Chinese market not expected to have effect on economy

Chinese market not expected to have effect on economy

WASHINGTON

There’s economic reality. Then there’s the Chinese stock market.

The two usually occupy parallel universes.

When China’s economy was roaring along at double-digit rates in the 2000s, Chinese stocks floundered. But starting in the summer of 2014, as evidence of an economic slowdown gathered, the Shanghai Composite index climbed nearly 150 percent.

“The stock market has never been fully aligned with the fundamentals,” said Yukon Huang, senior associate at the Carnegie Asia Program in Washington.

Now the Chinese stock bubble has burst and Shanghai shares are in a free fall. They’ve lost about 30 percent since peaking last month. But economists don’t expect the market meltdown to do much damage to the real economy.

“We don’t see it as a major macroeconomic issue,” Olivier Blanchard, the International Monetary Fund’s research chief, told reporters Thursday.

The IMF expects the Chinese economy to grow 6.8 percent this year, unchanged from the forecast it made in April, before the market meltdown.

US stocks increase

NEW YORK

Encouraging news from overseas pushed the U.S. market higher Thursday, helping stocks recover some of the ground they lost a day earlier.

In China, frantic efforts by authorities to stop a monthlong rout in the country’s stock market met with some success. The Shanghai Composite surged after opening sharply lower. U.S. investors have become concerned that the sell-off there would start to hurt growth in the world’s second-biggest economy.

IBM claims breakthrough in smaller chips

NEW YORK

IBM says it has achieved a breakthrough in making computer chips even smaller, creating a test version of the world’s first semi-conductor that shrinks down the circuitry by overcoming “one of the grand challenges” of the tech industry.

The microchip industry has consistently created smaller and more powerful semiconductors. However, the more chips shrink, the greater the physical and technological hurdles become.

Average US rate on 30-year mortgage falls to 4.04 percent

WASHINGTON

Average long-term U.S. mortgage rates fell this week, retreating from high levels for the year amid economic turbulence overseas. The lower rates brought an incentive for prospective purchasers toward the end of the spring home-buying season.

Mortgage giant Freddie Mac said Thursday the average rate on a 30-year fixed-rate mortgage declined to 4.04 percent this week from 4.08 percent a week earlier. The rate on 15-year fixed-rate mortgages eased to 3.20 percent from 3.24 percent.

Wire reports

Selected local stocks

STOCK, DIVIDENDCLOSECHANGE

Aqua America, .61, 2.340.09

Avalon Holdings,22.380.38

Clear Channel, .46 13.860

Cortland Bancorp, 33.47-0.32

Farmers Nat., .1214.180.11

First Energy, 1.44, 20.660.2

Fifth/Third, .5220.260.14

FirstMerit Corp., .64,8.080.01

First Niles Financial, .32,26.020.13

FNB Corp., .48,9.550

General Motors, 1.2011.120.07

General Electric, .88,31.01-0.18

Huntington Bank, .20, 66.110.68

JP Morgan Chase, 1.60,14.820.19

Key Corp, .26,16.810.29

LaFarge, 65.78-0.4

Macy’s, 1.25, 113.010.26

Parker Hannifin, 1.92, 94.900.76

PNC, 1.92,29.950.24

RTI Intl. Metals,178.12-0.22

Simon Prop. Grp.,5.20,11.600.11

Stoneridge 17.150.24

Talmer Bank, 5.07-0.03

United Comm. Fin., .04 25.14-0.43

Selected prices at 4 p.m. Thursday. Provided by Stifel. Not to be construed as an offer or recommendation to buy or sell any security.