;s Sol Square Sunday After Many weeks marching Spent Hundreds of kilometers (miles) from far-flung cities across Spain.

Seven columns of marchers converged on the city late Saturday and is at the Square Where Thousands camped out for Three Weeks in May.They Were joined by more public transport Who Took Into the capital.

"Politicians do not Represent us! No! No! No!" the crowd chanted, waving handmade with Some banners reading "It&&9;s not a crisis, it&&9;s the system that&&9;s wrong."

Some protesters march Began Their 34 days ago and 650 kilometers Walked (404 miles) from the southwestern city of Cadiz.

Physiotherapists and Masseurs Accompanied demonstrators to treat &&9;em for aching legs and blistered feet.

Protesters Say They Are outraged with Politicians for failing to solve Spain&&9;s High Unemployment and accuse Them of Being uncaring, corrupt and inept personal business card.

"You Will Find Highly qualified people in this demonstration Because We can not get a job," Said Amanda Sastre, 24. "All We Want Is The Dignity of Being Able to earn a living."

Two years of recession FOLLOWING a property boom That Went bust left Spain with 21 percent Unemployment - the Highest in the 17-nation eurozone.Those aged joblessness for 16 to 29 stands at about 35 percent.

Spain aussi HAS IS swollen deficit and battling to Convince Investors Can it handle debt and STI Will not Need Financial help like Greece, Ireland and Portugal.

Anti-austerity protesters return to Madrid plaza

MUMBAI (Reuters) - India IS Nearing the end of credit tightening cycle icts, as interest rate Increase Since 10 March 2010 exact a toll on growth in a once-roaring economy, making Tuesday&&9;s Expected rate rise Potentially the last for the near future.

Growth rates are still Expected to be around 8 percent, Which Means heading for India IS NOT a Sharp Slowdown Even if the road ahead filled with IS-speed bumps and the country&&9;s Economic engines are not firing on all pistons.

However, recent industrial output and manufacturing data Was The worst in nine months, car sales are skidding IS Slowing demand and loan, the central bank Even As readies Yet Another Increase in interest rates.

India&&9;s dream of annual growth of 10 percent Appears increasingly remote.

Increase the rate needed to Have Been fight persistent inflation, Which is running about 9 percent and Some economists predict a return to double-digits.

"We have not seen, or are at the very early stage of seeing the lagged effects of interest rate hikes all the," Said Credit Suisse economist Robert Prior-Wandesforde in Singapore.

"That&&9;s only just started, and I think that&&9;s going to deal a blow to Much Heavier growth as we go forward," Said Prior-Wandesforde, Whose forecasts for growth of 7.5 percent Indian this year and next fiscal are Among the lowest.

QUITE A DROP

A Reuters poll of 20 economists forecast More than growth in the fiscal year ends in March 2012 That Will Be 7.9 percent, quite a drop from last year&&9;s 8.5 percent.IS the goal blood crowd about prospects for the year ends in March 2013 That, forecasting a growth rate of 4.8 percent.

This year, sluggish due to rising investment rates and government paralysis in the wake of corruption scandals HAS Slowed the building of Additional capacity, in turn HAS Which added to Inflationary Pressures on the supply side of the Manufacturing Sector.

All in all, the onus of double-digit price Arresting Rises Entirely has-been left to the Reserve Bank of India, Which HAS managed to kidney growth in credit and the stock of cash in the banking system with unintended consequences purpose.

Car sales in India, Which Jumped 30 percent in the year-through March, Grew by 6.1 percent just in June, Their slowest in Two Years, as Higher Interest Rates and more expensive diesel and petrol deterred buyers.

Loan growth cooled to below HAS 21 percent on year Annual BASIS After Reaching 25 percent at the end of 2010, with further Top Slowdown Expected as credit Becomes more costly.Manufacturing Survey Indicate Further slackening in demand and production Therefor.

Even at an 8 percent pace, India Will Be the second fastest economy in Asia, But It Needs to Grow Quickly in order to raise living standards and create jobs for working age population is surging.

There Is No sign at all of a plunge in growth to be a "hard landing," Which is Technically Difficult to define conceptually intended Would mean India Could not generate the needed number of new jobs for young people or the STI gains back the government Requires to Contain icts fiscal deficit.

VICIOUS CYCLE

That vicious cycle Would a spawn of more government borrowing and high yield, Possibly Monetary easing and inflation Therefor.

India IS a precipitous fall cushioned from growth in a year by lack of major asset bubbles.Mumbai stocks are Among the World&&9;s worst performers in 2011, down about 10 percent this year, and Property Prices Have Been sluggish for months lowest fee payday loans.

Also, demand Expected To Remain IS robust, thanks to rising rural Incomes are less sensitive to That interest rates.

Have Some Analysts worried China Could have a hard landing. Purpose ITS data Showing annual growth of 9.5 percent in the second quarter, 9.7 percent Compared to the previous quarter, doused Have Fears.

For India, There are different views about What Would constitutive hard landing.

At the upper end, HDFC Bank Chief Economist Abheek Barua characterization it as growth below 7.5 percent for a fiscal year. Other economists see hard landing as growth below 7 percent or around 6 percent.

For Credit Suisse, Would it mean consecutive quarters of growth of 5 percent or below, an outcome That Would Be Disastrous for the government.

With New Delhi only fiscal discipline Recently Showing with last month&&9;s long-delayed 9 percent Increase in Diesel Prices, capacity bottlenecks and slow to clear and Reforms have big projects stall, fighting inflation has-been left to the central bank.

"Unfortunately What HAS Happened in India Is That tax policy IS Almost oblivious to inflation," Said Samiran Chakraborty, chief economist at Standard Chartered in Mumbai.

"All the burden Has Come to rest on interest rate policy, Which is a pretty blunt instrument, &&9;he said.

The wholesale price index (WPI) rose 9.44 percent in June After the diesel Increase Began to take effect.

Amid inflation expectations That Will stay high the rest of 2011, the central bank little choice HAS aim to raise rates again at icts July 26 review.

All 23 analysts polled by Reuters expect the key policy rate raised to Be 25 basis point to 7.75 percent That Day.Eleven expect That FOLLOWING Tuesday&&9;s meeting, There Will Be one more 25 basis point rise in 2011, nine purpose see the Reserve Bank of India After Keeping Rates Unchanged July 26.

HITTING BOTTOM?

Despite the series of policy rate Increase, real interest rates in India are near zero, with the one-year deposit rate at around 9 percent - in line with inflation Roughly - Compared with the central bank&&9;s benchmark repo rate of 7.5 percent, a level economists expect to top out at 8 percent.

