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Holders of Auction-Rate Debt Have Choices, but Few Solutions | Following her broker's advice, Cecilia Walsh put her entire $375,000 divorce settlement into auction-rate securities last December, planning on using the money for her day-to-day needs.</br></br>Yet before she ever withdrew a penny from the account, the auction- rate-debt market froze up, and Ms. Walsh, a 47-year-old actor in Delray Beach, Fla., was unable to withdraw any of her money. Her broker, UBS AG, gave her a margin loan secured by her account so that Ms. Walsh could pay her living expenses. But UBS later marked down the value of the securities in her account and has demanded that she repay part of the loan.</br></br>In the four months since auction-rate securities stopped trading normally, investors like Ms. Walsh have been taking out loans, selling their securities at big discounts, filing arbitration cases against their brokers, or simply waiting and hoping that the market will start functioning again. The one thing they haven't found is an easy way to get their money back.</br></br>For decades, individuals and companies bought auction-rate debt from municipalities, charitable organizations, student lenders and closed- end mutual funds. The securities had long-term maturities but functioned like a short-term investment, paying interest rates that were reset in weekly or monthly auctions conducted by Wall Street firms. Brokerage firms and financial advisers pitched them to investors as a safe place to stash one's cash and collect a higher yield than a money-market fund offered, often tax-free.</br></br>As a result, the $330 billion auction-rate securities market attracted many investors who were risk-averse or, like Ms. Walsh, knew they would need the money in the near future. But beginning in February, as the subprime-lending crisis spread to affect nearly all areas of the credit markets, auctions failed to attract sufficient bidders. Wall Street firms stopped supporting the market, causing it to freeze up and blindsiding thousands of small investors. | no | 0 |
DIGEST | USAir Shuttle joined Delta in offering a two-for-one weekend fare of $144 on round-trip flights that link Washington and New York and New York and Boston. While flights under the program can be taken any Saturday or Sunday until Labor Day, Sept. 6, tickets must be purchased by Aug. 3.</br></br>Philip Morris, which cut prices on Marlboro cigarettes in April, said it would continue that promotion indefinitely and slash wholesale prices by 40 cents on all of its premium brands. Rival R.J. Reynolds Tobacco promptly said it would revise prices on its brands to compete. Meanwhile, Philip Morris reported second-quarter earnings fell 22.2 percent, mainly because of a 53.1 percent drop in domestic tobacco earnings.</br></br>Orbital Sciences' launch in February of a Brazilian satellite was unsafe because of poor communications and inadequate authority, the National Transportation Safety Board said. The NTSB recommended procedural changes and levied no fines against Fairfax-based Orbital.</br></br>Integrated Health Services of Hunt Valley, Md., said it expects to post second-quarter earnings in line with analysts' estimates, Bloomberg Business News reported. Its prediction was made in response to frenzied trading yesterday when the stock opened off $2 and fell another $4 in the first 15 minutes of trading, before regaining upward momentum.</br></br>The world's multinational firms nearly doubled their pace of investments in Asia and Latin America over the five years through 1992 in a rapid expansion of global production networks based on low costs and high levels of technology and job skills, the United Nations reported. | no | 0 |
Moving the Market -- MoneyBeat: Wall Street Speaks Up for Workers | Investors aren't heartless, but they usually don't mind when workers' pay doesn't rise quickly.</br></br>That is because slow wage increases, while painful on an individual level, usually keep corporate profits high and inflation low, creating better opportunities for shareholders.</br></br>And yet, as if anyone needed further proof that we live in exceptional times, Wall Street is starting to complain that wages are too low.</br></br>"Without a real acceleration in wages it is hard to get a meaningful pickup in consumer spending," explained Michelle Meyer, senior U.S. economist at Bank of America Merrill Lynch.</br></br>Weak consumer spending holds back profits and economic growth, one reason stock gains this year have been soft. Both the Dow Jones Industrial Average and the S&P 500 closed at records on Friday, but the Dow is up only 2.1% for 2014, and the S&P is up just 5.5%. | yes | 1 |
Continental, UAL Gain Despite Oil's Steep Gain | Small-cap consumer stocks climbed Thursday on some better-than- expected May sales reports, offsetting renewed concerns surrounding a return of rising oil prices.</br></br>Also helping stocks was a surprising drop in the number of jobless claims last week, as the number of U.S. workers filing new claims for unemployment benefits fell to a six-week low, signaling some improvement in labor-market conditions ahead of Friday's employment report for May. As a result, key small-cap indexes closed at highs for 2008.</br></br>Leading the way for consumer stocks was teen retailer Buckle, which continues to report outsize increases. The company posted a 35% increase in May same-store sales; in the first four months of the year, the lowest growth was January's 19%. Buckle ended the day up $1.72, or 3.7%, at $48.57 on the New York Stock Exchange. Among other small-cap retailers posting better-than-expected May same-store sales, Cache rose 1.89, or 15%, to 14.59, while Hot Topic increased 89 cents, or 17%, to 6.16.</br></br>The Russell 2000 index of small-capitalization stocks climbed 19.56 points, or 2.63%, to 763.27, and the Standard & Poor's SmallCap 600 rose 9.34 points, or 2.38%, to 402.07, marking their biggest one-day gains since April 16. Both closed at their highest points this year.</br></br>The biggest one-day dollar increase in crude oil traded on the New York Mercantile Exchange did little to stop the momentum of consumer stocks, while driving several energy names higher. Within that sector, Swift Energy (NYSE) gained 3.66, or 6.4%, to 60.80. | no | 0 |
Options Report: After the Fed's Decision to Lift Interest Rates, Focus Turns to Monthly Contract Expiration | NEW YORK -- With the Federal Reserve's decision to raise interest rates behind it, the options market looked forward to its next signpost: tomorrow's monthly expiration of options contracts.</br></br>The problem is, traders and strategists frequently complain that expiration isn't as big an event in the options market as it once was. They say that this is partly because the position-rolling activity isn't as concentrated in the last few days leading up to expiration as it used to be.</br></br>Cibc World Markets options strategist Michael Schwartz said that a midafternoon scan of yesterday's most-active options contracts yielded few suspects for trades that were rolling positions forward, those that occur when an options player moves a position's expiration farther out, sometimes also using the opportunity to move the strike price up or down.</br></br>One possibility, though, was Cisco Systems Inc. With the stock falling 2 9/16 to finish at 58, Cisco's May 60 and June 70 calls were among the most active call contracts at the Chicago Board Options Exchange. Mr. Schwartz said that the activity may have been the result of expiration-related adjustments.</br></br>Additionally, options trading hasn't been as active as some would like. Paul Foster, options strategist at 1010WallStreet.com, complained that this week's expiration is "the driest expiration I've seen" in the past 12 months. | no | 0 |
Yellen Hearing to Stir Up Fed Issues | Senators will press Janet Yellen on a number of issues next week during a confirmation hearing on her nomination to lead the Federal Reserve, but one likely topic is a matter over which she has no control: the vacancy for a Fed vice chairman for supervision.</br></br>It is up to President Barack Obama to nominate a candidate for the job, a new role within the seven-member Fed board created by the Dodd-Frank financial law more than three years ago. He has yet to do so, frustrating Republican critics and some Democratic supporters of the law.</br></br>Sen. Jerry Moran (R., Kan.) raised the issue of the vacancy with Ms. Yellen during a recent meeting, he said. He said he reiterated the concerns he and Sen. Mike Johanns (R., Neb.) voiced in a letter to the White House last year. Both are members of the Senate Banking Committee, which will hold Ms. Yellen's confirmation hearing on Nov. 14.</br></br>Ms. Yellen, vice chairwoman of the Fed board, has been nominated to succeed Fed Chairman Ben Bernanke after his second term ends in January.</br></br>Among the Republicans' complaints is that the White House is denying the Senate its full oversight power over the position and its portfolio. Dodd-Frank dictates the vice chairman for supervision must be confirmed by the Senate and that the position reports to the Senate banking panel twice a year. | no | 0 |
What's Ahead -- People & Events to Watch in the Coming Week | Monday, July 2</br></br>Taking the pulse of manufacturing activity, the ISM index is expected to show a pickup in orders and production for June. But the overall index is likely to remain unchanged at 55. A reading above 50 indicates expansion.</br></br>---</br></br>President Bush and Russia's Putin continue a two-day meeting in Kennebunkport, Maine.</br></br>--- | no | 0 |
After Facebook, Kayak IPO Stalls | Kayak Software Corp. slowed its march to the stock market in one of the clearest examples yet of the fallout from Facebook Inc.'s tumultuous initial public offering.</br></br>Kayak, which runs a travel-listings website, didn't launch its "roadshow" to pitch the stock to large investors, an event that had been expected to begin around Memorial Day, people familiar with the matter said. Morgan Stanley, the lead bank on the Facebook deal, also is leading the Kayak deal. With Facebook proving a disappointment for many investors, timing for the Kayak deal is uncertain now, the people said, adding that the company is assessing investors' current appetite for Internet stock deals.</br></br>"We're waiting for market conditions to meet our requirements" for an IPO, said Kayak spokeswoman Jessica Casano-Antonellis on Wednesday. She said the IPO hasn't been delayed because the company never set a time frame for its offering.</br></br>As the first significant Internet IPO expected after Facebook's debut nearly two weeks ago, Kayak was shaping up as a big test both of the IPO market and of Morgan Stanley, which has endured criticism that it overestimated demand for Facebook shares.</br></br>On Wednesday, the shares fell another 2.25% to $28.19, leaving them down more than 25% from their IPO price of $38. | no | 0 |
Biden Touts Auto Industry Turnaround | WASHINGTON -Vice President Joe Biden touted the Obama administration's bailouts of U.S. auto makers in the White House radio address Saturday, saying they succeeded in turning around the auto industry and helped the economic recovery.</br></br>"Because of what we did, the auto industry is rising again. Manufacturing is coming back," Mr. Biden said. "And our economy is recovering and it's gaining traction."</br></br>Mr. Biden noted the announcement this week by Chrysler that the company will begin repaying loans from the U.S. government years ahead of schedule. He also said General Motors Corp., another recipient of government bailout money, had announced that its Detroit Hamtramck plant was ramping up production.</br></br>"Many people thought the president should just let G.M. and Chrysler go under," Mr. Biden said. "They didn't think the automobile industry was essential to America's future. The president disagreed."</br></br>Mr. Biden acknowledged near the end of the address that, despite signs the U.S. economy is improving, there are still problems with the economy. He said people's paychecks weren't keeping pace with rising gas prices and the cost of health care and college tuition. He said the Obama administration is focused on "making sure that if you work hard, play by the rules, you'll be able to get ahead, put your kids through college, retire with dignity and security." | no | 0 |
DIGEST | The Senate began considering legislation to overhaul the nation's bankruptcy laws. A final vote is expected next week on the measure, which is being pushed strongly by the credit card industry to make it harder for consumers to erase debts through bankruptcy filings. But an amendment approved yesterday would bar credit card companies from penalizing or terminating card holders who pay their balances in full every month.</br></br>U.S. inflation remained low in August, partly because of global economic troubles. The Labor Department said its consumer price index rose a seasonally adjusted 0.2 percent, the same as in July. So far this year, prices are rising at a 1.6 percent annual rate, compared with 1.7 percent for all of last year. Excluding food and energy prices, which many economists believe are too volatile to be a good measure of inflation, prices for other goods and services increased only 0.2 percent in August. For the year to date, these "core" prices are rising at a 2.5 percent annual rate, compared with 2.2 percent last year.</br></br>Philippine Airlines, ravaged by labor conflicts and citing "enormous losses," said it plans to shut down on Sept. 23 after 57 years of operation. A shutdown would make PAL the biggest Philippine firm to fold during Asia's economic crisis. Philippine President Joseph Estrada immediately called an emergency meeting with the airline's management and union officials in an effort to keep Asia's oldest national airline flying.</br></br>U.S. farm exports in the first seven months of the year totaled $29.6 billion, well below the $31.2 billion in the year-earlier period, the Commerce Department said. The agency also reported that the U.S. agricultural trade surplus for January through July was $8 billion, down from $10.3 billion a year earlier. Large crops around the world, the strength of the U.S. dollar and Asian economic troubles have combined to take a heavy toll on U.S. farm exports this year.</br></br>Chiron, a biotechnology company based in Emeryville, Calif., agreed to sell its diagnostics business to Germany's Bayer for $1.1 billion in cash. The company said that after selling Chiron Diagnostics it would focus on treatments for serious diseases, including cancer and infectious diseases; on developing vaccines; and on providing a safe blood supply. | no | 0 |
Tapping a Retirement Account Can Help or Hinder Home Buyer | Home buyer Duane Rollins had secured a 30-year, fixed-rate mortgage last May at a decent 6.75 percent interest rate so he could buy a small, one-bedroom house in Kensington. Nonetheless, he still needed several thousand dollars to cover his closing costs, even though he wasn't sure exactly how much.</br></br>What Rollins, 35, a facilities manager for a nonprofit group in the District, did know was where to turn for the cash: a retirement fund he had set up with a previous employer.</br></br>"I got close to $10,000 because I couldn't get a hard figure on my closing costs," he said. But when he ended up only needing $2,600 to settle the loan, he decided to use the rest of the money to help pay the cost of expanding the house, a former photographer's studio, to 1,700 square feet of living space.</br></br>Rollins is one of a growing number of consumers in the Washington area and across the country who are using a portion of their retirement nest eggs toward the purchase of a house. Whether taken as a loan or pledged as collateral in a mortgage application, such funds have become an attractive source of money for down payments, settlements, moving and decorating costs, and paying commissions to real estate agents, lenders and financial planners said.</br></br>Loans from 401(k) and other employee-directed retirement savings plans lately have blossomed in tandem with the stock market's growth, which boosted earnings among the mutual funds that launched many retirement plans, even if the bottom line for many savers has diminished since mid-July. Retirement savings accounts, whether 401(k), profit-sharing or some combination plan, have earned an average compounded annual return of 11 percent since 1983, said David Wray, president of Profit Sharing/401(k) Council of America in Chicago. | no | 0 |
Business and Finance | LEADING INDICATORS of the economy fell 0.9% in June. Such a decline could indicate slowing economic growth. New-home sales rose 0.6% to an annual rate of 620,000 units after falling 4.5% in May. June sales were down 5.3% from a year earlier.</br></br>The U.S. dollar soared, setting records against Britain's pound and France's franc. The prospect that the dollar will remain strong indefinitely is pressuring U.S. companies to slash costs, look abroad for parts and materials and move manufacturing facilities overseas.</br></br>---</br></br>ITT said it might divest itself of some businesses soon. Rand V. Araskog, chairman, also said 1984 profit would be 33% lower than 1983's. It has been speculated that Eason Oil, the Rayonier forest-products unit, Continental Baking and auto-parts companies might be sold.</br></br>--- | yes | 1 |
