01/08/2014 World Business Report

and other rare diseases. They are the very latest headlines

here on BBC News. Now, though, it's time for all the latest business

news with Alastair Baxter and World Business Report.

Markets slump as global worries mount. The Dow wipes out all of its

gains for this year. And investors now await US employment numbers.

Will they stop the slide or spark more selling? A warm welcome to you.

In just a moment, the struggles of Europe's airlines, and the latest in

our series on 21st`century jobs. First this hour, we start with worry

faces on the floor of the New York Stock Exchange on Thursday. Was it a

temporary setback or the start of a major correction on the market?

That's the question many are asking as global stocks had their worst day

in almost six months. A sell`off in Europe's spread to Wall Street,

which saw the Dow Jones plunged more than 317 points, at one point 1.9%,

to close at this amount. It means it's wiped out all of its gains for

the year. The FTSE 500 also fell more than 39%, or 39 points, rather,

to end at this amount. Still higher than it was at the beginning of the

year. Surged to record highs has led to warnings shares may be overvalued

and you are correction, so what's causing this current bout of nerves?

The answer, not one single think about a perfect storm of worries

from all around the world. Invest in nerves were clearly

frazzled on Thursday. Why? There are a host of reasons, starting with the

situation in Ukraine. We heard from companies like BP talk about the

impact it's starting to have on their business, and of course

there's also that default in Argentina. Closer to home, here in

the United States on Thursday there was a report on wage inflation. That

raised the prospect that perhaps America's Central bank would shift

its focus from battling the weak labour market to fighting inflation,

and that could mean higher interest rates. Now, as former central banker

Alan Greenspan noted, the stock market here has been rising for some

time, and perhaps it was due for a significant correction, and

investors will be worrying whether that has now begun.

Things have calmed a little in Asia. Let's go to Rico Hizon, monitoring

the market in our Singapore bureau. What has the reaction been like in

Asia? Well, it's been quite positive,

despite some of the losses. New data from China has stabilised nervous

regional markets. Asian shares with some of the losses as the

surprisingly strong pickup in Chinese manufacturing helped take

some of the sting out of the slump on Wall Street. The purchasing

managers index added to evidence that Beijing's stimulus initiatives

were indeed gaining traction. It was at the 27 month high. Let's look at

Japan. The new cake is recouping some of its earlier losses to be

down about zero point 1%. Hong Kong is down about 0.5%. But the china

and changing markets have recovered all the losses as the indices have

crossed over into positive territory. Despite issues outside of

the region, China's economy, read gaining momentum after targeting

government stimulus initiatives is indeed good news for the regional

economies. For now, many thanks. Rico Hizon in

Singapore. What happens next on the markets could well be determined by

the latest employment figures from the US. A strong showing could

convince investors that the Federal reserve will raise interest rates

sooner and more aggressively. Let's look at what we are expecting. US

employers are expected to have created some 233,000 jobs in July,

according to a Reuters survey. That would leave the jobless rate at a

six`year low of 6.1%. It would also mean six months in a row of job

creation above 200,000 ` that's the best run we've seen since 1997.

Staying with the world of employment now, because all of this week we've

been looking at the so`called millennials, young people born since

1980 taking an innovative approach to finding work. We have been

meeting some of New York's 21st`century Artisans.

So, this is the kitchen, the main centre of operations for a little

bit. Before even walking into this sweet shop's kitchen, the exquisite

smell of chocolate and Karen L just overwhelms the senses. Molasses and

barter. Chocolate dipped Karen Elson are hardly new. The difference is,

all these delectable delights are made by hand. I think the movement

towards handmade versus factory made has a lot to do with people

recognising the difference between something that's been touched I

human hands and something that's spent its whole life going through

stainless steel conveyor belts. They make their suites in one of the

buildings just behind me. This area is wall`to`wall warehouses. Many of

the spaces are being occupied by millennials ` that is, young people

that are building businesses based on selling something that's

handmade. And its reimagining the face of manufacturing in New York.

We thought manufacturing went away, the jobs left New York City and

either went overseas or relocated to more suburban areas, but in reality

manufacturing has simply changed, and what you see behind closed doors

in factory buildings like the one behind us now is dozens, scores,

hundreds of new manufacturing businesses. But before these new

businesses set up in industrial spaces, many of them start out like

Domine, who makes soap out of her Queens apartment. There is high in

employment and businesses are always being moved abroad, so, if you are

buying things that are made sustainably, eco` consciously, and

made by a small business that operates in the US, you feel like

you are helping, maybe not solve the problem is, but making little

decisions that are making steps in the right direction. Dominique's

business was born from a desire to find skincare products suited to

have sensitive skin. It's now turned into a fresh start in manufacturing.

Let's head to the aviation world now, because international airlines

group, the parent company of British Airways and Iberia, reports results

in just over an hour's time. Archrivals lives fans are and Air

France have warned on profits because of the weak state of the

European economy. Let's talk to Douglas McNeill, an investment

director at stockbrokers. Thanks for coming in to talk to us. What sort

of results are we expecting out of this? Not great. Last year the

company made a profit of just over half 1 billion euros. They are on

course to exceed that this year, and in particular to return Iberia to

profitability, or at least break even, since it merged with British

Airways back in 2011. It has lost nearly 1 billion euros in total so

if they could restore that the black that would be a significant

achievement, but some results from other airlines haven't been great.

Let's talk about them, and also look at British airlines, another airline

owned by IAG. How has that fair? It seems to be doing pretty well as far

as we can tell. It hasn't said anything to the country despite

warnings by air France and Lufthansa. Its great strength is its

transatlantic franchise, which is a big market for their enemies to

attack. The others are far more exposed to Asia than British

airways, and those markets for which the Gulf carriers are pretty

competitive. As I intimated, with what is happening with Russia and

Ukraine, it's looking a bit neuter the moment. Interestingly, I've just

seen that air France and Lufthansa, looking to introduce some sort of

budget airline to compete with the likes of easyJet. They both have

budget units, looking to bowl close up to move more into that business.

But it's a difficult thing to do. It's one thing to set up a budget

airline from scratch without entrenched working practices, union

restrictions, and with very new planes. That's a crucial part of the

formula. If you are trying to play catch up, much more difficult.

Challenging times ahead. Thanks for coming in to talk to us. Let's move

onto some other news now because the World Trade Organisation has failed

to reach a deal to standardise customs rules which supporters claim

could add $1 trillion and 21 million jobs to the world economy. It would

have been the first global trade reform in two decades but was

blocked by India 's demands for concessions on agricultural

subsidies and stockpiling. Argentina's main stop market slumped

8.4% on news the country has been pushed into second default in 13

years. The peso fell sharply against the US dollar. Argentina failed to

strike a deal with a group of creditors ahead of the midnight

deadline on Wednesday. The investors are pursuing payments in full the

$1.3 billion of debt they bought at a steep discount. From all of us

here on World Business Report, that's it for now. Stay with us.

England's coastline has been battered all this year with flooding

that's being causing millions of pounds worth of damage. Ten coastal

towns will receive new funding to create nearly 1400 jobs and