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Home Buyers Re-ARM as Fixed-Term Rates Rise | Adjustable-rate mortgages are gaining in popularity again now that interest rates on fixed-rate mortgages have increased to between 10 1/2 and 11 percent, housing economists reported this week.</br></br>With starting interest rates as low as 7 1/2 to 8 percent, adjustables are expected to take up a larger share of the market as long as fixed-rate loans continue to be priced above 10 percent.</br></br>"Most people should take a hard look at ARMS in today's interest-rate climate," said Thomas A. Lawler, vice president and senior economist for the Federal National Mortgage Association, which buys mortgages from lenders for resale into the secondary market.</br></br>"For many people an ARM is a good deal right now, particularly if you know you are going to be moving again within the next five years," Lawler said. "ARMs are priced low enough below fixed-rate loans to make them very attractive. Their popularity is only going to increase."</br></br>ARMS, which were introduced by lenders in the early 1980s as an alternative to high-interest fixed-rate mortgages, have waxed and waned in popularity as rates on fixed-rate loans have fluctuated, with adjustables always gaining in popularity when rates on fixed-rate loans increased. | no | 0 |
Magic Formula: Good Company With Woes --- An American Century Manager Looks for 'Glaring Problem' in a Stock | Kevin Toney likes companies with a solid balance sheet, strong brands and a glaring problem.</br></br>The manager of American Century Mid Cap Value Fund isn't looking for companies in the midst of a train wreck, just those with problems big enough to be noticed by investors but not so big that they are permanent and unsolvable.</br></br>"As value investors, when we're buying a company, there's usually a problem," Mr. Toney said. "That's why it's cheap."</br></br>The conservative investment philosophy of the Kansas City, Mo., fund has paid off over the long term, as it pursues what Mr. Toney calls a "winning by not losing" strategy that limits losses in economic downturns.</br></br>Year-to-date through Monday, the $1 billion fund had returned about 11.4%, outperforming the Standard & Poor's 500 stock index by two percentage points but underperforming its midcap-value category by about 3.2 points, according to Morningstar Inc. | no | 0 |
Low U.S. Rates Keep Dollar on the Defensive | Author: Javier E. David</br></br>NEW YORK--The Federal Reserve's bias for loose monetary policy is likely to keep the dollar trapped in a downdraft this week, just as hawkishness on inflation and looming interest-rate increases in Europe enhance the euro's luster.</br></br>Low U.S. interest rates and the possibility of an oil-driven jump in inflation have deprived the dollar of safe-haven investment flows that usually benefit the currency during times of global unrest. Risk-aversion will likely continue to benefit the Swiss franc and Japanese yen, for now.</br></br>Investors are searching for currencies that offer both stability and higher yields, which makes the euro a comparatively attractive bet.</br></br>Meanwhile, the dollar is on the defensive because of the Fed's controversial bond-purchase program, known as quantitative easing or QE2, which is keeping yields low on dollar-denominated assets. | no | 0 |
Slow thaw; Jumbo loans and the market for pricey homes show signs of revival | Since the collapse of the housing market, home buyers trying to a secure mortgage of more than $729,750 have faced higher interest rates and tough new standards to even qualify for a loan.</br></br>Now the market for these "jumbo" loans is starting to thaw. The average interest rate for a 30-year fixed-rate jumbo mortgage stood at about 5.8 percent this week, according to HSH Associates. That is near historic lows and down significantly from the height of the financial crisis, when it was near 8 percent.</br></br>"Things have been steadily getting better," said Keith Gumbinger, vice president at the research firm.</br></br>But the market is still far from normal, he said. The disparity in the rates offered for jumbo mortgages and traditional ones (which also carry rates near record lows) remains wider than normal, Gumbinger said. "Normalcy is returning, but I would by no means say it has returned," he said.</br></br>Before the housing market collapsed, jumbo loans were those for more than $417,000. But Congress temporarily increased that limit for high-priced parts of the country, including the Washington area. Through at least the end of this year, jumbos start at $729,750. They are still considered the most difficult to get. | no | 0 |
Job News Fuels Deficit Divide | The White House and congressional leaders begin a crucial weekend of negotiations on a deficit-reduction deal under a cloud of dour economic news and mounting political pressures on both sides, casting doubt on how significant an agreement they can achieve.</br></br>President Barack Obama and House Speaker John Boehner (R., Ohio) are battling opposition from within their own parties to their decision to strive for a plan that would reduce the deficit by $4 trillion over 10 years, in part by curbing entitlement spending and rewriting the tax code to boost revenue.</br></br>The two men surprised many in Washington this week by aiming for such an ambitious bargain, rather than a smaller package of roughly $2 trillion the White House and Congress had pursued for weeks. Although many Republicans and Democrats say they applaud the goal in theory, they also express doubts about reaching it given the major compromises it would require from both parties heading into an election year.</br></br>Mr. Obama and eight congressional leaders, including Mr. Boehner, are scheduled to meet at the White House on Sunday night to determine how big a deal they can achieve.</br></br>News that the unemployment rate rose to 9.2% in June, its highest level this year, pushed members of both parties further into their rhetorical corners Friday. | yes | 1 |
2d-Quarter Productivity Rises 4.7%: Productivity Up For 8th Quarter | 4.7 percent annual rate in the second quarter, the largest jump in a year, the Labor Department-reported yesterday.</br></br>The rise marked the eighth consecutive quarter of productivity increases, the longest period of uninterrupted gains in 11 years, Labor said.</br></br>Productivity measures the output of goods produced per number of hours employes are paid to work. Productivity gains bode well for inflation and are a major reason for the low inflation record so far this year, economists said.</br></br>Unit labor costsÛÓthe cost of labor per unit of productionÛÓ dropped 0.9 percent during the second quarter, the first time decline in a year, Labor said.</br></br>The White House welcomed the news, calling it a ÛÏsnapshot of an economy that is producing goods and services with more efficiency and lower costs." ÛÏThe rise in productivity and the drop in unit labor costs portends continued control of inflation,Û said the statement issued by White House spokesman Larry Speakes. ÛÏMore Americans are working today than ever before, and their productivity is steadily increasing. ThatÛªs a winning combination.Û | no | 0 |
U.S.-Japan Trade Not Expected to Improve This Year: Trade With Japan Not Improving | U.S. Trade Representative William E. Brock yesterday predicted a ÛÏfurther deteriorationÛ in AmericaÛªs trade deficit with Japan but said a turn-around could take place in</br></br>U.S. Trade Representative William E. Brock yesterday predicted a ÛÏfurther deteriorationÛ in AmericaÛªs trade deficit with Japan but said a turn-around could take place in ÛÏThe situation will get worse before it gets better,Û the Reagan administrationÛªs top trade official said at a breakfast with reporters the day after Japanese Prime Minister^ Ya-suhiro Nakasone left Washington.</br></br>The question of trade dominated NakasoneÛªs three days of talks with administration officials, including two meetings with President Reagan.</br></br>Brock was pessimistic about any quick fixes for the United StatesÛª growing trade imbalance with Japan, but he cautioned against following the protectionist route which is being pushed by many labor and business leaders and which has strong support in Congress.</br></br>ÛÏProtectionism is not the right response because it hurts us more that anyone else,Û said Brock, who added that is the advice he will give to Congress. | no | 0 |
Richard Syron, 45, Is Named President Of the Boston Fed | WASHINGTON -- Richard Syron, president of the Federal Home Loan Bank of Boston and a one-time assistant to former Federal Reserve Chairman Paul Volcker, was named president of the Federal Reserve Bank of Boston.</br></br>The 45-year-old economist has spent much of his career with the Fed in various capacities, both in Washington and in Boston. He also served as deputy assistant Treasury secretary in 1979 and 1980.</br></br>"He's got a resume that looks like it was designed to be president of the Federal Reserve Bank of Boston," said Gerald Mulligan, president of First Mutual of Boston and a former Massachusetts bank commissioner.</br></br>Mr. Syron will succeed Frank Morris, 64, who is retiring after two decades in the post. Mr. Morris said he has been grooming Mr. Syron for a Fed presidency since 1975.</br></br>Mr. Syron's most significant exposure to Fed policy-making came in 1981 and early 1982 when he served as Mr. Volcker's assistant. Those were among the central bank's most tumultuous years. Under Mr. Volcker, it raised interest rates sharply to reduce inflation, producing the deepest recession since the Great Depression and evoking stiff criticism from politicians and some businesses. | no | 0 |
Interest Rate Signal Inspires Investors | Stocks advanced Wednesday after New York Federal Reserve President Timothy F. Geithner said in a speech that core inflation is "quite moderate."</br></br>Since fighting inflation is the U.S. Federal Reserve's top concern, investors interpreted Geithner's remarks as another sign that the Fed might soon end its series of short-term interest rate increases.</br></br>Geithner said that overall inflation pressures have risen but that "inflation excluding food and energy, however, has been quite moderate, in part due to very modest growth in unit labor costs."</br></br>The Dow Jones industrial average rose 31.86, or 0.29 percent, to 11,043.44. It was the average's best close since June 2001.</br></br>Broader stock indicators were higher. The Standard & Poor's 500- stock index rose 4.49, or 0.35 percent, to 1294.18, its highest finish since May 2001. The Nasdaq composite index rose 11.04, or 0.48 percent, to 2331.36, its highest close since February 2001. | yes | 1 |
White House Hasn't Agreed On Tax Breaks for Investors | WASHINGTON -- White House officials said they aren't yet close to agreement on a package of investor tax breaks, more than a month after President Bush embraced the idea at his economic forum in Waco, Texas.</br></br>That suggests the administration isn't likely to introduce its own proposal this year. Congressional time pressure and political concerns among some vulnerable Republican candidates are contributing to the delay.</br></br>White House budget director Mitchell Daniels Jr. said this week that none of the various packages put together by advisers have met the administration's requirements of helping the economy without hurting the budget, which is now back in deficit. "Maybe the greater reality is simply the shortness of time, and the crowded calendar," he said.</br></br>But while equities markets sag, White House officials, including Mr. Daniels, won't say they have scratched the item off the administration's agenda. On Capitol Hill, die-hard GOP tax cutters including Rep. Tom DeLay of Texas again pushed the idea this week in party meetings.</br></br>The back-and-forth over Wall Street tax breaks has prompted renewed criticism of Mr. Bush's economic team among some Republicans. At the Waco conference in August, Mr. Bush enthusiastically touted two big tax breaks: an increase in the amount investors can deduct for stock-market losses, and a reduction in the so-called double-taxation of corporate dividends. | no | 0 |
Business and Finance | GREENSPAN GAVE NO HINT that an increase in interest rates is imminent, buoying the financial markets. In congressional testimony, the Federal Reserve chairman hailed the current state of the economy as "exceptional" and welcomed the recent slowing of economic growth.</br></br>Stocks soared in reaction to the remarks, with the Dow Jones industrials climbing 154.93 points to 8061.65. Bond prices took off as well, with the yield on the Treasury's bellwether bond falling to its lowest point since early December. The dollar finished mixed.</br></br>---</br></br>Boeing is close to winning European approval for its $14 billion acquisition of McDonnell Douglas after offering four key concessions. An agreement is viewed as likely to be announced today, averting a major trans-Atlantic trade conflict.</br></br>--- | yes | 1 |
Disability claims rising sharply at Social Security | The number of former workers seeking Social Security disability benefits has spiked with the nation's economic problems, heightening concern that the jobless are expanding the program beyond its intended purpose of aiding the disabled.</br></br>Applications to the program soared by 21 percent, to 2.8 million, from 2008 to 2009, as the economy was seriously faltering.</br></br>The growth is the sharpest in the 54-year history of the program. It threatens the program's fiscal stability and adds to an administrative backlog that is slowing the flow of benefits to those who need them most.</br></br>Moreover, about 8 million workers were receiving disability benefits in June, an increase of 12.6 percent since the recession began in 2007, according to Social Security Administration statistics.</br></br>Though policymakers anticipated the program's rolls growing with the aging of the baby-boom population, they suspect the current surge has less to do with any worsening in the health of the workforce than with the poor health of the economy. | no | 0 |
Bank Loans Spurt To New Peak Here | A jump of $6 million in the week ended NTov. 21 broughti Washington bank loans to a new all-time high, according to1 the Federal Reserve Bank of Richmond. t</br></br>Commercial loans increased $2,360,000 and loans for securities advanced slightly more than $500,000. The only decline was in'real estate loans;</br></br>Western Union has inaugurated Microfilm billing in the Washington area and other, major cities, it was announced yesterday by M. G. Ihrig, local superintendent.</br></br>From now on, original telegrams will be returned to customers with simplified monthly bills for checking, Ihrig said. A Microfilm record of the original messages is kept by Western Union. Ihrig pointed out that each reel of Microfilm, four inches in diameter, contains 14,000 telegrams.</br></br>Washington Gas Light Co. reported a seasonal net operating loss of $77,571 for October, compared with a loss of $108,-445 in the same 1955 morith. After all charges, there was a net loss of $183,821 for October, compared with, a deficit of $222,466 a year ago. | no | 0 |
MCI wins NASDAQ network contract | MCI Communications Corp. yesterday announced it has won a $150 million contract to provide the trading network for the Nasdaq stock market.</br></br>Under the contract, worth an estimated $150 million over six years, the Washington telecommunications company will install, operate and manage the network that carries all of Nasdaq stock transactions.</br></br>Nasdaq is run by the District-based National Association of Securities Dealers. The trading system allows brokers to buy and sell shares in thousands of companies on a national network of computers instead of going through traditional stock exchanges. The new MCI system will be designed to increase the speed of transactions and the volume of shares the fast-growing system can handle.</br></br>"This is a significant, very future-oriented contract," Barry Wagar, senior vice president for marketing at MCI. The current Nasdaq system was provided by MCI arch-rival AT&T. "It feels real good to us," Wagar said. However, "It's not that much in terms of the bottom Line," said Michael J. Balhoff, an analyst at Legg Mason Wood Walker Inc. In Baltimore. He said that $150 million over six years does not add up to much for a company with annual revenue of $10.6 billion. "That's why the stock closed up 25 cents." he added. MCI shares closed at $28.87-1/2 yesterday.</br></br>The contract is a strong "vote of confidence" in MCI, Balhoff said. "Here is a major exchange that requires absolute reliability." | no | 0 |
$155,860 Deficit Bared In Alexandria | Members of the Alexandria City Council disclosed a city budget deficit of $155,860 last night and proposed cuts in operating expenses to get finances back in balance.</br></br>Six of the cityÛªs seven coun-cilmcn addressed members of the North Ridge Citizens Association at George Mason Schol. The absent member was James M. Duncan, Jr.</br></br>The budget is in the hole largely due to lower revenue receipts than earlier anticipated, the councilmen said.</br></br>Deficit operations for fiscal 1953-54 were reported at $120,-869. Moreover-, the city heads added, an additional defit of $35,000 has built up since the new fiscal year began July 1.</br></br>The $35,000 figure, they said, results from lower receipts than were anticiapted from the cityÛªs new utility tax. | no | 0 |
