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News Wrap: European Markets Reel as Spain’s Debt Rating Slides

April 28, 2010 at 12:00 AM EST
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In other news Wednesday, the European debt crisis escalated as Standard and Poor's credit rating agency downgraded Spain's debt, and the Federal Reserve said it will leave interest rates unchanged for the time being.

TRANSCRIPT

HARI SREENIVASAN: The European debt crisis escalated today. The Standard & Poor’s credit rating agency downgraded Spain’s debt, a day after it cut ratings for Portugal and Greece.

In Berlin, German Chancellor Angela Merkel discussed the crisis with leaders of the International Monetary Fund and European Central Bank. Merkel said Germany hopes to finalize its portion of an international bailout for Greece in the coming days.

ANGELA MERKEL, German chancellor (through translator): It’s absolutely clear that the negotiations between the Greek government and the European Commission and the IMF have to be accelerated now. We hope that they will be completed in the next days. Based on this, Germany will make its decision.

HARI SREENIVASAN: In Washington, a White House spokesman said President Obama and top economic advisers are watching the European situation closely.

Wall Street rebounded from yesterday’s big losses, despite the uncertainty in Europe. The Dow Jones industrial average gained 53 points to close at 11045. The Nasdaq rose a fraction of a point to close above 2471.

The Federal Reserve will leave short-term interest rates unchanged for a while longer. Fed policy-makers agreed today to keep rates at record lows, where they have been since December of 2008. In a statement, the Central Bank said the job market is — quote — “beginning to improve” and consumer spending has picked up.

Senate Republicans set the stage today to let financial reform move forward. Senator Richard Shelby of Alabama said Democrats agreed to address concerns that the bill might lead to more bank bailouts in the future. The two sides remained at odds over a Democratic proposal to create a consumer financial protection bureau.

But, in Quincy, Illinois, late today, President Obama welcomed the apparent signs of progress.

U.S. PRESIDENT BARACK OBAMA: It appears an agreement may be in hand to allow this debate to move forward on the Senate floor on this critical issue.

BARACK OBAMA: I’m very pleased by it.

BARACK OBAMA: And I want to work with anyone, Republican or Democrat, who wants to pursue these reforms in good faith.

HARI SREENIVASAN: Earlier, Republicans had blocked action on the bill for the third time in as many days, and Democrats had briefly threatened to force an all-night session.

Toyota has added 50,000 sport utility vehicles to its list of recalls. The Sequoias were sold in the U.S. during the early part of 2003. The automaker said the electronic stability control system could prevent the vehicle from accelerating at slow speeds.

For the record, Toyota is an underwriter of the “NewsHour.”

In Thailand today, a standoff between security forces and protesters known as Red Shirts erupted into new violence on the outskirts of Bangkok.

We have a report from Nick Paton Walsh of Independent Television News.

NICK PATON WALSH: When the Red Shirts said they would take their seven-week-old protest from Bangkok’s center to across the town, it was pretty obvious they would soon run into an army here in number to contain them.

And, if they were looking for trouble, they soon found it.

NICK PATON WALSH: Amid the traffic and the sticky heat of a highway, they took potshots at each other. It’s become a new way of talking in a long conflict that many worry could drift into civil war, police pelted with anything from rocks to bottles, and protesters hit with rubber bullets and baton charges.

The protesters, mostly the rural poor, angry at the urban elite’s grip on society, at first just wanted new elections. Now they have been duking it out in the streets for so long, many seem to want a new society altogether.

Today’s violence was brief, if crazed, injuring at least 18 people and killing one soldier, apparently through friendly-fire. But it exposed a Thailand now so divided, it wasn’t a political deal that put today’s clashes out. It was the rain, a lot of it.

Still, back in the lucrative central shopping district, the barricades remain, cutting off a huge swathe of Bangkok’s economy.

An opposition of differing motives and deepening anger, its leadership is erratic, but facing a stubborn government, and demanding both change and peace.

MAN: Our side is running everything in order to create peace, but the government is trying to push the war. And, you know, if they push the war, it means that the civil war will be coming.

NICK PATON WALSH: The longer this standoff drags on, the more each side has to lose, and the more often they threaten each other with violence.

HARI SREENIVASAN: More than two dozen people have been killed since mid-March, when demonstrators began occupying parts of Bangkok.

British Prime Minister Gordon Brown had to apologize today for an election gaffe. He referred to a supporter of his Labor Party as a bigot. At a campaign stop, Brown met with 66-year-old Gillian Duffy, a grandmother who complained about the influx of Eastern European immigrants.

The prime minister’s microphone was still on as he drove away, and he complained about the encounter and what reporters would make of it.

GORDON BROWN, British prime minister: That was a disaster. Well, I just — should never have put me in with that — with that woman. Whose idea was that?

MAN: I don’t know. I didn’t see.

GORDON BROWN: Sue, I think. It’s just ridiculous.

MAN: I’m not sure if they will go with that one.

GORDON BROWN: They will go with that.

MAN: What did she say?

GORDON BROWN: Oh, everything. She’s just a sort of bigoted woman. She said she used be Labor.

HARI SREENIVASAN: Later, Brown met with Duffy a second time to apologize. He said he was mortified and had misunderstood what she was saying. The gaffe came one day before the third and final televised debate of the candidates for prime minister. The vote is May 6.

Those are some of the day’s stories, main stories. I will be back at the end of the program with a preview of what you will find tonight on the “NewsHour”‘s Web site — but, for now, back to Gwen.