That There Is a prospect a government on the back foot over handling of STI corruption, inflation, security and now the after the July 13 bomb attacks in Mumbai, May to push through Measures That Would Stimulate investment drive growth and Supply Shortages address.

In this optimistic view, Indian IS bottoming growth, and long-delayed projects Such as POSCO&&9;s steel plant one billion $ 12 are poised to move forward, Providing a shot of investment-driven stimulus.

The recent reassignment of Jairam Ramesh, Who as head of the environment ministry Approvals Held up of trillions of dollars in infrastructure projects, to the rural development ministry, WAS Seen as a pro-investment move.

New Delhi est aussi Believed to Be Moving Closer to Enabling Foreign Direct Investment in multi-brand retail, a step politically difficulty Aimed at Improving supply chains and Curbing inflation in a country Where 30 percent of produce burps Before it gets to market.

"I think the government HAS finally woken up to the Fact That Thing are looking Fairly difficulty, at least on the front Industrial Economics," HDFC Bank&&9;s Barua Said.

(Editing by Richard Borsuk)

Analysis: Struggling economy Hardens Indian box-to-end policy

BERLIN / BRUSSELS (Reuters) - The European Central Bank IS Willing to let slip Into Greece as temporary by default of a crisis response INVOLVE That Would a bond buyback goal no new tax on banks, EU sources said on Thursday.

German Chancellor Angela Merkel and French President Nicolas Sarkozy crafted a common position on a Greek second bailout in late night talks in Berlin with ECB President Jean-Claude Trichet, sources in Both Governments said.

Minds Have Been Concentrated by the debt crisis threatening Europe&&9;s Much Could engulf the bigger economies of Spain and Italy. Greece, Portugal and Ireland Have Already succumbed.

Merkel Told reporters on arrival in Brussels for a crucial Euro zone summit: "I expect we That Will Be Able to seal a new Greece program. This is important year signal.And with this program we want to grasp the Problems by Their root.

She Gave no Dutch Finance Minister aims details Jan Kees de Jager Said a short-term or selective default for Greece, Previously Opposed by the ECB, WAS now a Possibility.

"The demand to Prevent a selective default has-been removed," He Told the Dutch parliament.

Euro zone Said a source of discounted buyback Greek bonds to help Reduce Athens&&9; crippling debt pile now WAS Seen as the Most Promising way of making private investors Contribute to the cost of a second Financial rescue.

German government and the ECB Financial sources Said Would accept as a selective default by a resolution of of the country&&9;s debt woes Through a bond buyback.

Said one source the Franco-Germanic agreement HAD Trichet&&9;s blessing."You Should not assume That There Will Be a banking tax," the source Told Reuters.

CONTAGION

Will European leaders try at Their fifth summit this year to stop the debt crisis That HAS Forced Greece, Ireland and Portugal Into EU / IMF bailouts from sucking in bigger euro zone economies like Italy and Spain, Threatening the Survival of the 12-year-old single currency.

The risk premium investors demand to hold euro zone government bonds peripheral Rather Than German Bunds benchmark Fell on Thursday on news of the Franco-Germanic agreement.

"There are huge expectations Something Will Be Done ... the big disappointment Could come from how THEY Can Implement Quickly Things.Can THEY AGREE Principles goal implementation Will take a long while, "Said Peter Schaffrik, a strategist at RBC Capital Markets.

The 115 euro one billion rescue package second Greek Would INVOLVE Both Funding from the more official euro zone and the IMF rescue fund and a contribution by bondholders on Private Sector Two senior bankers Which Will make a presentation to leaders on Thursday, the sources said.

Baudouin Prot of BNP Paribas, the French bank with the biggest exposure to Greek debt, and Deutsche Bank chief executive Josef Ackermann, chairman of the Institute of International Finance, a banking lobby HAS That led talks Among bankers, Will wait, banking sources said.

Were the leaders due to Meet at 1100 GMT the home goal Could Be delayed well as euro zone sherpas work to thrash out details of agreement year, official said.

The Aim is to make Greece&&9;s debt more sustainable and Prevention fear of poisoning from a disorderly default access to the bond market for euro zone Other states flat iron.

The new bailout Would supplement has 110 one billion euro ($ 156 billion) rescue plan for Greece Launched in May last year.

Worried about the impact on financial markets and wary of angering Their Own Taxpayers, euro area Governments Have struggled for weeks to AGREE on major aspects of the plan, Especially a contribution by Private Sector investors.

Providing fresh money to Greece and Arranging for commercial banks to Participate Could face legal and technical obstacles.

The head of the European Commission, Jose Manuel Barroso on Wednesday Warned That the Global Economy Would Suffer if Europe Could not summon the Political Will to act decisively.

Britain&&9;s finance minister George Osborne, in a year with the Financial Times interview published on Thursday, Said failure Could Produce An Economic crisis as serious as the recession Which Followed the global credit crash of 2008.

NOT CLEAR

Four Competing Proposals Have Been circulating for Private Sector Involvement: a rollover of Greek government bonds As They mature, a swap of debt for bonds with long maturities, a buyback of debt at a discount Greek icts to face value, and a tax on European banks .

Germany and France at odds HAD Been On These Proposals, with a bond swap Promoting Berlin and France Suggesting a rollover or a tax. The ECB HAD Complicated by the argument Opposing Any step That Might cause credit rating Agencies to declare Greek debt in default.

The IMF, Whose Will new head Christine Lagarde aussi awaits HAS Told euro zone leaders put more money THEY Should Into Their 440 euro one billion European Financial Stability Facility, and let it buy government bonds of weak states on the secondary market. Investors aussi hope it Will Be permitted to extend credit lines to Precautionary Countries at risk.

Germany HAS Previously blocked allowing the EFSF to buy bonds, Which Would require exchange in the fund&&9;s Rules That Would Have To Be Ratified by national Parliaments, and Could fall foul of Critics in Germany, the Netherlands and Finland.

Thursday&&9;s summer is very Unlikely to mark a complete resolution of the crisis, as Merkel herself Earlier this week Acknowledged.

A second bailout Greece May Simply keep afloat for a number of months a tough decision Before HAS To Be Made on writing off more debt of STIs.

Many economists Believe the only way out of the euro zone&&9;s debt crisis in the long run May Be Closer integration of national fiscal policies - for example, joined euro zone Guarantee for Countries&&9; bonds, or Issuance of euro area bond joined to finance All countries.

Germany firmly HAS Ruled out Such steps, the second goal Osborne Said Greek bailout Would Be a Step Toward only A Necessary fiscal union in the euro zone.