Mechanic's Skill Is Wrenching Lease Deals --- Fried Frank Lawyer's Tools Include Publicist, Parties And Lengthy Documents | It isn't unusual for a takeover lawyer to get attention for his role in a corporate drama. But a leasing lawyer?</br></br>Meet Jonathan Mechanic, the 47-year-old, bushy-moustached head of real estate for Fried Frank Harris Shriver & Jacobson in Manhattan. He employs a publicist, socializes relentlessly, and instills drama into the dusty world of landlord and tenant law by turning every negotiation into a fight. "I want a tough lease. I want {to win} every right that can go the client's way," he says.</br></br>Though rivals deplore his tactics, the $500-an-hour lawyer has collected clients such as Conde Nast Publications, a unit of Advance Publications Inc., and Jerry Speyer, plus 1998 revenue of $10 million at his 30-lawyer group. And Fried Frank aims to represent not one but two suitors, including Brookfield Financial Properties Inc., in the forthcoming contest for the country's biggest lease: 10 million square feet of offices at New York's World Trade Center.</br></br>In lease negotiations, lawyers routinely complain that Mr. Mechanic wastes time and money with his 50-page documents, while challenging every detail in their much shorter ones. Then, "at some point, he will always pound on the table about something that surprises me because it seems so unexceptional," says attorney Philip Rosen of Weil Gotshal & Manges, who has sat across the table from Mr. Mechanic several times. Mr. Mechanic is nevertheless "a very good lawyer," he adds.</br></br>And his methods win clients. Real-estate investor Andrew Davidoff of Emmes Group of Cos. first encountered Mr. Mechanic 12 years ago representing a company that wanted to lease space in a building Mr. Davidoff then owned, Harborside Financial Center in Jersey City, N.J. Last year, buying out a partner in a difficult $50 million negotiation, he made sure Mr. Mechanic was working for him. "He knows when to go on a rampage to get a deal closed," Mr. Davidoff says. | no | 0 |
Aetna, Cigna and UnumProvident Show Declines; Rise of Texas Instruments, IBM Fails to Lift Market Rattled by Insurance News | Dow Jones Newswires</br></br>NEW YORK -- Stocks of Aetna, Cigna and UnumProvident were especially weak as the probe of insurers appeared to be taking a bigger turn toward health-care providers. Even strength by International Business Machines and Texas Instruments couldn't lift the market.</br></br>The Dow Jones Industrial Average dropped 58.70 points, or 0.59%, to 9897.62 and the Nasdaq Composite Index lost 13.62, or 0.7%, to 1922.90. The Standard & Poor's 500-stock index fell 10.79, or 0.97%, to 1103.23, continuing its seesawing between positive and negative territory. The index is now back in the red for the year.</br></br>The insurance news rattled the market, traders said, helping to set the trend for the session.</br></br>"The hammer can drop, and this time it came from chatter about what Spitzer is doing regarding the investigations of insurance companies," said William Choi, trader at Pali Capital Management. | yes | 1 |
Japan's trade surplus matters | Critics of the U.S. position in the Framework talks with Japan question their central premise namely, that Japan's distinctive trading behavior harms its partners. Often such criticisms begin by pointing out that the bilateral trade imbalance between any two nations does not matter. But the bilateral imbalance between the U.S. and Japan is not what the talks seek to remedy. Rather, they are designed to address Japan's multilateral current-account surplus and structural barriers to Japan's markets, both of which matter very much to Japan's trading partners.</br></br>Japan is currently running a current-account surplus of about $130 billion, or 3% of its gross domestic product. This huge surplus depresses global demand and slows the pace of economic expansion and job creation in other nations. A reduction of $50 billion in Japan's multilateral trade surplus -- which would still leave Japan with a current-account surplus of $80 billion, or about 2% of its GDP -- would mean an additional $50 billion in demand for the goods and services of Japan's trading partners. America's share of this $50 billion might be in the $5 billion to $15 billion range, or about 100,000 to 300,000 jobs.</br></br>Can Japan do anything to reduce its current-account surplus? Luckily, yes. Increases in public spending and tax cuts can stimulate domestic demand, increase imports and reduce the trade imbalance without jeopardizing Japan's fiscal stability. Japan's own consumers and businesses, reeling from the effects of the worst economic slowdown since World War II, would be the major beneficiaries of more expansionary fiscal measures. But Japan's trading partners would share in the benefits. Fiscal expansion is a win-win strategy for Japan and the rest of the world -- and it was a major focus of the Framework talks.</br></br>Japan's current-account surplus is only one of the distinctive features of its international performance. Another is the comparatively small share of manufactured imports in total Japanese consumption. Over the past 20 years, the share of manufactured imports in total consumption has increased steadily and perceptibly in all of the advanced industrial countries, except one: Japan. Today this share is only about 6% in Japan, compared with more than 15% in the U.S. and Germany.</br></br>Japan also has a distinctively low level of intra-industry trade -- that is, trade in differentiated manufactures within a given industry. Japan does import -- but it tends not to import very much in industries in which it is a major exporter. Japan is a major exporter of automobiles, for example, but it imports very few of them. In contrast, the U.S. and the other advanced industrial countries that trade with one another tend to buy and sell in the same product lines, thereby reaping the benefits of enhanced product competition and lower prices for their consumers. | no | 0 |
Bernanke Issues Deficit Warning | Author: Jon Hilsenrath</br></br>For months the Federal Reserve has been plotting a strategy to exit from its easy money policies while promising that it won't do so for a while.</br></br>On Wednesday, Fed Chairman Ben Bernanke urged lawmakers to take the same approach with the budget deficit: Devise a plan now, but act on it later.</br></br>In testimony to the House Budget Committee, Mr. Bernanke said that having a credible deficit-reduction plan in place "will help keep interest rates down and help growth" in the near term, but indicated the economy was too fragile to start cutting the deficit now.</br></br>Advancing a theme he has emphasized in the last few months, Mr. Bernanke said that if Congress pursued more fiscal stimulus to sustain the recovery, it should be accompanied by a concrete plan to bring the deficit back into line in the long run. Without a fiscal "exit strategy," he said, the U.S. could, "in the worst case," see financial instability like in Greece. | no | 0 |
A Special Summary and Forecast Of Federal and State Tax Developments | FASTER ECONOMIC GROWTH finally brings some cheer to many states.</br></br>As the economy perks up, tax collectors report higher revenues. State revenue, even excluding tax increases, rose faster than inflation in the third quarter, says the Center for the Study of the States in Albany, N.Y. That was the first time this has happened in any quarter since late 1990. Oregon and Utah posted especially strong gains. Total state revenue rose 4.3%, without tax-law changes, up from sluggish second-quarter growth of 2.6% and anemic first-quarter growth of 1%.</br></br>But growth generally remains "far from robust," says Steven Gold, the center's director, and many states remain depressed. The mid-Atlantic region posted the smallest improvement, and California's budget woes worry bond investors. This year, fewer states raised taxes than last year. Total third-quarter state revenue, including tax increases, rose 7.6%, down from second-quarter growth of 8.9%.</br></br>Ohio, facing an estimated $300 million deficit, may increase taxes soon, an aide to Gov. Voinovich says.</br></br>SOFTWARE SALES surge for tax preparation and planning. | yes | 1 |
Battering Of Dollar Hurts Bonds --- But Stock Prices Post Only Moderate Drop In Sluggish Volume | NEW YORK -- Central banks crushed the dollar's rise against key currencies, and bond traders reacted by dumping Treasury bonds. But stocks fell only a bit in light volume.</br></br>The Dow Jones Industrial Average closed 10.81 lower at 2649.55. The benchmark 30-year U.S. Treasury bond sank 1 1/8 points, or $11.25 for each $1,000 face amount, also in light trading.</br></br>Both markets felt the effects of sustained and coordinated dollar selling by central banks. By late afternoon in New York, the dollar fell a relatively sharp 1.1% against the West German mark and 0.7% against the Japanese yen.</br></br>U.S. dealers and investors bought dollars yesterday morning, following a round of intervention by foreign central banks during European trading. But in the afternoon, the Federal Reserve surprised traders by selling dollars in exchange for both yen and marks.</br></br>The Fed "came in aggressively," said Robert Ryan, manager of corporate foreign exchange at Bank of New York. "They started selling in marks and then in yen, and they knocked the dollar right down." | no | 0 |
Key Inflation Gauge Is Revised Upward, Despite More Signs Economy Is Cooling | WASHINGTON -- Inflation is running higher than previously thought, even as more signs emerge that growth is slowing.</br></br>The Commerce Department said the personal-consumption-expenditures price index rose 3.5% in the first quarter on a seasonally adjusted annualized basis, revised upward from a preliminary report of a 3.1% rise. The index, a key inflation gauge, rose 2.5% in the 1999 fourth period.</br></br>The department also said gross domestic product grew at an annual rate of 5.5% in the first quarter, revised upward from an increase of 5.4%. The fourth-quarter growth rate was a scorching 7.3%.</br></br>A separate department report showed that sales of new single-family homes fell again in May, another indication that the housing market may be softening after a series of interest-rate increases.</br></br>Federal Reserve Chairman Alan Greenspan has indicated that the personal-consumption-expenditures price index is one of the best measures of inflation and is among those he watches most closely. The Fed's policy-making committee chose not to raise interest rates after its meeting Wednesday, although it released a statement citing "heightened inflation pressure" as cause for concern. | yes | 1 |
Interest Rate Rise Boosts the Dollar; Gold Gains by $2.60 | Falling U.S. bond prices and rising interest rates sent the dollar soaring Friday to its highest levels against major foreign currencies in nearly a month.</br></br>"The collapsing bond market," said Mory Ogata, senior vice president and treasurer of Union Bank, Los Angeles, "means that (U.S.) interest rates are back again as the main support of the dollar. People are buying the dollar on the basis of higher interest rates and expectations that interest rates will be still higher."</br></br>High U.S. interest rates usually help the dollar by making dollar-denominated investments look especially attractive. By contrast, they usually hurt gold by making purchases of the metal more expensive to finance. But on Friday, gold also advanced $2.60 an ounce in light trading. "The fact that precious metals held up so well in the face of higher interest rates," said Bernard Savaiko, a senior precious metals analyst of Paine, Webber, Jackson & Curtis Inc., "indicates that people still are worried about inflation, and there's an underlying support for inflation hedges." Gold is frequently held as a hedge against inflation.</br></br>Mr. Ogata said that rising interest rates should help spark "more capital flows into the U.S."</br></br>Nonetheless, he added, he doesn't see "a drastic move up" for the dollar. It should have a top range in the days ahead of about 2.65 West German marks and 226 Japanese yen, he said. In late New York trading Friday, the dollar settled at | yes | 1 |
Pulling the punchbowl | As we write, the money is even on whether the Fed's Open Market Committee will choose to push up the Fed funds rate at its meeting tomorrow, or perhaps after the election in November. With unemployment at a seven-year low of 5.1%, the Street's priests are warning that higher inflation is around the corner unless the economy makes the autumnal sacrifice of a pre-emptive rate hike.</br></br>Such thinking of course has long traditions among central bankers. Back in the 1960s, William McChesney Martin Jr. used to describe the Fed's job as that of the sourpuss who removes the punchbowl just as the party gets going. The Fed chairman himself practiced what he described: Faced with inflation of a whopping 1.5%, Martin led the Fed's board in hiking the discount rate a steep 150-basis points over 18 months during the spending build-up for Vietnam. Given that inflation is now closer than it has been in decades to the levels of Martin's tenure, it's hard to think of a good reason for tightening money except for taking away the punchbowl.</br></br>Of course, it's also currently faddish to talk of minimum unemployment levels, or to drop the unlovely acronym of NAIRU -- the "non-accelerating inflation rate of unemployment." But the notion of some kind of grand trade off between inflation and a slowdown flies in the face of the experience of recent decades. We learned, or should have, that it is possible to at once suffer both evils (the stagflation of the 1970s), or neither (the relatively low inflation, high growth 1980s).</br></br>The signs we like to look at show a picture of growth pushing forward absent inflation. The Dow Jones Spot Commodity Index, which seeks to measure the pressures in the commodities markets, stands at 146 vs. 151 a year ago. Stripped of volatile oil and food prices, most commodities measures are down from a year ago. Brian Wesbury of the Chicago bond firm Griffin, Kubik notes that the Fed funds rate is still higher than overall economic growth as measured by Gross Domestic Product, a sign that the central bank is not stimulating the economy.</br></br>The dollar is gaining against the mark, yen and the currencies of other important trading partners such as Canada. As for gold, after punching across the $400 border this spring -- the monthly average for February was $404 -- it is now bumping around at $382. The dollar is buying more gold than it was nine months back, a sign that there is scarcely a need to "wring inflation" from the greenback. | no | 0 |
Market Drops to 903.97; Many Brokers Optimistic | NEW YORK, Feb. 7 CAP)ÛÓ [The stock market drifted lower today after pulling back from a small early gain.</br></br>The Dow Jones average of 30 industrials slipped 2.71 to 903.97. During the morning part of the session, the Dow was up nearly 2 points.</br></br>Turnover was very heavy early in the day, but as prices turned lower some of the selling pressure dried up, and trading slowed. Analysts interpreted this as a positive sign, saying it indicated a bullish undertone in the market.</br></br>Brokers noted the downward drift was part of the marketÛªs recent consolidation phase, in which the strong gains of the November to Jan-uaiT rally were being digested.</br></br>Aside from these technical factors, there was little in the news background to explain todayÛªs slide. | no | 0 |
DIGEST: DOW 4556.10 UP 5.54 DETAILS ON PAGE 2 | U.S. factory orders rose 1.4 percent in May, recovering from tliree straight declines. The Commerce Department said the increase was the largest since orders rose 2 percent in December. The department also reported that the gross domestic product, the broadest gauge oi economic strength, rose at a 2.7 percent annual rate in the first quarter this year. That is less than half the 5.1 percent booming growth in the last three months of 1994.</br></br>Organization countries to work for another four weeks, tojuly 28, on an agreement to liberalize trade in banking, insurance and securities. World economic officials have worked for the past 18 months to complete an accord that would let financial service firms operate more freely in foreign countries. But hopes were dashed Thursday when the United States rejected the package as inadequate. Faced with rejection by the world's largest economy, European trade ministers scrambled for a compromise.</br></br>The IMF approved about $2 billion in financial help for Mexico and held out the promise of $8.7 billion more over the next year if the nation sticks with its tough economic reform plan.</br></br>Eastman Kodak's claims that Japanese rival Fuji isnÛªt playing fan-lias the attention of the Clinton administration, which said it will begin a formal review of charges that unfair practices by Fuji in . collusion with the Japanese government have cost Kodak $5.6 billion in lost revenue over the past two decades.</br></br>BellSouth will change its accounting practices to prepare for the day when it faces more competition in local telephone service, a decision that will result in a $2.7 billion charge against second-quarter earnings. BellSouth is the fourth of the seven regional Bell operating companies to make the change in accounting methods. | no | 0 |