Corporate Treasurers See Rates Rising But Don't Say a Downturn Will Result | Corporate treasurers expect interest rates to continue rising for the rest of the year and into 1989 without provoking a business downturn.</br></br>Despite the highest short-term rates since last October's stock-market crash, the outlook "is very optimistic," says Wayland F. Blood, vice president and treasurer at Detroit-based Ford Motor Credit Co., echoing the view of many of the nation's biggest industrial companies. Many treasurers anticipated the Federal Reserve's increase in the discount rate to 6 1/2% from 6% last week and say it prompted no change in financing plans.</br></br>The Fed's decision to tighten credit by raising its lending fee to banks, however, caused rates on Treasury bills, bank certificates of deposit and commercial paper to spurt 0.2 percentage point in four days. The yield on the government's most recently issued 30-year bond rose 0.3 percentage point last week to 9.43%, its highest level since Dec. 11, according to Merrill Lynch Capital Markets. Treasury bond prices fell as much as three points, or $30 for each $1,000 face amount.</br></br>Even with expectations that short-term and long-term rates could rise at least another half a point, corporate financial officers are optimistic the expansion will continue for a seventh consecutive year.</br></br>"There's a lot of strength in the economy, based on what's going over the counters at our restaurants," says Jack Greenberg, executive vice president and chief financial officer at Oakbrook, Ill.-based McDonald's Corp. "The Fed's discount rate increase was expected and doesn't change any of our plans for expansion." | yes | 1 |
REVIEW & OUTLOOK (Editorial): Greenspan's Recovery | The White House says the recession is over, and the anecdotal evidence suggests a recovery has begun. The lackluster response in financial markets, however, suggests widespread doubts that policy makers in Washington have a clue about how to sustain a recovery.</br></br>Specifically, markets have to be wondering about the delay in reappointing Alan Greenspan as chairman of the Federal Reserve. Colin Powell's first term as chairman of the Joint Chiefs of Staff expires in the autumn, and President Bush announced his reappointment a month ago. Mr. Greenspan's four-year term expires in a month, but Mr. Bush has made no announcement. Meanwhile, various aides, deputies and kibitzers tell reporters that the delay is an attempt to "leverage" the Fed to ease interest rates further.</br></br>This sounds all too much like the same advisers who urged Mr. Bush to raise taxes three months into this recession. Having abandoned their own control over fiscal policy, these advisers have since taken to lecturing Mr. Greenspan and the Fed on monetary policy. This is graceless at the least, but also probably dangerous; financial markets can see when stones are being thrown from glass houses in Washington.</br></br>Especially since Mr. Greenspan is the one U.S. official who has built some credibility in world markets lately. Amid the capital's fiscal gridlock, the Fed has had to steer the economy with its single monetary oar, and with fair results. The Fed has brought down long-term interest rates, which are the decisive rates for investment. It's done this without reigniting inflation, which except during Paul Volcker's Fed tenure, has been the expectation before every presidential election cycle.</br></br>It's true that, at 8.5% or so, long-term interest rates remain stubbornly high. But this isn't something the Fed can easily control. The Fed in the short run can dictate the fed-funds rate, which is what banks charge each other for overnight loans. And the Greenspan Fed has done this, dropping fed-funds to 5.75% April 30. | yes | 1 |
Though Inflation Appears Tame, Fed to Focus on Clouds in Forecast; Despite Benign Reports, Officials May Emphasize Risk Factors in Outlook | WASHINGTON -- With inflation soon likely to drop into the Federal Reserve's so-called comfort zone of 1% to 2%, Fed officials are seeking to shift their emphasis away from today's benign inflation readings to the more uncertain path of future inflation.</br></br>To that end, the central bank's policy makers, when they meet next Wednesday and Thursday, are likely to continue to highlight the risks that low unemployment could yet push inflation higher.</br></br>At next week's meeting, Fed officials are expected to debate whether to continue describing inflation as "elevated" in their post-meeting policy statement, an issue complicated by their lack of consensus on whether inflation ought to be much lower than it already is.</br></br>There is little chance the Fed will alter its target for short-term interest rates, which has stood at 5.25% since last summer. Officials appear on hold for at least the next several months.</br></br>Inflation alarms sounded at the Fed when the annual pace of core inflation, which excludes food and energy prices, jumped to 2.4% in February from 2.1% in December, as measured by the Fed's preferred inflation gauge -- the price index for personal consumption expenditures. The jump prompted officials to describe inflation as "elevated" following their March and May meetings. | no | 0 |
U.S. Government Bonds Gain on GDP Qualms; Headline Reading of 3.5% Growth Masks Some Underlying Concerns | Treasury prices gained Thursday as investors kept their optimism about the U.S. economy in check despite a solid headline reading on last quarter's growth.</br></br>In late-afternoon trading, benchmark 10-year notes gained 6/32 in price to yield 2.305%. Two-year notes rose a fraction to yield 0.481%. Bond yields decline when prices rise.</br></br>Those gains came despite the U.S. reporting that gross domestic product grew 3.5% in the third quarter, surpassing expectations. Investors felt details to the report were less rosy, with typically volatile spending on defense boosting the reading, while the price index continued to show a lack of inflation.</br></br>"The internal mix of the GDP report was not as good as the headline suggests," said Andres de Lasa, a government bond trader at Pierpont Securities, adding that prices are reverting a bit higher after Wednesday's decline.</br></br>Mr. De Lasa said last session's declines came as investors placed new bets against Treasurys, particularly around the two- and five-year maturities, after a policy statement by the Federal Reserve showed increased optimism about the U.S. economy. While the central bank maintained that it will wait a "considerable time" before raising rates, for investors, the latest statement moves policy one step closer to tightening. | yes | 1 |
Business and Finance | STOCKS SURGED world-wide and the dollar jumped against the mark after Germany cut key interest rates, raising hopes of lower U.S. rates and a boost to the world's economies. But the German cuts may be too small to do much good, and Fed officials said they don't plan any quick action on rates. The Dow Jones industrials gained 70.52 points, or 2.1%, to 3376.22, and the S&P 500 rose 1.4% to a record. Share prices soared 4.4% in Frankfurt, 4% in Paris and 2.2% in London.</br></br>First Chicago plans to try to sell $2.1 billion in foreclosed property and problem real estate loans, and is taking a related $625 million write-down. The move could lead other banks to follow suit, depressing real estate prices. First Chicago stock rose $2.375 to $33.</br></br>---</br></br>Mellon Bank agreed to buy money management firm Boston Co. from American Express's Shearson unit for $1.45 billion in cash and stock. The sale will bolster Shearson financially and let American Express concentrate on its flagship card business. Mellon outbid PNC, another Pittsburgh bank.</br></br>--- | yes | 1 |
Growth and the Myth of the Deficit | Most of the nationÛªs establishment economists think the federal budget deficit is the root cause of all of the economyÛªs troubles. But they havenÛªt convinced one of their colleagues, Robert Eisner, professor of economics at Northwestern University.</br></br>To the contrary, EisnerÛÓa past president of the American Economic AssociationÛÓsays, deficit spending is what keeps the economy goingÛÓespecially now, when business and consumer demand is lagging.</br></br>EisnerÛªs philosophyÛÓthat there are bigger things to worry about than budget deficitsÛÓmay prove a handy rationale for whoever sits in the White House next Jan. 20.</br></br>Despite the Perot-led budget-balancing bandwagon, it now seems probable that the next president will be forced to postpone deficit-cutting for at least a year and turn attention instead to pump-priming a weak economy.</br></br>In an interview after Perot got back in the presidential race, Eisner said that anxiety about the budget deficit is misplaced. Instead, he argues, we should be worried about the deficits in jobs, health care, adequate housing and our educational system: ÛÏMy point essentially is that the [budget] deficit is completely misunderstood. Most people literally donÛªt know what theyÛªre talking about.Û | no | 0 |
New Japanese Investment in the U.S. Is Expected to Slow, Shift From Bonds | New Japanese investment in the U.S. will slow from last year's record pace but will remain significant, analysts say. Japanese investors also are expected to accelerate the diversification of their U.S. holdings away from bonds and into equities and real estate.</br></br>The major factors behind the expected shifts are the weak U.S. dollar and relatively low U.S. interest rates.</br></br>Salomon Brothers Inc. projects that private Japanese investors will purchase the equivalent of about $115 billion of foreign assets in 1987, down from a record $132.4 billion last year. Much of these funds are either invested in the U.S. or in Eurodollar bonds. The New York-based investment firm estimates that 85% to 90% of Japanese purchases of foreign stock and 70% of the fixed-income securities purchases have been dollar-denominated, including U.S. government, agency and corporate debt and Eurodollar securities.</br></br>A slowdown in new Japanese investment in the U.S. could have far-reaching implications. Foreign purchases of U.S. government and other dollar-denominated investments have helped fund the U.S. budget deficit, keep U.S. interest rates low and prevent the dollar from crashing. And the Japanese have played a leading role.</br></br>Japan's long-term foreign assets at the end of last year totaled nearly $397 billion -- higher than the Organization of Petroleum Exporting Countries' peak holdings of $380 billion in 1983. Japanese trading in U.S. Treasury securities climbed fivefold in the past 17 months and now accounts for as much as 15% of daily turnover, according to Michael R. Rosenberg, a vice president at Merrill Lynch & Co. "They are an important force in our market and are going to remain such," he adds. | no | 0 |
Answer Man: A New View of 'The Awakening' | In his Jan. 9 column about "The Awakening" statue on Hains Point, Answer Man wrote that J. Seward Johnson still owns the life-size aluminum giant he created for a sculpture conference in 1980. The National Park Service seems happy to have it, although any statue going on federal land today would need to be "commemorative" in nature.</br></br>Robert Lloyd Nelson of Rockville wrote to say that he'd always found the statue whimsical. Then he read a story about Isoroku Yamamoto, the admiral who planned the Japanese attack on Pearl Harbor. "Yamamoto is said to have counseled against [the attack] but was overruled," Robert wrote. "He was then put in charge of the attack, and as a dutiful subject of the Emperor, successfully carried out his assignment. But as the war got under way, he reportedly remarked, 'I fear we have awakened a giant.' "</br></br>Now Robert sees "The Awakening" in a new light. "It doesn't take much imagination to see the enraged face of Uncle Sam on that giant's head emerging from its buried slumber," he wrote. "The Park Service should consider itself blessed to have inherited this significant work when the original sculpture conference closed. The giant did indeed awaken, and who/what/where would we be today if it hadn't?"</br></br>On Jan. 16 Answer Man wrote about the Peoples Building, which is visible from New York Avenue. It houses D.C. government offices now but started life as the warehouse and headquarters of the homegrown Peoples Drug chain.</br></br>Doris Taylor remembers the building well. Fifty years ago she was secretary to the warehouse manager, Wilbur Disney. | no | 0 |
Competition for Lawyers Pinches the Biggest Firms | The state's biggest law firms are caught up in a bidding war for top law-school graduates, and corporate clients will inevitably pick up part of the tab.</br></br>Salary inflation has reached such extremes that hundreds of wet-behind-the-ears lawyers in this state will gross $115,000 this year -- the same as the chief justice of the Texas Supreme Court. Twenty-seven-year-old Trent McKenna, who started last year with the Houston office of Akin, Gump, Strauss, Hauer & Feld L.L.P. at a base salary of $78,000, has already received raises of about $37,000. "It's not so much that we're 100% worth whatever salary," he says. "What's driving this is that we're a commodity that is more scarce than it used to be."</br></br>The root cause of the salary surge is the booming economy. In particular, dot-coms are competing for top legal talent by offering lucrative stock options. The biggest Texas law firms expect to shell out up to $12 million each in extra salaries this year.</br></br>That could have drastic consequences, and not just for the legal profession: In-coming lawyers will be asked to work more hours; partners at top firms may make less money; and big firms could lose clients to cheaper firms or in-house lawyers. Some worry that big law firms will cut back on pro bono services.</br></br>Debby Ackerman, associate general counsel for Southwest Airlines Co. in Dallas, says that while it's usually worth paying for top talent, her company might bring more work in-house if legal salaries keep rising. "If the rates go up again, clearly that would be too much pressure," she says. | no | 0 |
Fixed Rates Rose In the Latest Week | Dow Jones Newswires</br></br>NEW YORK -- Rates of long-term fixed-rate home mortgages rose this week, according to the primary market survey by Freddie Mac, the housing-finance agency.</br></br>Freddie Mac attributed the rise in mortgage rates to improved sentiment in financial markets that growth in the final quarter of 2004 will be strong. "Of course, with the signs of strong growth come fears of inflation, and that tends to push up long-term mortgage rates," said Frank Nothaft, Freddie Mac chief economist, in a statement.</br></br>The 30-year fixed-rate mortgage rate rose to 5.81% from 5.72% in the week. A year ago, the 30-year fixed-rate mortgage stood at 5.89%.</br></br>The 15-year fixed-rate mortgage rate rose to 5.23% from 5.15%. A year ago, this rate stood at 5.22%. | no | 0 |
Corporate Executives Urge Bush to Block Measures That Increase Business Costs | WASHINGTON -- Top corporate executives urged President Bush to stop legislation that raises business costs and to continue pushing for lower interest rates.</br></br>The president met yesterday with 10 business leaders as part of an evolving effort to show concern about the state of the economy. In addition to the hour-long meeting, Mr. Bush presided over a cabinet meeting where he heard several presentations on the economy.</br></br>Today he is scheduled to hear again from his economic advisers to discuss ways of easing tight credit conditions, the third such meeting he has held in the past two weeks.</br></br>The business leaders, who were mostly chairmen of Fortune 500 companies, had differing views of the economy's health, according to Robert Giordano, a Goldman, Sachs & Co. economist who attended. But they were largely unanimous in urging the president to oppose measures that increase business costs -- such as legislation mandating health benefits -- and to push measures that reduce those costs -- such as limits on product liability suits.</br></br>"I think the most important thing is that we not add to . . . added costs to the society," said John Georges, chairman of International Paper Co. "In other words, we do have a slow-growing economy; we've got to be careful we don't bury it with additional costs, whether they be a whole variety of social, environmental issues." | yes | 1 |
Maguire Warns of Loan Defaults --- Creditors to Get Seven of the Property Firm's Buildings as Vacancies Rise and Rents Drop | Corrections & Amplifications</br></br>U.S. office vacancies rose one percentage point to 15.4% in the second quarter compared with the prior quarter, according to Colliers International. A Marketplace article Monday about Maguire Properties Inc. incorrectly said the change was from the same period last year.</br></br>(WSJ August 12, 2009)</br></br>Maguire Properties Inc., one of the largest office-building owners in Southern California, is planning to hand over control of seven buildings with some $1.06 billion in debt to creditors, the latest sign that rising vacancies and falling rents are causing stress in the commercial real-estate sector.</br></br>Maguire, which borrowed heavily during the go-go years to make disastrous top-of-the-market investments, mostly in Orange County, notified the buildings' mortgage holders Friday that it expected "imminent default" on the loans. The buildings are all worth less then their mortgages and aren't generating enough cash to pay debt service and finance leasing expenses. | no | 0 |
It's Your Money | You might think that the very first thing the American taxpayer has the right to expect from a financial institution dedicated to maintaining monetary cooperation and the international balance of payments would be some honest bookkeeping. Especially when Uncle Sam is its largest contributor.</br></br>Think again.</br></br>Forget about looking for the answer in the U.S. budget. America's contribution to the International Monetary Fund is an off-budget item. And Congress has long preferred to pretend that the billions of dollars in loans that the U.S. makes to the Fund cost the U.S. taxpayer, as Treasury Secretary Robert Rubin put it in 1998, "not one dime." Naturally, this line of thinking is just fine with the IMF, which is happy to avoid the closer scrutiny that would be sure to follow if Congress ever admitted that its U.S. funding is not cost- free.</br></br>Though such logic (not to mention such arithmetic) was always suspect, a new study shows just how flawed it really is. The U.S. contribution to the IMF, says Adam Lerrick of the Gailliot Center at Carnegie Mellon University, has cost the U.S. an average of $1.5 billion a year since 1991. This year those costs will reach $1.9 billion. It sure would be nice if Congress noticed.</br></br>Mr. Lerrick reaches his conclusions using a set of facts that are difficult to argue with. Start with the fact the Fund makes large loans at low interest rates to such risky economies as Argentina or Indonesia or Russia -- countries that aren't like to repay soon (if ever). | no | 0 |