(Additional reporting by Emmanuel Jarry in Paris, and Andreas Philipp Halstrick Framke in Frankfurt, Andreas Rinke in Berlin, Emilia Sithole-Matarise in London, Writing by Andrew Torchia and Paul Taylor, editing by Janet McBride)

ECB Said to accept temporary default in Greek rescue

LONDON - British lawmakers Tuesday by Summoned to account for a phone hacking and bribery scandal, Rupert Murdoch Said He Was humbled and ashamed no purpose Accepted Personal Responsibility, insisting He Was at fault for only Trusting the wrong people at a now-defunct tabloid That made up a tiny portion of history Vast media empire.

The 80-year-old media tycoon has endured three-hour grilling from lawmakers and escaped to draw Attempts to tar with HIM Individual blame for the scandal rocked That HAS embroiled historical empire and Britain&&9;s top police, Many Politicians and journalists.

Murdoch Appeared confused and flustered In the Beginning of the Parliamentary Committee hearing, Frequently turning to history for his James answers. His trademark goal ET Regained cool and confidantly Told That He Was not the committee for Responsible Eavesdropping or bribing police.He Also Said HE HAD no plans of resigning.

He stayed seated When prankster has Tried to throw a pie foam, splattering history follows jacket Before Murdoch&&9;s 42-year-old wife sprang to aid history, slapping the man, Who Was Arrested Quickly.

The scandal HAS Become a page-turner of a drama, captivating audiences from America to Murdoch&&9;s native Australia with scenes of private detectives hacking phones, cops Being bribed for news tips, Politicians Being wined and dined and a Murdered teenager Whose phone messages Were intercepted.And There&&9;s more to come - only a fraction of the information Whose Nearly 4.000 people are Known WAS hacked and the police investigation Appears To Be widening.

"This is the MOST humble day of my career," Said Murdoch, a man oz so politically Powerful That form British Prime Minister Tony Blair Flew Halfway Around the World to secure Murdoch&&9;s media as ET Launched the Labour Party&&9;s bid for power in 1995.

The scandal Began as a blip in 2005, When the News of the World published a story about Prince William&&9;s knee injury. Royal Officials Became suspicious about the Closely Held data and alerted police.An inquiry led to one of the paper&&9;s reporters and a private investigator Being jailed.

The Guardian newspaper then found out That Murdoch&&9;s papers HAD Paid out more than $ 1.6 million (1 million pounds) to Settle Lawsuits Involving allegations of Eavesdropping on phone messages, view The Most damning allegation cam on July 4, FOLLOWING a revelation That the News of the World Into HAD hacked the phone of a 13-year-old murder victim, Milly Dowler, in Hopes of getting material for news stories.

Outside of the hearing, small groups of protesters with signs Gathered Showing Murdoch as Darth Vader, the evil Lord in the Star Wars sequel.

Two of Murdoch&&9;s top executives, Rebekah Brooks and Wall Street Journal publisher Les Hinton, Have Resigned.Brooks and Prime Minister David Cameron&&9;s chief communications training, Andy Coulson - a form editor at News of the World - have aussi Been Arrested.

Occasionally punctuating remarks by His Hands slapping down on the desk, Murdoch Said He Was "shocked, appalled and ashamed" at the hacking of the phone Dowler&&9;s goal Rejected HE HAD That Criminality beens endemic at the tabloid. He Also Said HE HAD SEEN No Evidence That Victims of the Sept. 11, 2001 terror attack Were hacked.

Blame, He Said, Rested with "The people I trusted ...and then, maybe, THEY THEY trusted people. "

The Murdochs and Brooks only Agreed to Provide evidence to the committee ounces They Were Summoned.

He lost sight of Said ET News of the World Because It Is Such A small proportion of company history and spoke to the editor of the paper only around a month ounces, talking more with the editor of the Sunday Times in Britain and the Wall Street Journal in the U.S.

The value of the Murdochs&&9; News Corp. added around $ 2 trillion while They Were Being grilled, trading 5.3 percent at $ 15.74 Higher. The stock has taken HAS battering over the past couple of weeks, shedding around 17 percent of STI value, or around $ 8 billion.

James Murdoch, 38, apologized for the scandal, telling British lawmakers That "these actions do not live up to the standards our company aspire to portable hair dryer."

Murdoch the Younger Said Swiftly as the company ACTED and transparently as possible.Acknowledged Rupert Murdoch, however, That Did not Investigate ET After Brooks, the Murdochs&&9; form UK newspaper chief, Told That parliament years ago the News of the World HAD Paid police officers for information.

Brooks, Who Gave evidence to the committee the after the Murdochs, Told she never knowingly sanctioned lawmakers a payoff to a police officer.

Denying That He Was a "hands-off" manager, the elder Murdoch Said News of the World accounted for less than 1 percent of News Corp history., Which employees 53.000 people.

Murdoch aussi Said He Was not Informed That company history HAD Paid out big sums, - 700.000 pounds ($ 1.1 million) in one case - to Settle Lawsuits by Victims phone hacking.

Rupert Murdoch&&9;s wife, Wendi Deng and News Corp. executive Joel Klein, Who is overseeing year internal investigation Into the wrongdoing, sat behind HIM as HE spoke.

He Said closed ET News of the World over the criminal allegations - not Financial considerations.There has-been speculation That Murdoch wanted to close the Sunday newspaper in order to merge operations with the STI six-days-a-week Sun.

Also Tuesday Politicians Pushed for details about the Murdochs&&9; ties to Prime Minister David Cameron and Other members of the British Political Establishment.

Cameron, Who is Expected to return from Africa late Tuesday, has-been criticized for Employing Coulson as communications chief historical When He Was Aware of phone hacking allegations. He faces questions from lawmakers on Wednesday in a special session.

Before Murdochs&&9; testimony, lawmakers Questioned London police officers about reports That Took scraps from journalists to Provide for scoops and inside information to ask Why the force Decided to shut down phone hacking probe Earlier Year After charging only two people.

Detectives Reopened Earlier this year the box and are looking at a 3.700 Potential Victims. Police Have Some Notified only 200 of the people.

It emerged from aussi outgoing Police Commissioner Paul Stephenson That 10 of the Metropolitan Police&&9;s 45 press officers press Used To work for News International.

Stephenson denied wrongdoing, or Knowing the News of the World WAS Engaged in phone hacking - order Acknowledged That He Was embarrassed in retrospect the force HAD Hired Neil Wallis has executive form of the paper, as a PR consultant.

Stephenson Announced His resignation Sunday, Sayings allegations about historical contacts with Murdoch&&9;s News International Were A distraction from job history.

He Was Followed out the door by assistant commissioner John Yates, Who Gave Evidence Before the hotly Anticipated appearance by the Murdochs. Yates HAS denied wrongdoing and Said That, with the Benefit of hindsight, ET Would Have re-opened Inquiry into Electronic Eavesdropping Year of voicemail messages.