Needed: Catchword For Bush Ideology; 'Communitarianism' Finds Favor | It's been difficult to pin an ideological tail on the nascent Bush White House. One day the president is called a staunch conservative for nominating John D. Ashcroft to run the Justice Department and acting to restrict U.S. funding to overseas groups that support abortions. The next he's labeled a bleeding heart for helping prisoners' children and promoting literacy programs.</br></br>The problem, some Bush advisers and friends say, is that conventional political definitions do not adequately explain what the president is trying to do. His actions have less to do with the left vs. right, they say, than with his embrace of many of the ideas contained in the movement known as "communitarianism," which places the importance of society ahead of the unfettered rights of the individual.</br></br>"This is the ultimate Third Way," said Don Eberly, an adviser in the Bush White House, using a favorite phrase of President Bill Clinton, who also sought, largely unsuccessfully, to redefine the debate with an alternative to the liberal-conservative conflict. "The debate in this town the last eight years was how to forge a compromise on the role of the state and the market. This is a new way to rethink social policy: a major reigniting of interest in the social sector." "Communitarianism," or "civil society" thinking (the two have similar meanings) has many interpretations, but at its center is a notion that years of celebrating individual freedom have weakened the bonds of community and that the rights of the individual must be balanced against the interests of society as a whole. Inherent in the philosophy is a return to values and morality, which, the school of thought believes, can best be fostered by community organizations. "We need to connect with one another. We've got to move a little more in the direction of community in the balance between community and the individual," said Robert D. Putnam of Harvard University, a leading communitarian thinker.</br></br>Many of Bush's early proposals fit this approach. This week, Bush moved to make it easier for the government to fund religious groups that cater to the poor and disadvantaged. He also gave a boost to AmeriCorps, the national service program that sends volunteers to help community initiatives. Last week, Bush rolled out an education plan that gave localities more authority over their schools. A week earlier, he spoke of the need for character education in schools. Even his tax plan, due next week, has what are touted as community- building elements: a new charitable tax credit, a charitable deduction for those who don't itemize, and a reduction of the marriage penalty.</br></br>Bush's inaugural address, said George Washington University professor Amitai Etzioni, a communitarian thinker, "was a communitarian text," full of words like "civility," "responsibility" and "community." That's no accident: Bush's advisers consulted on the speech with Putnam. At the same time, Bush has recruited some of the leading thinkers of the "civil society," or "communitarian," movements to his White House: former Indianapolis mayor Stephen Goldsmith, University of Pennsylvania professor John DiIulio, fatherhood advocate Eberly, speechwriters Michael Gerson and Peter Wehner. Even Lawrence B. Lindsey, long before becoming Bush's economics adviser, was a Federal Reserve governor who explored ways to lure capital to rebuild poor urban communities. | no | 0 |
An Office Closer to Home; Area Centers Offer Employees Chance To Telecommute | Phyllis D. Rose spends up to 90 minutes each weekday in her car, driving to and from the General Services Administration's offices in Arlington where she works.</br></br>And when she gets there, after the traffic-filled ride from her home in Laurel, Rose typically gets interrupted many times over by bosses, colleagues and the telephone. The distractions are many; the opportunities to concentrate are few.</br></br>But things are a lot calmer on the days she reports to the Laurel Telecommuting Center--a mere five-minute drive from her house. Away from the interruptions of her workplace, she finds she is far more efficient and gets much more done.</br></br>Rose is one of 27 federal workers signed up to telecommute part of the week from the telecommuting center in Laurel, which opened almost a year ago. The center is part of a federal program and one of three pilot projects run by the College of Southern Maryland in La Plata.</br></br>There are now 17 such telecommuting centers in the Washington area and about 27 around the country, all of which are nonprofit projects started in 1994 and funded by the General Services Administration (GSA). Each federal agency also has $50,000 set aside in its annual budgets to contribute to the centers, if employees use them. | no | 0 |
U.S. News: Europe, Weak Economy Add to Pressure on Fed | Federal Reserve policy makers, meeting amid growing concerns about the U.S. recovery and the European debt crisis, have an array of options if they decide the economy needs an added boost.</br></br>Fed officials, concluding a two-day policy meeting Wednesday, could extend a program known as "Operation Twist," in which the central bank sells short-term Treasury bills and notes and plows the proceeds into longer-term securities. They also could decide to shift the proceeds into mortgage- backed securities rather than long-term Treasury bonds.</br></br>Among other choices: launching a new round of bond-buying, known to some as quantitative easing, to expand the central bank's portfolio of assets. Or they could alter the way they describe their plans for interest rates with an assurance that short-term interest rates will stay near zero beyond 2014.</br></br>Policy makers also could stand pat but offer assurance that they stand ready to act if the economy gets weaker.</br></br>With the exception of standing pat, all these moves would be aimed at bringing down long-term interest rates and reducing credit costs more broadly to spur spending and investment. | no | 0 |
Nation: Income Up Only 0.5% | The personal income of Americans rose by a modest 0.5 percent in June, again trailing inflation and continuing a slowdown evident since the first of the year, the government said yesterday.</br></br>Personal incomeÛÓincluding factory wages, farm income, dividends and interest-^-rose $9.4 billion last month to $1.9 trillion, the Commerce Department said. This compares with a rise of $12.4 billion, or</br></br>CITATION: The Energy Department cited Exxon yesterday for $95 million in alleged customer overcharges on gasoline and oil, raising to $1 billion the total amount of citations against the oil industry giant since December 1977.</br></br>Agency Attorney Paul Bloom said the latest citations against Exxon allege two separate violations of Energy Department refiner pricing</br></br>CHRYSLER LAYOFFS: Chrysler Corp. has scheduled an indefinite layoff of 4,200 hourly workers at two of its plants because of a delay in the start of 1980-model production. | no | 0 |
U.S. Urges Suharto To Show Restraint | The Clinton administration, worried that political upheaval in Indonesia could wreck the country's international economic rescue, is warning the government of President Suharto to show restraint in dealing with student demonstrations and other forms of dissent.</br></br>But administration officials said that despite mounting criticism of the Suharto regime's human rights practices, they are not threatening to cut off Indonesia's $43 billion bailout led by the International Monetary Fund. Depriving the country of desperately needed cash, they argue, would only deepen its economic crisis and increase the chances of social turmoil and bloodshed.</br></br>The IMF is expected to approve another $1 billion installment for Indonesia on Monday. Administration and IMF officials said that last-minute negotiations are continuing but that Indonesian authorities, after balking for months, appear to be complying with IMF demands for economic reforms, including the dismantling of monopolies run by the president's relatives and cronies.</br></br>Behind the flurry of maneuvers lies the administration's anxiety about keeping the situation in Indonesia, the world's fourth most populous country, from spinning out of control.</br></br>Indonesia's financial condition remains extremely fragile, with its currency deeply depressed, inflation soaring and joblessness spreading. An outbreak of social chaos in Indonesia could spook investors in neighboring countries and cause the Asian financial crisis to worsen, U.S. and IMF officials fear. Moreover, the Indonesian archipelago straddles major shipping lanes, and civil strife there could disrupt global commerce. | no | 0 |
DJIA Again Loses Its Grip on 10000; Summer Rally for Blue Chips Falters as Weak Data Accumulate; Waiting to Hear From Bernanke | Author: Jonathan Cheng; Kristina Peterson</br></br>The Dow Jones Industrial Average stumbled back below 10000 on Thursday, an unwelcome milestone as worries about the U.S. economy increase.</br></br>The blue-chip index erased early gains to finish down 74.25 points, or 0.74%, at 9985.81. The close is its first finish below the psychologically important level since July 6.</br></br>The Dow has toyed with 10000 for the past few days before finally closing below. The key risk now is that the benchmark will plumb the year's lows reached in July.</br></br>One clue to the market's direction may come on Friday when Federal Reserve Chairman Ben Bernanke speaks at the Fed's annual huddle in Jackson Hole, Wyo. The last time Mr. Bernanke spoke, his reference to an "unusually uncertain" economic outlook wiped more than 100 points from the Dow. | no | 0 |
Trading Pace Increases | NEW YORK. Dec. 13 '.-FÛÓThe stock market snapped back to the upside today following three days of downward adjustment in the wake of last week's big rise. Leading stocks advanced from fractions to 2 points or so.</br></br>The recovery followed a classic pattern and was indicated in advance by analysts who noted the tendency of the market to readjust downward to the extent of a third or a half of a previous advance of the scope of last week's, the biggest weekly rise in 18 years. A further rise could follow such consolidation. they said.</br></br>The recovery today was made in the absence of outstanding news of a stimulating nature and. in the case of specific stocks, even in spite of some dispiriting corporate news.</br></br>The Associated Press average of 60 stocks rose S1.40 to S179.90 with the industrials' up SI.20. the rails up $3.20 a*:id the utilities up 20 cents. The rise in the AP average recouped about 45 per cent of the past three daysÛª losses.</br></br>of the market giving a play to previously neglected stocks and for some, notably aircrafts, there were declines on profit-taking. The aircrafts have been rising^ against the recent lower trend. | yes | 1 |
New Market Found for 'Gloom' Tag: Gallery Glimpses | ONE OF THOSE fascinating changes in stance which can happen only in American politics took place in the Senate during the stock market gyrations.</br></br>Last week the Democrats turned around and pinned the identical label on their Republican brothers. A Republican attack touched off by the stock market tumble triggered their reaction. In speech after speech, Republicans had blamed New Frontier policies for the break, predicted melancholy days ahead.</br></br>The Democrats absorbed the punishment for awhile, then swung to the offensive. They painted a roseate picture of the NationÛªs basic economic strength, assured their colleagues that all would be well.</br></br>Assistant Senate Majority Whip Hubert H. Humphrey was making this sort of defense Tuesday afternoon. Across the aisle, Sen. Henry C. Dwor-shak (R-Idaho) arose to read a dolorous cable report of American stocks toppling abroad.</br></br>Humphrey asked him for the time line on his dispatch. Then, with an aide running bulletins from the ticker, he topped Dworshak with later news of the blue chip rally in Wall Street. | no | 0 |
Intel CEO's Stock-Option Idea | Intel Corp. Chief Executive Officer Craig Barrett entered the public debate over stock-option accounting by suggesting that companies list as expenses only options given to top executives.</br></br>The chip maker, at its annual shareholders meeting in Santa Clara, Calif., also said it would formalize a CEO performance review that was handled more casually in the past. The new policy came as Intel went to great lengths to distance itself from the accounting controversies and management improprieties ensnaring companies such as Enron Corp.</br></br>Mr. Barrett said his accounting proposal wouldn't penalize companies such as Intel that grant most of their options to employees outside the executive suite. But it would "minimize abuse at the top," he said. He suggested that only options given to the company's top five officers be listed against income.</br></br>The prospect of having to account for options as an expense is controversial in Silicon Valley, where companies commonly use stock grants as employee incentives. The concerns are reflected in a bill, introduced by Senators Carl Levin (D., Mich.) and John McCain (R., Ariz.), that would force the accounting changes.</br></br>Options costs currently are listed as balance-sheet footnotes and don't affect quarterly income statements. | no | 0 |
Embrace Globalism | This is a critical moment for U.S. manufacturing. Of course it is fraught with risk and controversy -- but also rich with possibility. Unfortunately, the latter usually goes unnoticed by our policymakers. Many of them believe that U.S. companies can no longer compete on their own. They want to isolate America by erecting trade and investment barriers. They seem not to have a clue that we live in a global economy.</br></br>This parochialism hurts American companies, and hence it hurts America; it also hurts the rest of the world, denying the benefits our industry can bestow. The new protectionism, then, is a "lose-lose- lose" proposition. It is unsustainable: U.S. companies cannot collectively operate as a single-engine plane trying to pull the rest of the world along with us. We need multiple engines for growth, and the rest of the world provides them.</br></br>Here, Caterpillar's experience may be instructive, and perhaps lead to some larger lessons for U.S. business leaders in the global economy. We're in the midst of one of the most successful periods in our 81-year history, coming off our second year of record sales and profits. Our workforce has grown more than 20%, and our stock price has more than tripled in five years. To be sure, we've run up against the same labor costs and global competition as the auto makers and other troubled manufacturers. But we're doing fine. Why?</br></br>There's no single answer. We've addressed rising health-care costs proactively; we invested substantially to improve productivity and get flexible with our sourcing; we eliminated our centralized, functional structure and established independent businesses with specific profit- and-loss responsibilities. Throughout, we kept our focus on designing high-quality, innovative products. But most importantly, we're thriving today not because we survived globalism but because we embraced it.</br></br>Caterpillar is one of America's major manufacturers; last year alone we exported more than $9 billion in products. But we've also become a major British manufacturer, a major Brazilian manufacturer and a major Chinese manufacturer -- just to name three of the 40 countries where we have a presence. By expanding globally, we have maintained our ability to grow. We refused to concede markets to competitors and thus kept them from gaining undue strength to block our entry. When it made sense to invest for local access, we did so. | no | 0 |
Corporate News: FDA Weighs Stiffer Rules | WASHINGTON -- The Food and Drug Administration said Monday it will propose stronger regulations for drug companies that outsource manufacturing, putting more responsibility on them to ensure the purity and safety of products made by contractors.</br></br>During a conference at Xavier University's Med-XU program on pharmaceutical global outsourcing, the FDA's Brian Hasselbalch said the agency may soon require companies to conduct on-site audits at outside contract manufacturing facilities, according to slides of his presentation.</br></br>Mr. Hasselbalch and Kathleen Culver, an official at the agency's Cincinnati office, indicated the agency wants to hold sponsor companies more accountable for flaws in manufacturing processes of outside contractors both in the U.S. and abroad, and for certifying that contractors have followed FDA standards, according to conference director Marla Phillips.</br></br>An FDA representative and Mr. Hasselbalch couldn't immediately reached for comment.</br></br>Credit: By Alicia Mundy | no | 0 |
The Intelligent Investor: Are Bond Rates on a Road to Nowhere? | The "bond vigilantes" who once imposed law and order on financial markets are being run out of town. That means investors thirsting for a quick return to "normal" interest rates might stay parched for a long time to come.</br></br>Throughout most of the bull market in bonds over the past 30 years, big investors dumped Treasury securities whenever the U.S. flirted with fiscal recklessness. By sending a stinging signal to Washington that they wouldn't tolerate irresponsible policies, the vigilantes imposed discipline and kept rates stable at yields investors could live on.</br></br>But the bond vigilantes are on the run, warns Todd Petzel, chief investment officer at Offit Capital, a New York firm that manages $6 billion for wealthy clients. In recent years, Mr. Petzel says, the Treasury market has changed in profound ways.</br></br>Historically, the bulk of U.S. Treasury debt was held by private investors -- including the big institutions that used their enormous market power, vigilante-style, to keep interest rates in line.</br></br>Now, Mr. Petzel points out, much of the demand for U.S. debt comes from "uneconomic" buyers who scoop it up -- and hold on to it -- at any price. Only 23% of Treasurys are held by individual and institutional investors -- down from 55% in 1982 and 31% a decade ago. | no | 0 |
Fed's Williams: Fed Not Near Limit on Bond Buying | The Federal Reserve isn't near a limit on how many Treasury or mortgage-backed securities it can purchase, Federal Reserve President John Williams said in an interview with The Wall Street Journal.</br></br>Some Fed officials have been concerned that if the central bank buys too many bonds in these markets it could become such a big player that these markets become illiquid and stop functioning properly. Mr. Williams said the Fed isn't close to causing those kinds of problems. He said he wants to keep buying $85 billiong per month of long-term securities in 2013.</br></br>He is in a camp of policy activists at the Fed who want the central bank to keep buying mortgage and Treasury bonds next year to push down long-term interest rates in hopes of boosting the economy.</br></br>The Fed next meets Dec. 11-12. It is widely expected to continue its $40 billion-per-month mortgage-bond-buying program. It must decide what to do about its Treasury purchase program, known as Operation Twist. Under the program, which expires at year-end, the Fed is buying $45 billion per month of long-term Treasurys.</br></br>Mr. Williams said he wanted to keep buying both classes of securities at the present pace. Stopping or scaling back, he said, would be "counterproductive" for the economy. | no | 0 |
