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Treasurys Wipe Out Early Dip | Treasury bonds clawed back nearly all their early price losses Monday as mixed signals from a key U.S. manufacturing report heightened debate over the timing of the Federal Reserve's withdrawal of monetary stimulus.</br></br>In late-afternoon trading, the benchmark 10-year Treasury note fell 1/32 in price, yielding 2.482%, according to Tradeweb. Bond prices move inversely to their yields.</br></br>The 30-year bond performed better. The bond's price rose 12/32 after recouping all its earlier decline, yielding 3.477%.</br></br>The bond market stumbled earlier -- the 10-year yield rose to 2.551% during Monday's trading -- as upbeat manufacturing reports out of Europe and Japan sapped demand for safe assets.</br></br>But buyers flocked back to the market as the overall strength of the manufacturing industry was overshadowed by a decline in the sector's employment. | no | 0 |
Nippon Chairman Resigns Post in Scandal | The chairman of Nippon Telegraph and Telephone Co., the world's biggest company, resigned today under fire for alleged involvement in a scandal that has spread throughout Japan's political and business world.</br></br>The minister of posts and telecommunications, Masaaki Nakayama, told a news conference he had accepted the resignation of Hisashi Shinto as NTT chairman.</br></br>Nakayama said Shinto had denied any personal involvement in dubious share trading but had accepted responsibility for actions by his personal secretary.</br></br>Japanese press reports said prosecutors had traced some 10 million Japanese yen, or around $81,000, to Shinto's bank account from proceeds of the sale of shares in Recruit-Cosmos Co., a real estate subsidiary of the Recruit conglomerate.</br></br>Shinto on Tuesday had issued a statement denying involvement in the share transaction, which was carried out by his personal secretary, Kozo Murata, in 1986. Murata has since resigned as Shinto's aide. | no | 0 |
Nation: Most Banks Drop Prime to 15 3/4% | Most of the nationÛªs major banks cut their prime lending rates a quarter point yesterday to a one-year .low of 15% percent amid expectations that interest rates will continue to decline in the current recession.</br></br>Citibank, the nationÛªs second-largest bank, led yesterdayÛªs move to a lower charge on loans to top blue chip corporate customers following No. 3 Chase Manhattan BankÛªs move last week to a 15% prime.</br></br>No. 1 Bank of America, Morgan Guaranty Trust, - JFirst National Bank of Chicago, Chemical Bank, Ir-' ving Trust, Manufacturers Hanover and, in Wash->ington, Riggs National Bank were among major -banks that followed CitibankÛªs action yesterday.</br></br>i LAYOFFS: SCM Corp., citing a sales slowdown due 'to the recession, announced it was laying off 500 of its 4,000 workers for an indefinite period. The com- pany said it would suspend production at its Smith-Corona typewriter plants in Cortland and Groton, N.Y., and at Scarborough, Ontario, for three weeks starting Dec. 14.</br></br>International Harvester Co. also announced yesterday that it will shut down two plants Dec. 14, affecting about 4,000 workers. The plants at Rock Island and East Moline, 111., will reopen Jan. 18. | no | 0 |
Pathmark Posts Profit, Not Including Items From Restructuring | CARTERET, N.J. -- Pathmark Stores Inc. said it posted a profit before reorganization and other items for the fiscal fourth quarter of $13.6 million, or 45 cents a diluted share, mainly because of the opening of new stores and renovation of existing locations.</br></br>Including the reorganization and other items, the supermarket chain reported a net loss of $48.5 million, or $1.62 a share, for the period ended Feb. 3.</br></br>For a year earlier, Pathmark posted a loss of $2.5 million, or eight cents a share.</br></br>Results in the recent quarter are a combination of two different entities formed because of the company's emergence from Chapter 11 protection in September 2000.</br></br>Sales for the period climbed 11% to $1.06 billion from $956.1 million. Aside from an extra week in 2000, a company spokesman said the increase was driven by strong holiday sales, the opening of four new stores and renovation of 19 stores in the Philadelphia and New York City metropolitan areas. | no | 0 |