Sponsors to Reintroduce Several Housing Bills; Measures Failed to Pass 100th Congress | Several bills designed to preserve low-income housing and help first-time home buyers died when Congress recessed three weeks ago, but the sponsors of most of those bills plan to introduce the measures again when the 101st Congress convenes in January.</br></br>Hopes for strengthened consumer credit protections also ended when a dispute between two House committees prevented a floor vote on the banking deregulation bill that contained the reform measures. Supporters of the legislation said efforts will be made to resolve differences over the bill so that it can be reintroduced. Several provisions in the bill are intended to prod lenders into extending credit and banking services more widely in low-income communities.</br></br>Legislation not passed by both houses when Congress adjourns is effectively killed. Bills must be reintroduced in the next session if their sponsors want to resuscitate them. In some cases, however, committee hearings held in the previous session of Congress are not repeated.</br></br>Construction and rehabilitation of housing for poor people and the homeless would be authorized by several pieces of legislation that their sponsors plan to reintroduce. An affordable housing bill providing $15 billion a year for five years to acquire, renovate or build 7.5 million housing units was introduced last July and referred to the House committees on Banking, Finance and Urban Affairs and on Ways and Means. Its sponsor, Rep. Barney Frank (D-Mass.), regarded the introduction of the measure in the last session as "a foundation for later efforts" and will reintroduce the bill again next year, an aide said.</br></br>Another Massachusetts Democrat, Rep. Joseph P. Kennedy II, plans to reintroduce a measure authorizing $500 million a year in grants to subsidize low-income rental housing development and some homeownership opportunities for families with incomes below 115 percent of area medians. The legislation says that funds provided by the bill must be matched by at least $1 to every $3 by state or local governments, or private groups. | no | 0 |
World News: Inflation Makes EU Rate Cut Less Likely | FRANKFURT -- Inflation in the euro zone rose sharply in March, pushing back expectations of a European Central Bank interest-rate cut even as economic sentiment softened and the bank pumped more funds into strained money markets.</br></br>Inflation in the 15 countries that share the euro rose to 3.5% in March from a year earlier, up from 3.3% in February and the highest since the series began in January 1997.</br></br>ECB policy makers have said rising food and energy prices will keep inflation above their preferred range of just less than 2% most of this year, but the March surge suggests inflation could stay higher longer than expected and spill over into wages and other prices.</br></br>Investors and many analysts now expect the ECB to defer a rate cut until September at the earliest, rather than June, as previously anticipated.</br></br>"The inflation news looks a whole lot worse than we'd expected; therefore, to get rate cuts as soon as June, the economic or financial situation has to deteriorate much more rapidly than we've seen," said Ken Wattret, an economist with BNP Paribas in London. | no | 0 |
Annan's Contacts With Firm Probed; Oil-for-Food Panel Is Examining Son's Links With Company | -- A U.N.-appointed panel investigating influence peddling in the oil-for-food program in Iraq is examining three contacts between Secretary General Kofi Annan and executives of a Swiss company that made payments to Annan's son while it conducted millions of dollars' worth of business with the world body, a senior U.N. official said.</br></br>The U.N. chief of staff, Mark Malloch Brown, made the disclosure less than a week before former Federal Reserve chairman Paul A. Volcker is due to issue a report on whether Kojo Annan improperly used his family connections to obtain a U.N. contract for his former employer, Cotecna Inspection SA, in December 1998.</br></br>Malloch Brown described Annan's meetings as "innocent encounters" that played no role in securing contracts for the Geneva-based firm and said the secretary general told investigators about them. He said that Annan is confident he "will be exonerated of any wrongdoing" but that Volcker will determine whether the actions of his son were "appropriate or not."</br></br>The $64 billion U.N. oil-for-food program was created in December 1996 to provide Iraq with an exemption from sanctions, which had been imposed after its 1990 invasion of Kuwait, to sell oil to buy food, medicine and other humanitarian goods. The former Iraqi government collected more than $2 billion in bribes and kickbacks from companies trading with Iraq under the program.</br></br>Annan appointed Volcker in April to investigate allegations of misconduct by U.N. personnel. Last month, Volcker accused Benon Sevan, the former director of the oil-for-food program, of asking the Iraqi government to steer valuable oil contracts to an Egyptian businessman. Sevan insists he has done nothing wrong. | no | 0 |
Welcome Back? | Federal officials are confident that the government can absorb 10,000 new workers from the welfare rolls without disrupting regular personnel operations and office routines or harming the quality of government work. Even members of Congress who often are skeptical of social engineering programs, especially in government, express little concern that this effort will do any harm.</br></br>But some rank-and-file federal workers, not to mention ex-feds who were downsized into the unemployment ranks, are less than happy about the White House's welfare-to-work program.</br></br>The program will hardly be noticeable in most federal agencies. The Census Bureau will take the largest number of the welfare-to-work hires (about 40 percent of the total hires), with the Defense Department hiring most of the rest.</br></br>Most of the new hires will go into temporary jobs outside the regular civil service system. They will do basic office work and will be paid at Grade 1, or about $13,500 a year. Agencies also expect that they will have to provide low- or no-cost day care and transit subsidies.</br></br>Career officials in several agencies say they have been instructed to be upbeat about the plan, which is supposed to prompt private industry to hire many thousands more from the welfare rolls. The idea is to get some people off welfare and pay them while they pick up basic office skills and develop work habits that could lead to full-time jobs in private industry. It is yet to be determined how many welfare recipients -- if any -- will be hired by officials who developed the program. | no | 0 |
Cheap Shares Fail to Entice in Japan; Worries Over Exposure to Global Slowdown Sinks Nikkei | Tokyo -- Japanese stocks are cheaper than they have been for decades. So why are so few investors interested in buying them?</br></br>Driving stocks lower is a combination of worry that Japanese shares will be disproportionally hit by a slowdown in the global economy and continuing concern that managers at Japanese companies aren't as sensitive to their shareholders as those at U.S. and European companies are. The slow pace of overhaul in the world's second-largest economy is also weighing on shares.</br></br>Yesterday, the benchmark Nikkei Stock Average fell more than 3.3% as concerns continued to build that the U.S. economy -- which takes in slightly less than 25% of Japanese exports and helps power many of Japan's other markets -- might slide into a recession.</br></br>So far this year, the Nikkei has fallen nearly 12% and now stands at 13504.51 -- a two-year low. The Dow Jones Industrial Average, by comparison, is off 6%.</br></br>The latest slump in the Japanese market, which has fallen irrespective of what stocks in the U.S. or elsewhere have done for the past three months, is damping optimism that shares here would rise as investors looked for bargains. The Nikkei's price/earnings ratio, which compares the price of a stock to its earnings, is now just below that of the S&P 500. | no | 0 |
TCS Not Seeing Rise in Staff Departures | MUMBAI --Tata Consultancy Services Ltd. isn't seeing any rise in staff departures, a senior executive said Wednesday, unlike its competitors where employee resignations have increased as a revival in demand for outsourcing services has opened up more job opportunities.</br></br>Staff resignations had fallen during the economic crisis when most software companies froze recruitments and fired people as they cut costs to wade through the slowdown. But most of the companies are now back in the market for hiring staff as they get new orders.</br></br>Tata Consultancy is India's largest software exporter by revenue. Last week, its nearest rivals Infosys Technologies Ltd. and Wipro Ltd. confirmed that staff resignations have risen in the past three months.</br></br>In a bid to control the rise in staff resignations, most technology companies are offering a raise in salaries. While Infosys increased staff pay in October and is considering another hike in April, Wipro raised salaries in February.</br></br>"We will announce a (salary) hike in April," Tata Consultancy Chief Financial Officer S. Mahalingam told reporters on the sidelines of an industry conference. He didn't say what will be the quantum of the pay raise. | no | 0 |
Economists Fear That New Dose of Interest Rate Tonic Will Be Overkill | Economists and government officials are increasingly worried that in its efforts to restrain the U.S. economy's current boom, the Federal Reserve may boost interest rates so much that it produces a mild bust next year or in 1996.</br></br>The Fed, which has already raised interest rates six times this year in an unsuccessful attempt to cool the red-hot economy, could act again at a policy-making session today. But analysts said the central bank is more likely to wait until it meets next on Jan. 31.</br></br>Many analysts now predict that to curb the economy's robust growth, the Fed will have to provide such a harsh dose of interest rate medicine - raising short-term interest rates at least a percentage point on top of this year's increases of 2.5 percentage points - that it will eventually plunge the economy into recession.</br></br>"There is less and less chance of a soft landing and a higher and higher chance of the more traditional boom-and-bust cycle," said Sung Won Sohn, chief economist at Norwest Bank in Minneapolis.</br></br>In its latest forecast, Merrill Lynch & Co. said last week that strong economic growth in early 1995 could lead the Fed to raise rates "by more than we currently expect. In that case, the U.S. economy would probably decelerate more sharply by late 1995 and possibly into a recession in 1996." | yes | 1 |
(T1)C IVnsIjington JJost | Major banks raised their prime lending rates.to 13 percent yesterday in the wake of an earlier 1-point rise in the Federal Reserve BoardÛªs discount rate. The prime was previously at 12lA and 12l/2 percent.</br></br>There has been a rapid succession of rises in the prime rate in the last few weeks. Bankers attribute these to a combination of increased loan demand, fears of renewed inflation and the marketÛªs expectation of a tightening in the FedÛªs money policy.</br></br>YesterdayÛªs move was triggered by the discount rate increase to 11 percent, said spokesmen for Chemical Bank and Citibank yesterday.</br></br>The monetary aggregates have recently been growing very rapidly, partly in reaction to their slump earlier this year. Yesterday the Fed reported further rises in both the narrower measures of the money supply in the week to September 17. The Fed also revised upwards the figures for the money supply in the previous week. The market had earlier been expecting a decline in the aggregates for the latest week, according to Chemical Bank economist and Senior Vice President, Frederick W. Deming.</br></br>The United StatesÛª foreign trade deficit narrowed last month to its lowest level in more than four years, despite a visible rebound in oil imports, the government reported yesterday. | no | 0 |
Currency Reserves Held by Beijing Continue to Swell | HONG KONG -- China's foreign-exchange reserves ballooned to $818.9 billion at the end of last year, putting the country on the road to hitting the $1 trillion mark and claiming the world's largest reserves this year. The expanding coffers will likely add to pressure from the U.S. for Beijing to speed up appreciation of its currency.</br></br>For China, the reserves are in some ways an embarrassment of riches. They draw unwelcome attention to Beijing's policy of maintaining exchange-rate stability by buying up most of the dollars that flood into the country in the form of foreign direct investment, export earnings and speculative capital. Critics in the U.S. and Europe complain that this practice gives Chinese exporters an unfair advantage on world markets by making the Chinese yuan artificially cheap.</br></br>Partly in response to U.S. pressure, Beijing allowed a 2.1% appreciation of the yuan against the dollar last July and pledged to make its exchange rate more market-driven. However, since that time, the yuan has edged up only by a further 0.52%. It last traded on Friday at 8.0698 to the dollar.</br></br>Coupled with other evidence of breakneck economic growth in China, the buildup of reserves "is definitely helping Western countries to add pressure on China" for currency appreciation, said Grace Ng, a senior economist at J.P. Morgan.</br></br>To China's critics, the figures provide evidence that the economy can withstand a stronger currency. If, as expected, the country's reserves leap by a similar margin this year, taking the total over the $1 trillion threshold, economists say Beijing will find it harder to resist pressure for faster currency appreciation from the U.S. and other major trading partners and still avoid a protectionist backlash. | no | 0 |
EuroLinks Daily View: A Citigroup Swoop on ABN Amro Might Win Some Spoils -- or More | Ever since news emerged that ABN Amro Holding NV was not only in play but in exclusive takeover talks with Barclays PLC of the U.K., it has seemed to be only a matter of time before other big banks began circling. The real question was whom. Now comes news that a faction within U.S. giant Citigroup Inc. is pushing Chairman and Chief Executive Charles Prince to bid for the big Dutch bank.</br></br>The fact that any move would have to be unsolicited, and might be considered hostile, complicates matters. Hostile takeover bids in the banking industry are difficult to win, and hostile deals of all stripes are particularly tough in the Netherlands, where companies enjoy many defenses that aren't allowed elsewhere, as Carrick Mollenkamp, Jason Singer and Dennis K. Berman report. Indeed, the Dutch central bank has already said it would frown on such a situation.</br></br>However, ABN Amro and Citigroup have complementary businesses in the U.S. and Latin America, and a deal would give Citigroup a stronger foothold in continental Europe. There also is the possibility that Citigroup could push for part of ABN's assets, such as Chicago-based LaSalle Bank or Banco ABN Amro Real SA of Brazil, each of which contribute about 17% to ABN's overall revenue.</br></br>Nonetheless, the Dutch community might not like a Citigroup bid, fearing it would reduce the bank's Dutch headcount aggressively, according to corporate government consultant Jaap Koelewijn. But he also considers the proposed Barclays takeover no more than a diversion, arguing that active investors won't accept it because other competitors could achieve greater synergies and hence be able to pay a higher premium.</br></br>Read Carrick Mollenkamp, Jason Singer and Dennis K. Berman's report: http://online.wsj.com/article/0""SB117462029775746489,00.html | no | 0 |
BofA Resists Buying Back Bad Loans --- Bank Posts $7.3 Billion Third-Quarter Loss as Fee Revenue Tumbles; Effects of Regulatory Overhaul | Bank of America Corp. and some of its largest mortgage investors clashed on Tuesday as the bank vowed to fight government-backed demands that it repurchase loans that allegedly didn't meet underwriting guidelines and other promises.</br></br>The bank acknowledged receiving a Monday letter from investors alleging that a Bank of America unit didn't properly service 115 bond deals. The investors include Freddie Mac, the government-owned mortgage company. Freddie Mac and Fannie Mae, its larger sibling, have boosted demands on lenders over the past year to buy back defaulted loans that had been sold to and guaranteed by the mortgage titans.</br></br>But Tuesday's action marks the first step by either company to force banks to buy back mortgage-backed securities that were issued by Wall Street, not by government-backed mortgage giants.</br></br>Other investors, some of whom were acting on behalf of their clients, include the Federal Reserve Bank of New York, Neuberger Berman Group LLC, BlackRock Inc., Western Asset Management Co. and Allianz SE's Pacific Investment Management Co., or Pimco, according to people familiar with the matter.</br></br>The Charlotte, N.C., bank hoped the lifting of its foreclosure sale moratorium would debunk fears that the mortgage process was flawed. But investors grappled with new concerns Tuesday that the bank could be overwhelmed with investor requests to repurchase flawed mortgages made before the U.S. housing collapse. Its shares dropped 54 cents or 4.4% to $11.80. The shares have declined more than 30% since the end of April amid worries about regulatory reform, lackluster revenues and weak loan demand. | no | 0 |