THE DOW PLUNGES: Dow Drops 192 On Comment by Japanese Leader | NEW YORK, June 23ÛÓStock prices slipped off their lofty perch today when comments by JapanÛªs prime minister spooked the U.S. bond market and sent interest rates higher. The Dow Jones industrial average, which started the day at a record level, lost 192.25 points, its second-biggest point drop ever.</br></br>ÛÏThe market is priced for perfection,Û said Douglas Cliggott, U.S. equity strategist at J.P. Morgan Securities Inc. in New York. ÛÏAny news that comes in and bounces it in the other direction can move it pretty fastÛ</br></br>The Dow average of 30 blue-chip stocks dropped 2.5 percent to 7604.26, in active trading, with much of that loss coming in the last 90 minutes of the session. TodayÛªs setback follows a powerful rally that had lifted the Dow 6.3 percent in the past three weeks.</br></br>Several market analysts had warned that stock prices were due for a pullback, and some said today that Prime Minister Ryu taro Hashi-motoÛªs comments gave investors an excuse to sell. There have been a lot of smiling faces on Wall Street, but everyoneÛªs very concerned about val-Sec STOCKS, A8, Cot. 1</br></br>Rations,Û said Hugh Johnson, chief investment strategist at First Albany Corp., an Albany, N.Y., brokerage firm. | no | 0 |
Soft Landing in a Spoiled Nation | Americans quickly come to think of pleasures as entitlements, so as the gaudy economic expansion encounters turbulence, they seem not just stunned but affronted. The stock market, however, is simply doing its job, reallocating capital from unproductive to more productive uses. This is, so far, what a soft landing of a high- flying economy looks like. And the vocal angst of many investors is what a soft landing sounds like in a spoiled nation that is becoming the crybaby of the Western world.</br></br>Economic expansions are not like human beings and light bulbs. Expansions do not inevitably expire of natural causes. They could continue indefinitely, absent policy blunders by government or major mistakes by sizable elements of the private sector. The latter sort of mistakes have been made, particularly in overinvestment in technology and dot-com sectors. But government has two powerful levers for moving the faltering economy--interest rates, which are high, and fiscal policy, which is tight because government is running a surplus. Interest rates and taxes can be lowered.</br></br>Anyway, America's long expansion may not be over. Housing starts are up, the job market remains strong, and some producers' difficulties are consumers' delights: AT&T has cut its dividend for the first time in 113 years, and its stock is down 60 percent, but, then, long distance rates have fallen 35 percent in seven years, and cell phone rates even faster--in effect, a huge transfer of wealth from producers to consumers of those services.</br></br>Third-quarter growth (2.4 percent) was less than half the second- quarter rate (5.6), and sobering economic indicators have been multiplying for many months. Sobriety--a virtue, lest we forget--was producing dot-com carnage last spring. Investors were at long last pulling back from valuing companies for prospects--often chimerical-- rather than profits, and were belatedly acknowledging that, ultimately, profits dictate share prices.</br></br>On Oct. 12, in a sell-off unrelated to technology, the Dow began falling 379.21 points (3.6 percent) minutes after Home Depot, one of Wall Street's top growth stocks and a bellwether of consumer spending, warned that third-quarter earnings would fall short of analysts' expectations. Home Depot's stock plunged 28 percent because the firm's growth was 4 rather than 7 percent. But 4 percent is hardly agony. Besides, the analysts who set expectations sell stocks- -so they sell expectations. Furthermore, Home Depot ascribed its disappointment to the happy fact, for consumers, of falling prices of some building products. For example, during the summer, when housing starts slowed, sawmills did not, so lumber prices fell. | no | 0 |
Jobless Recovery Indicated | Orders for durable goods unexpectedly jumped last month and first- time claims for unemployment benefits rose last week to the highest in a year, adding to evidence that a jobless economic recovery is under way. Orders for items made to last at least three years increased 2 percent, to $173.6 billion, after dropping 1.5 percent in February, the Commerce Department said. The Labor Department reported states received 455,000 applications for jobless benefits, up from 447,000 in the prior week.</br></br>The Paris Club of creditor nations agreed to conduct an in-depth study of Iraqi debts and said they "stood ready to engage on Iraq's debt." Baghdad owes the club's 19 members, including the United States, Japan, Germany and Russia, an estimated $26 billion. But that includes only principal, not interest that has gone unpaid on most of the debt since the 1970s.</br></br>President Bush plans to nominate Harvey Rosen, a Princeton University economics professor and a deputy assistant Treasury secretary in the first Bush administration, to serve on his Council of Economic Advisers. If confirmed by the Senate, Rosen will replace Mark McClellan, who was named in October to be commissioner of the Food and Drug Administration.</br></br>Johnson & Johnson won FDA approval to sell its drug-coated stent called Cypher, a device expected to revolutionize the treatment of clogged arteries in heart patients by preventing them from later re- clogging with scar tissue.</br></br>The Securities and Exchange Commission unanimouslyvoted to prohibit executives, creditors, customers and others from trying to misrepresent a company's finances by manipulating or coercing the auditor. The new rule gives the SEC greater latitude to prosecute cases in which an attempt to derail an audit wasn't successful. | yes | 1 |
Dow Gains 37 Following Economic Reports | Stocks followed bonds sharply higher today, as investors sifted through several economic reports and decided that there is a chance the Federal Reserve will lower interest rates in the near future.</br></br>The Dow Jones industrial average gained 36.98 points to close at 4647.54. The price of the Treasury's benchmark 30-year bond ended with a gain of $4.69 per $1,000 in face value in shortened pre-holiday trading. Its yield fell to 6.61 percent from 6.65 percent late Thursday.</br></br>Advancing issues outnumbered declining ones by about 11 to 7 on the New York Stock Exchange. NYSE volume was relatively light in pre-holiday trading -- 255.72 million shares, down from 300.9 million Thursday.</br></br>Broad market indexes lagged blue chips but managed some gains, as technology stocks turned in a mixed performance. The American Stock Exchange index rose 1.20 to 535.66, topping its closing record set on Thursday; the NYSE composite index climbed 1.23 to 303.23; and the Standard & Poor's 500-stock index gained 1.96 to 563.84. But the Nasdaq index fell 0.60 to 1019.51.</br></br>The market started the day slightly lower, after the Labor Department reported a surprising 0.1-percentage point drop in the nation's unemployment rate in August, to 5.6 percent. | yes | 1 |
Look Out Below: How to Prepare Your Portfolio for Falling Bond Prices | DON'T lose interest.</br></br>Worried that the bond market is vulnerable after the heady gains of the past few years? You might be tempted to withdraw to the safety of a money-market fund. The problem is, that means giving up the 4% or 5% interest rate available on bonds and substituting the wretched 0.7% yield now offered by money funds.</br></br>Want to do better? Here are two ways to reduce your bond portfolio's risk, while still clocking decent gains.</br></br>-- Sounding the Retreat: If economic growth accelerates, inflation is likely to perk up, driving interest rates higher. That would be bad news for bond prices, which move in the opposite direction from interest rates. Indeed, 10-year Treasury-note prices have edged lower this year as stocks have climbed modestly.</br></br>Even without a big economic rebound, inflation and interest rates could climb. After all, the tumbling dollar is likely to shove up the price of imported goods. Inflation could also be re-ignited by ballooning government spending, as Washington aims to cut taxes while also grappling with the cost of the Iraq war and its aftermath. | no | 0 |
Bonds Enter the Big Time As Investors Hedge Bets; Investment at Record Levels, but Will Rally Last? | Amid happy bedlam on the three dozen bond trading floors scattered about the New York metropolitan area, a piercing wail of anguish rose last week from the respected Bridgewater Associates Inc.'s bond managers.</br></br>"This bond rally has been brutal," said the Wilton, Conn.-based investment advisory firm's daily report, as it agonizingly confessed it had recently lost heart and bet against the bond market rise. "For years, it seems, we've been waiting for a secular breakout of bond yields to 1960's levels. Here it is, and we're short. Obviously it's painful to have missed this move."</br></br>The bond trading business - with the exception of the short-lived and perilous junk bond boom of the late 1980s - has traditionally been a back room gentlemen's game. It was the stock market that drew the headlines, the high rollers and the rapt attention of millions of small investors.</br></br>"The stock market is a lot easier for the layman to understand," said Larry Jones, president and chief executive of the GovPX Treasury market pricing service, which provides instant computer data on bond trading. "The bond market is different in that it is a fairly complex animal. It depends on macroeconomics," a measurement of the economy on a national scale, "which {small investors} may have taken in college, but they do not understand the real dynamics."</br></br>Now they hunger to know more, and are joining institutional investors in tossing money into a bond market that has reached record levels in the past few weeks. With President Clinton's deficit reduction and tax policies indicating a slow-growth, low-inflation economy to many investors, with interest on overnight deposits at a minuscule 3 percent and with the stock market volatile and life uncertain, bonds have become hot items even as long-term Treasury interest rates have sunk to an all-time low of less than 7 percent. | no | 0 |
FRIDAY, MAY 1, 1981 A 1 8 | SYRIA' AND ISRAEL have got themselves into a cians and generals who ache, in the name of protect-pretty fix in. Lebanon. Both are guilty of the same ing LebanonÛªs Christians, to exploit the SyriansÛª dis-basic offens^: contempt for Lebanese sovereignty, comfiture. That Israel is in the middle of an election They have assumed a right to use particular geo- campaign doesnÛªt help.</br></br>for their own purposes. They have thereby made words are potential'dynamite, and the United States themselves hostage to an extent to the very forces has used some ill-chosen ones. Richard Allen of the they are trying to manipulate. The result is that they White House staff gave the Israelis encouragement are, conceivably, close to war. for ÛÏhot pursuitÛ of Palestinian border guerrillas,</br></br>To pin down the start of a new phase in Lebanon and they have used it as license for attacks all over is never easy, but it will do to start this one with the Lebanon. Secretary Haig,.on his recent Mideast trip, recent attempt of one of the Christian militias, the seemed to stumble briefly into what may have been a Phalange, to strengthen its position against the Phalange trap. He condemned the Syrians alone Syrians. Suspecting an Israeli plot to undermine its without apparently realizing how his condemnation forward buffer position in Lebanon, Syria responded would affect the situation. Now American diplomats fiercely. Suspecting a Syrian plot to undermine its are scrambling to cool things off. forward buffer position in Lebanon, Israel responded The most interesting aspect of American dipio-in kind. In recent days they have abandoned some, macy is the approach to the Soviet Union, SyriaÛªs pa-though not all, of the longstanding tacit restrictions tron and therefore a power to be reckoned with on at on the scope of their confrontation in Lebanon, least the Lebanese part of the Middle East scene. Syrians have introduced helicopters; Israelis have Last week Secretary Haig was lambasting the Krem-shot some of them down. Syrians have moved up lin, again, as the greatest threat going to world peace, surface-to-air missiles; Israelis have uttered grave and this week he asked the Kremlin to help defuse warnings in return. Lebanon. So far Moscow has refused to consider a</br></br>Syria feels isolated, and much besieged on other diplomatic role except to condemn Israel. It has its counts these days, and the question is whether it can own interest, however, in seeing that its client does find a face-saving way to back off. For Israel the not go over the edge, perhaps dragging it along. The question is whether it can control those of its politi- same goes for the United States and its client, Israel.</br></br>THOUGH NEARLY ALL eyes on Capitol Hill are momentarily riveted on the center ring where the Great Ax-Throw Act is in progress, another act is getting under way that may feature even more rough-and-tumble political gymnastics: ItÛªs the Clean Air Act, which is due for congressional reauthorization by the end of September. For a while, it looked as if cool heads might prevail to avoid bitter wrangling; but unless a bipartisan coalition of legislators does some quick footwork, there may be little hope for timely, reasonable action. | no | 0 |
Mexico Secures Funding Package To See It Through 2000 Election | MEXICO CITY -- The Mexican government will announce today an $11 billion financing package aimed at building confidence that the country can survive next year's presidential election without suffering an economic crisis.</br></br>The heart of the package, officials said, is a new $4.2 billion International Monetary Fund standby loan, to be disbursed over 18 months, that the fund's board is expected to approve shortly after recent lengthy negotiations. The package will also include commitments by the World Bank and the Inter-American Development Bank, some previously announced, as well as the longexpected renewal of an estimated $6.8 billion in swap lines with the U.S. Federal Reserve, the U.S. Treasury and Canada's central bank.</br></br>The swap arrangement dates back many years and was strengthened in the 1994 peso crisis when Canada and the U.S., Mexico's partners in the North American Free Trade Agreement, and commercial banks supported Mexico's faltering economy with $47 billion in emergency financing.</br></br>A Finance Ministry spokesman said late yesterday he couldn't confirm details.</br></br>An IMF official in Washington, however, confirmed that a deal had been struck and said the Mexicans would "probably" draw on the funds. Countries sometimes secure IMF lending agreements to calm financial markets, but don't actually draw on the money. | no | 0 |
REVIEW --- The Week -- R&D: Google, Politics and Stocks | Wondering if the market is in for a tumble? If you find yourself Googling a lot of political and financial terms, it may well be.</br></br>In the past, trends in Google searching have been shown to predict flu outbreaks, unemployment rates and the success of movies at the box office. There was even evidence that financially oriented searches -- of Google and Wikipedia -- could predict stock market movements.</br></br>The pattern was simple: Before stocks moved lower, there was an uptick in searches of finance-related terms. Now researchers from Boston University and the University of Warwick, in England, are reporting that stepped-up searching for terms relating to politics also points to a lower market.</br></br>Building on their previous work, the scientists used the techniques of computational linguistics to group all the words in Wikipedia into topics. Then, using Google Trends, a publicly available service, they determined how often salient keywords within each topic area were searched from 2004 to 2012. The result? Increased searching of finance or political terms predicted falling stocks.</br></br>The scientists used their keyword searches to make hypothetical trades based on historical data for the S&P 500 index. For each keyword topic, they bought or sold the index weekly depending on whether searches were rising or falling, comparing their results to a strategy of buying and selling randomly each week. The median return for trading based on a collection of politics keywords was 38% above the random strategy. For business-oriented keywords, it was 28%. "Crucially," the scientists write, "we find no robust link between stock-market moves and search-engine queries for a wide range of further semantic topics." | no | 0 |
Fight Pledged By Putnam Oil Inflation | SPRINGFIELD, Mass., Nov. 26 (IP).ÛÓIndustrialist Roger Lowell Putnam, thrice Springfield mayor, who was named Economic Stabilization Administrator tonight pledged himself to fight inflation.</br></br>Putnam said the United StatesÛª economic stability ÛÏis the staff on which the whole free world leans for security in these troubled times. It is my job to keep this staff strong so that We in America may be the guiding light for freedom everywhere.Û</br></br>When informed President Truman had named him to the post to succeed Eric Johnston, Putnam said: ÛÏThatÛªs very interestingÛÓIÛªm glad to hear it.Û*</br></br>Putnam, prominent Democrat and president of the Package Machinery Co., at East Long-meadow, Mass., said he 4fkind of had the ideaÛ he would get the job. He said he had conferred about the position with Mobilization Director Charles E. Wilson.</br></br>Mr. Truman gave Putnam a recess appointment, effective December T. Johnson resigned last week to return to his post as motion picture czar. | no | 0 |