Puerto Rico Urged to Keep Language Debate Off 1991 Ballot | The chairman of a Senate committee urged supporters of Puerto Rican statehood yesterday to say nothing on the island's 1991 ballot about an official language for the proposed state.</br></br>"The question of the official language is meaningless save in an emotional context," said Sen. J. Bennett Johnston (D-La.). Putting it on the ballot might focus the debate in Congress on that issue, he added. "Let Puerto Rico be Puerto Rico . . . leave it out altogether."</br></br>Former governor Carlos Romero Barcelo protested that he wants dual official languages-English and Spanish-in his testimony before the Energy and Natural Resources Committee, which has jurisdiction over U.S. territories. "We must go home, go to a plebiscite, tell the nation it is not the congressional intention to force the English language on us. This is used by demagogues in Puerto Rico against statehood that . . . laws would be passed requiring the use of English only.</br></br>"I know you want to make sure this bill {calling for a referendum on statehood, independence or an enhanced commonwealth} goes through, but I must think it over, give it much more thought," he said.</br></br>Federal activities, such as district court hearings, are conducted in English, but Spanish is preeminent on the island. About 60 percent of Puerto Ricans do not speak English, according to Gov. Rafael Hernandez Colon, who leads the group urging an enhanced commonwealth status. | no | 0 |
Technically Speaking: Tech Stocks Need More Spark Than Just M&A | Investors may be asking too much if they think the recent spate of deal making will be enough to finally ignite technology stocks.</br></br>Hewlett-Packard launched a bidding war Monday to wrest data-storage company 3PAR from Dell, but technology stocks largely failed to respond. The Nasdaq Composite Index fell Monday and technology stocks were among the Standard & Poor's 500-share index's worst performers.</br></br>Macroeconomic worries appeared to drown out the boost that merger-and-acquisition activity provided Monday, at a time when technical analysts see the sector as primed for a rally off recent lows. The upshot may be that while M&A activity certainly provides a boost for stocks, it isn't necessarily the panacea that many investors had hoped for.</br></br>Mergers certainly looked like a big boost last week. Technology stocks were showing encouraging signs last week amid efforts like Intel's $7.7 billion bid for McAfee. The S&P 500's technology components started to turn around what had been a tough August, in which they were notable underperformers.</br></br>And the sector looks to have better news ahead from a technical standpoint. Janney Montgomery Scott market technician Daniel Wantrobski predicted last week that technology stocks, particularly semiconductors, should outperform the S&P 500. | no | 0 |
Price Report Sends Blue Chips Up 31 | NEW YORK, Dec. 14-Blue-chip stocks tacked up strong gains today as news of moderate inflation eased fears that the Federal Reserve would increase interest rates again next week.</br></br>After losing more than 54 points last week, the blue-chip index has gained 55 points so far this week.</br></br>In the broader market, advancing issues outnumbered declining ones by about 2 to 1 on active trading of more than 354 million shares on the New York Stock Exchange.</br></br>A modest rise of 0.3 percent in NovemberÛªs consumer price index indicated the economy is growing steadily with only moderate inflation, analysts said.</br></br>A jump in the CPI would have increased chances that the Fed would raise interest rates at its policy-making meeting Tuesday, analysts said. The central bank has pushed up lending rates six times this year to curb inflationary pressures. | no | 0 |
Pellegrini Taps Former Merrill Economist | Paolo Pellegrini, the hedge-fund manager who helped Paulson & Co. amass gains before leaving to start his own firm, has hired Merrill Lynch & Co.'s former chief international economist to help identify and wager on global financial trends.</br></br>Alex Patelis, 38 years old, starts this week with Mr. Pellegrini's new hedge-fund firm, called PSQR Management LLC, according to both men.</br></br>Mr. Pellegrini, 52, in December left John Paulson's hedge-fund firm. So far, Mr. Pellegrini has been trading about $100 million of his own money but plans to start raising funds from outside investors this summer.</br></br>Much of Mr. Pellegrini's personal wealth came from Paulson & Co.'s bets that subprime-mortgage defaults would skyrocket. Paulson & Co. made some $15 billion in profit in 2007 and added several billion more last year, after the firm extended the trade to include wagers against a range of financial firms.</br></br>As co-manager of the firm's big credit funds, Mr. Pellegrini helped identify what mortgages to target and how to formulate the trades. | no | 0 |
The Australian Economic Lesson; Reform must happen at home and in multilateral fora to be effective and sustainable. | Author: Wayne Swan</br></br>It's an unfortunate reality that two years from the start of the financial crisis, many of the world's advanced economies are still grappling with near double-digit unemployment rates, an anemic private recovery and high sovereign debt. Many countries are still yet to recoup the output lost during the crisis. But that's not the Australian story, and it's important to understand why, and what lessons can be learned from our experience.</br></br>In 2009 the global economy contracted for the first time since the 1930s but the Australian economy continued to grow. We have an unemployment rate of 5.1%--around half the levels seen in the United States and Europe. Our net debt will peak at just 6% of GDP in 2011-12. By comparison, the collective government net debt of major advanced economies is expected to hit 90% of their GDP in 2015. And we're on track to get the budget back to surplus in 2012-13--years ahead of every major advanced economy.