The Budget Battle and Your Wallet; Which Bush Proposals Are Likely to Survive; Band-Aid on the AMT | With Democrats now in control of Congress, many proposals President Bush made yesterday affecting individuals' wallets -- including killing the estate tax and overhauling the tax treatment of health- insurance benefits -- appear to be heading for the cutting-room floor.</br></br>But a few others, such as giving the Internal Revenue Service more money to pursue tax dodgers and protecting millions of people for another year from being ensnared in the alternative minimum tax, could attract bipartisan support.</br></br>Here is how the president's proposed $2.9 trillion budget may affect your pocketbook.</br></br>TAXES: The president is asking for nearly $2 trillion in net tax cuts over the next decade, mainly by extending provisions scheduled to expire in coming years. For example, the top 15% rate on long-term capital gains and most corporate dividends is set to expire at the end of 2010. So are today's federal income-tax rates, which range as high as 35%. Without legislation, those rates would head higher starting in 2011.</br></br>Don't expect Congress to act soon on the president's proposals to make those tax rates permanent. Lawmakers effectively have punted that issue into the elections of 2008, and beyond, amid continuing concern about reining in the federal budget deficit. | no | 0 |
Technology (A Special Report): The Providers --- Playing the New Order: Stocks to watch as software meets the Internet | When the software's for rent, what can investors buy?</br></br>The abbreviation ASP is suddenly as much of a stock-market buzzword as e-commerce and dot-com once were. And just as with the earlier manias, some traders already have made a bundle while others have lost their shirts.</br></br>ASP, or application service provider, is technology lingo for a company that rents out access to computer software and hardware to business customers, often providing the access over the Internet.</br></br>Bullish investors believe that ASP is the Next Big Thing and that it will revolutionize how small and medium-size companies approach technology. Before long, the theory goes, everybody from mom-and-pop retailers to steel warehouses will embrace the notion of outsourcing complicated stuff such as accounting programs and productivity software, saving themselves time and money -- and creating stock-market winners among the ASP providers.</br></br>Such beliefs already have created wild rides in the stock market. As investors have caught outsourcing fever, ASP firms such as the pioneering company USinternetworking Inc. and, more recently, Breakaway Solutions Inc. have enjoyed wildly popular initial public offerings. | no | 0 |
DIGEST | The stock of Dart Group, the Landover-based owner of Crown Books, Trak Auto, Total Beverage and part of Shoppers Food Warehouse, rose $11.12 1/2, or 13 percent, to close at $95 on the Nasdaq stock market. Investors responded to an agreement, announced after the market closed last Friday, under which outside directors of Dart would remove control of the company from the feuding Haft family. Trading had been halted until midday yesterday.</br></br>CoreStates Financial and Meridian Bancorp agreed to a $3.2 billion merger. CoreStates, of Philadelphia, has $29.3 billion in assets and about 355 branches in Pennsylvania and New Jersey. Meridian, based in Reading, Pa., has $15 billion in assets and more than 300 branches in those two states and Delaware. The merged company will become the nation's 19th-largest bank, as measured by its $44.3 billion in assets.</br></br>T-bill rates fell. The discount rate on three-month Treasury bills fell to 5.31 percent from 5.34 percent last week. Rates on six-month bills fell to 5.32 percent from 5.38 percent. The actual return to investors is 5.47 percent for three-month bills, with a $10,000 bill selling for $9,865.80, and 5.56 percent for a six-month bill selling for $9,731.00. Separately, the Federal Reserve said the average yield for one-year Treasury bills, a popular index for making changes in adjustable-rate mortgages, fell to 5.61 percent last week from 5.69 percent the previous week.</br></br>A key union negotiator at USAir has resigned his union post. Pete Gauthier, chairman of the Air Line Pilots Association master executive council at USAir Group, said two recent events made it a "natural" time for a change in the union's leadership. Arlington-based USAir ended talks with its unions in July that would have swapped a stake in the company for $2.45 billion in wage concessions over five years. And it said last week that it has held talks with United and American airlines about a possible alliance or acquisition.</br></br>Healthsouth of Birmingham, the largest U.S. provider of rehabilitation services, said it will buy Surgical Care Affiliates of Nashville, the biggest outpatient surgery firm, in a $1.2 billion stock swap. The deal extends a series of acquisitions by Healthsouth as it seeks to marry the two medical services and offer them on a nationwide scale. | no | 0 |
Of Potholes and Pollsters | The nineteenth century poet, Sam Walter Foss, called for "Men to match my mountains." That's out now. Voters are looking for a man to fix their potholes.</br></br>Character doesn't count any more. A Washington Post-ABC poll shows that to 77 percent of the electorate, it isn't "the highest personal character" that matters. Mount Rushmore is all very well, but we're talking meat and potatoes here; character is caviar. They are talking about "someone who understands the problems of people like you."</br></br>The Republicans cannot believe that all the virtue has been driven out of the electorate. They are sure that if they touch the right button, Americans will come to their senses and vote for Bob Dole. They believe that Bill Clinton's biography is a gold mine in terms of potential negatives that will kill his candidacy.</br></br>That is surely what the president's 1992 rivals thought. His baggage -- Whitewater, Gennifer Flowers, the draft -- would rob him of nomination and election. But from those first snowy days in New Hampshire, the verdict was as strong as it was surprising. Some said they would have preferred a more upright man and faithful husband, but could not let those considerations be decisive.</br></br>They imposed a kind of "vision test." They were looking for a man who saw what they saw -- foreclosures, bankruptcies, failures, vacant houses, idle factories -- in a word, recession. George Bush, the squire among the peasants, tried to accentuate the positive, get people to be patient with a global economy, marvel in the pleasure of having Arnold Schwarzenegger in their midst. He was grandfatherly, gracious and the lion of the Persian Gulf War. But they were looking for something else, a grasp of reality. | no | 0 |
Pay Envelopes Hold the Answer to What Drives Prices Up | Anytime the consumer price index goes up, as the government reported it did last month, some financial analysts immediately worry that the Federal Reserve will respond by boosting short-term interest rates.</br></br>In fact, many Fed officials, including Chairman Alan Greenspan, usually pay more attention to what is happening to costs that could push inflation up in the future - than to recent changes in prices.</br></br>The numbers Fed officials monitor most closely are those on labor costs, because for most businesses they are the biggest cost item by far. For the average business, wages paid to employees and the cost of fringe benefits represent more than 70 percent of all expenses. The labor statistic that economists follow most closely is "unit labor costs," which tracks the labor cost of each unit produced, and thus reflects any labor-saving productivity gains.</br></br>The chart at right shows how closely consumer price inflation has tracked changes in unit labor costs since 1980. It also indicates why so many analysts think inflation will remain subdued for some time to come: Unit labor costs are low and give no sign of accelerating.</br></br>In the 12 months that ended in September, businesses other than farms increased worker compensation an average of 3.2 percent, according to the Labor Department. But productivity gains - increases in the amount of goods and services produced for each hour worked - of 1.4 percent meant that firms' unit labor costs rose only 1.8 percent. | no | 0 |
Wanted: Employees in Michigan and Ohio --- States Compete to Lure Skilled Workers Amid Shortage | DETROIT -- The economy is so good in Michigan and Ohio that these two states, once symbols of the Rust Belt's struggles, are fighting across state lines to recruit workers and ease growing labor shortages.</br></br>Michigan, facing its lowest unemployment rate in almost 30 years, at 4.4%, is doing the once unimaginable. The state is spending $50,000 to advertise in national newspapers to attract people back to the place from which thousands fled in the early 1980s when unemployment skyrocketed past 15%. One private company alone says it has about 1,000 openings.</br></br>On behalf of hundreds of companies looking for skilled workers ranging from engineers and computer analysts to construction workers, the five-week campaign is essentially a huge help-wanted ad for the state. The ad, touted by Gov. John Engler's administration as proof of Michigan's economic comeback, comes complete with a list of fringe benefits, including affordable housing, 11,000 inland lakes and the nation's highest number of golf courses. Likely to be added soon: "Home of the Stanley Cup Champions," after Detroit's beloved Red Wings won the title Saturday night. (The ads are being placed only in cold-weather climates because Michigan officials doubt they are going to attract many workers from California or Florida to brave the state's winters.)</br></br>"These are $50,000-to-$100,000-a-year jobs that are going unfilled," says Jim Tobin, a spokesman for the Michigan Employment Security Agency. "A lot of people, particularly on the East Coast, don't appreciate the high quality of life here. We are asking people to pick up and move."</br></br>But the ads are running straight into a similar campaign by some cities in Ohio. Businesses in Ohio are touting job openings, symphony, and ballet in national magazines like BYTE, and are flooding the nation's job fairs with glossy brochures in a campaign already exceeding $20,000. One task force recently came to Detroit to try to lure workers south across the state line. | yes | 1 |
Market Gains In Slow Trade: Slow Trading Pace NYSE Index Advances | NEW YORK, Aug. 19 (AP)ÛÓThe stock market today resumed last weekÛªs recovery upswing as trading continued slow bv 1968 standards.</br></br>Volume was 9.91 million shares compared with 9.94 million Friday. Both figures were far below the 12.4 million-share average for the first seven months this year. Û÷</br></br>Prices rose from the start and slightly improved on balance throughout the session. Market analysts observed, however,' that there was no great urgency either on the buy or sell side.</br></br>Building materials issues and stocks of equipment suppliers for houses advanced in the wake of news that housing starts had a sharp rise-'in. July. The inflationary atmosphere was heightened by -an increase in beer-bottle prices by Owens-Illinois, the largest U.S. maker of that product. Its stock was up %.</br></br>Wall Streeters credited news of the sharp drop in the U.S. balance of payments deficit and the easing of the discount rate by some banks, as well as technical market factors, for the continued improvement. | no | 0 |
Some Say Rate Cuts Are Just A Scratch; Analysts: Banks Not Following Fed Lead | The Federal Reserve lowered the federal funds rate, a key short-term interest rate, by another quarter of a percentage point to 5 percent on Thursday, but economists and analysts questioned yesterday whether it would be enough to light a fire under the faltering U.S. economy.</br></br>Like a brakeman on a runaway train, the Fed is credited with stopping the economy from falling into a deeper decline by aggressively cutting rates more than 3 percentage points since the recession began in August 1990.</br></br>But with the monetary tools available to Alan Greenspan and his colleagues, it took months to stop the slide.</br></br>Now, according to George Eads, chief economist for General Motors Corp. and a member of the Council of Economic Advisers in the Carter administration, more - much more - is needed.</br></br>"For products like ours people have to have both the ability to buy and the willingness to buy," Eads said. "Rate cuts provide a little bit of help because they cut payments a little. Consumers are telling us they want interest rate cuts. But it's got to be a very large cut to get people's attention. | yes | 1 |
Stock Market and GDP Both Fall Short as Bellwethers | The usually reliable Edward P. Lazear gets it badly wrong ("The Stock Market Beats GDP as an Economic Bellwether?," op-ed, July 31). Of course it does. Stock prices are based on expectations about the future. GDP only reports what has already happened. Of course stock prices are "better than GDP." But stock prices are still not a very good predictor of future economic activity simply because there are many other factors that affect stock prices (interest rates, corporate profits, and so on).</br></br>I await Mr. Lazear's article discussing factors that are actual predictors of the economy. To paraphrase an old saying, the stock market has predicted four out of the past two economic recoveries.</br></br>Prof. Tony Lima, Ph.D.</br></br>Calif. State Univ., East Bay</br></br>Hayward, Calif. | no | 0 |
Dismal Science: Fannie Deserves a Smack | Fannie Mae, the mortgage company behemoth, is not having a good year. Shareholder equity has been evaporating -- down 27% at the end of the third quarter (or down 47% if one ignores Fannie's accounting shenanigan). Worse, there are more difficulties on the way. Aside from skating on thin ice with investors, there is political risk from politicians who are looking at its operations with growing crankiness.</br></br>In the immediate post-Enron period, investors went on orange alert when increased scrutiny revealed that Fannie has serious problems with corporate governance, financial disclosure and reporting. More recently came revelations that Fannie was having trouble managing its huge portfolio of assets. A bad guess on the direction of interest rates exposed a giant mismatch between the maturities of its assets and liabilities, and demonstrated how vulnerable Fannie is to interest-rate risk.</br></br>The bizarre thing is that Fannie willingly (and happily) exposes itself to interest-rate risk. There is nothing in its government charter that even remotely requires Fannie to borrow great gobs of money to purchase and hold a huge portfolio of mortgages. Fannie does it because it is wildly profitable. Because of the implied government guarantee of its debt, Fannie can borrow at very low rates and then lend out that money at higher rates by retaining or repurchasing the mortgages it has securitized. This opportunity to borrow low and lend high is so seductive for profits, it's almost a form of entrapment.</br></br>It's such a good deal, in fact, that Fannie has issued an amazing amount of debt. Currently its outstanding debt is around $800 billion. Moreover, Fannie's debt relative to its small capital base gives it enormous leverage. Fan's required core capital is 2.4% of on-balance sheet assets and 0.45% of outstanding mortgage-backed securities and other off-balance sheet obligations. This is well below levels necessary for FDIC-insured commercial banks; even government securities dealers carry capital around 5% of assets. Fannie is running with this huge leverage (about 54-to-1) because it can -- shareholders, at least until this year, didn't seem to care.</br></br>What about its creditors? Well, considering taxpayers are the ultimate creditors, they should probably care more than they seem to. At the end of the third quarter, Fannie's combined debt and its mortgage-backed securities held by outside investors totaled $1.8 trillion. | no | 0 |
Dollar Plunges; Stocks, Bonds Follow --- Central Banks Join Forces To Drive Currency Down | The dollar plunged on a round of concerted dollar selling by central banks. The central-bank intervention backed up a weekend warning by major industrial nations that continued dollar strength could hurt the world economy.</br></br>The dollar tumbled to 1.8993 marks and 142.13 yen in late New York activity, down sharply from 1.9510 marks and 146 yen late Friday. The pound climbed to $1.6170 from $1.5715 Friday.</br></br>In Tokyo Tuesday, the dollar opened for trading at 142.25 yen, down from Monday's Tokyo close of 142.95 yen.</br></br>The Group-of-Seven major industrial countries -- the U.S., Japan, West Germany, France, Britain, Italy and Canada -- issued a communique in Washington on Saturday stating that the dollar's rise in recent months is "inconsistent with longer run economic fundamentals."</br></br>The central banks launched their attack on the U.S. currency early yesterday with dollar sales by the Bank of Japan, the Federal Reserve Bank of New York and the Bank of Canada in Far Eastern trading. Dealers said the Bundesbank, West Germany's central bank, intervened in the Tokyo and Singapore markets through West German commercial banks. | no | 0 |
Dow Industrials Flirt With Peak On Latest Climb | THE DOW JONES Industrial Average bypassed its high within minutes of the market open, then again near the close, but trimmed its gains to finish shy of the record.</br></br>The indicator, which tracks 30 blue-chip companies, posted an intraday high of 11728.46, up 5.48 points from its January 2000 peak. But on the day, the Dow industrials finished up 29.21 points, or 0.29%, at 11718.45, up 9.3% on the year.</br></br>Among the Dow average's strongest components were Caterpillar and General Motors. GM rose after Kirk Kerkorian's Tracinda, which owns 9.9% of GM's shares outstanding, said it was considering purchasing as many as 12 million more shares of the auto maker. Tracinda also said it supports an alliance between GM and Renault-Nissan.</br></br>However, the three names with the biggest influence weightings in the price-weighted Dow industrial average -- International Business Machines, Altria Group and Boeing -- all finished the day off less than 0.5%. Even modest gains at one or two of those companies would have sent the Dow industrial average over its record, which now stands just 4.53 points away, at 11722.98.</br></br>"The Dow is teasing everybody right now," said Kenneth Tower, chief market strategist at the online-brokerage firm CyberTrader. | no | 0 |