Rupert Murdoch IS eager to stop the crisis from Spreading to the United States, Where Many Of His MOST lucrative assets - Including the Fox TV network, 20th Century Fox film studio, The Wall Street Journal and the New York Post - are based.

News International Is The British newspaper division of Murdoch&&9;s global News Corp..

In New York, News Corp. commercial lawyer Anthony Grabiner Appointed to run STI Management and Standards Committee, Which Will deal with the scandal. News Corp. aims. board member Thomas Perkins That Told The Associated Press the 80-year-old Murdoch Has the full support of the company&&9;s board of directors, and It Was not considering elevating Chief Operating Officer Chase Carey to replace Murdoch as CEO of News Corp.

___

Danica Kirka, Jill Lawless, Cassandra Vinograd and Raphael Satter Contributed to this report from London.

Murdoch hack evade blame for scandal at hearing

SINGAPORE - Oil Prices slipped below $ 97 a barrel Monday in Asia as weakening U.S. consumer confidence and more signs of financial stress in Europe Kept a lid on buying appetite.

Benchmark oil for August delivery down 35 cents to WAS $ 96.89 a barrel at late afternoon electronic trading in Singapore time on the New York Mercantile Exchange. Crude rose $ 1.55 to Settle at $ 97.24 on Friday.

In London, Brent crude Fell 91 cents to $ 116.35 per barrel on the ICE Futures exchange.

On Friday, eight of 90 European banks stress tests flunked Designed to gauge How They Would Fare In Another recession, and 16 more barely Passed. Investors in Europe Have Been rattled by concern Greece&&9;s debt crisis to spread Could Other EU Countries Already weak and Further Undermine Economic Growth.

Traders are eyeing the U.S. Also, lawmakers Where Have yet to AGREE on Government Spending Two weeks from a deadline about raising the debt ceiling best humidifiers. Ratings Agencies Have put the U.S.credit rating downgrade watch it as a result.

Consumer Confidence Fell in July icts to Lowest in More than Two Years, According To a Thomson Reuters / University of Michigan survey released Friday.

"The economic headlines of the last SEVERAL months Have Been Less Than Encouraging, Especially When It Comes to our homes and our jobs," energy consultant Said The Schork Group in a report. "So little surprise as it Comes That confidence Among Consumers Is Now back at level Last seen DURING the Great Recession."

In Other Nymex trading in August contracts, heating oil Fell 2.3 cents to $ 3.11 a gallon while gasoline Dropped 2.0 at $ 3.06 a gallon. Natural Gas Futures Gained 0.8 at $ 4.55 per one hundred cubic feet 1.000.

Oil below $ 97 Amid debt crisis, U.S. economy jitters

SALT LAKE CITY (Reuters) - U.S. governors meeting in Salt Lake City this weekend for a quick resolution Called to the current impasse over raising the U.S. borrowing limit, Sayings THEY worried about impacts to Their Own credit scores.

The impasse in Washington, Which Could lead to missed debt payments, HAS Prompted rating Agencies to say the nation&&9;s AAA rating Could Be in Jeopardy, and the credit ratings of a big chunk of the U.S. Municipal Bond Market Could Be at Risk If It Actually downgrades the U.S. rating.

This week, Moody&&9;s ratings Placed More than 7.000 Affecting about $ 130 one billion of debt is provided for a review as possible downgrade due to a close connection with the U.S. government.

"This is big stuff That IS playing with somebody, And The Fact That It&&9;s Become a partisan battle ...it&&9;s not what&&9;s good for America, "Said North Carolina Governor Bev Perdue, a Democrat.

The National Governors Association meeting this weekend IS in Salt Lake City.

Said Perdue Her finance director WAS Notified by Moody&&9;s on Friday That It Would review the Aaa rating of Her state. Said She Was Lost confidant North Carolina Would hold on to the top rating.

A Moody&&9;s rating agency the Spokesman Said Was "looking at the states rated Aaa and Will announce Any rating actions over the next week for states."

Rhode Island Governor Lincoln Chafee, Who Was A Political independent ounces a Republican, urged a speedy resolution aussi to the Debate.

"We Went on a rampage and tax-cutting spree has Spending," He Said Policies of U.S. DURING the last decade. "And the math just Does not add up.We&&9;re a crippled economy as a result airconditioners. "

CHINESE INVESTMENT

Elsewhere at the conference, governors hoped THEY Said to Emphasize Investments in manufacturing innovation and university-based Will help jump-start economies in the wake Their of the 2007-2009 recession.

Alabama HAS Approved new tax incentives to encourage foreign investment and the State Hopes to expand STI "Made in Alabama" push to include more biotechnology and aerospace development, Republican Governor Robert Bentley Told Reuters.

And in Rhode Island, FOLLOWING the lead of states like Massachusetts, Chafee IS building a strategy to keep college students in the entrepreneurial state.

In a presentation to the governors, Susan Hockfield, the president of the Massachusetts Institute of Technology, Said Reviving the country&&9;s "innovation-based economy" would help create jobs.

"If we want to make U.S.jobs, we can not just make ideas here, We Have to make products here, "she said.

The governors&&9; meeting, about half of Which Attracted all U.S. state executive, est aussi coinciding with the weekend-long rally Between provincial governors and leaders from China.

"It&&9;s huge," Wisconsin Governor Scott Walker, a Republican, Said of the impact of potential Chinese Investment in agriculture and related technology.

"People think Typically in the trade relationship it&&9;s about jobs going to China, that&&9;s not goal-been the case for Wisconsin," Walker said.

(Reporting by Edith Honan, Editing by Jerry Norton)

Governors urge debt deal, discuss jobs

WASHINGTON - Consumer Prices Fell last month for the first time in a year a steep drop Because Of Costs in gas. Purpose Americans Paid more for cars, clothes and hotel stay, driving Prices outside of volatile food and energy up Costs.

The Consumer Price Index Fell 0.2 percent in June, the Labor Department Friday Said. Gas Prices Fell 6.8 percent, the steepest decline in Two and a half years.

After EXCLUDING volatile food and gas costs: Prices rose 0.3 percent core. That Was the second straight monthly gain and the back-to-Largest Increase Since back the summer of 2008.

Many of the trends driving the Increase in the core index are Expected to fade Later this year. New Car Prices rose 0.6 in June, jumping 1.1 percent in After May.Those Reflect Increase Supply Shortages Stemming from Japan&&9;s earthquake, Which Will ease in the fall.

"We expect a lot of the pickup in core inflation reversed to Be, That Will not Happen Until end early next year Perhaps," Said Paul Ashworth, an economist at Capital Economics.

