THE NEWS WRAP: US and Europe “dangerously close” to plunging into recession

The United States and Europe are “dangerously close” to plunging into recession, according to financial services giant Morgan Stanley.

The company has cut its global growth forecasts, adding to stock market nervousness that saw Wall Street dip by 3.7% overnight.

“Recent policy errors – especially Europe’s slow and insufficient response to the sovereign crisis and the drama around lifting he US debt ceiling — have weighed down on financial markets and eroded business and consumer confidence,” the Morgan Stanley research note said.

HP to exit hardware business

Hewlett Packard has announced that it is to exit the tablet, PC and smartphone markets to concentrate entirely on software.

The company had launched TouchPad, a tablet competitor to the iPad, but it failed to gain traction with consumers. It said that it was looking to sell off its PC-making business, which is the largest in the world.

Qantas CEO hits out at unions

Qantas chief executive Alan Joyce has claimed that unions are “in denial” about the situation the airline finds itself in.

Joyce has come under fire from unions after unveiling plans to make 1,000 redundancies in order to turn around Qantas’ under-performing international operation.

Overnight

The Dow Jones Industrial Average was down 3.7% to 10,990.81. The Australian dollar was up to 106.01 US cents.