</br></br>So how have we come through the crisis in such good shape? Our banking system is one of our great strengths. Only nine of the hundred largest banking groups in the world are rated AA or above--and four of those are Australian. Even at the height of the crisis, no Australian bank, building society or credit union required an injection of government funds. We also have tough and effective regulators. And we didn't suffer the financial market excesses of Europe and the U.S.</br></br>But it wasn't only the strength of our banks; prudent monetary and fiscal policy played a role, too. When the crisis began, the Reserve Bank of Australia aggressively cut interest rates to emergency levels and the government immediately put in place powerful fiscal stimulus to support jobs and growth. Our response was quick enough and big enough not just to arrest the decline in confidence, production and spending, but to turn them around. | no | 0 |
China, Bernanke send S&P to 3-month high | U.S. stocks rose last week, pushing the Standard & Poor's 500-stock index to the biggest weekly advance since March, as China's exports jumped the most in six years, Federal Reserve Chairman Ben S. Bernanke said the economic recovery is intact, and commodity prices rallied.</br></br>Alcoa, DuPont and Dow Chemical helped lead raw-material producers higher as reports showed the global economy is strengthening. A measure of apartment developers, hotel operators and warehouse owners rallied the most in seven weeks after Fitch Ratings boosted its outlook on the industry. Bristol-Myers Squibb soared 12 percent, the biggest gain in 15 months, after studies showed two of its cancer drugs worked better than current therapies.</br></br>The S&P 500 gained 2.5 percent for the week to 1,091.60 as its 10 main industries rose. The Dow Jones industrial average had its first gain in four weeks, rising 2.8 percent to 10,211.07. The Nasdaq composite index climbed 1.1 percent to 2243.60.</br></br>"The bear is running out of fuel," said Don Hays, who manages more than $1 billion at Hays Advisory Group. "We're virtually on the threshold of what you only get at the bottom of major bear markets. It's one of those amazing times to buy stocks."</br></br>Reports last week showed property prices in China rose at a near-record pace and exports surged 48.5 percent in May, signaling Europe's crisis hasn't slowed the world's fastest-growing major economy. | yes | 1 |
A Lesson for Yuppies: How to Get By on $75,000 a Year | In fact, according to a new study by the International Association of Financial Planners, a family with a $75,000-a-year income might not be able to afford a Volvo these days-or a Saab or Chrysler LeBaron or some similarly priced car-and still have money for a week in the islands, a $260,000 house, college tuition for a child, a comfortable retirement and a lot of other things that might seem to be within easy reach of someone with that income.</br></br>The striking thing about the study is that none of the items on the list (see accompanying chart) seems particularly outlandish by the standards of yuppies here or in most other affluent urban areas of the country.</br></br>But that very fact goes a long way toward explaining a growing phenomenon here: people who are making what they correctly perceive to be a good living and yet find themselves with no money.</br></br>The IAFP recognizes this. "This is an example of costs," it says, "not a recommended pattern of spending." This family, which has spent three-quarters of its income before even getting to food, clothing, child care, entertainment and the like, "needs to readjust {its} spending goals."</br></br>In fact, anyone who pries into the finances of apparently affluent colleagues and neighbors around here will find that a lot of them have readjusted-they keep the Volvo and the Caribbean vacation and skip the insurance, tuition and retirement savings. | no | 0 |
New T-Bill Rates Fall to Lowest Level Since Late 1988 | NEW YORK -- Interest rates on new short-term Treasury bills tumbled to their lowest levels since late last year.</br></br>But bills still are extremely popular among individual investors, partly reflecting fears that recent surges in both stocks and bonds may be short-lived. Individuals bought especially large amounts of new three-month bills yesterday at the government's regular weekly auction.</br></br>The average rate on these new bills dropped to 8.21%, the lowest since December and down from 8.41% at last week's sale. That translated into a bond-equivalent yield of 8.50%, down from 8.71% last week. As recently as the end of March, similar bills yielded nearly 9 1/2%. But most other rates and bond yields ended at about the same levels as on Friday.</br></br>Both stock and bond prices soared Friday after the government reported an unexpectedly small 0.4% rise in producer prices last month. That, coupled with growing signs of slower economic growth and the dollar's recent strength, sparked speculation that the Federal Reserve will ease credit at a meeting in Washington, D.C., today.</br></br>However, that speculation now appears wrong. Government officials said late yesterday in interviews with The Wall Street Journal that the Fed probably won't ease short-term interest rates at today's meeting because of continued concern about inflation. | yes | 1 |