Answer Man: Putting the Cars Before the Fact | The Labor Day weekend is upon us. We hear authoritative pronouncements from AAA Mid-Atlantic confidently predicting the number of persons in the metropolitan area who will be traveling over 50 miles outside the area during the holiday weekend. We hear similar predictions for Memorial Day and Thanksgiving. How do they know that? What methodology do they use?</br></br>Answer Man has often thought that it would be useful to possess a time machine. He would use it to go into the past to rectify certain bad decisions -- an unfortunate quip at a social event, a poor choice of haircut, the more ill-advised portions of his senior prom -- and, occasionally, to peer into the future.</br></br>He also would lend it to AAA so it could leap forward, count some cars, then come back and tell us exactly what's in store for us, traffic-wise.</br></br>Sadly, such technology does not exist. And so AAA has to rely on a different method for its predictions of holiday traffic volume. Here's what it does: It asks people if they're going to travel.</br></br>Actually, the Travel Industry Association of America asks that question. To arrive at this year's Labor Day forecasts, TIA pollsters called at random 1,300 U.S. adults between July 15 and 25 and surveyed them about their travel intentions, said AAA spokesman Justin McNaull. The results of that survey were then massaged, with the massage oil being a proprietary forecast model developed by TIA's economist. Its ingredients are the results of the surveys the association is doing continually, along with such indicators as unemployment rates, consumer spending and gross domestic product. The final figure was then broken down for various geographic locations. | no | 0 |
Exodus Communications Files for Chapter 11 | SAN JOSE, Calif. (AP) -- Burned by the dot-com blowout and costly growth investments, Web-hosting concern Exodus Communications Inc. filed for bankruptcy protection, but said its business will continue to operate.</br></br>Exodus, a Santa Clara, Calif., provider of services to major sites including Yahoo and eBay, has warned for months that it was quickly running out of cash and needed additional financing to stay afloat.</br></br>In addition to the Chapter 11 filing in U.S. Bankruptcy Court in Wilmington, Del., Exodus said it received a commitment for up to $200 million in debtor-in-possession financing from General Electric Co.'s GE Capital.</br></br>"We will now be able to devote efforts to solidifying and executing on a go-forward operating plan that is based on tough-minded fiscal discipline and focuses on managing Exodus to profitability," said L. William Krause, Exodus' chief executive.</br></br>It wasn't immediately clear whether the filing would lead to customer defections. Yahoo Inc. officials were looking into the situation, spokeswoman Shannon Stubo said. EBay Inc. didn't return a telephone message. | no | 0 |
Oil Firms, Tanker Owners Renew Debate Over Amount Each Should Pay in Oil Spill | Oil companies and tanker owners will take their longstanding feud over responsibility for oil spills to a diplomatic conference that starts today in London.</br></br>The goal of the month-long conference of the International Maritime Organization is to update treaties adopted in 1969 and 1971 that set limits on the liability of oil companies and shippers for oil-spill cleanup and damages costs.</br></br>Shipowners and oil companies had expected the accords to cover the cleanup costs of even the largest oil spills. But inflation, increased tanker sizes and bigger oil-spill damages have since forced the maritime organization to consider raising the maximum liability, which currently is $50 million for each oil spill.</br></br>Of that amount, shipowners are liable for up to $17 million in damages from oil spills. If cleanup costs exceed that, the oil companies, through a collective fund, are responsible for the rest, up to a maximum of $33 million.</br></br>Although both sides agree that the overall amount of liability should be increased, each wants the other to bear a greater share of oil-cleanup costs. Shippers complain that they end up paying for most oil spills. But the oil companies contend that with more oil spills exceeding the $17 million limit that shippers are responsible for, oil companies are taking on a greater share of the cleanup costs. | no | 0 |
Japan Shares Fall, Indonesia Stocks Lift; Mixed Results on Asian Markets, but Signs Selloff is Cooling | Japan shares fell into correction territory Friday, pressured by global market volatility, but stocks in Indonesia jumped ahead of the inauguration of President-elect Joko Widodo.</br></br>Japan's Nikkei Stock Average, Asia's biggest victim of fears about a global slowdown given the country's heavy reliance on global trade, fell 1.4% to 14,532.51. The index is now down more than 10% from its recent peak at the end of September--a move described by analysts as a correction.</br></br>The last time the Nikkei had such a fall was May last year, when worries about the U.S. Federal Reserve tapering its economic stimulus program roiled markets globally.</br></br>Financial markets have been struck by volatility over the past week and a half, amid concerns about a stagnating European economy, questions about the strength of the U.S. economy and again, worries about the prospect of higher U.S. interest rates.</br></br>There are signs that the selloff in Asia is cooling, however. | yes | 1 |
Baby Crops Are A Boom Variable | IF WE CAN just get by this recession, economic pep leaders assure us, a big boom stretches indefinitely ahead. The basis for this is babiesÛÓand more</br></br>Just let the war babies of the 1940s reach 20 or thereabouts, and thereÛªll be another big rush to the altar.</br></br>offspring of these marriages will marry, and so on . and so on.,, with ever more buyers for everything.</br></br>But the tendency of marriage patterns to change may alter this picture somewhat. 'Will dating at 14 and marriage at 18 with babies by the early 20s continue fashionable indefinitely? Or will economic factors or changes in modesÛÓand moodsÛÓof romance set young people to marrying later, and perhaps having later and fewer children?</br></br>The postwar marriage and baby boom seems to.be ending. The marriage rate has been dropping for at least six months and a deficiency in births as compared with the year before, has existed since last November. | no | 0 |
50% Increase Expected In Deficit With Japan: U.S. Expecting 50% Increase In Trade Deficit With Japan | Pg-PJ----------------------------------------------------------------------------------------------------------</br></br>OISO, Japan, Sept. 2 ÛÓ U.S. Special Trade Representative William Brock revealed tonight that the American trade deficit with Japan will be up almost 50 percent this year to $14 billion or $15 billion. He described this as an "enormousÛ gap that is likely to restimulate protectionist pressures at home.</br></br>It was the first official estimate of the 198 L bilateral trade deficit with Japan, and Brock told a reporter that the larger deficit represented increased 'imports across the board, stimulated by a cheaper yen. This is one of the consequences of the soaring value of the U.S. dollar in response to high American interest rates.</br></br>high-level private gathering of Japanese and American leaders called the Shimoda Conference after the Japanese city where the first such meeting was held in 19.59. He is completing a swing of 10 southern Asian nations, which he said constitute ÛÏthe most exciting region in the world.Û</br></br>Brock told the conference that the increasing Japanese trade surplus makes it imperative that this nation "open its markets much wider,Û even though there have been substantial liberalizations of import regulations, some of which the American public does not know about. | yes | 1 |
Private-Public Stimulus | Waiting for Congress to pass the much-needed economic stimulus bill is beginning to look like waiting for Godot. Fortunately for the U.S. economy, two large private industries -- automobiles and homebuilding -- have stepped up to provide the stimulus that the government has thus far failed to deliver. There is a great irony here. A clear function of government -- combating recessions -- is being performed by the private sector. But there's actually a double irony, for government policies have been instrumental in enabling each of these industries to accomplish what it has.</br></br>The auto industry's contribution has been more spectacular but will be less durable. Right after the terrorist attacks, industry executives saw some pretty bad-looking handwriting on the wall and reacted quickly -- in what they perceived to be their companies' best interest. They offered buyers 0 percent financing, a head-turning discount that filled the nation's showrooms and produced record sales just when the economy most needed the additional spending. Thank you, Detroit.</br></br>I don't pretend to know whether 0 percent financing made good business sense for GM, Ford and Daimler-Chrysler. After all, it's costly -- the auto finance companies that lend you money at no interest do not get their funds for free. But it did succeed in driving auto sales to record highs while other categories of consumer spending were slumping, which is quite a feat.</br></br>The 0 percent financing programs thus amounted to a kind of "privatized" stimulus policy -- wonderfully timed, well-targeted and effective. Would that Congress had done so well. But notice that the Federal Reserve's aggressive interest-rate cuts made it all possible. If short-term interest rates were as high today as they were in January, free auto loans would probably have been too expensive for Detroit. I doubt that people at the Fed were thinking about 0 percent financing when they started cutting interest rates back in January. But monetary policy sometimes works in unexpected ways.</br></br>The story in housing may be less dramatic, but it is much longer lasting. As the economy weakened before the terrorist attacks, observers marveled at how well the housing sector was holding up. This industry acted as a pillar of strength supporting the U.S. economy in at least two ways. First, homes continued to be built in large numbers even while much of the rest of the economy slipped. Second, millions of American households obtained immediate cash by refinancing their mortgages at lower rates; they then spent some of this money on consumer goods. | no | 0 |
Early Gains Wiped Out In Slow Market Session | NEW YORK, Nov. 24ÛÓTlraiouglT oomph to continue tha,j ff stock market gave up nearftdvance. ThereÛªs enough Ûª Ûª . , .</br></br>all its early gains today fffi )ney to spark a rally but r otpther large blocks included, investors remained on tW^ ough to sustain one.Û 51 sidelines in slow pre-holiday The market nearly halv^k 0ff iys- ancj 46,600 shares trading. ; its sharp loss near the clc</br></br>Advances on the New Yoi^hm> % at IOY4 on Stock Exchange were sligh lWume of 204,000 shares. The ahead of declines. company recently halved its</br></br>TJ 5-3iÛ÷Û¢Ji.S㢠list included Minnesota the a\erage pace of Gaining & Manufacturing, off common share climbed ^ at n8; TransameriCa up cents. The American Stock I.fc at 16; Florida P 0 w e r & change index advanced .03 fcightj off 2 at 56s/4r j. c> Û÷It was just a få¡uå¡wÛªOf the 1,679 issues traded on through from yesterdayÛªs P^he Big Board 739 advanced tial rebound,Û remarked Jo ijind 627 declined. New yearly Smith analyst for Fahnestocj^ws Wcre touched by 156 is-</br></br>Gainers on the Big Board in eluded steels, rubber issues,, farm implements, electronics, j and tobaccos. All other groups I were mixed. | yes | 1 |
Business and Finance | STOCKS TUMBLED on investors' concerns about terrorism, Asian stability and oil prices. The Dow Jones industrials ended down 121.85, or 1.2%, at 10064.75, their lowest level since Dec. 15. Gold and Treasury bonds jumped. Taiwan's stock market plunged 6.7% after the legitimacy of the president's election was challenged by his opponent.</br></br>---</br></br>Putnam's board concluded that three top executives knew about improper trading by fund managers in 2000 and should have reported it to fund trustees.</br></br>Fund-trading scandals have hurt investors and inflicted long-term damage on the industry, the SEC's top fund watcher said.</br></br>--- | no | 0 |
A Special Background Report On Trends in Industry And Finance | STATES MULL refinancing as a way to save cash, but a debt redo isn't for all.</br></br>STATES MULL refinancing as a way to save cash, but a debt redo isn't for all.</br></br>As interest rates slide, ailing states (29 face tax-revenue shortfalls) may try to refinance debt to save even a little. "It should help," says Standard & Poor's Hyman Grossman. But he cautions that rates may have to drop further to merit the step and even so, big budget gaps yawn. The National Governors' Association's Raymond Scheppach sees only "marginal" benefit but real risk in re-entering debt arenas: States may find their bond ratings have slipped.</br></br>As interest rates slide, ailing states (29 face tax-revenue shortfalls) may try to refinance debt to save even a little. "It should help," says Standard & Poor's Hyman Grossman. But he cautions that rates may have to drop further to merit the step and even so, big budget gaps yawn. The National Governors' Association's Raymond Scheppach sees only "marginal" benefit but real risk in re-entering debt arenas: States may find their bond ratings have slipped.</br></br>Another caveat: the "new math" ushered in by the 1986 Tax Reform Act allows only one refunding of a prior debt issue. "Before, anytime you had a decline of 2% or so, it made sense to refinance. That's no longer true," says William Fish, head of municipal research at Donaldson, Lufkin & Jenrette. Still, some states may be tempted to restructure debt, largely to free current debt service reserve funds, which can then be used as badly needed operating cash.</br></br>Another caveat: the "new math" ushered in by the 1986 Tax Reform Act allows only one refunding of a prior debt issue. "Before, anytime you had a decline of 2% or so, it made sense to refinance. That's no longer true," says William Fish, head of municipal research at Donaldson, Lufkin & Jenrette. Still, some states may be tempted to restructure debt, largely to free current debt service reserve funds, which can then be used as badly needed operating cash.</br></br>On S&P's CreditWatch list: California, Connecticut, Illinois, Maine, Michigan, Pennsylvania and Rhode Island.</br></br>On S&P's CreditWatch list: California, Connecticut, Illinois, Maine, Michigan, Pennsylvania and Rhode Island.</br></br>MOM'S STRATEGIES hold up well in the business world, offspring avow.</br></br>MOM'S STRATEGIES hold up well in the business world, offspring avow. | no | 0 |
Shares Recede in Quiet Session As Investors Await Key Data | Stocks finished a quiet session moderately lower Monday as investors waited for a raft of quarterly results and economic data later this week.</br></br>The Dow Jones industrial average fell 23.36, or 0.19 percent, to 12,302.06. The Standard & Poor's 500-stock index fell 4.51, or 0.34 percent, to 1328.32, and the Nasdaq composite index fell 14.42, or 0.63 percent, to 2275.82.</br></br>Wachovia surprised investors by posting a first-quarter loss of $350 million and cutting its quarterly dividend by 41 percent. The bank, which analysts had expected to post a profit, also said it plans to raise $7 billion through a stock offering.</br></br>But investors appeared to find some encouragement from a better-than-expected report on retail sales. The Commerce Department's reading on March sales, which showed a modest 0.2 percent rise after February's 0.6 percent decline, appeared to quell some unease about the economy. Excluding a 1.1 percent rise at gasoline stations, though, retail sales would have been flat last month.</br></br>Ryan Detrick, senior technical strategist at Schaeffer's Investment Research, said many investors are holding off on major moves ahead of corporate results and economic figures on inflation due later in the week. | no | 0 |
Ontario's 30% Tax-Cut Plan Gets Lukewarm Reception --- Premier Hopes to Stimulate The Economy, but Voters Aren't Convinced | AuthorAffiliation Staff Reporter of The Wall Street Journal</br></br>Canada's most populous province must reduce its chronic deficits, Mr. Harris argues, or risk being left behind as other provinces already have moved to balance their budgets.</br></br>Now Mr. Harris is moving ahead with his promised 30% income-tax cut. "We want to stimulate the economy with consumer spending" and by "rewarding initiative," he says. The revenue lost because of the tax cut will return to the government's coffers through "increased spending, more jobs and more sales taxes," he believes.</br></br>But is it really so simple? Can the government cut taxes and reduce spending simultaneously, without triggering a recession? And if the government goes along with its plans, including eliminating 13,000 public-sector jobs, will the economy create new jobs?</br></br>Although some economists believe the conservative government's plans are achievable, voters aren't so sure. And unlike the situation in America, where calls for lower taxes and cuts in social spending are greeted enthusiastically by large numbers of voters, liberal-minded Ontarians are in a stir. | no | 0 |