Maryland Speaker Girds For Gambling Showdown; Busch Challenges Governor in First Major Test | Maryland House Speaker Michael E. Busch had a single question for a delegate who recently compared his crusade against slot machine gambling to the ancient tale of Horatius, the man credited with preventing the Etruscan army from conquering and pillaging Rome.</br></br>Legend has it that Horatius single-handedly staved off attackers by defending a strategic bridge until it could be destroyed, then jumped into the Tiber River. But versions differ as to whether he reached safety and was duly rewarded by a grateful city or drowned before reaching the bank.</br></br>In the modern world of state politics, Busch (D-Anne Arundel) is the chief obstacle to a proposal that would dramatically expand legalized gambling in Maryland. The affable new speaker has pitted his House of Delegates against Gov. Robert L. Ehrlich Jr. (R), who has made legalizing slot machines a centerpiece of his first year in office, and against Senate President Thomas V. Mike Miller Jr., a Democrat and pro-slots veteran with a proven ability to manipulate the levers of power.</br></br>In the coming days, Busch's political acumen will be put to the test. He will bring to the House floor a proposal to study the gambling issue for a year. He will settle on a package of tax increases and budget cuts to fill a gap estimated at more than $400 million. He will have to move those proposals through two key finance committees, where leaders would rather use slot machine revenue to backfill at least a portion of the shortfall. And then he will have to persuade a majority in the House to vote for the budget plan the following week.</br></br>A plan to close corporate tax loopholes could raise about $200 million but would still require deep cuts to balance the budget. Two other options, raising the sales tax by a penny or temporarily increasing the income tax for top earners, would raise more money. But Ehrlich has promised to veto both, meaning delegates might be forced to take a politically difficult vote for naught. | no | 0 |
Carter Lacks Plan to Attack Inflation, U.S. Ex-Aide Says | A former White House economic adviser said yesterday that President Carter is spending too much time trying to make 1 lie business community happy and not enough time halting inflation.</br></br>Dr. Arthur M. Okun, chairman of the PresidentÛªs Council of Economic Advisers under Lyndon B. Johnson and now a senior fellow at the Brookings Institution, said the While House; has no anti-inflation program. He said he expects economic growth to continue in 1978 and a further reduction in unemployment, hut he said the current 6 per cent inflation rate is more likely to go up than down, unless President Carter does something about it.</br></br>Okun, interviewed on ÛÏMeet the PressÛ (NI3C. WHC), said price inflation wonÛªt go down unless wage inflation goes down, "and you can't solve either of these problems without solving both.Û ÛÏWhat T would like to see.Û Okun said, ÛÏis some kind of an incentive system offering rewards through lower taxes specifically for those business firms and labor groups that volunteer to restrain prices and</br></br>wages ... O'herwisr- we are going to he stuck with the stagflation swamp tiiat we have been inÛª, with a perpetual motion machine of 8 per cent wage increases and 6 pel cent price increases.Û Okun said he docs not foresee any ÛÏdramatic changeÛ in monetary policy, hut hailed the nomination last week of G. William Miller as chairman of the Fedcial deserve Board.</br></br>Me said Millet'? succession to the post now ludd by Arlhui E. Burns would produce a more coordinated and cooperative relationship between the Pod and the administration, lie added that such cooperation can be | no | 0 |
The Greenback Is Golden Again; Economic Troubles in Asia Spur Resurgence of U.S. Dollar | With Asian financial markets in turmoil, Europe in an economic funk and the price of just about everything falling around the world, it seems everyone wants to have and hold dollars.</br></br>In recent weeks, there have been reports of Russian housewives stuffing greenbacks into glass jars and secretaries in Singapore switching their savings accounts into dollars at local branches of Citicorp and American Express. Thai chambermaids have taken to pleading with hotel guests for tips in dollars, not baht.</br></br>Big financial players have also jumped into the act. Treasurers of giant corporations are scrambling to convert overseas profits back into dollars before they erode further in value. And central bankers in Argentina, Belgium, Canada, Australia and even Switzerland have been selling off gold reserves in favor of dollars and U.S. Treasury bonds.</br></br>All this demand for greenbacks has driven up the value of the dollar against most other currencies. In the past six months, the dollar has risen 4 percent against the German mark, 15 percent against the Japanese yen, 70 percent against the Thai baht, 90 percent against the Korean won and 195 percent against the poor Indonesian rupiah.</br></br>To a large degree, the dollar's ascent reflects flight from the economic problems in Asia to the relative safety offered by the U.S. economy and its financial markets. Were it not for the stabilizing influence provided by the dollar, economists say the damage from the crisis could have been even greater. | no | 0 |
Burns Hits Plan to Change Appointment | Federal Reserve chairman Arthur Burns yesterday reversed his position and came out against making the chairmanÛªs term coincide more closely with that of the President.</br></br>ÛÏThe consequence,Û he told a House Banking Subcommittee, ÛÏcould be some politicizing of the Federal Reserve, and perhaps some erosion of the independence of the nationÛªs monetary authority.Û</br></br>Decisions on the nationÛªs money supply, he said, might end up being made by some ÛÏpolitical hack in the basement of the White HouseÛ.</br></br>Last year Burns told Congress the-Federal Reserve Board had ÛÏno objectionÛ to making the two terms roughly coincide. Explaining this shift of position, he said he took the earlier stand partly to avoid any implication he was fighting for continuation of his own job.</br></br>The seven members arc appointed for 14-year terms by the President, -subject to Senate confirmation, The President selects the chairman from among the members for four-year terms without need of Senate approval. Often the terms do not coincide with his. | no | 0 |
Plan B for AIG | The survival of a great American business may now depend on whether private investors will be allowed to succeed where government seems to be failing. We're referring to insurance giant AIG, which under the terms of a federal bailout is threatening to become a loser for taxpayers. Maybe it's time for the feds to consider Plan B.</br></br>With its September 16 rescue of the world's largest insurer, the New York Federal Reserve has managed to put taxpayers on the hook for more than $120 billion, but on terms so onerous that AIG may have to be sold in pieces at firesale prices. Most of the taxpayer exposure comes from an $85 billion revolving credit facility, in return for the government taking almost 80% of AIG's equity.</br></br>The Feds are charging AIG more than 10% interest on the entire $85 billion, even if the company doesn't borrow that much. The interest rate on money actually borrowed is more than 14%. One AIG shareholder likens it to a financial counselor advising someone struggling to pay the 6% interest on his mortgage to solve the problem by running up debt on his credit card. That's why the New York Federal Reserve recently had to bail out the bailout, lending another $37.8 billion at more attractive terms.</br></br>But the first transaction is still crushing the company, forcing a virtual liquidation. According to a source familiar with the company, AIG is suffering declines in renewals among corporate customers as it loses business to competitors. An AIG spokesman says, "Renewals worldwide are strong, but there are variations depending on the region and line of business." No one disputes, however, that interim CEO Ed Liddy's job is not so much to run the business as to prepare various AIG subsidiaries for quick and dirty sale, though there's no guarantee that the prices he gets will protect taxpayers from losses.</br></br>We have little sympathy for a company that sought government assistance, except that in this case shareholders were never permitted to vote on the deal. The shareholder with the largest stake, former CEO Hank Greenberg, says the firm would have been better off in Chapter 11. AIG directors instead had every incentive to choose a transaction with the government -- even on horrible terms -- over bankruptcy. That's because a bankruptcy filing would have stripped directors of legal protection. | no | 0 |
Signs of Economic Strength, Inflation Caused Fed to Tighten Credit in March | WASHINGTON -- Surprising strength in the U.S. economy and a determination to respond quickly to hints of renewed inflation caused the Federal Reserve to tighten its grip on credit in late March, newly released minutes of Fed meetings show.</br></br>The decision to reverse course, which had been widely reported but not previously confirmed by the Fed, led to higher interest rates immediately after the March 29 meeting of the Fed's policy-making Open Market Committee. The minutes of the meeting were released Friday after the customary seven-week delay.</br></br>The Fed tightened credit again in early May because of continued fears of inflation. That move wasn't covered in the minutes released Friday. The Open Market Committee held a regularly scheduled session last week at which it apparently didn't change its credit position.</br></br>The minutes of the Open Market Committee offer one of the few ways for outsiders to get a glimpse of the Fed's deliberations. Before the March 29 meeting, economists generally predicted that the Fed wouldn't tighten credit. But at the meeting, only one of the 11 committee members, Fed Governor Martha Seger, dissented from the tightening move.</br></br>Among the others, the only disagreement was a matter of degree. "Most indicated a preference for only a slight move toward restraint, at least at this time, but a few urged somewhat greater tightening," the minutes say. | no | 0 |
Feet to the Fire | Treasury Secretary Larry Summers may have concluded by now that some guys do have all the luck. His fabled predecessor Robert Rubin seems to have left the cupboard bare.</br></br>The state of Summers's karma matters. He arguably has one of the four or five most important jobs in the world--along with guys named Clinton, Greenspan and Yeltsin. If the financial gods frown at Larry Summers at some point, they frown at nearly all of us. And they are curling a lip his way right now.</br></br>A stock market that soared to irrationally exuberant new heights under Rubin has yo-yoed downward under Summers. The strong dollar that helped wring inflation out of the U.S. economy has weakened erratically against the Japanese yen, tearing a hole in international monetary cooperation. And Summers was forced to defend himself in Congress last week against charges that he contributed to the ineffectiveness of U.S. aid to Russia.</br></br>This sea of troubles arrives as Summers plays symbolic host this week to the annual gathering here of the world's most important central bankers, finance ministers, private banking executives and the other assorted money men who have some connection to the International Monetary Fund and the World Bank.</br></br>Rubin managed these meetings with his customary aplomb, elegantly turning aside European schemes to weaken U.S. domination of the IMF and, to calm the panicky types, repeating that the world's economic fundamentals were solid. | no | 0 |
Farewell Blast For a Hotel In Pittsburgh | A Û÷Û÷controlled implosionÛ (top) begins to crumble the 16-story Carlton House Hotel in downtown Pittsburgh Saturday morning. The 28-vear-old building is being razed to make way for Renaissance II, the second phase of a major redevelopment of the city. Thick smoke billows from the building (center) as more than 1,000 explosive charges do their work. Seven seconds after it began, the demolition is completed (bottom). Construction of a 52-story office building has been proposed in place of the hotel, where former Soviet Premier Khrushchev stayed while visiting the city during his tour of the United States in 1959.</br></br>ROANOKE (UPI)ÛÓIndustry analysts believe recent labor unrest and other problems in Poland, South Africa and Australia may lead foreign coal buyers to depend more heavily on the United States than in recent years.</br></br>PolandÛªs labor changes, racial unrest in South Africa and a major minersÛª strike in AustraliaÛÓthe worldÛªs three largest coal exporters behind the United StatesÛÓare spreading the he-' lief that the United States may be t he most stable source of coal, analysts' said.</br></br>ÛÏThe United StatesÛª image as a coal supplier has made a big comeback. Our problems are beginning to pale in com-parispn (with other coal exporters),Û said Jack Kawa, a coal analyst with. Wheat, First Securities.</br></br>ÛÏThe outlook for I he U.S. export is getting stronger and stronger as the world turns to coal. Customers are turning towards American coal,Û ho said. | no | 0 |
Computer Business: Signs of Softening | The computer industry, which until now has sailed above the recession, is showing signs of softness with scattered layoffs, dismissals, shorter workweeks and longer vacations among component manufacturers.</br></br>Most of the cutbacks iii the work force have been aimed at keeping inventory from building up rather than reflecting an absolute decline in demand, and industry officials expect business to pick up again soon as prices fall.</br></br>So far the recessionÛªs impact on the manufacturers of semiconductors and other computer components has been almost negligible compared with the battering manufacturing industries such as autos and steel have taken. But an increasing number of aggressively competitive Japanese firms are moving into the market, and American manufacturers fear the inroads the Japanese firms may make while the U.S. industry is in a weakened condition.</br></br>Texas Instruments announced two weeks ago that it was reducing its work force by about 2,800 jobs, or 3 percent. Reduced work schedules were already in effect for ap-</br></br>More than other semiconductor manufacturers, Texas Instruments supplied parts for the consumer market, which has been weakened by the recession. At the same time, it announced the cutback in the work force, the company also said it is phasing out its digital watch business. | no | 0 |
JDS Uniphase, Brocade Tumble As Rate Cut Reinforces Pessimism | NEW YORK -- Technology issues fell again and consumer names retreated as investors interpreted the Federal Reserve decision to cut interest rates again as a signal that economic trends remain weak.</br></br>A host of telecommunications-gear makers fell during trading. Communications-chip maker Broadcom shed $4.73, or 13%, to $33.06 in Nasdaq Stock Market trading. Optical-equipment maker JDS Uniphase, which hit a 52-week low Monday, fell further, dropping 44 cents, or 5.9%, to 7.07. Cellphone-chip maker RF Micro Devices slid 2.02, or 7.9%, to 23.54. Storage-software developer Brocade Communications retreated 1.60, or 5.9%, to 25.47. All trade on Nasdaq.</br></br>The weakness came after the Federal Reserve voted to lower interest rates to 3.5% from 3.75%, marking the central bank's seventh rate cut this year.</br></br>Market averages, which had moved slightly higher, albeit in thin trading, ahead of the release of the Fed's decision, veered lower. The Nasdaq Composite Index finished down 50.05, or 2.7%, at 1831.30, the lowest the index has finished since April 9. Technical analyst Peter Green of Gerard Klauer Mattison speculated the Nasdaq composite could fall another 4% during the short term, given the recent technical patterns.</br></br>The Dow Jones Industrial Average closed down 145.93 points, a 1.4% drop, at 10174.14, its lowest finish since April 12. | yes | 1 |
Burns Says Goals Same: Growth Policy Set At 5-7.5% | Federal Reserve Chairman Arthur F. Burns told Congress today the board will keep following the same money growth policies for the next year that it has pursued in recent months despite pressures for expansion.</br></br>Anything higher than a growth targtet.of 5 to 7.5 per cent. Burns told the Senate Banking Committee, could help to set off a new round of inflation. He called it ÛÏthe only responsible option.Û</br></br>There has been pressure in Congress on the Federal Reserve Board to increase its money growth targets to as much as 10 per cent a year, in hopes of promoting a faster recovery from recession.</br></br>Burns said the Federal Reserve recognizes that monetary policy ÛÏhas an important role to play in maintaining a financial environment that is favorable to sustained economic expansion.Û And he said.the boardÛªs money growth targets support this role.</br></br>Burns said the board is following a course ÛÏthat will provide expansion in supplies of money and credit adequate to facilitate further good recovery of production and employment, but not so large as to rekindle the fires of inflation.Û | no | 0 |
