Stocks Fall on Mixed Economic News

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The Group of 20 nations is close to an agreement that would require members to subject their economic policies to a type of "peer review," according to several senior G-20 officials, in a shift that would expose the U.S. and China to broad scrutiny of the way they run their economies. Also, the G-20 heads of state will announce on Friday that the G-20 will become the permanent council for international economic cooperation, eclipsing the Group of Eight, a senior U.S. administration official said. The

The initiative was pressed by U.S. President Barack Obama, but it satisfied the demands on Brazil, China, India and other large developing countries, which have bristled at being left out of G-8 conclaves. Under the G-20's proposal aimed at improving coordination of global economic policymaking, the world would reduce its reliance on U.S. consumers. The Chinese would boost domestic demand, the U.S. would trim its borrowing from overseas, and the Europeans would encourage investment, said a number of G-20 officials involved in the talks. The scope and effectiveness of the agreement -- which was expected to be signed off on by G-20 leaders on Friday -- will depend on whether and how it is enforced.

Bloomberg News reported G-20 leaders are poised to crack down on banker pay and better coordinate economic policies as they seek to temper the excesses that helped trigger the worst financial crisis since the Great Depression. Obama and other G-20 leaders are uniting behind a plan to force banks to tie compensation more closely to risk and tighten capital requirements, U.S. officials said.

The Wall Street Journal reported that G-20 nations agreed to phase out government subsidies for the production and consumption of fossil fuels, and directed finance ministers to complete by November a "range of possible options" to fund climate change mitigation in developing countries, according to a copy of the summit's communique.

In company news, Research in Motion shares ankd after the company posted adjusted second-quarter earnings per share (EPS) of $1.03 after the close of trading Thursday, vs. $0.86 EPS one year earlier on a 37% revenue rise. Wall Street was looking for EPS of $1.00. The company said approximately 3.8 million net new BlackBerry subscriber accounts were added in the second quarter. At the end of the quarter, the total BlackBerry subscriber account base was about 32 million. The company sees third-quarter revenue of $3.6 billion-$3.85 billion, with gross margin of about 43%, and EPS of $1.00-$1.08.

Tibco Software (TIBX) posted third quarter non-GAAP EPS of $0.13, vs. $0.11, despite a 7.4% revenue decline. Wall Street was looking for $0.11 EPS. The company sees $0.19-$0.21 fourth-quarter non-GAAP EPS on revenue of $176 million-$184 million.

Sara Lee (SLE) received a binding offer of €1.275 billion from Unilever (UL) to acquire its global body care and European detergents businesses. Where permissible, Sara Lee has agreed to accept the binding offer upon satisfaction of certain conditions.

McDonald's (MCD) raised its quarterly cash dividend by 10% to $0.55 per share -- the equivalent of $2.20 annually.

Andrews is managing editor of the Investing Channel for BusinessWeek.com .

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