Plug Power Stock Drops Nearly 6% On Snag With GE | Shares of Plug Power Inc. fell nearly 6% Friday after two analysts downgraded the stock. The stock-price decline came a day after the designer of consumer fuel cells said design changes relieved its joint-venture partner, General Electric Co., of a contractual obligation to purchase 485 fuel cells, the bulk of its projected product sales this year.</br></br>That drop followed a nearly 27% decline on Thursday, when Plug Power made the disclosure in its first-quarter earnings report. Shares fell $3.4375, or 5.8%, at $56 at 4 p.m. Friday on the Nasdaq Stock Market. Plug Power shares have lost nearly twothirds of their value since hitting a 52-week high of $156.50 on Jan. 24.</br></br>On Thursday, Plug Power, Latham, N.Y., said fuel-cell units it was designing and which GE planned to market for the company didn't conform to specifications agreed upon in a February 1999 contract, which relieved GE of the obligation to buy them. The company, which didn't disclose the precise specifications for competitive reasons, originally had expected to deliver the fuel cells, which are small, appliancetype units designed as power sources for homes, by year end.</br></br>The delay is significant because fuelcell technology, while viewed as promising, still is evolving. GE was contracted to pay $10.3 million for the units through the companies' joint venture, GE MicroGen, at a projected loss to Plug Power, then resell them to residential customers for initial field trials.</br></br>Officials at both companies said GE, Fairfield, Conn., still expects to purchase most, if not all, of the 485 units from Plug Power, albeit some not until 2001, and said other aspects of their relationship remain intact. GE owns a 12% stake in Plug Power, and the head of GE Power Systems, Robert L. Nardelli, sits on Plug Power's board. | no | 0 |
As Maine Goes . . . | When President Bush recently visited his summer home in Kennebunkport, Me., he lamented the devastation an Atlantic storm had wreaked on his property and his neighbors.</br></br>Had he returned four days later, he could have heard of the terrible damage wrought by the unrelenting recession that has struck the state he knows so well. "I see it every day," said one Mainer, "in the faces of friends and neighbors, whether it is the fear of a businessman who has never faced unemployment before, the mill worker resigned to the fate suffered by co-workers or the hopelessness of those who continue their fruitless search for a job."</br></br>This was not Bush's least-loved Mainer, Senate Majority Leader George Mitchell, speaking to some partisan Democratic crowd. It was Maine's Republican governor and loyal Bush supporter, John R. (Jock) McKernan Jr., explaining on Nov. 6 why he was proposing drastic cutbacks in government services - the layoff of one-fifth of state employees, a $50 million cut in aid to localities, elimination of the general assistance welfare program and abolition of 35 state agencies, including the Office of Volunteerism, which coordinates Maine's version of Bush's favorite "Thousand Points of Light" program.</br></br>All this in a desperate effort to close a budget shortfall that has emerged just since July, when McKernan furloughed all state employees for half the month in order to force through what he then hoped would be a solution.</br></br>The only consolation the governor could offer his beleaguered constituents is that similarly painful scenes are being enacted across the country from New England to California. | no | 0 |
Durable Goods Orders Surged 2.9% in April: Recession Fears Ease; Dollar Turns Mixed | Orders for ÛÏbig ticketÛ durable goods surged 2.9 percent in April, the biggest advance since December, the government said yesterday in a report that further eased fears of a recession this year.</br></br>The Commerce Department said orders for manufactured goods expected to last three years or more rose to a seasonally adjusted $129.1 billion last month after a 1 percent increase in March.</br></br>Those gains followed declines in January and February that had raised concerns that economic growth might be in danger of slowing so much that the country could topple into a recession brought on by a credit squeeze engineered by the Federal Reserve Board.</br></br>But analysts said the back-to-back gains of the last two months were a good indication that demand in the manufacturing sector will be enough to keep the economy expanding this year, although at a slower pace than 1988.</br></br>The news initially caused the dollar to rise further on international currency markets, continuing the recent rally, but the surge later subsided. The dollar turned mixed as dealers cashed in profits from its recent strength and speculated on what the United States and its trading partners might do next to stabilize foreign exchange rates. | yes | 1 |
Business and Finance | DAIMLERCHRYSLER AGREED with Aerospatiale Matra to combine their aerospace businesses and create the world's No. 3 aircraft and defense company. The pact between the German and French firms raised concerns at the Pentagon and is likely to intensify the fierce competition between U.S. and European rivals.</br></br>---</br></br>GM posted record third-quarter earnings, beating forecasts and reversing a loss, on strong results in North America. Still, shares eased on worries that momentum might slow and concern about labor costs.</br></br>---</br></br>Retail sales rose just 0.1% in September, cooling after two months of blistering growth. Prices of imported consumer goods rose a sharp 0.3%, though, fueling some inflation fears. | no | 0 |
D14 Thursday, March 25, 1082 | NEW YORK, March 24ÛÓThe stock market, encountering a rise in money rates, declined slightly, today in slackened trading.</br></br>Most oil issues were among the leaders of the retreat, which brought the marketÛªs strongest rally so far in 1982 to at least a temporary halt.</br></br>The Dow Jones average of 30 industrials, up 30.82 points in the four previous trading days, slipped back 3.33 points to 823.34.</br></br>Volume on the New York Stock Exchange slowed to 49.38 million shares from 67.13 million Tuesday. The daily tally on the Big Board showed about seven losers for every six stocks that gained ground, and the exchangeÛªs composite index slipped 0.30 point to 65.00.</br></br>Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 58.64 million shares. | no | 0 |
World News: U.K.'s Recovery Slows Amid Sluggish Spending | A suggestion that the U.K. economy was making a speedy recovery has fizzled, with recent numbers showing that banks still aren't helping businesses invest, and consumers still aren't spending enough to spur faster growth.</br></br>Data including retail sales, house prices and manufacturing orders had suggested that the recession-plagued U.K. might be moving faster in the right direction. The numbers helped trigger rallies earlier this month in stocks, bonds and sterling.</br></br>More recent figures, however, were a reminder of the recession's reality.</br></br>The Organization for Economic Cooperation and Development predicted Wednesday that weak lending will contribute to a 4.3% fall in U.K. gross domestic product this year -- more pessimistic than a U.K.-based economists' consensus forecast for a 3.7% decline, or the 2.8% fall the OECD predicts for the U.S.</br></br>Conditions are fragile elsewhere in Europe. This week, European Union statistics agency Eurostat said new industrial orders in the euro zone posted their sharpest year-to-year drop on record in April -- a sign that the currency area's recovery could be painfully slow. | no | 0 |
Male Pattern Badness | In place of the "power ties" of the Reagan years, Washington men are now wearing neckties that look like walls of Play-Doh oozing through a chain-link fence. Ties that look like amoebas marching across the Hawaiian flag, like a pool table dressed up as a rain forest, like a squadron of Chiclets lost in space, like the colorblindness test that kept your Uncle Lou out of the Army.</br></br>You see them all over downtown Washington, laid out in the paneled eternity of Britches at $50-or-so apiece. Or hung out by street vendors in three-for-$10 clusters so thick you could use them as automatic carwash brushes. Even at Brothers, where next to the tiny pheasants there's an apocalyptic paisley.</br></br>Just a few years ago, these neckties were not only out of fashion, not only bad taste, they were reactionary relics of the 1940s, like Filipinos standing in dime-store windows demonstrating yo-yos. And power ties were the fixed and final style for the Connecticut Avenue Commandos, the Gucci Gang, the K Street Torpedoes.</br></br>"Power ties started in Washington," says Gerald Anderson, head of the Neckwear Association of America. They were little prints (called "neats"), often on a yellow background, the sort of thing you might reupholster a chair with if the Queen of England were coming to visit. Or polka dots, transcendently genteel in their tininess, as if someone had fired holes in the tie with a shotgun loaded with dust. There was something irreducible about them, the distillation of male respectability to a Zenlike potency.</br></br>It started with the trend-surfers, the retro freaks, the thrift- shop mavens. They were the first to spot the styles of the '40s and '50s as a growth stock. Soon you saw these ties on hip waiters and art gallery assistants, on men who spent a lot of time in New York or Los Angeles, which were places that had never treated the power tie as some kind of bias-cut Shroud of Turin. | no | 0 |
Capital Idea; One man's proposal to reduce taxes, create jobs and fund the needs of the nation. | In Ken Bohnsack's dream, he tunes in to the Jan. 28 State of the Union address just in time to hear President Bush saying something like this:</br></br>In Ken Bohnsack's dream, he tunes in to the Jan. 28 State of the Union address just in time to hear President Bush saying something like this: "And now, turning to the domestic economy, I will shortly send forward a proposal to allow Congress to create a determined amount of money to be loaned to states, counties and municipalities, interest free, to pay for the rebuilding of the nation's infrastructure.</br></br>"The result, I am confident, will include not merely long-overdue improvements to our deteriorating bridges, streets and highways and the creation of much-needed employment for our people, but also with no increase in the national debt that has plagued our economy in recent years. All of this will be accomplished without added inflation. In fact, my belief is that my proposal will actually reduce inflation, taxes and the federal deficit."</br></br>You're not going to hear any such proposal from President Bush, so hear it from Bohnsack, chairman of a year-old Freeport, Ill., not-for-profit association called Sovereignty.</br></br>The heart of the plan is simple enough: "Sovereignty wants tax-supported bodies to be able to borrow money, interest free, directly from the U.S. Treasury for capital projects and for paying off existing debt. It would be a loan, not a grant, and it would be for capital projects, not day-to-day expenses. The Treasury would get the money not from the federal budget but rather Congress would create the money (as authorized in the U.S. Constitution: Article 1, Section 8, Clause 5) - just like banks and the Federal Reserve do every day." | no | 0 |
Dow Soars 88 Pointy On Interest Rate Cut: Gain Is Average's Largest ... | NEW YORK. Dec. 23ÛÓStock prices staged a powerful pre-Christmas rally today as Wall Street held a delayed celebration for lower interest rates.</br></br>It was the biggest one-day gain for the key market indicator since it climbed the same amount Aug. 21 after the Soviet coup collapsed. The two advances were the Dow's sixth-greatest gains ever.</br></br>Advancing stock issues outnumbered declining ones by a ratio of more than 3 to 1 on the New York Stock Exchange. Volume on the floor of the Big Board came to that it was cutting the discountljate a full percentage point to 3.5,percent. a 27-year low. to stimuIattCthe economy. In response, many.bgnks' cut their prime lending ratesatttfthe' Dow climbed 20.12 points.</br></br>Today's rally ÛÏwas a delaygtj, response to the very strong action of the Fed last week," said A.C. NJoore, the market analyst at Argus, Investment Management in Santa Barbara. Caiif. rv: .</br></br>"The immediate benefit for stocks' is that alternatives to equities-are. seriously diminished," Moore-said. > In addition, he said. ÛÏI think youÛªre going to get an economic response and itÛªs going to translate into (higher corporate] earnings.Û | no | 0 |
The Washington Post Sunday, Octobeb 25. 1987 H3 | L. William Seidman, chairman of the FDIC, supports banking deregulation. Comptroller Robert Clarke says a ÛÏgremlinÛ is frustrating deregulation effort.</br></br>Such events don't change the need for banks to be able to sell securities, Clarke said, but they intensify public fears that blending commercial and investment banking will add more risk to the financial system.</br></br>The underlying conditions of improved technology and increased competition that have forced banks to seek new powers remain unchanged, bankers argue. Many proponents of bank deregulation insist that in the long run the full effect of the marketÛªs plunge could prove a boon to their cause.</br></br>ÛÏ[Last] week shows that a marriage between commercial banking and investment banking has nothing to do with the ups and downs of the market,Û said Richard M. Whiting, general counsel of the Association of Bank Holding Companies.</br></br>ÛÏEven if the combination of banking and underwriting were allowed [in the United States],Û he said, ÛÏthere are a lot of things that have been put in place since 1929 that would prevent many of the horror stories.Û | no | 0 |
Letters to the Editor: Fannie Mae Answers Back | Your Aug. 24 editorial "Fannie Mug" presents an argument about the role Fannie Mae plays in mortgage finance that is plainly wrong. You also make a proposal for an alternative mortgage finance system that is just wrongheaded.</br></br>For more than 50 years, Fannie Mae has served every region of the country, at all times, in good housing markets and bad, bringing lower cost mortgage rates to Americans of modest means. The average annual saving to the homeowner whose loan we buy or securitize amounts to nearly $400. This year alone we will serve two million American families and add substantial liquidity to a mortgage market that will see an astounding $700 billion in new originations. We are the largest private investor in multifamily housing, and 18 months ago announced a commitment to purchase $10 billion in loans by the end of 1994, specifically targeted to low- and moderate-income families. Finally, largely because of Fannie Mae and Freddie Mac, there has been no credit crunch for home buyers throughout the recession.</br></br>Yet you propose scrapping the current smoothly functioning mortgage finance system of which we are a part. It would be replaced by one that would lead to higher mortgage rates and severe liquidity problems. Substituting Fannie Mae's role in mortgage finance with a purely private system may satisfy a theoretical and ideological goal. It would, however, deny consumers the advantages they now have, and subject them to a new system whose effectiveness has not yet been tested.</br></br>Consumers would no longer be served by companies like Fannie Mae and Freddie Mac, which are limited to one industry-housing finance. Instead, the market would be served by companies able to pick and choose whether, and at what price, to fund homeownership. The mugging mentioned in the title of your editorial would surely take place, and the home buyer would be the victim.</br></br>You implied that we receive a $4 billion federal subsidy. No fewer than five studies by the Office of Management and Budget, the General Accounting Office and the Congressional Budget Office have found that any governmental benefits we receive flow directly to consumers. The risk-based capital requirement in the pending "government-sponsored entities" legislation is, contrary to the editorial's assertion, far tougher than bank and thrift risk based standards. It requires us to capitalize against credit and interest rate conditions so severe that were those conditions to become real, they would amount to nothing short of economic catastrophe for the nation, not just Fannie Mae. | no | 0 |
Financial Conditions Start to Tighten | Financial conditions have started to tighten sharply again.</br></br>Or so says a new financial conditions index produced by a group of academic and Goldman Sachs economists*. And that's important, because financial conditions are a significant determinant of overall economic performance.</br></br>Financial conditions indexes already exist. In fact there's a plethora that have been developed by investment banks and economic agencies or consultancies. They try to measure the degree to which changes in credit availability, interest rates, risk premia, money supply, wealth effects and other factors are likely to influence future economic activity. Analysis shows they don't work particularly well as predictors of real economic activity.</br></br>The new index tries to get around these problems by, among other things, broadening the data series included and by trying to strip out the effects of past changes in economic activity that affect the financial variables. In other words, it's looking for evidence of financial shocks rather than the normally dynamics of financial indicators, which tell us plenty about the past but not a lot that's new about the future.</br></br>Having done that, the new indicator diverges substantially from the existing ones. Established FCIs show that general financial conditions are back to normal or even better than normal. The new index points to a big deterioration during the past quarter, retracing nearly half of last year's big rebound. | no | 0 |
Clements and Foe on Their Best Behavior, Almost | j^fcJSTIN, Oct. 12ÛÓA sharp rise in Texas un-|l|ipldyment and a nearly statewide audience put G'6\CBill Clements and his Democratic challenger. Attorney General Mark White, on their best behavior when they me* here for their second television debate.</br></br>In contrast to their noisy confrontation last month, the candidates, locked in a tough election fight, kept themselves focused on national and Texas issues ranging from the economy to utility rates to campaign spending, and mostly avoided the insults that highlighted their earlier meeting.</br></br>White abandoned his charges that Clements was a mudslinger in favor of a steady barrage of criticism that the governor consistently had ÛÏsided with the rich against the average Texan.Û</br></br>Clements, under orders from his aides to restrain himself, carefully corrected many of WhiteÛªs statements without resorting to overkill or questioning WhiteÛªs competence, as he had done.</br></br>ÛÏI am a businessman,Û he said, ÛÏnot a politician.Û He argued that he had managed state government effectively in his first term and could do so in a second term. | no | 0 |