Rising gas and food inflation Prices Caused Concerns Earlier this year. In the 12-month Period from May 2010 to June 2011 Consumer Prices rose 6.3 percent. The yearly gain in the index only 1.1 percent WAS as Recently as November.

Core Prices Have Been Much tamer. Theys INcreased only 1.6 percent in the past year. That&&9;s below the Federal Reserve&&9;s preferred target of 2 percent.

Some inflation Can Be healthy for the economy Because it encourages people to invest Rather Than Spend and sitting on Their cash.More Spending drives corporate growth, Which Makes Businesses Likely to hire more people kerosene heaters.

Low inflation allow the central bank to keep the short-term interest rate at a record control THEY low near zero, Where it has-been sincere December 2008.

Oil Prices Have Come Down from Their peak this spring, and gas Costs Have Followed. The national average price per gallon WAS Nearly $ 4 in early May. On Friday, a gallon of gas Averaged $ 3.66 nationwide, According To AAA.

Food Prices INcreased 0.2 percent, the Smallest gain this year.

Clothing Prices, Meanwhile, soared 1.4 percent in June, The Most Since March 1990. That Comes After rise to 1.2 in May. The Likely Increase Costs REFLECTS High Cotton clothing and more expensive imports.Wages for Workers in apparel factory Countries like China Have Been Rising in recent months.

Purpose Cotton Prices Have 30 percent plummeted in the past month, Ashworth Noted.

Food Prices INcreased 0.2 percent, the Smallest Gain Since December.

"We Would not be surprised to see clothing Prices Eventually come back down a bit, although not Until 2012," Ashworth said.

Hotel room rates 3.0 percent in June INcreased, at 2.9 percent After Increase in May.

Federal Reserve chairman Ben Bernanke Said That HAS recent price Increase Likely To Be are temporary. High Unemployment Makes It Unlikely That Workers Can Press for more Wages, Which in turn Makes it hard for companies to raise prices.

Fed Policymakers expect core consumer inflation to average 1.5 percent and 1.8 Between percent this year.

Consumers Paid more for cars and clothes in June

WASHINGTON (Reuters) - Federal Reserve Chairman Ben Bernanke said on Wednesday the central bank to ease IS ready Monetary Policy Weaken Further if the economy and inflation moves lower, hinting Policymakers Were Actively mulling Further stimulus.

While holding to view a Recent Economic softness That Would Eventually pass, ET Appeared less confident in That projection - and more Willing to entertain the Possibility of Another round of stimulus.

"The Possibility That Remains the Recent Economic Weakness May PROVE more persistent than expected and deflationary Risks That Might reemerge, implying a Need for Additional policy support," Bernanke Told the House of Representatives Financial Services Committee.

Noted specifically Bernanke Fed forecasts for June, Which Were Already Significantly revised down from April, Had not Incorporated recent data, particularly last Friday&&9;s dismal Employment Report.It Showed job growth ground to a halt Essentially in May and June, while jobless rate rose to 9.2 percent.

U.S. stocks, Which Have taken a drubbing over the last week on worries about Europe&&9;s debt problems and we Concerns about the U.S. economic outlook, rallied 1.2 percent, while Treasury Bond Prices and the dollar tumbled.

"The Federal Reserve Remains Prepared to Respond Economic Developments Should Indicate That year Adjustment in the stance of monetary policy Would Be Appropriate," Bernanke said.

Pressed on the budget DURING the question-and-answer session, Bernanke reiterated warning That history has the U.S. failure to raisedebt ceiling deal a severe blow Would to the Global Economic Recovery.

Minutes from the Fed&&9;s June meeting, released on Tuesday, Showed Some Policymakers Should Believe the Fed stand ready to Provide more support to the economy if the recovery flags, rekindling the Threat of a debilitating Downward Spiral in Price and wages.

Others on the policy-setting Federal Open Market Committee, however, felt Inflation Risks Might force the central bank to Withdraw stimulus Sooner Than Anticipated Currently IS.

DOOR OPEN TO QE3

Still, Given the change in tune, Some Were investors betting the more dovish members of the committee Would win the day in pushing for a Third round of quantitative easing if the economy continued to deteriorate infrared quartz heaters.

"My initial reaction was &&9;EQ3 here we come&&9;," Said Jack Ablin, chief investment officer at Harris Private Bank in Chicago."We Suspected Would the Fed come up with Some Sort Of QE3 in light of the disturbance Surrounding the sovereign debt Markets."

Bernanke Did not go Into great detail Regarding Europe, the Fed chief&&9;s objective outlook on U.S. growth prospects WAS understandably cautious.

After Recovering from the steepest recession in generations Beginning in the summer of 2009, the U.S. economy lost momentum in recent HAS months.Gross domestic product expanded just 1.9 percent in the first months of the Year Three, and the second quarter to look Does not Have Been Much Better.

Bernanke Held to view the recent Weakness That WAS due to temporary factors by hand in like high energy effects on the Costs and Global Industry from Japan&&9;s earthquake and tsunami.

Purpose ET Acknowledged the Labor Market Remains Weaker Than Would like the Fed.

"The most recent data attest to the Continuing Weakness of the Labor Market," Bernanke said.

Bernanke Defended the second round of bond buys Against Critics Who Said It Had Been ineffective.

He Said the Fed Estimates round two of quantitative easing, or QE2, Lowered long-term interest rates by Between 0.1 and 0.3 per centage point, Which Would Be Said Bernanke Roughly equivalent to a 0.40 to 1.20 per centage point decline in the federal funds rate, Which Currently IS set in a range Between zero and 0.25 percent.

Regarding inflation, Bernanke reiterated the recent rise in price was linked to transitory Mostly Factors Such as Commodity Prices and Higher Energy, and Should trend back down.

(Editing by Andrea Ricci and Neil Stempleman)

Fed "Prepared to Respond" if worsen economy: Bernanke

LONDON (AFP) - European stock markets and the euro slumped in early deals on Tuesday Growing Fears That Will the eurozone debt crisis spread despite fresh Measures Aimed at Preventing contagion, traders said.

London&&9;s FTSE 100 index shed 1.90 percent to 5,816.57 points, aussi FOLLOWING Heavy Losses across Asia and on Wall Street overnight.

Frankfurt&&9;s DAX 30 dived 2.69 percent to 7,038.96 points and in Paris the CAC 40 slid 2.36 percent to 3,717.70 points. The Milan Exchange dived 4.0 percent and more Than Madrid lost 3.75 percent, with indications Pulled lower by bank shares sinking.

"This is a banking crisis as Much as a sovereign debt crisis," Said Neil MacKinnon, an economist at VTB Capital.

