Government considers another stimulus package? Shares end week on sour note: Economy roundup

Just days after the first payments of the Federal Government’s stimulus package have started to flow into bank accounts, Prime Minister Kevin Rudd has declared the possibility of further spending.

Just days after the first payments of the Federal Government’s stimulus package have started to flow into bank accounts, Prime Minister Kevin Rudd has declared the possibility of further spending.

Rudd says more could be spent on infrastructure in a “nation building” exercise to help boost the economy.

“Further stimulus is necessary, particularly to support infrastructure investment,” Rudd told ABC television last night.

“As I’ve indicated already, we’ll be making another statement on infrastructure before year’s end. And also, we intend to deliver a further statement in the first part of the new year.

“We want to embrace a series of measures to support growth in what will be a very difficult, late ‘08, early ‘09, in terms of the (economic) growth numbers.”

The sharemarket could certainly do with a bit of stimulus.

The Australian sharemarket has opened lower today after losses on Wall Street, following fears the bailout of the US auto industry has halted in the Senate.

The benchmark S&P/ASX200 index was down 72 points or 2% to 3526 at 11.55 AEDT. The dollar has remained steady, however, at $US66 cents.

BHP shares have dropped 2.4% to $29.47, while Wesfarmer also fell 3.6% to $15.21. Woolworths sank 4.8% to $24.94 and AMP dropped 1.2% to $5.11.

In the US, Wall Street experienced marginal losses after JP Morgan chief executive Jamie Dimon described the current economic climate as “terrible”.

The Dow Jones Industrial Average dropped 196.33 points or 2.24% to 8565.09.

In the latest of a string of financial institutions to shed jobs, Bank of America says it will slash 30,000 to 35,000 workers over the next three years.

The move could affect workers at Merrill Lynch, which Bank of America will soon acquire. Up to 11.4% of its workforce – about 308,000 people – could be shown the door in an attempt to save $US7 billion annually.

But the job cuts will also affect workers at Merrill Lynch, recently purchased by Bank of America. It says it will not confirm how many workers will be affected until the sale clears by 1 January, but up to 11.4% of its workforce could be gone.