Early Rally Falters; Dow Gains Only 6.17 | NEW YORK, June 22ÛÓExpectations of sharply higher dividend payouts for investors shot the stock market higher this morning in a spirited rally that failed, however, to last out the morning.</br></br>The buying, in the wake of new guidelines issued by the Committee on Interest and Dividends, descended on the market in a near-avalanche. The Dow Jones industrial average soared 19.04 points in the first half hour and, in the first 60 minutes, 5.44 million shares changed hands. Volume in the first two hours was the highest since last Feb. 13.</br></br>A number of stocks could not even begin trading on time because of the crush of buying. Most notable among those were the automobile manufacturers, who now may increase their dividends by as much as 25 per Û¢ centÛÓand are expected lo do so shortly. Some oil companies and glamor stocks also had trouble getting started.</br></br>As far as price action was concerned, however, the excitement was all over by the end of the first hour. After its jump of more than 19 pointsÛÓwith more than 1.-000 issues ahead and only a couple of hundred lowerÛÓ the Dow industrials sank steadily until it had given up more than half its gain. Another spell of weakness at the close sent the Dow to a final reading of 879.82. a gain of 6.17 points for the day.</br></br>Standard and PnorÛªs 500-stock composite added 0.-19 points to 103.70 ami the New York Stock Exchange index gained 0.24 point to 54.56. | no | 0 |
European Stocks Are Driven to Fresh Highs | European stocks soared to close at their highest level in more than two years, helped by an extension to U.S. income-tax cuts and the presentation of tough austerity measures for Ireland to help sort out its public finances.</br></br>In Asia, Shanghai stocks recovered from initial losses suffered after a media report said China's central bank may raise rates around the weekend, while Australian shares advanced after the central bank there left interest rates unchanged and signaled a steady monetary policy.</br></br>The Irish government was expected to successfully pass its austerity budget in order to qualify for financial aid from the European Union and the International Monetary Fund. The vote was expected after the close of European financial markets.</br></br>The Stoxx Europe 600 index ended up 0.9% at 273.91, its highest close since Sept. 19, 2008. Germany's DAX also posted a record, closing 0.7% higher at 7001.91 and trading above the 7000 mark for the first time since June 2008.</br></br>The U.K.'s FTSE 100 closed up 0.7% at 5808.45, France's CAC-40 closed 1.6% higher at 3810.50, and Ireland's ISEQ rose 1.7% to close at 2799.97. | no | 0 |
Two Winners, Lost Too Soon | On a gray day in a black week for government service, many of the town's impeachment-tossed met to say goodbye to two surpassingly splendid public servants, who, in their separate ways, had shown us how it should be done. Toni House was a blithe spirit who spoke for the Supreme Court. Kirk O'Donnell, a rock of decency and good judgment, spoke generally for Democrats and particularly for former House speaker Tip O'Neill. They both died young last month.</br></br>Toni, who succumbed to lung cancer at the age of 55, was a radiant blonde. I knew her from the days when we both worked at the Washington Star. In the paper's last days, she was like a bright banner flowing around us. She wore one of those square paper caps that only printers know how to make, and she was everywhere. She carried news about people who had landed jobs and those who hadn't; she knew about morale in classified; and she gauged the rage of our overlords at Time, Inc. A photograph of her mourning as the Star's final edition rolled off the press said it all.</br></br>When she went to the Supreme Court in 1982, Toni's fans wondered what kind of a fit it would be. Here was an institution more reserved than the Federal Reserve, stuffy and huffy and never explaining itself. When its members ventured out of their marble temple, they sometimes dropped speeches like hand grenades in the provinces. And there was Toni, who had been a police reporter, accustomed to trading expletives with recalcitrant desk sergeants who were trying to withhold information. But the match worked wonderfully well. Toni charmed the justices into some acknowledgment of the needs of the Fourth Estate.</br></br>Supreme Court Justice Oliver Wendell Holmes Jr. once said of his place of business, "We are very quiet there, but it is the quiet of a storm center." Toni was at the eye of the storm. On decision day, she presided over the distribution of the latest edict from the bench. It was always a mad moment, and Toni loved it. At her memorial service at St. Mark's Episcopal Church, Lyle Denniston, a famously crusty Supreme Court reporter who now works for the Baltimore Sun, told about it through tears: "Toni was quite at home amid that chaos; indeed . . . she was quite capable of adding to the chaos, but then {also} uniquely gifted at bringing everything back to order."</br></br>All who spoke at her service conveyed Toni's greatest quality: an obligation to be delightful. She took pride in her job, but she was also a fashion plate, a gourmet cook and an impassioned gardener. She brought picnic hampers into the office from home. She filled her office with flowers. She fed her cats lobster thermidor. | no | 0 |
Shearson Weighs Scrapping Its Stock Sale | NEW YORK -- Faced with a weak stock market and a plunging share price, Shearson Lehman Hutton Holdings Inc. is considering dropping plans to sell 20 million common shares, according to investment bankers familiar with the planned offering.</br></br>Shearson had planned to set a price for the new stock this week as part of its plan to bolster its sagging capital base. The securities firm, which is 61%-owned by American Express Co., wants to raise about $850 million, and about $265 million of that was expected to be raised through the common-stock offering, in which American Express would buy three million of the 20 million Shearson shares.</br></br>But since it announced the planned stock sale Dec. 14, Shearson's stock has fallen nearly 30%, from $14.75 to near a record low of $10.50 yesterday in New York Stock Exchange composite trading. The stock fell 37.5 cents yesterday. Shearson went public in 1987 at $34 a share.</br></br>At a closed-door meeting with hundreds of Los Angeles-area Shearson brokers Friday, Shearson Chairman Peter A. Cohen said the firm may be "past the point" at which it's willing to sell stock, according to several brokers who were there. Shearson officials have privately given the same warning to securities-industry analysts, several of the analysts said.</br></br>A Shearson spokesman wouldn't comment yesterday. Shearson officials said they are restricted by federal securities laws from speaking publicly ahead of the planned new offering. | no | 0 |
Jobless Aid Splits Parties, Experts; Budget Agreement Excludes Extension of Jobless Benefits, But Parties Keep Debating Program's Impact | Lawmakers left an extension of jobless benefits out of their budget agreement, fueling the debate over what happens to unemployed workers--and the economy--when the program expires.</br></br>Many Democrats are upset that the extension wasn't included in the deal, and the White House estimates that roughly 1.3 million workers will stop receiving unemployment payments, which average $300 a week, when the program expires on Dec. 28. Republicans say the extended benefits have gone on long enough--more than five years--and argue that the checks create a disincentive for people to find work.</br></br>Many economists believe such aid boosts the unemployment rate, perhaps by as much as 1 percentage point. But they differ on the reasons and on the size of the effect. Some of the unemployed might drop out of the labor force altogether without the aid; others might be spurred to search harder for a job.</br></br>Now the debate is about whether current economic circumstances warrant a longer extension. Democrats argue that they do and that the current labor market is too weak to allow benefits to expire. About 4.1 million workers in the U.S. have been jobless for at least six months. That is down from a peak of 6.7 million in April 2010, but still triple the pre-recession level.</br></br>"Although [long-term unemployment] has come down, it is still at an unusually high level by historical standards," said Rob Valletta, economist at the Federal Reserve Bank of San Francisco. "That raises concern about the status of the long-term unemployed and policies that might be designed to support them." | no | 0 |
Exxon, Shell Profits Soar On Higher Oil Prices | Author: Isabel Ordonez</br></br>HOUSTON--Exxon Mobil Corp. said Thursday its first-quarter earnings surged 69% as it benefited from high oil prices, stronger refining margins and a jump in natural-gas production. Other oil companies also reported soaring profits.</br></br>The results for Exxon, the world's largest publicly traded oil company, reflected a continued recovery from the recession for the broader energy sector, which appears poised for a return toward the boom that preceded the 2008 financial collapse. But the robust earnings also coincide with sharp increases in gasoline prices, which have triggered concern among consumers and elected officials.</br></br>Exxon's earnings jumped to $10.65 billion, or $2.14 a share, from $6.3 billion, or $1.33 a share, beating analysts expectations of $2.06 a share. The results were $4 billion shy of the record $14.8 billion it generated in the third quarter of 2008. Revenue rose 26% to $114 billion.</br></br>Meanwhile, Los Angeles-based Occidental Petroleum Corp. said profit jumped 46% to $1.55 billion, and Anglo-Dutch giant Royal Dutch Shell PLC posted profit of $6.29 billion, up 30%. | yes | 1 |
It All Ads Up to Who You Know; Marketing Software Helps Web Sites Track Personal Data | Most advertising on the World Wide Web these days isn't much different from what you find on television, radio and even roadside billboards. Advertisers can select Web sites like they would TV channels or radio stations, but after that, it's one size fits all. Everyone gets bombarded with the same pitch.</br></br>Nobody who runs a Web business wants it that way. In theory, the Web is the ultimate tool for targeting specific ads to specific people. Unlike other media, every bit of information that shows up on your computer screen when you're on the Web is sent directly to you by specific Web sites.</br></br>Web ads could be like, well . . . junk mail. Just as catalogues from fly-fishing equipment companies tend to show up at the homes of people who stayed in hotels in fly-fishing country, ads appearing on the screen would be targeted to the viewer's interests.</br></br>Doing so, however, isn't simple. Determining just who is visiting a particular Web site -- and what their interests are -- is the number one frustration for many marketers.</br></br>One way is to offer people a trade: a free service in exchange for personal data about themselves, which they type into a screen form -- age, sex, hobbies, what appliances they own, whether they traveled in the past six months, etc. Then, when they use the service, the system knows who they are and displays ads matching their interests. | no | 0 |
Stock Slide: `Correction,' Or a Trend?; Some Analysts Foresee Long, Sustained Fall | With the stock market continuing to fall from its January peak, a growing number of Wall Street analysts are warning customers that a major correction, if not a long-term market decline, is underway.</br></br>Those who have joined the pessimists' camp say the reasons abound for their dim view of the market. They cite rising interest rates, inflationary expectations, a slowdown of mutual fund money pouring into stocks and worldwide political uncertainties ranging from the domestic Whitewater issue to the threat of trouble in Korea.</br></br>Since late January, when it neared the 4000 mark, the Dow Jones industrial average has fallen 216 points, or 5.4 percent, including 120 points last week and another 12 today {Details, Page D2}. Other indexes have fallen as well. The Nasdaq stock market index, which tracks smaller companies, is off about 4 percent.</br></br>Some analysts are hoping this is no more than a long-awaited correction, a short-term decline in an otherwise rising market that helps to keep speculative fervor in check.</br></br>But if this slide marks the start of a long, sustained decline in stock prices - a full-fledged bear market - it would be bad for the economy, for federal regulators and for President Clinton, who has largely enjoyed the benefits of rising stock prices. | yes | 1 |
Sector Weakness Could Derail State's Competitiveness | A new legislative study says Florida's economic competitiveness with other states remains "reasonably strong" overall, but could be threatened in a few vital areas by low productivity and profitability.</br></br>The in-depth report by the Legislature's Office of Economic and Demographic Research examined business data from Florida and 24 rival states. In part, the report simply confirms what previous research has showed: Florida generally enjoys lower costs -- particularly labor costs -- than most of its rival states.</br></br>For many sectors, that helps translate into strong competitiveness. For example, Florida's electronics-manufacturing sector is highly profitable, thanks in large part to low labor costs, the report notes.</br></br>But with Florida's relatively low-skill, low-wage work force, productivity tends to be low, the report concludes. That is contributing substantially to relatively weak profitability in some industries. Even Florida's mighty hotel industry suffers from profitability that's 1.5% below the national average, the report shows.</br></br>Of particular concern is the state's surprisingly low profitability in a couple of high-tech sectors that state leaders are anxious to nurture, including the aerospace industry. Profitability of that sector ranked 21st, and 10.1% below the average. | no | 0 |
Dollar Finishes Narrowly Mixed; Gold Declines $1 | The U.S. dollar was narrowly mixed yesterday as the foreign-exchange market awaited a number of American economic indicators -- including money supply, inflation and retail sales -- that may determine the currency's course in future days.</br></br>Gold declined $1 an ounce in reaction to the still-strong dollar and trader speculation about weakening oil prices.</br></br>Paul Steinborn, an assistant vice president of Credit Suisse, New York, said, "The foreign-exchange market is long (bought) on dollars, and people are nervous about it. There are a lot of players on the sidelines waiting for (today's) economic data."</br></br>The foreign-exchange market, he added, fully expects those figures to present an optimistic view of the U.S. economic recovery, "and the only surprise would be if the economic numbers are on the down side."</br></br>Bruce Pflaum, an assistant vice president and principal dealer of First National Bank of Chicago, agreed that "if (today's economic data) is on the down side, that could pull the dollar down somewhat." He said that New York entered the market yesterday with the dollar strong, "but the dollar failed to set a new high, with the result that the market felt this was a good signal to sell dollars, so the dollar fell back during the course of the day. But it strengthened again in the afternoon in expectation that (today's economic data) will be good." | no | 0 |
Stock Prices Turn Lower; Volume Down: Bond Market Closes Mixed | strong gains, the stock market turned lower today and appeared headed for a belated consolidation period.</br></br>ÛÏWhatÛªs unusual, actually, is that the market didnÛªt consolidate earlier,Û observed Monte Gordon, analyst for Bache & Co.</br></br>He added that the market appeared to be counting on a strong first quarter but could lose some of its upward thrust on any statement - that- the economy would not be powerful in the first quarter of 1971.</br></br>Some brokers also- said it was a good sign that volume had fallen off a bit with.the decline in prices. . i The Dow Jones average:., of 30 industrials closed down 2.74 at 823.18.</br></br>Declines outnumbered advances by 886 to 493 among the 1,685 issues traded on the Big Board as volume dropped to 13.81 million shares from FridayÛªs turnover of 15.8 million shares. = | no | 0 |
Assault against dollar is on the horizon for a variety of reasons, experts say | NEW YORK -- Last week's dollar-selling was only a warm-up for the assault now gathering force, traders and analysts say.</br></br>Trade tensions, capital flows out of the U.S., bond-market turmoil</br></br>and inflation concerns will probably drive the dollar to new lows</br></br>against the yen and 1994 lows against the mark, analysts say.</br></br>Sheer momentum will help. The dollar's short-lived rally on last week's interest-rate increase by the Federal Reserve reinforced market players' perception that nothing can help the U.S. currency. | no | 0 |
Greenspan Takes Hard Line on Growth --- Fed Will Continue Raising Rates Unless Spending And Market Cool Down | WASHINGTON -- Federal Reserve Chairman Alan Greenspan is taking a harder line on the perils of rapid growth, signaling that the Fed will keep raising interest rates unless consumer spending and the stock market quickly cool down.</br></br>In his semiannual economic presentation to Congress, Mr. Greenspan dropped his assertion -- made a month ago -- that the Fed's attempts to rein in the economy with earlier interest-rate increases were "well advanced."</br></br>Instead, he said yesterday that investor optimism and a bullish stock market have "to date . . . more than offset" the effects of higher rates and that spending even in sectors of the economy normally considered sensitive to higher rates "has remained robust." There is, he said, "little evidence that the American economy . . . is slowing appreciably."</br></br>In a booklet presented to the House Banking Committee accompanying Mr. Greenspan's testimony, Fed staffers wrote that the continued surge in demand "implies that the level of interest rates needed to align demand with potential supply may have increased substantially."</br></br>Markets have long been expecting the Fed to boost its target for the federal funds rate -- the rate at which banks lend to each other overnight -- by at least a quarter of a percentage point when policymakers next meet on March 21. Many investors have been expecting at least another half-point increase by the summer. | yes | 1 |