Broad Band: Nasdaq Stocks' Swings Are Unprecedented -- But Taken in Stride --- Instant News, Online Trades, Momentum Investing All Increase the Volatility --- Consumers Are Not Spooked | John Schott loaded up on biotechnology stocks last year, then watched them soar fourfold. He sold a few but held on to most -- only to see the prices cut in half in a matter of days.</br></br>His reaction: Easy come, easy go. "All through the '90s we've tended to have these rolling crashes," says the 62-year-old suburban-Philadelphia investor. "That tends to inure you to the whole thing."</br></br>Without question, the volatility in stock prices is unprecedented. Last year, the Nasdaq Composite Index moved 2% or more on a quarter of the trading days. That was the most in the Nasdaq Stock Market's 29-year history. But this year is more volatile still: More than half of the trading days have seen the index close up or down by at least 2%. Yesterday, it swung all the way from being up 3.8% to being down 2.5% at its close of 3676.78. Even the Dow Jones Industrial Average, representing established, blue-chip stocks, is fluctuating the most it has in a decade.</br></br>Investors had better get used to it. The broad embrace of "momentum" investing by big and small investors alike, the growth of technology stocks that are intrinsically volatile, and the Internet's instant news and inexpensive trading all suggest that the market is becoming more susceptible to sudden surges and swoons.</br></br>How much does this volatility really matter? Clearly, that depends partly on where stocks go from here. With its 27.2% sell-off since its March 10 high, the Nasdaq Composite is in what Wall Street customarily calls a bear market, but it is still up 45.8% from 12 months ago. | yes | 1 |
Business world: Feeling like the fifties | Slow growth, low interest rates, bare hints of inflation and a political preoccupation with raising taxes to try to keep pace with government spending. Has the U.S. been here before? Arguably it has, in the 1950s.</br></br>The Elvis Decade is a tempting comparison for the Clinton Hour. The president goes to the mike this week for the fiscal medley the congressional leadership has scored for him. Like a lot of the Eisenhower-era budget bills, it is a song of stasis that won't singlehandedly close down the economic show.</br></br>Over the long run, higher tax rates on income from success and saving will retard economic opportunity. Not a lot of those taxes actually will be paid, but they will be avoided, and in the process capital won't be optimally used. "Animal spirits" will still galvanize the venturesome -- levies below 50% won't keep them down -- but fewer will go flat out. In the 1950s mode, wealth is built more slowly, more equally, less openly.</br></br>The good news is that, if otherwise not too hindered, the economy could swamp that tax legislation; like the mighty rivers of the Midwest, it will go more or less where it wants. At the moment, it seems to be reinforcing the more desirable conditions of '50s, relentlessly beating down the cost-of-living in our joyless recovery.</br></br>The consumer world-wide, and especially in the U.S., has never had it so good. Nearly everything is falling in price and rising in quality. Computers. Long-distance telecommunications. Clothing. Fuel. Sporting goods. Even the "domestic" auto manufacturers are containing themselves in their flush times. Intense competition drives the show. The major exceptions are those areas of the economy dominated by government and its unions: schooling, transit and law enforcement. | no | 0 |
Mexico's GDP Jumps Sharply; Fundamentals Appear Strong | MEXICO CITY -- On a day when fears that a cooling in the U.S. economy could damp Mexico's expansion, figures released by the country's Finance Ministry showed there's plenty of momentum here.</br></br>Mexico's gross domestic product surged at an annual rate of 7.9% in the first quarter, its fastest clip in 21/2 years and well above expectations, as the strong peso and low inflation helped spread the economic recovery to all sectors.</br></br>Mexico's industrial sector expanded by 8.6% from a year earlier, with manufacturing output rising 9.4%. Construction expanded 6.9%, while mining and energy sectors also increased by healthy margins.</br></br>Mexican officials noted that the first-quarter results were skewed by several additional working days in the period.</br></br>Strong fundamentals are the real story behind the surge, analysts said. Even before garnering a coveted investment-grade rating from Moody's Investor Service Inc. in March, the country had met its overseas debt obligations for 2000. Moreover, despite increased government spending this election year, Finance Minister Angel Gurria confirmed Mexico is on track to meet its target of a budget deficit of 1% of gross domestic product for 2000. slightly better than 1999's 1.15% figure. | no | 0 |
Lack of Lifeline May Give Ford a Boost | As General Motors and Chrysler seek another infusion of government funds, Ford is standing apart for now -- and may be benefiting.</br></br>Ford's staggering 40 percent plunge in U.S. light-vehicle sales last month was actually a victory of sorts. GM's sales declined by an even steeper 49 percent, and Chrysler's fell 55 percent from January 2008, according to Ward's Automotive Group, which tracks the industry.</br></br>Part of the explanation may be that car buyers believe Ford is more likely to survive the recession, industry analysts said.</br></br>Unlike its domestic rivals, Ford didn't seek a federal bailout late last year, and it didn't turn to the government again last week begging for a second big infusion of taxpayer funds to avoid bankruptcy.</br></br>"One of the factors is that Ford's not asking for money in Washington, so consumers may be less concerned about Ford," said John A. Casesa, automotive analyst and managing partner of the consulting firm Casesa Shapiro Group. | no | 0 |
Dumping on the Dollar | Everyone has his favorite household remedy. Mom is partial to chicken soup, Uncle Pete prefers a shot of Jack Daniels and over at the National Association of Manufacturers they like to prescribe a weak U.S. dollar.</br></br>With the U.S. trade deficit still large, the weak-dollar boys are back selling their elixir to Congress. Our old friend Jerry Jasinowski, head of NAM, was his typically laid-back self this week, explaining that an "overvalued" dollar "is decimating U.S. manufactured-good exports, artificially stimulating imports and putting hundreds of thousands of American workers out of work." How it managed to cause all of this mayhem while the economy was growing by some 5.8% in the first quarter must constitute a miracle. Either that, or maybe a strong greenback isn't quite the economic disaster he claims.</br></br>The U.S. had a robust currency all throughout the 1990s when times were flush. The same was true for most of the 1980s, though we recall similar moaning about the Reagan dollar. The worst recent decade for U.S. economic policy was the 1970s, when the Nixon and Carter Treasuries decided to take NAM's advice and debase the dollar. Nirvana did not arrive.</br></br>NAM's argument isn't economic policy so much as special pleading. Its members have to cope with rugged foreign competition, and they're looking for some government relief. They figure that the inefficient steelmakers got theirs -- tariffs -- so it's only fair that they now get a similar break. A dollar devaluation would be a kind of universal tariff on imports.</br></br>You'd think Mr. Jasinowski would worry about the company he's keeping here. His allies include the AFL-CIO, that free-market paragon, and in the Senate the likes of Maryland's Paul Sarbanes, who has never met a tax or regulation he didn't like. He's only too happy to flack for NAM when it gives him a chance to whack foreign imports. | yes | 1 |
U.S. Jobless Rate Stays At 7.1 Pct.; Local Unemployment Reported at Highest Level in Nine Years | The nation's economic recession apparently continued last month as employers cut payrolls and the unemployment rate remained frozen at a five-year high, government officials reported yesterday.</br></br>While the U.S. unemployment rate stayed at 7.1 percent, other figures showed the local jobless rate reaching its highest level in nine years, and analysts predicted the Federal Reserve would come under renewed pressure to cut interest rates once more in hopes of kindling a recovery.</br></br>The Washington area unemployment rate jumped 0.3 percentage points to 4.9 percent in December, the highest level of the current economic slump. In 1991, the number of jobs in the region fell 2.1 percent, according to yesterday's figures.</br></br>"It looks to me like the recession is deepening," said Richard Groner, chief of labor market information for the D.C. Department of Employment Services, which compiles the area figures.</br></br>"I think we will see more increases in the unemployment rate," Groner said. "January and February tend to be high-unemployment months." Local employment data is a month behind the national statistics. | no | 0 |
Bernanke Leaves Investors Disappointed | Author: Michael Casey</br></br>NEW YORK--Federal Reserve Chairman Ben Bernanke left investors disappointed after he painted a gloomy picture of the U.S. economy but gave no indication the Fed is preparing any new stimulus measures.</br></br>Stocks and other assets with greater exposure to risk fell, while U.S. Treasurys and the dollar gained as Mr. Bernanke delivered his much-awaited semiannual address to Congress, describing the economic outlook as "unusually uncertain."</br></br>The Fed chairman reiterated the Fed's official view that interest rates would stay near zero for "an extended period." But although he stressed that it is "prepared to take further policy actions as needed to foster a return to full utilization of our nation's productive potential," he offered no new policy options for reversing the recent slowdown in the U.S. economic recovery.</br></br>In answer to senators' questions, Mr. Bernanke later explored the possibility of further stimulus measures "if the recovery seems to be faltering," but in failing to address this in his prepared remarks he left investors disappointed. In the lead-up to his appearance, there had been growing speculation that the Fed chairman might signal the central bank's willingness to cease paying interest on the reserves it holds on banks' behalf, a move that would be an incentive for banks to lend that money to customers. Indeed, Mr. Bernanke mentioned that idea, along with other prospects for added stimulus in the question-and-answer session, although he said that for now the Fed was still intent on gauging the strength of the recovery. | yes | 1 |
Finance Ministers May Meet on Dollar's Fall; Group of Five Representatives Could Convene in Europe Within Two Weeks | The Group of Five major industrial nations may meet within the next two weeks to discuss the recent decline of the dollar and its impact on the global economy.</br></br>The Group of Five includes the finance ministers and central bankers of the United States, Japan, West Germany, France and Great Britain.</br></br>According to Japanese news agencies-normally close to government officials-the G-5 meeting may take place in Paris on Saturday, Feb. 7, at the conclusion of a trip by Treasury Secretary James A. Baker III to Saudi Arabia.</br></br>Baker, asked about the report during an appearance last night on the McNeil-Lehrer News Hour, said, "We don't comment on plans for future G-5 meetings, but as we sit here, there are no present plans for such a meeting."</br></br>Baker again said he was not "talking the dollar down," and has not done so for about a year. But he indicated he was prepared to accept a further decline through market forces. That decline has been orderly, except for the "instability" of the past few weeks, Baker said. "But at some point, it could reach a point where we don't want it to go." | no | 0 |
In Silicon Valley, a Rebirth of Risk-Taking | Many people have wondered lately what happened to the American Dream. Somehow, in the face of tougher foreign competition, a wary Wall Street and skittish customers, that fabled chance to turn a clever idea into a caravan of cash seemed to slip away.</br></br>Len Bosack and Sandy Lerner are proof that the dream-and this sunny region of Northern California that thrives on it most-are alive and well.</br></br>Just a few years ago, the husband-and-wife team was developing computer equipment in a bedroom of their home, assembling it in the living room and holding meetings with their nine-person staff in the cramped dining room. Lacking a sales force, they peddled their goods over electronic computer networks. Lacking a service department, they took customer calls at 2 a.m. on a phone conveniently positioned by their bed.</br></br>Today, their company, Cisco Systems Inc., is fast filling a spacious industrial building south of San Francisco and is shipping $70 million a year worth of sophisticated equipment used to link clusters of computers at scattered locations. Modestly paid employees of Stanford University until starting Cisco, the young couple now have a net worth in Cisco's publicly traded shares of $80 million.</br></br>Bosack and Lerner are doing much to strengthen the ethic of risk-taking that has made this area the world's leading hothouse for innovation. Even as the technology-rich Northeast flirts with recession and as defense cutbacks cloud Southern California's future, Silicon Valley is enjoying a bit of a resurgence. Fed by the recent hunger on Wall Street for new stock offerings, young technology companies like Cisco are stirring up an enthusiasm that is unmatched since 1983, when nearly three dozen Silicon Valley companies went public in a frenzy of first-time stock offerings. | no | 0 |
For the investor, some bold words | I regard my home as a place to live, not as an investment. It is not a substitute for retirement savings.</br></br>I invest regular amounts every month, in both rising and falling markets. I know I cannot gauge market tops and bottoms. If I receive a windfall -- a bonus, bequest or gift -- I gradually feed it into my regular investment mix.</br></br>My share of bonds roughly equals my age. I will allocate to stocks a declining portion of my financial assets as I get older.</br></br>I rebalance my portfolio every quarter. If the stock market plunges, pushing my stock allocation way below its target percentage, I sell bonds and use my cash to buy stocks.</br></br>I force myself to sell high and buy low by periodic rebalancing -- just what is temperamentally difficult for most investors to do. | no | 0 |
Waddell Sees 'Little' Crash Fallout | Author: Jenny Strasburg</br></br>Waddell & Reed Financial Inc., the Kansas firm whose May 6 trading regulators have highlighted as a trigger of the "flash crash," said its mutual-fund inflows declined last quarter as profit rose.</br></br>But Waddell executives played down the impact of scrutiny it has received over its $4.1 billion sale of futures contracts May 6 tied to the Standard & Poor's 500-stock index. Regulators earlier this month said the trade, made using a computer algorithm, spooked an already-fragile market and helped trigger the day's stock selloff.</br></br>At Waddell, business has continued more or less as usual under the spotlight, executives said on a third-quarter earnings call on Tuesday. The company managed $76 billion in assets at the end of September, its most ever at the end of a quarter, and it pulled in money when many mutual funds had outflows.</br></br>"There's little effect that has been seen," Thomas Butch, an executive vice president of the firm who oversees sales of Waddell's popular Ivy Asset Strategy Fund and other retail and wholesale funds, told analysts on a call Tuesday. Traders with the Asset Strategy fund were responsible for the futures trade in question, which they intended as a hedge, or protection against losses, amid market turbulence. | no | 0 |
Global View: Breaking Up Is Hard, But Let's Not Freak Out | Corrections</br></br>Monday's Global View column on this page misstated the</br></br>name of the successor to the U.S.S.R. The correct name is</br></br>Commonwealth of Independent States.</br></br>(WSJ Dec. 18, 1991) | no | 0 |
SEC Chairman to Retire; Levitt Has Been Agency's Longest-Serving Chief | Securities and Exchange Commission Chairman Arthur Levitt Jr. announced yesterday that he will step down by mid-February, ending the longest chairmanship in the agency's history.</br></br>Levitt, 69, has overseen the nation's securities markets during a period of remarkable change since President Clinton appointed him in 1993.</br></br>He told reporters that he had met with vice president-elect Dick Cheney at transition headquarters in McLean to tell him of his plans and that an acting chairman might be named before the new administration selects his replacement.</br></br>Levitt could have remained a member of the commission until June 2003. He said he has not decided what he will do next.</br></br>Observers and members of the securities world yesterday described Levitt much as he describes himself: as an advocate for the investor. | no | 0 |
After the Sizzle, Whither Stocks?: More Experts Expect a Decline Because of Takeover Slowdown | Folklore has it that the stock market likes to worry. The old saying on Wall Street, after all, is that the market will ÛÏclimb a wall of worry.Û</br></br>But logic would seem to indicate that at some point the stock market will take some of its problems seriously. And thatÛªs when equity prices will stop climbing and start declining.</br></br>That point may soon be reached, a lot of experts on Wall Street are now saying, thanks to the chaotic situation in the junk bond market recently, uncertainty over whatÛªs happening in the economy and, maybe most important, the sharp slowdown in the number of corporate takeovers.</br></br>ÛÏA lot of the sizzle is gone,Û says Hugh Johnson, chief investment officer of First Albany Corp. in explaining why the stock market has declined sharply after venturingÛÓreluctantly, it now seemsÛÓinto record territory early this month. "Because of the problems in the junk bond market, takeover activity has been reduced. [And] takeover activity has been the principal reason the market has done so well in 1988 and 1989."</br></br>Johnson cites Federal Reserve figures that show corporations bought stocks at a $180 billion annual rate at the beginning of this year, at the same time many othersÛÓespecially individuals, foreigners and life insurance companiesÛÓwere big sellers of stocks. And a lot of the corporate stock purchases, Johnson concludes, came as the result of takeovers. | no | 0 |