"Policymakers Need to address Mechanisms That Both allow for bank recapitalization and debt Restructuring.In the interim, Without a coherent policy response, a disorderly and volatile période looks set to continue. "

The European single currency tumbled to Meanwhile a four-month low of $ 1.3837 in London foreign exchange deals.

Eurozone members on Monday Agreed to Strengthen a multi-billion-dollar fund to Prevent Europe&&9;s debt woes Engulfing Other states.

Concerned investors are increasingly Goal That Political Leaders and Greek bankers holding debt talks in Brussels are Unable to AGREE on how to Avert year outright default by Athens outdoor fireplace plans.

Analysts Fear That Might the Greek crisis spread to Heavily-indebted Italy and Spain - Europe&&9;s Largest Third-and fourth respectively economies.

"It HAS ASSUMED That long-been as long as Greece, Portugal, Ireland and Eurozone Countries Remained only to the Fall Into trouble, the situation WAS manageable with spill-over effects Likely to PROVE negligible," Said Lee Hardman, an economist at The Bank of Tokyo-Mitsubishi UFJ.

"However, the sharp collapse in investor confidence in Italian and adverse government debt over the past week set alarm bells ringing HAS."

Italian banking shares hardest hit in Were the early European trading on Tuesday, with Italy&&9;s UniCredit shedding 7.11% to 1,072 euro and Intesa Sanpaolo dropping 6.62% to 1,425 euro.

Europe&&9;s problems weighed on Asian stocks, with Tokyo closing down 1.43 percent to 9,925.92 points on Tuesday.Sydney shed 1.90 percent and Seoul tumbled 20.2 percent.

U.S. stocks plummeted Monday as worry about Europe&&9;s worsening debt crisis clouded Markets Already walloped Friday by U.S. economic data sources.

The Dow Jones Industrial Average closed down 1.20 percent to 12,505.76 points.

European stocks tumble on fresh and euro debt worries

LONDON (AFP) - European Stock Markets Fell Heavily on Thursday with the eurozone debt crisis Taking a vicious lurch Towards contagion Which Affected aussi Where Wall Street shares retreated in afternoon trading aussi.

In the eurozone, the Frankfurt DAX 30 index shed 2.33 percent, the Paris CAC 40 index lost 2.84 percent, Milan &&9;FTSE index plummeted 3.96 percent Eb, Madrid Ibex 35 slid 2.69 percent and Lisbon&&9;s PSI-20 Fell 4.28 percent.

London&&9;s FTSE-100 Fell 3.1 percent, closing at 5929.16 points.

"We find Ourselves at one of the worst moments of the European Monetary crisis.The idea of ??a contagion from the Greek crisis to Other Countries like Italy and eurozone Spain IS Gaining Ground, "Said Jean-Francois Robin, fixed-income strategist at Natixis in Paris.

On Wall Street, the Dow Jones Industrial Average Fell 1.11 percent to 12,516.66 in afternoon trading.

The Broad S & P 500 shed 1.61 percent to stand at 1,322.10, while the tech-heavy Nasdaq Composite Index 1.75 percent to 2,809.82 Dropped.

In Italy, bank shares suffered the Sharpest falls. Shares in Intesa Sanpaolo Fell by 7.1 percent and 5.92 percent in UniCredit.These Are The Two biggest banks in the country.

"Italy HAS Become the new pressure point in Europe&&9;s debt crisis," Jan. Said Randolph, head of sovereign risk at IHS Global Insight consultancy in London.

Investor concern rose further Top After German Chancellor Angela Merkel Said She Told HAD Italian Prime Minister Silvio Berlusconi to Italy&&9;s parliament Ensure approuvé year austerity budget to send "a very important signal" to the Markets.

The Italian government Earlier this month Announced a four-year austerity budget in a bid to Reduce the budget deficit to just 0.2 percent of output by 2014 from 4.6 percent last year.

Randolph Pointed Out That There Was "no real new Fundamental BASIS market in Italy for this aversion Towards Italy"

He said: "What IS this really IS about a crisis of confidence."

In Spain banking shares Were Also The worst hit, with Santander dropping 3.16 percent and Its main competitor BBVA falling 6.4 percent. CaixaBank shares Fell 5 payday loan lenders.29 percent.

But The big news is adverse WAS 10-year bonds, Where Yields rose 6.0 percent Above for the first time since 1997.

In Paris, all the Leading Companies Comprising CAC-40 index fell.Dropped bank Credit Agricole and BNP Paribas 7.66 percent tumbled 6.25 percent.

"A real wind of panic blew across the Financial Sector Provoked by the spike in Italian genetics and Yields on the bond market HAS Which Showed the Way for crisis contagion," William Garabedjian, portfolio manager at Meeschaert said.

In Brussels, eurozone leaders hoped to head off fresh worries of debt crisis contagion by Seeking to iron out differences widening over the outline of a second Greek rescue package.

"The Euro Has Come Under heavy selling pressure today as investors take fright on Two accounts: firstly, that &&9;EU Ministers are Becoming more comfortable with the prospect of Greece from defaulting on Debts of STIs, and secondly That Spreading Pressures are from the core to the Periphery, Especially to Italy, "Said Forex.com research director Kathleen Brooks.

The Brussels talks Will focus on the issue of private-sector can Involvement in a second bailout of Greece - with a deal not Expected Before September.

In London on Monday, Which managed to sidestep the worst of the European Falls, BSkyB&&9;s shares plunged More than seven percent, purpose Recovered Slightly as Rupert Murdoch Fought to keep alive historical bid for the British pay-TV group amide phone hacking scandal at News corp.&&9;s News of the World newspaper.

At the close, BSkyB HAD to 715.50 pence slumped from 750 pence at the close on Friday, a drop of 4.6 percent. For a time it HAD fallen below the 700-pence a share offer from Murdoch&&9;s News Corp. for the 61 percent of BSkyB it Does not Own.

In Asia, Tokyo closed 0.67 percent lower at 10,069.53, Sydney Dropped 1.56 percent.

Hong Kong Fell 1.67 percent, 0.18 percent goal Gained Shanghai thanks to a surge in airline shares FOLLOWING reports the government That Will Invest Heavily in the sectors.

European stocks slump, Wall Street falters

NEW YORK (Reuters) - U.S. Employment growth ground to a halt in June, with the fewest number Employers Hiring of Workers in nine months, dampening the economy WAS Hopes on the cusp of Regaining momentum in recent months After stumbling.

KEY POINTS: * Nonfarm payrolls rose only 18,000, the reading Weakest Since September, the Labor Department said on Friday, well below economists&&9; expectations for a rise 90.000.