Nikkei Drops on Murakami Fallout; Some of Financier's Stocks Do Manage to Post Gains; Limited Effect Is Expected | TOKYO -- Japanese stocks pulled back yesterday, as uncertainty over the downfall of corporate financier Yoshiaki Murakami and declines in U.S. stocks from Friday prompted profit-taking in pricey blue-chip shares such as Toyota Motor, Canon and Mitsubishi UFJ Financial.</br></br>But many of the stocks in Mr. Murakami's fund rose, after falling sharply on Friday on fears the fund might sell off its shares.</br></br>The Nikkei Stock Average dropped 121 points, or 0.8%, to 15668.31 following a 285.57-point rally on Friday.</br></br>Most investors said the effect likely would be limited on the overall Tokyo stock market from the Murakami scandal. But some also said they want to see foreign investors' reactions to the news. Mr. Murakami, who leads the so-called Murakami Fund, admitted yesterday that he had violated the country's insider-trading laws, and would step away from his own fund and investments.</br></br>Yesterday, the home for many of the Murakami stocks of start-up companies, the TSE Mothers market, saw its index rise 3.4% to 1393.86, but it is still down about 50% from its year high of 2799.06 in January. Among the stocks in which the Murakami fund holds a major stake, Matsuzakaya, Sumitomo Warehouse, GMO Internet and New Japan Radio all rose. | no | 0 |
Investor's Calendar | THIS WEEK</br></br>Budget Time: The Bush administration tomorrow releases its proposed budget for fiscal year 2006, which begins Oct. 1 this year. In his State of the Union speech, the president said the budget "holds the growth of discretionary spending below inflation, makes tax relief permanent, and stays on track to cut the deficit in half by 2009."</br></br>Senate Mulls Class-Suit Reform: The Senate is set to take up a bill that would push class-action lawsuits out of state jurisdiction and into the federal courts. Business groups have lobbied hard for the legislation, complaining that frivolous lawsuits are costing them millions, but consumer groups say it would cut off consumers' access to timely and fair trials.</br></br>Google Spills the Beans: Investors expect more news about Google's strategies this week, when the search-engine company hosts its first information day for financial analysts since its initial public offering of stock in August.</br></br>Earnings Season Winds Down: Most big companies have now reported quarterly earnings and the results in general have been better than expected. Tech giant Cisco Systems reports on Tuesday, and then come Cigna, MetLife and Nissan on Wednesday, followed by Aetna and Dell on Thursday. | no | 0 |
Deals & Deal Makers -- IPO Outlook: Variety Tops Menu as 2004 Opens Strongly; Range of Sectors Are Active As This Year's 17 Offerings Indicate Market Vitality | Dow Jones Newswires</br></br>NEW YORK -- Wall Street stock underwriters are taking a breakfast- buffet approach to the IPO market this year.</br></br>Last week marked the first big-volume push for initial public offerings of stock, with 11 deals raising $3.08 billion, according to data from Dealogic LLC in New York.</br></br>To date, there have been 17 IPOs, raising $3.73 billion. This time last year, there had been just one IPO, raising $26.3 million, according to Dealogic. The deals come from a range of industries, such as insurance, biotech, auto parts and retail. And this range of sectors is likely to continue throughout the year, assuming the economy and the markets continue to improve.</br></br>"In a broadly based strengthening economy that benefits a variety of sectors, you should have an IPO market with a diversity of sectors and names," said Marc Baum, managing director of Seaport Group, a broker- dealer in New York. Such diversity is also healthy, he said, given that "bubble" periods, such as the tech-stock boom of the 1990s, are often driven by momentum investors chasing a single sector. | no | 0 |
Business and Finance | JAPAN INTERVENED Friday to stem the yen's surge against the dollar. The U.S. currency had plunged to a three-year low when traders bid up the yen on news of Japan's strong GDP growth. After Tokyo's action, the dollar touched 110 yen but later receded slightly. Yesterday in New York, the greenback fell as low as 107.55 yen. The U.S. shows no signs it is ready to intervene itself.</br></br>---</br></br>Illinois Tool Works said it agreed to acquire consumer-products maker Premark for $3.4 billion, creating a broad-based manufacturing giant.</br></br>---</br></br>Torfinex, a wire-transfer company linked to the Bank of New York money-laundering probe, appears to have operated illegally in the U.S., funneling millions of dollars out of Russia, law-enforcement officials said. | no | 0 |
Stocks Take Sharp Downturn As Economic Readings Sour Outlook | The stock market finished with a sharp loss Thursday after bleak readings on the economy heightened investors' fears of recession.</br></br>The Dow Jones industrial average fell 142.96, or 1.15 percent, to 12,284.30. The Standard & Poor's 500-stock index shed 17.50, or 1.29 percent, to 1342.53, and the Nasdaq composite index fell 27.32, or 1.17 percent, to 2299.78.</br></br>Wall Street was disappointed when the Philadelphia Federal Reserve reported that regional manufacturing fell more than predicted. The Conference Board's January index of leading economic indicators posted its fourth consecutive drop.</br></br>The biggest loser among the 30 Dow components was General Motors after lender GMAC, which is part-owned by GM, said it will slash hundreds of jobs at its auto-finance business.</br></br>Investors have already been pricing in another interest rate cut after minutes from the Federal Reserve's last policy-setting meeting indicated that central bankers will remain vigilant about the economy. Bond prices moved sharply higher on expectations of a rate reduction. The yield on the 10-year Treasury note, which moves opposite its price, fell to 3.78 percent from 3.89 percent late Wednesday. | no | 0 |
Futures Traders Shorten the Span Of Their Positions | NEW YORK -- Some commodity traders, spooked by recent stock-market bumps, have shortened the span they keep contract positions, reflecting the rippling psychological effects of the stock crash.</br></br>Before this month's events, traders in many raw-material markets initiated trading positions and held them for several weeks to let a trading strategy pan out. Now, however, a growing number of futures traders -- even those with little direct contact with the stock market -- are closing contract positions at the end of each day, fearing huge losses.</br></br>"It's just too risky now," says Eric Bolling, an oil trader and vice president at Geldermann Inc., New York, who has cut back his longer-term trading. "There are too many things happening out there that can blow your position out of the water."</br></br>Futures traders most affected by the recent tumult continue to be those trading stocks' closely-related shadow markets -- stock-index futures and options. And many independent traders, or locals, typically close their positions at the end of the day, no matter what the trading instrument.</br></br>Still, says Shahrokh Nikkhah, vice president, futures, at Shearson Lehman Brothers Inc., New York: "For all those in the commodity markets, short-term trading is the way to go right now." | no | 0 |
Merrill Lynch Drop in Profit Isn't All Bad --- Net Falls 37%, but Industry Strength Is Seen | NEW YORK -- As Wall Street tries to pick its way out of the rubble of last October's crash, first-quarter results are expected to prove surprisingly good for some major securities firms not heavily tied to the retail trade, Wall Street executives and analysts predict.</br></br>But an unusually strong 1987 first quarter and special charges at some firms will depress year-to-year comparisons.</br></br>Thus few Wall Street professionals were surprised yesterday when Merrill Lynch & Co., which has the industry's largest retail brokerage network, reported a 37% drop in first-quarter earnings, to $68.3 million, or 62 cents a share, largely because of a big drop in retail and institutional commissions. Merrill earned $108.6 million, or $1 a share, in the year-ago quarter. Revenue dropped 5% to $2.4 billion from $2.5 billion.</br></br>As other firms report first-period results in the next few weeks, a pattern is expected to emerge: a booming mergers and acquisitions business, strong arbitrage profits, a big bond market rally in January and February and some serious cost cutting should help many securities firms withstand the continuing slump in stock market volume.</br></br>Merrill Lynch was the first major firm to report first-quarter results. And while earnings were down, portions of its performance confirmed some generally positive trends. Merrill Lynch posted a 20% increase in trading profits for its own account, and the firm's compensation and benefit expenses were down 14% because of previously announced layoffs and other cutbacks. The stock market gave a slight nod of approval to the results. | no | 0 |
Ahead of the Tape | Deflation Buzz</br></br>Drives Talk</br></br>Of a Rate Cut</br></br>After months of thinking the Fed's next move would be a rate increase, the market is suddenly toying with the idea of another cut.</br></br>Inflation seems to have buckled under the heft of a global economic slowdown. Crude-oil prices are down 27% from their July peak. The dollar has rallied, throwing more dirt on inflation -- though the temporary government takeover of Fannie Mae and Freddie Mac could change that. Even gold, investors' friend when prices rise, has declined. | yes | 1 |
Atlas Air to Unveil Agreement to Fly Planes for FedEx | GOLDEN, Colo. -- Atlas Air Inc., which provides freight flights for airlines, is expected to announce an agreement today to fly three Boeing 747 jumbo jet cargo planes for Federal Express Corp.</br></br>The outsourcing deal, valued at more than $30 million in annual revenue for Atlas, is believed to be part of FedEx's strategy to restructure operations to reduce reliance on its own pilots. By contracting some international shipping to low-cost Atlas, FedEx risks further rankling its higher-paid pilots during contentious contract negotiations.</br></br>Federal Express, a unit of FDX Corp., Memphis, Tenn., declined to comment.</br></br>Atlas, a six-year-old concern that founder Michael A. Chowdry has built into the world's largest operator of 747 freighters, said service for FedEx would begin in the fourth quarter. Atlas will provide two 747-400 freighters, a 747-200 cargo plane plus crews, maintenance and insurance. The company declined to say how long the FedEx contract would last.</br></br>Last year, Atlas provided two planes for extra seasonal lift to FedEx in the fourth quarter and, in 1996, provided one plane for FedEx. | no | 0 |
Now's Not the Time To Unload Stocks | Lately, readers have been asking whether it's time to sell. No wonder they're worried. From Jan. 12 to March 24, a space of just 12 weeks, the Dow Jones industrial average rose 17 percent. For the year, Pfizer Inc. is up 28 percent; Ford Motor Co., 31 percent; Fidelity Select Telecommunications Fund, 29 percent.</br></br>Why not simply take a breather? You're not greedy. With the market this high, it's bound to fall and you can buy back later, right?</br></br>Wrong. There may be reasons occasionally to sell stocks, but the overvaluation of the stock market -- alleged or actual -- is not one of them. I'll get to the right reasons for selling below, but first a tougher question than whether to sell: whether to buy. . . .</br></br>The date was May 28, 1995. The place was this very column. "With the market up 20 percent in the past 12 months and acting giddy at such a high altitude," we asked if this might not be a good time to wait -- rather than purchase more shares of stock. Our suggestion: Buy.</br></br>At the time the Dow Jones industrial average stood at 4369. Since then, with dividends included, it has returned 112 percent. | yes | 1 |
With Easy Photo Reader, One Picture Is Worth a Thousand Views | The only flaw with this formulation is that occasionally we come upon a new hardware gadget or software program that is so intriguing, so much fun, that all productive work gives way for a few hours or days (months, maybe?) while we mess around with the new acquisition.</br></br>IÛªve been playing with just such a new computer toyÛÓer, toolÛÓ for the past few weeks. The gadget in question is the Easy Photo Reader, a smaller-than-a-breadbox desktop peripheral that does just what the name suggests: It digitizes your snapshots and reads them into the computer. Once the photo is stored on diskÛÓa remarkably swift process, by the wayÛÓyou can use the Easy Photo software to enhance, sharpen, manipulate and generally take advantage of the picture in all sorts of useful ways. Then you stick the enhanced photo into a letter, report, spreadsheet, presentation or whatever.</br></br>desktop publishing seven or eight years ago, it has been possible to work with photographs on a PC. But it wasnÛªt for everybody. To digitize and store a photograph took so much processor time and disk space that most users couldnÛªt even think about trying it. Today, though, high-speed microprocessors, billion-byte hard disks, and color printers are just about standard equipment. Thus, any user with a fairly new PC can play with pictures.</br></br>There are basically three ways to get photographs into your computer so that you can manipulate them and insert them into documents.</br></br>You can obtain collections of photos that are already digitized for computer use. Every software store sells CD-ROM photo collections, usually with thousands of pictures in every imaginable category. You also can download photos, maps and other items from cyberspace. But this method restricts you to pictures somebody else took. | no | 0 |
Inflation Pressure in Check as Consumer Prices Edge Up 0.1% | WASHINGTON-- U.S. consumer prices ticked up in May as weak growth abroad and slow wage gains at home kept inflation pressures contained.</br></br>rose a seasonally adjusted 0.1% last month, the Labor Department said Tuesday, driven by higher rents, airfares and energy costs.</br></br>While the data suggest prices are stabilizing after two months of declines, even with May's small gain, consumer prices are up only 1.4% from a year earlier. The latest report showed that four years into the economic recovery, demand still remains too weak for firms to push prices higher and unemployment too high for workers to secure significantly higher wages.</br></br>"The economy is still running well below capacity and for that reason you're going to see inflation run on the soft side," said Michael Feroli, chief U.S. economist at J.P. Morgan Chase.</br></br>The moderate inflation readings should give the Federal Reserve latitude to proceed cautiously in reining in its bond-buying program in the coming months. Fed officials started a two-day meeting Tuesday where they're expected to discuss how to adjust their $85 billion-a-month in bond purchases. The purchases, coupled with near-zero interest rates, are designed to spur economic growth and boost job creation. | yes | 1 |
S&P 500 Sets Closing Record As Jobs Report Eases Recession Fears | Wall Street capped a huge week with a sharp advance Friday after the government's employment report for September and its revision of August's data cooled the market's fears of a recession. The Standard & Poor's 500-stock index reached a new closing high.</br></br>The S&P 500 index gained 14.75, or 0.96 percent, to 1557.59. Its previous closing high was 1553.08, on July 19. The index, which is the basis of many mutual funds and other investments and used as a benchmark for others, also set a fresh trading high, at 1561.91.</br></br>The Dow Jones industrial average rose 91.70, or 0.66 percent, to 14,066.01. It set a trading high, at 14,124.54. The technology-dominated Nasdaq composite index showed bigger gains, rising 46.75, or 1.71 percent, to 2,780.32.</br></br>The Labor Department's report that employers added 110,000 jobs in September -- essentially what analysts had expected -- reassured Wall Street that the job market wasn't pulling back sharply, as was feared a month ago. Though the data appeared to lessen the likelihood of an interest rate cut when the Federal Reserve meets Oct. 30, investors were relieved that the economy does not appear headed for a precipitous slowdown.</br></br>Strength in the job market during a housing downturn and a time of tighter credit conditions has been a pillar of the economy. With consumer spending accounting for about two-thirds of U.S. economic activity, investors are eager for workers to continue to collect their paychecks. | no | 0 |
D 16 ir*anesday, May l4,1999- THE WASHINGTON POST | NEW YORK, May 13ÛÓThe dollar registered gains against most currencies today but declined in late trading after a federal judge struck down the 10-cent-per-gallon fee President Carter attempted to impose on gasoline. Gold prices rose as much as $10 in New York.</br></br>Gold for delivery this month rose S10.10 to close at $517.80 at the New York Commodity Exchange, Inc. 1.6550; 227.28 yen, up from 226.35; and $1.1723 Canadian, down from $1.1742.</br></br>Trading in all the metals was reported as quiet. Silver rose 42 cents an ounce at the Comex to close at $12.97 an ounce.</br></br>The price of gbld closed in Zurich at $512.50 an ounce, unchanged from Monday. In London, the closing quote was $514, up $1.</br></br>Late New York dollar prices, compared to Monday, were; 1.7890 marks, up from 1.7860; 4.1925 francs, up from 4.1810; 1.6608 Swiss francs, up from 1. 550; 227.28 yen, up from 226.35; and $1.1763 Canadian, down from $1.1724-Canadian, down from $1,174. | no | 0 |
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