Interest Rates Tumble Again As Bonds Soar --- Yield on 10-Year U.S. Note Drops Below 8%; Prices Of 30-Year Issues Jump | NEW YORK -- Interest rates tumbled again yesterday as the credit markets staged another powerful rally.</br></br>The yield on 10-year Treasury notes dropped below 8% for the first time in eight years. Bond prices soared. Prices of some 30-year Treasury issues rose about 2 points, or around $20 for each $1,000 face amount. Since Feb. 7, prices have jumped more than 13 points in one of the strongest rallies in history.</br></br>Speculation continues to mount that West Germany will cut its interest rates soon in an effort to spark faster economic growth, and that Japan and the U.S. will make similar moves in coming weeks, money managers said. Some analysts expect West Germany's central bank to act within a few days.</br></br>Further declines in oil prices also helped fuel the rally, analysts said. "There is a growing belief that the big drop in oil prices means inflation is going to be lower than anyone expected over the next several years," said William H. Gross, a managing director of Pacific Investment Management Co. in Newport Beach, Calif.</br></br>In commodity markets, Treasury-bond futures prices closed at 7 1/2-year highs. But the rally in the credit markets failed to lift stock prices. The Dow Jones Industrial Average fell 12.39 points to close at 1696.67 in active trading. | no | 0 |
Case Study: Recovering From a Ride On the Coattails of Y2K | THE PROBLEM: What happens when an expected tidal wave of business reveals itself to be a brief splash?</br></br>Mark Kolb, chief executive of Taratec Development Corp., of Bridgewater, N.J., is the first to admit he was unprepared for the spring of 2000. "Spending for our services just dried up," he says. "We were caught off guard."</br></br>Though he didn't realize it at the time, Taratec, an information-technology consultant to large pharmaceutical companies, had been an unwitting beneficiary of the Y2K computer crunch. Through the late 1990s, big corporations, including his clients, shoveled piles of cash at software and hardware consultants, anticipating computer snarl-ups when the digital calendar turned to the year '00.</br></br>Even though Taratec did little Y2K work, by 1999, Mr. Kolb employed 100 and was looking at record revenue of $17 million. He told his partners to prepare for a public offering in 2000. He was proud that a business launched from his living-room coffee table in 1984 had reached this grand juncture.</br></br>But in the first quarter of 2000, new business evaporated. The stock market tanked. Y2K was a nonevent. "We didn't realize how much of our 1999 revenue was driven by Y2K budgets," he says. For the first time ever, annual revenue fell. | no | 0 |
Stocks Post Slight Gain | NEW YORK, Nov. 30, (AP) ÛÓ The stock market posted a moderate gain in fairly active trading today, partially in response to bargain hunting brought on by steep losses earlier in the week.</br></br>Gaining issues had a slim 7-6 lead over losers in the dosing tally of New York Stock Exchange- listed stocks.</br></br>Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exehangse and in the over-the-counter market, came to 25.79 million shares.</br></br>The Dow posted a surprisingly large 12-point drop in the previous session and slipped another 4 points in early trading today before investors began moving</br></br>Brokers also said President Carter's statement on his plans for handling his tax program was one encouraging factor. Carter said he would press for substantial tax reductions early next year but might delay sending complicated tax reform measure to Congress for fear they would tie up the tax cuts. | no | 0 |
MasterCard Profit Jumps 31%, Beating Views | Author: Melissa Korn</br></br>NEW YORK--MasterCard Inc.'s second-quarter profit jumped 31%, beating analysts' expectations, as higher consumer spending in Latin America, Europe and Asia boosted the top line.</br></br>Though sales of discretionary items in the U.S. have slumped in recent months, the company said spending in Europe hasn't been hurt by macroeconomic uncertainty, and Asia-Pacific and Latin America continue to expand by double digits on a percentage basis.</br></br>Still, President and Chief Executive Ajay Banga said during a conference call on Tuesday that there could be "some tempering" in topline growth in the second half of the year compared with the 9.7% revenue increase the company posted for the six months through June, citing an uneven pace of economic recovery, especially in the U.S., as well as tough comparisons to strong year-ago figures.</br></br>Roll-offs of some debit portfolios will continue to damp processed-transaction results as well, though MasterCard expects the effects of those terminated contracts to wane after the third quarter. | no | 0 |
The Morning Brief: White House Seeks to Limit Child Insurance Program | The Wall Street Journal Online</br></br>The Morning Brief, a look at the day's biggest news, is emailed to subscribers by 7 a.m. every business day. Sign up for the e-mail here.</br></br>On Friday evening, with Congress out of town on its summer recess and Americans heading into a mid-August weekend, the Bush administration sent a message to the states: The federal government will make it tougher for a national children's insurance program to cover the offspring of middle-income families.</br></br>The State Children's Health Insurance Program was created in 1997 to help children whose families couldn't afford insurance but didn't qualify for Medicaid, and administration officials tell the New York Times that the changes are aimed at returning the program to its low- income focus and assuring it didn't become a replacement for private insurance. Administration point man Dennis Smith wrote to state officials saying there would be new restrictions on the District of Columbia and the 18 states -- including California and New York -- that extend or plan to extend coverage for children whose families make more than 250% of Federal poverty levels. For a family of three that 250% is $42,900, and for a family of four it's $51,625. Under the new limits, a child from a family making more would have to spend one year uninsured before qualifying, and any state that wants to extend coverage would have to assure Washington that at least 95% of children eligible for SCHIP or Medicaid are enrolled in one of the programs. But as the Associated Press reports, no state can currently make such assurances.</br></br>Rachel Klein, deputy director of health policy for advocacy group Families USA, tells the AP that since many families above the 250% threshold can't afford private insurance, "the effect of this policy is to have more uninsured kids." Ann Clemency Kohler, deputy commissioner of human services in New Jersey, tells the Times the changes "will cause havoc with our program and could jeopardize coverage for thousands of children." States have already been imposing waiting periods and taking other steps to prevent parents from moving their children from private insurance to SCHIP, which currently serves some 6.6 million children, the Washington Post notes. The administration's new restrictions come as the program, which expires at the end of next month if Congress doesn't reauthorize it, is the subject of a larger political fight that pits the White House against Democrats and some Republicans in Congress and state capitals. | no | 0 |
å£Ijc toosijington post | College director Mike Fountaine, front right, and instructor Tom Farace lead the cheers of the graduating class.</br></br>You wonÛªt find Hamburger Col-lege listed in LoVe joyÛªs Guide to Colleges and Universities. It has no campus, no football team and no fraternities. But Hamburger College does have studentsÛÓstudents who are hungry to learn how to make and sell a better hamburger.</br></br>Hamburger College (officially known as McDonaldÛªs Washington Regional Training Center) opened in Silver Spring Monday and graduated its first class yesterday. It is here that future store managers and area supervisors for the giant hamburger chain are taught the ins and outs of the burger business.</br></br>ÛÏThis is the finest hamburger college in the country,Û says Mike Fountaine, McDonaldÛªs regional training manager and director of the college.</br></br>Hiden away in a small but comfortable suite of offices on Georgia Avenue, Hamburger College is the latest and most sophisticated facility in McDonaldÛªs extensive management training program. The new school (which replaces the original one built 10 years ago in Chillum, Md.) cost the company $400,000. with a quarter of that amount being spent on an impressive array of audio-visual equipment. | no | 0 |
House Batters President on Budget Issues: Rebellions House and Its ... | A rebellious House and its Dem-ocratic-controlled committees battered President Reagan on budget issues yesterday, handing him defeats on housing, college student loans, unemployment compensation and welfare.</br></br>In its second such action in two days, the House, on a 343-to-67 roll call, approved a $1 billion emergency measure, this time an appropriation, for a new program to subsidize mortage interest payments of families who buy new homes. The .program is meant to help prop up the sagging housing industry, a leading victim of the recession.</br></br>The Mouse passed the authorization bill for the program Tuesday. The Republican-controlled Senate is at work on similar legislation, but the Reagan administration opposes it as too costly, and Office of Management and Budget Director David A. Stockman yesterday said he would recommend that the president veto the authorization bill.</br></br>.YesterdayÛªs $5.9 billion appropriations bill also contains $1.3 billion in supplemental funds for student aid, $321 million more than the president wants, and $1 billion he did not seek for the Government National Mortgage Association, also to help support the housing industry.</br></br>The House also, in the same bill, declined to rescind $9.3 billion in previous appropriations for housing assistance to the poor. Reagan had sought rescission. | no | 0 |
Analysts Wary Despite Dow's Gain of 32 | The nation's financial markets rebounded today from a two-day selling binge brought on by the stall in talks on eliminating the federal budget deficit, but analysts said they expected future trouble from the economy and the Washington debate.</br></br>The Dow Jones industrial average rose 32.16 points to close at 5065.10, boosted in part by investors buying semiconductor stocks and expressing new confidence in financial service and software companies.</br></br>The Dow plunged 165 points, more than 3 percent, Tuesday and Wednesday because of bad news from some technology companies and reports that the long-anticipated deficit reduction agreement in Washington might be beyond reach.</br></br>Marshall Acuff, portfolio strategist at Smith Barney Inc., said it was no surprise that "there would be some rebound after the pounding the markets took the last two days, but beyond that I'm not sure there is much to get excited about."</br></br>Analysts cited continued indications of a sluggish economy and disappointing fourth-quarter corporate earnings reports as rough spots for traders and investors in the next several weeks. They said they expected the market would continue to bounce up and down in reaction to statements from Washington on how the budget talks are faring. | yes | 1 |
Echoes of 1929 Market Crash | month featured front-page the Division of Corporate Pi-stories calling attention to the nance, and let him answer the fact that it was exactly 25 years balance of the cross-examina-since the tragic 1929 stock market crash that precipi-tated the Hoover depression. After recalling the billions lost to big and little investors all over the U.S.A., they _ noted that the</br></br>Here in Washington, meanwhile, a Senate subcommittee has. been digging out some possible answers to that question.</br></br>Given not one cent of funds by Sen. William E. Jenner of Indiana who holds the purse strings on Senate probes, the Langer - Kefauver Committee has pieced together an amazing story of how some of the safeguards erected to prevent another stock market crash have been ignored.</br></br>1. Creation of the Securities and Exchange Commission to police the stock market and protect the investor.</br></br>2. The Public Holding Corporation Act which required big utilities to ditch the rule of Wall Street. Electric light and power companies, under the Holding Corporation Act, were to be bossed by the local people who bought the power and paid the electric light bills. | no | 0 |
Alexandria's VSE makes waves on Nasdaq with Navy contract | The Navy yesterday made some shareholders of little-known VSE Corp. of Alexandria very wealthy--at least on paper--and the navies of foreign nations ultimately will foot the bill.</br></br>The company's shares jumped 66 percent on the Nasdaq stock market yesterday on the news that VSE won a Navy contract to maintain surplus military ships sold overseas. The work would be worth as much as $1 billion over 10 years for a dozen companies.</br></br>VSE's stock opened yesterday at $16, where it has traded lately, and closed at $26.50 following the announcement of the Navy contract, whose first phase is valued at $202 million That's not bad for a firm with revenue of $66 million last year.</br></br>"It's been a forgotten stock, until today, perhaps said Calvin Koonce, president of Koonce Securities Inc., a brokerage in Rockville, and a member of VSE's board of directors. "This is a good day."</br></br>VSE's team of contractors beat seven other ventures for the contract, the Navy said, including groups led by Resource Consultants Inc. of Vienna, Columbia Research Corp. of Arlington and Bath Iron Works of Maine, whose purchase by Falls Church-based General Dynamics Corp. for $300 million was announced Thursday. | no | 0 |
The Outlook: New 'One-Worlders' Are Conservatives | WASHINGTON -- The "one-worlders" are back.</br></br>Once upon a time, it was fashionable to label as "one-worlders" radical socialists who believed that national governments were an anachronism and that the peoples of the world would one day unite under a single workers' state. Those folks aren't very numerous anymore. Even in the Soviet Union, the concept is in disrepute.</br></br>But some new "one-worlders" have emerged-conservatives, this time.</br></br>They are the economists and academics who believe that in a global economy, with goods and especially capital surging across political borders, the economic fortunes of individual countries aren't important anymore. The U.S. trade deficit and other statistics, they argue, are only artificial figures in what has become a multinational corporate economy in which political distinctions matter little. It's all one big market, they contend, so why worry about it?</br></br>These experts see the world economy almost solely in financial terms and dispute the idea that relative economic flows can have real long-term effects on national security or geopolitical power. When it comes to whether the U.S. remains a world leader if its junior allies are its senior creditors, their motto is, "Don't worry, be happy." | no | 0 |
Fed s Easy Credit Moves Depress Anxious Market | Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, came to</br></br>IBM was unchanged at 270V4. Analysts said the companyÛªs report that its fourth quarter earnings rose to $4.47 a share from $3.94 in the year-earlier period jibed with advance Wall Street estimates.</br></br>Standard & PoorÛªs index of 400 industrials lost 0.28 point to 115.42, and S&P's 500-stock composite index was down 0.19 point at 104.01.</br></br>The American Stock Exchange market value index, on the other hand, rose 0.55 point to 11.15, and the NASDAQ composite index for the over-the-counter market picked up 0.36 point, to 97.20.</br></br>Weekly statistics issued after yesterdayÛªs close by the Federal Reserve showed a sharp rise in j:he nationÛªs money supply. | no | 0 |
Stocks Advance To Record Peak: Turnover Expands on Rise | N E W V ORK, March 5 Of) The stock market hit another new high today as prices advanced from $1 to around $5 a share. Rails were spurred by the new 6 per cent freight rate increase. Coppers and honfer-rous metals were strong also.</br></br>NEW YORK, March 5 UP)ÛÓ'The stock market hit another new record high today in a performance that matched FridayÛªs rally to historic levels.</br></br>Gains today were extensive and pushed on to around 5 points at the best. Gains of 1 to 3 points were numerous. Losses werenÛªt very frequent but they went to around 2 points.</br></br>Railroads started the ball rolling and had strong help from the non-ferrous metals. The Interstate Commerce Commission Friday granted the NationÛªs carriers a 6 per cent freight rate increase, and there was a rush to buy rails at the opening of the stock market today.</br></br>Steels gave early help but faded into a mixed position at the close. Motors were mixed as well, and the aircrafts showed a lot of losses. Chemicals, too, were mixed. Gains were shown by the oils, radio-televisions, utilities, and many individual issues. | no | 0 |