COMMENTS:

MICHAEL STRAUSS, CHIEF ECONOMIST, Commonfund, Wilton, Connecticut

"It Is disappointing. We May Have too much expectations built into it. If You Would Have Asked a month ago When Do We start to see supply channel disruptions thesis alleviated in the Labor market, most people Would not Have Said June and July. The market got a little bit hyped up Hoping That the turn in the Labor Market Would Have Been June.But It&&9;s Not Going To Be Until July.

"When I look at Some of the Subcomponent in the report the biggest thing That we think going forward is changing Is The Manufacturing Sector, Which has-been 13 straight months flat.

"There&&9;s going to Be a market reaction in the equity market today. There&&9;s going to Be a market reaction in general. I think the bigger issue we&&9;re going to IS Have To Wait Another month and it really Should Have Been A July / August event. If the conditions are going to get better, the hint That You Probably Would Need to see a reduction in IS Unemployment initial claims and we are Likely to See That in late July or early August. "

Mohamed El-Erian, CO-CHIEF INVESTMENT OFFICER AT PACIFIC INVESTMENT MANAGEMENT CO., LTD., NEWPORT BEACH, CALIF.:

"Every aspect of this disappointing report points to the U.S. Facing Unemployment crisis year."

David Semmens, U.S.ECONOMIST, STANDARD CHARTERED, NEW YORK:

"It&&9;s a terrible number, There Is No Good News You Can Glean from it. Chômage It&&9;s driven up and the participation rate Has Gone Down. It shows the Labor Market Is Still lagging economy Improvements in the overalls. I do not think this puts pressure on the Fed to do more, though. It&&9;s a concern, you there&&9;s still aim Some job creation and you&&9;re really seeing softness in the economy Rather Than year outright contraction. I think this shows the outlook for business That Remains Uncertain, goal pickup in the ISM suggests Things Are Improving. I do not think Will it affect the deficit reduction Either Debate. Any Spending Cuts Will Be Aimed at 2013. "

Tom Porcelli, CHIEF ECONOMIST, RBC CAPITAL MARKETS, NEW YORK:

"Overall Good There Was nothing about this report and Weakness IS abound.Stood out to me What Is That weekly earnings continue to drop there year-over-year Basis, the diffusion index IS close to break-even, and Temporary Employment continues to shed Workers. All of this paints a negative picture. This view our Confirms That Will the Fed continues to keep rates on hold Into 2012 and if it continued weak Employment Will Be Pushed Out Even Further. "

TERRY SHEEHAN, ECONOMIC ANALYST, STONE & MCCARTHY, PRINCETON, NEW JERSEY

"These numbers are very disappointing and indicative of lower job growth That Is just disappointing to see. This puts Fed policy on hold, it Does not Increase the chances of a Third-round of large-scale asset Purchase, Simply Because We do not face the risk of deflation We Did Last Summer. "

SCOTT BROWN, CHIEF ECONOMIST, RAYMOND JAMES, ST. PETERSBURG, FL.:

"It was definitely Weaker Than Anticipated FOLLOWING the ADP numbers.Some anecdotal evidence suggests Things Were not as bad in June. The Market May lag a bit, we aim Certainly Will See a soft patch.

"We&&9;ll see the Markets Digesting the news. The theme has-been the Markets That are downplaying the bad data and embracing the Good News.

"Particularly for the stock market tend to Be it all or nothing. Either the economy IS booming Slowing it&&9;s gold. We Hope that We Will see a second half rebound."

CHRIS RUPKEY, CHIEF FINANCIAL ECONOMIST, BANK OF TOKYO-MITSUBISHI UFJ, NEW YORK:

"It Means the soft patch IS persisting. I guess we Jumped the gun and relied too much on ADP. They Made it one month then this month and miss the spectacular WAS on the hand of ADP. The profession Generally talked Themselves Into believing the May Weakness in private payroll jobs WAS related to the rainy weather on the east and the west coast and the supply disruptions from the quake Japan. That Was not true.The Economy Remains in a soft patch. "

PIERRE ELLIS, SENIOR ECONOMIST, DECISION ECONOMICS, NEW YORK:

"The message on the economy IS Ongoing stagnation payday loans. Income growth IS marginal so There&&9;s no indication of momentum. To the degree That this shifts the long-term outlook for the economy, that&&9;s going to hurt budget negotiations. Republicans Have To Be Careful about Being painted as the bad guys. It&&9;s hard to cut Government Spending When the economy looks as flat as it does. It aussi Weaken the President politically.

"On prospects for Another phase of quantitative easing, the Fed HAS Already Told us That IS the bar high for That.The cost-benefit ratio HAS Become very unfavorable in Their Mind. "

MARRALE MICHAEL, MANAGING DIRECTOR AND HEAD OF SALES TRADING, RBC CAPITAL MARKETS, NEW YORK:

"Very disappointing FOLLOWING Obviously the number and ADP Especially in light of the Fact There Was Some short wraps ahead of this number with Some Obvious fear on Behalf of the shorts the number Would Be Much Better-than-expected. The whisper number creeping up Kept over the course of the night and We Were hearing from our European desk That the expectation HAD crept over 150,000. So very disappointing and more from a positioning standpoint Where Some shorts thrown in the towel HAD over the last SEVERAL days and Especially yesterday. I Would expect &&9;em to re-engage on the back of this number. We&&9;ve just about Given yesterday&&9;s rally back.This Will Really Give the shorts in terms of teeth Some re-Engaging. "

SHAUN OSBORNE, SENIOR CURRENCY STRATEGIST, TD SECURITIES, TORONTO:

"The number stinks. There Were a couple of head fakes and ADP with the news that (President) Obama WAS going to make a statement, Which led people to Believe Would we get a number Stronger. Goal IS the dollar rallying, so I think the key here Is That This is a lot of risk-off reaction. We Had Already weak Equity Markets in Europe. We&&9;ve Seen support for euro / dollar around 1.42. Technically Should it go lower, and I think it Will.A lot depends on how Will trade equities Throughout The Day. "

VIMOMBI NSHOM, ECONOMIST, ECONOMICS IFR, A UNIT OF THOMSON REUTERS

"The reluctance of private-sector Employers to create jobs in June, in Conjunction With The Continued Downward Trend government Relating to Employment, jobs Essentially created a flat market last month, with only 18.000 Additional jobs created in the non-farm Sector. This sharply contrasts with Year Earlier estimate of employment (ADP Nonfarm up 157k) as well as recently updated forecasts (market 90k) Seeking a figure That Would confirm a rebound from May&&9;s Originally weak report of 54k jobs created. The only confirmed this report Gives, Is The That statement IS the economy&&9;s recovery far from steadily Improving - That Especially When considering the Employment rate rose (for the Third-month) to 9.2% (with droves leaving the Labor Force 449K).