Stock Market Analysts Await Summer's Traditional Rally | NEW YORK, June 18ÛÓFor nearly 18 months, the stock market has been behaving like one of those video blips that shuttle back and forth in a Pong game. ></br></br>Locked into a narrow trading band of about 100 points, the market has dropped back every time the Dow Jones industrial average reached 1,000 and has bobbed up again when it Slipped below 900, With the Dow hovering near the low end of this range, stock market analysts again are looking for a rally to develop. They are fortified with statistics that show few seasonal phenomena arc as reliable as the traditional summer slock market rally. ; A study by Smith Barney, Harris Upham & Co. shows that such an advance has occurred in each of the past 37 summers going back to 1940, with an average gain of 9.7 per cent.</br></br>Using a different measurement base, Reynolds Securities research chief Robert H.S. Stovall reached a similar conclusion. He said a rally has Keen recorded in each of the 31 summers since the end of World War II, with the best gain (22.5 per cent) recorded in 1970,.the weakest 12 per cent) in 1969, up a flat 2 per cent, and an aver-age'advance of 9.5 per cent for the period.</br></br>" As positive background factors for the market, analysts also note that concerns that inflation and interest rates would accelerate for the rest of 1977 have begun to abate. Corporate profit reports for the second quarter are expected to be robust. When they start pouring in early in July, they could be enough to kickoff the awaited rally.</br></br>Bud Simons, vice president and research chief at Weeden & Co., believes the rally's takeoff is ÛÏlikely to start now, and maybe has already started. 1 think all of a sudden things are going to look pretty good, and the main question then will be whether the economy slows down later this year. But the answer wonÛªt be visible in the statistics for quite some time to come.Û | no | 0 |
Area Unemployment Drops, But District's Rises in June: Area Jobless Rate Drops to 4-Year Low | Unemployment in the metropolitan Washington area dropped to a four-year low of 4.4 percent in June, but unemployment in the District jumped to 8.4 percent, the D.C. Department of Manpower reported yesterday.</br></br>The 8.4 percent unemployment rate for the city was up sharply from the 8 percent reported in May, while the unemployment rate for the overall area was down slightly from 4.5 percent in May.</br></br>Unemployment in the metropolitan area has been falling generally since February 1977, when the rate was 5.7 percent. In the District, unemployment has been increasing since March of this year, when it was 7.6 percent.</br></br>The June unemployment figures reflect a continuing trend of new jobs being created in the suburbs with very little growth in the city. In June, for example, employment increased by 20.-100 jobs in the suburbs but by only 200 jobs in the city.</br></br>While the number of jobs increased, the number of people looking for jobs also increased sharply in June. | no | 0 |
IBM Rethinking Cherished Policy Of No Layoffs: IBM Starts Rethinking ... | The computer industry slump, sagging profits and concerns about future growth are forcing a painful internal examination of IBMÛªs cherished Û÷Û÷full-employmentÛª' no-layoffs policy, and raises serious questions about whether the worldÛªs biggest computer company is overstaffed, analysts said.</br></br>With more than 405,000 employesÛÓ242,000 of them in the United StatesÛÓInternational Business Machines is one of the worldÛªs largest employers. It is one of a handful of technology companies with a tradition of avoiding layoffs.</br></br>While other multibillion-dollar corporations with paternalistic practices, such as Eastman Kodak Co., Xerox Corp. and E. I. DuPont de Nemours, have dramatically cut their blue-collar and middle-management ranks in recent times, IBM "remains fully committedÛ to full employment, said IBM Chairman John F. Akers.</br></br>But at an analysts meeting in San Jose, Calif., last week, Akers aknowledged there would be a drop in the U.S. work force by the end of this yearÛÓthe first such year-to-year decline at the company in 11 years. An IBM spokeswoman said, "IBMÛªs objective is to reduce IBMÛªs U.S. employment.Û Û÷TheyÛªre overmanned, which means theyÛªll continue to be in an attrition mode,Û said J. Quinn Mills, a Harvard Business School professor and occasional consultant to IBM. "The most pessimistic case is that this computer recession will deepen and that they will not be able to Û÷attritÛª people fast enough.Û</br></br>IBM has a hiring freeze in forceÛÓnew hires have dropped from a record 18,500 in 1984 to a projected 2,500 to 3,000, ÛÏmainly technicalÛ hires for 1986ÛÓand is counting on attrition to trim IBMÛªs U.S. employes. | no | 0 |
Moving a Nation Along; When the Going Gets Tough, Time to Get 'Going Forward' | Definition: Once strictly an adverbial description of literal motion, now used to suggest progressive movement where the less hopeful fear there is none. Often used when incidents "on the ground," another Stump Speech favorite, suggest post-Saddam Iraq might be, in fact, going backward.</br></br>Recent examples: "Well, I think that the president made a serious detail presentation," Cleveland Plain Dealer reporter Tom Diemer says on CNN, speaking about President Bush's recent prime-time speech on Iraq, "and I think what he was trying to convey was that things are under control, there is a plan, we're going forward."</br></br>Or, from White House communications director Dan Bartlett, on "Today," talking about "the fact that we will have a new relationship going forward, and where the Iraqi people are making a lot of the decisions."</br></br>In recent briefings, White House press secretary Scott McClellan has talked up "a leading role for the United Nations in Iraq going forward on the political process," "our strategy going forward," and, even aboard Air Force One, which goes forward very, very quickly, a reserve fund for military affairs "to make sure that there is no disruption, in terms of funding or resources for our troops, going forward in Iraq."</br></br>Antonyms: Stalled, bogged down, as in Sen. Fritz Hollings (D- S.C.) telling Defense Secretary Donald Rumsfeld, "You don't have security. In fact, we're bogged down." Or, even worse, going backward, as in likely Democratic presidential nominee John Kerry saying of the president, "He can't go out and talk to people about making the environment better, because he's . . . going backwards on forest policy." Bush, who likes to measure the ground he's covering when he jogs, explained to a campaign audience in Prairie du Chien, Wis., the vagaries of economic recovery: "Starting in early 2001, we went through a recession. That means we're going backward." | no | 0 |
Remembrances | KENT SNYDER (1959-2008)</br></br>His Efforts Fueled Ron Paul's Campaign</br></br>As the driving force behind Ron Paul's presidential bid, campaign chairman Kent Snyder turned his one-man operation into a national grass-roots phenomenon that now calls itself "The Freedom Movement."</br></br>It began in February 2007 with a personal computer in Mr. Snyder's Arlington, Va., apartment. It ultimately became a $35 million operation with 250 employees that helped deliver more than one million votes for the Texas congressman's bid in the Republican nominating contest.</br></br>"It was Kent more than anyone else who encouraged and pushed Ron to run for president," said Jesse Benton, a spokesman for Mr. Paul. "Ron would not have run for the presidency if it had not been for Kent. Ron was really hesitant, but Kent drove him forward." | no | 0 |
Market Gains on Post-Vote Rally Hope | NEW YORK, Oct. 27 (A) The stock market gained more_ ground today on the strength of tradersÛª hopes for a rally after next weekÛªs presidential election.</br></br>The Bow Jones average of 30 industrial stocks rose 7.98 to 956.12, extending its gain for the last two sessions to 18.12 points.</br></br>Standard & PoorÛªs index of 400 industrial stocks picked up .83 to 113.90, and S&PÛªs 500-stock composite index climbed .70 to 101.76.</br></br>Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, came to 18,85 million shares.</br></br>After that it showed some hesitation, pulling back to a plus-1 reading by noontime. But late in the afternoon it began pressing ahead again. | no | 0 |
CSX Corp.'s Railroad Unit Gets Business Back on Track --- Michael Ward Looks to Be Firm's CEO Heir-Apparent After Leading Service Changes | JACKSONVILLE, Fla. -- Officials at CSX Corp.'s railroad business are accustomed to receiving complaints from customers about poor rail service. But lately they are starting to hear something new: praise.</br></br>"They are doing things better," says Craig Huss, vice president of transportation at Archer-Daniels-Midland Co., the Decatur, Ill., grain-processing company.</br></br>After years of service and merger-related problems, the Eastern railroad is taking a different course these days -- running a reliable railroad. Under Michael Ward, who became president of the railroad business CSX Transportation Inc. in 2000, CSX has cleared up its worst service problems and started winning over customers.</br></br>While still trailing other railroads in overall efficiency, CSX is moving toward running its freight trains on a more precise schedule. It is trying to change the old adversarial railroad culture that created internal friction. And it is winning some freight business away from trucks and securing higher rates from customers for improved rail service.</br></br>"Customers were actually telling us the truth when they said if we gave them more consistent service, they would give us more business and pay us more," Mr. Ward says. | no | 0 |
Golf Courses Through Their Veins | To economists, GDP refers to gross domestic product, but to David Owen, GDPs are Golf-Dependent Personalities, a group to which he proudly belongs. GDPs will enjoy these two books.</br></br>I have a colleague at Smith College who is at least a borderline GDP. Once in a while, I play golf with him. When I don't play with him 1 might as well have, because without provocation he meticulously describes the lughlights of his game. 1 took a risk and invited him to dinner with the provision that no golf talk be uttered. He responded that of course he could not possibly sit through a whole dinner without discussing the game, but he thought lie would be able to refrain from putting in my living room.</br></br>Owen, a contributing editor of Golf Digest and a staff writer for the New Yorker, probably would not have been able to make even that commitment. He is a member of several country clubs, owns many sets of irons and woods, plays golf in the snow and indulges in practically every other golf-dependent ritual one might imagine, and still others one would never imagine. After playing the great courses of America, Owen writes that he never before could understand the appeal of a monastic life. But now he thought to himself: "Oh, I get it. Monks feel about God the way I feel about golf. The two words are even almost spelled the same. I suddenly had a vision of a sort of ideal community of golfers: a golfing monastery, or golfastery.Û</br></br>Owen writes well and humorously. He writes trenchantly about the questionable moral leadership of the PGA Tour, and he writes exhaustively about all the shots he has hit on the worldÛªs most famous courses. As a casual golfer, I care little about whether Ben Hogan and Sam Snead walked on the same fairways I am playing, and I care even less about the shots that Owen played on these fairways.</br></br>One recurrent theme in OwenÛªs book is that his addiction to golf has created certain tensions in his marriage. He writes: "If golf is, in part, a game of spouse-avoidance, should one wonder that spouses don't like it?" Despite the appearance that Owen plays golf 80 percent of his waking hours, he repeatedly vents resentment that having a wife and family keeps him from the game, I kept asking myself how he keeps his marriage together. It would have been a true service to | no | 0 |
Virginia Home Sales Rise, but Area Jobless Rate Also Grows | Home sales in Fairfax County rose 10.7 percent last month, the county's first double-digit increase in a year and a half, according to the most recent data from the company that tracks local real estate listings.</br></br>The flurry of sales activity suggests that prices have dropped low enough to lure buyers to the Washington area's largest county. But the uptick in sales is not widespread throughout the region, and unemployment data for August show a steady slowdown in the region's economy.</br></br>"The big unknown is to what extent the financial trauma we've seen in the news in the past week has scared buyers away," said Barry Merchant, senior policy analyst at the Virginia Housing Development Authority. "We know it has shaken people's confidence in the economy and their own personal situations."</br></br>Fairfax's median sales price was $375,000 in August -- meaning half the homes sold for more and half for less. That's nearly a 22 percent drop since August 2007. The last time prices fell lower was in April 2004, said John McClain, a senior fellow at George Mason University's Center for Regional Analysis.</br></br>"Perhaps we've seen enough cut out of prices to see a return to normalcy," McClain said. "We're seeing buyers move back in from the sidelines in the past few months." | no | 0 |
Mart Plunges Sharply in Heavy Selling: Glamour Stocks Pounded | NEW YORK, May 7 (AP)ÛÓThe stock market took its sharpest loss since last November as profits were taken vigorously today in a wide range of issues from glamour stocks to blue chip's.</br></br>The space age stocks, whose advance yesterday Û÷ screened increasing weakness in high quality issues, toppled to losses running to 8 points or more. The key stocks which govern the market averages dropped fractions to around 4 points.</br></br>It was a long overdue "correction,Û in the minds of Wall Street analysts, to a market which has moved very narrowly on average for the past eight sessions since it began adjusting to its latest record peak.</br></br>Veteran traders were described as alarmed at the fantastic proportion of the gains in many of the ÛÏscience fictionÛ stocks. They decided now was a time to cash substantial profits. As the big gainers lost ground they touched off strings of "stop loss" orders beneath the market, accelerating the pace of the shakeout.</br></br>Thiokol, the week's most active issue, dropped IVt points of the 18}åÇ it had gained in the three previous sessions this week. The New York Stock Exchange banned all stop orders in Thiokol. These are orders to buy or sell at specific prices above or below the going price. They are banned occasionally to prevent undue fluctuations in a stock. | no | 0 |
Bond Prices Drop as Dollar's Decline Prompts Concern About Fed's Intentions | NEW YORK -- Bond prices declined yesterday amid concern that the dollar's sharp decline in foreign exchange trading may keep the Federal Reserve System from easing credit conditions further.</br></br>Until recently, many analysts were predicting that the Fed soon would push interest rates lower in an attempt to stimulate economic activity. Now some contend the Fed will wait, hoping the dollar's drop will revive the nation's beleaguered manufacturing industries by making exports cheaper and imports more expensive.</br></br>The Fed's policy-making arm, known as the Federal Open Market Committee, yesterday concluded a two-day meeting to establish credit strategy for the weeks ahead. Also on the committee's agenda was a review of the Fed's money supply targets for this year and the setting of new ones for 1986.</br></br>Fed officials declined to comment on what actions the committee took. But some details of the meeting are to be disclosed next Wednesday, when Paul Volcker, Reserve Board chairman, is scheduled to testify at a congressional hearing.</br></br>Prices of some actively traded U.S. government bonds fell yesterday by about 1/2 point, or approximately $5 for each $1,000 face amount. Most short-term interest rates edged higher. | yes | 1 |
Clinton Ads Tout Federal Programs; Despite Downsizing Rhetoric, President Talks Up Government | Nine months ago, President Clinton declared before a packed House chamber that "the era of big government is over."</br></br>In his television ads, however, Clinton has touted his support for the Education Department, Medicare, student loans, school anti-drug programs, Social Security, gun control, job training, border patrols, federally subsidized police, government-mandated family leave, health care portability rules, a higher minimum wage, childhood vaccinations, unemployment benefits, tobacco advertising rules and tuition tax credits.</br></br>Equally important, the ads have assailed Robert J. Dole -- or, as the spots often put it, "Dole/Gingrich" -- for opposing these federal programs and initiatives.</br></br>"Americans are against government in the abstract but are quite supportive of it in the particular," said Thomas Mann, a policy analyst at the Brookings Institution. "Clinton is relying on the public insistence that some of the things that government does are worthy activities. Many Americans believe government is incompetent and a mess and too wasteful, but there's also the fear of losing something they hold dear."</br></br>Bill Knapp, a Clinton media adviser, said the defense of government programs in the president's ads is balanced by an emphasis on the new welfare reform law and success in cutting the budget deficit. And Clinton can claim credit for reducing the federal work force. | no | 0 |
China-Bashing Gains Bipartisan Support | Author: Naftali Bendavid</br></br>China is emerging as a bogeyman this campaign season, with candidates across the American political spectrum seizing on anxieties about the country's growing economic might to pummel each other on trade, outsourcing and the deficit.</br></br>In television ads, China is framed as an ominous foreign influence in a time of economic anxiety, often accompanied by red flags and communist-style stars and sometimes by Asian-sounding music. Democrats say Republicans support tax breaks that reward companies for moving jobs to China; Republicans blame Democrats for a federal budget deficit they say forces the U.S. to borrow money from China.</br></br>"Candidates are looking to speak in a visceral way to the fears and concerns of voters about jobs," said Lawrence Jacobs, a political scientist at the University of Minnesota. "Bashing China is safe."</br></br>The heated rhetoric puts the White House in a bind. Administration officials often don't mind Congress putting pressure on China, and Treasury Secretary Timothy Geithner himself in a speech Wednesday offered a blunt critique of Beijing's currency policy. But officials also worry that a confrontational approach could backfire. | no | 0 |
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