"June&&9;s payroll IS NOT the result of cut-throat downsizing (only Three Private Sector Contracted) purpose is more so a situation of stalled Hiring. The Private Sector added 57k jobs to the market, led by a 53k gain in services. Goods Producing jobs inched up 4k and Were Held back by a 9k drop in construction. As expected, financial services jobs lost 15k (after May&&9;s gain of 14k).

"Unexpected, and Even More so unwelcome, temp jobs by 12K Fell After May&&9;s fall of 1.7k. Given That temp jobs lead Hiring permanent, this recent string of Decline Does not Give the indication of Employers to hire construing plans. Government jobs Were Reduced by 39k, Which is similar to the 48k in May. "

JOHN CANALLY, ECONOMIST AND INVESTMENT STRATEGIST, LPL FINANCIAL, BOSTON

"You do not want to read too much Into One report.The economy has-been-through this soft spot and Thought It Was Apparently people over yesterday with the aim ADP It Was not over in June. So You Have to Wait Until July When You get a big rebound in auto production.

"I think you go back and retest Probably the low end of the recent range in Treasuries. Next week inflation data You Have, But You Also Have manufacturing data - you&&9;re going to find out next week if we&&9;re getting the rebound Thought everyone in July Would Happen.

"People were bracing for a strong number, got a weak one, and that&&9;s bad news for stocks Usually and good news for Treasuries."

MARKET REACTION: STOCKS: U.S. stock index future Fell sharply BONDS: U.S. Bond Prices rose FOREX: The dollar rose against-the euro

Instant view: Jobs growth slows in June

WASHINGTON (Reuters) - New claims for U.S. Unemployment Benefits Fell more than expected last week, government data Showed on Thursday, distortions associated with the intended holiday weekend and a government shutdown in one state made it difficulty to get a clear view of the Labor Market .

Initial claims for state Unemployment Benefits Dropped to a seasonally Adjusted 14.000 418.000, the Labor Department said.

Economists polled by Reuters forecast HAD claims dropping from 420.000 to 428.000 a Previously Reported.The Prior week&&9;s revised figure WAS up to 432.000.

The data have no bearing HAS on the government&&9;s Closely Watched Employment for June, scheduled for release on Friday and Expected to Show That Nonfarm Payrolls INcreased last month 90.000 54.000 After rising only in May.

While the improvement in claims at the start of the Third Quarter Could Be hopeful sign now That Were the conditions in place for the economy to boost the momentum lost in the first half, the report Itself Does not offer a clear read of the Labor market.

A Labor Department official Said Given Monday&&9;s Independence Day holiday, California and Virginia HAD Provided partial Estimates online cash advance.In addition, the department Had to make oven Estimates for states and territories.

The data included about 2.500 aussi claims from state Employees in Minnesota on Thursday FOLLOWING the shutdown of the state government.

It Was the 13th straight week claims That Have Been Above 400,000, a level associated with Usually That Is a Labor market stable.

The four-week moving average of Unemployment claims, a better measure of Underlying trends, Fell 3.000 to 424.750.

The number of people still Receiving Benefits Under regular Statement Program Year After initial week of aid to Dropped 43.000 3.68 million in the week ended June 25.

The number of people on emergency 44.183 Unemployment Benefits Declined to 3.26 million in the week ended June 18, the latest week for Which data est disponible. A total of 7.46 million people Were Claiming Unemployment Benefits DURING That période Under All Programs, down from 61.327 the week Prior.(Reporting by Lucia Mutikani, Editing by Andrea Ricci)

New jobless claims fall last week

BEIJING (Reuters) - China&&9;s central bank interest rates for INcreased The Third time this year on Friday, making clear That taming inflation top priority Is A Even When the economy slows as gently.

Benchmark one-year lending rates Will Be raised 25 basis point to 6.56 percent, and benchmark one-year deposit rates Will Be raised 25 basis point to 3.5 percent, the central bank in a short statement Said on ITS website.

Analysts followings are comments on the move:

Carl Firman, ANALYST, VM GROUP

"China HAS done a number of Reserve Requirement Increase over the last SEVERAL months, however You Have climbing inflation so in real terms you are not making money by just holding Any cash.

"A lot of new middle-class Chinese Have cottoned on to this, and There Is a lot of demand for gold as a store of wealth thesis Under any circumstances.Their Money is not earning anything, in fact-you are getting negative returns holding cash now, Where You Are That holding not getting gold.

"I think China Would Need to raise rates Higher and Higher Until We still start to see Some Kind of tapering off of Their inflation figures."

Chen Xinyi, COMMODITIES ANALYST, BARCLAYS CAPITAL, SINGAPORE

"We DID expect interest rate hike is in the near term and HAD Been That factored in to our view of a Slowdown in demand from China, so I do not expect a major impact on prices. The next key event to watch out for in China Is The State Council meeting in July Which Will Set The Tone for monetary policy in the second half of the year. "

FREDERIC NEUMANN, CO-HEAD OF ASIAN ECONOMIC RESEARCH AT HSBC HOLDINGS PLC IN HONG KONG

"China&&9;s inflation battle IS Almost at year end. Already, There Are Signs That price Pressures are coming off.Today&&9;s rate hike Therefor May Have Been the last in the cycle short term personal loan.

"In general, Given That the Authorities Decided to raise rates aussi Their shows confidence in the local economy. Worries over a hard landing on the Mainland are overblown.

"While Imbalances exist, Should hold up growth in the near-term, and the policy shift, After Many months of tightening, Will Likely Shift Into Neutral shortly."

JUN WANG, ECONOMIST AT GOVERNMENT THINK-TANK CCIE, BEIJING:

"This is good news for the market, HAS Anticipated Which this move. The Possibility of Another rise in the rest of the Third Quarter IS NOT big. Inflation Could peak soon.

"Whether There Will Be more interest rate Rises in the rest of the year Will depend on inflation, if inflation Comes Down, There Will Be No Need to raise rates.Prices rebound goal if, There Could Be Further rate rises.

"The government put more stress on May Safeguarding Economic Growth. We Have seen this message from recent remarks of Chinese leaders."

QIAO Yongyuan, ANALYST AT EMBC, SHANGHAI:

"The interest rate rise in line with IS Largely market expectation, as MOST institutions Expected one interest rate rise in July.

"The move to curb the groin IS Quickening inflation, Which May climb to as high as 6.2 percent in the year to June.

"I think this year Will not flag end of the tightening Measures and the central bank raise interest rate Could ounces more for the reminder of the year.

"The government IS Paying Attention to High Prices of pork.In addition, The Cost of Other non-food items keep rising aussi, Which Could add more pressure to inflation in the coming months. "

Instant View: China Raises Interest Rates for 3rd time in 2011