Burns: Odds for Controls Up | The Û÷nation may face mandatory wage-price controls if inflation continues at the present rate for another six months, former Federal Reserve Board chairman Arthur F. Burns said yesterday.</br></br>Burns, now a resident scholar at the American Enterprise Institute here, made clear that he was not advocating controls. He added that President Carter has ÛÏwisely" rejected mandatory controls.</br></br>But he said ÛÏthe administration may be driven in that direction" by an inability to achieve further fiscal restraint, and the political difficulty of getting certain ÛÏstructural reformsÛ such as a redaction in minimum wages, and subsidies to farmers.</br></br>ÛÏThey then would be left with monetary policy or mandatory controls,Û Burns said, ÛÏand there is concern in the business world that mandatory controls might come along.Û</br></br>Burns, former Nixon Economic Council Chairman Herbert Stein and other AEI scholars talked to reporters at a press conference yesterday at AEI headquarters. | no | 0 |
China's Trade Time Bomb | It sometimes seems as if almost everything we buy comes from China: DVD players, computers, shoes, toys, socks. This is, of course, a myth. In 2006, imports from China totaled $288 billion, about 16 percent of all U.S. imports and equal to only 2 percent of America's $13.2 trillion economic output (gross domestic product). Does that mean we don't have a trade problem with China? Not exactly.</br></br>China is already the world's third-largest trading nation and seems destined to become the largest. On its present course, it threatens to wreck the entire post-World War II trading system. Constructed largely by the United States, that system has flourished because its benefits are widely shared. Since 1950, global trade has expanded by a factor of 25. By contrast, China's trade is mercantilist: It's designed to benefit China even if it harms its trading partners.</br></br>There's a huge gap in philosophy. By accident or design, China has embraced export-led economic growth. The centerpiece is a wildly undervalued exchange rate. Economist Morris Goldstein of the Peterson Institute thinks the yuan is 40 percent cheaper than it should be. The resulting competitive advantage props up exports, production and jobs. Since 2001, China's surplus on its current account -- the broadest measure of its trade flows -- has jumped from $17 billion to $239 billion. As a share of China's GDP, it has zoomed from 1.3 to 9.1 percent. These figures include Chinese firms and multinational companies doing business in China.</br></br>Despite popular impressions, China's trade offensive hasn't yet seriously harmed most other economies. For example, America's current account deficit (to which Chinese imports contribute) was $857 billion last year, up from $389 billion in 2001. Still, that hasn't stymied job creation; the U.S. unemployment rate is 4.5 percent. And world economic growth has accelerated.</br></br>But what's been true in the past may not be true in the future. The huge U.S. trade deficits, fed by Americans' ravenous appetite for consumer goods and heavy borrowing against rising home values, stimulated economies elsewhere, including China's. Now that stimulus is fading as U.S. home prices weaken and consumers grow more cautious. For China to expand production, demand must come from its own consumers or other nations -- or some other country's production must be displaced. There's the rub. | no | 0 |
Los Angeles Port Boycott Hits Key Economic Link | AuthorAffiliation Staff Reporter of The Wall Street Journal</br></br>Jointly, the neighboring ports of Los Angeles and Long Beach, which make up Los Angeles Harbor, account for about 25% of all U.S. container traffic. For Los Angeles and Southern California, the commercial role is far broader.</br></br>"International trade is perhaps the single most important driving force in the region's economy in the 1990s, and will continue to be a driving force in the years to come," says Mark Zandi, chief economist at Regional Financial Associates Inc. in West Chester, Pa. "The port has been a key part of that flow."</br></br>Even during the dark days of Southern California's recession in the early 1990s, foreign trade continued to grow. "In many senses, it saved us," says Jack Kyser, chief economist of Economic Development Corp., a research group in Los Angeles. "There were days when I was feeling a lot of pain, and I would call someone down at the port to brighten my day." The rising tide of foreign traffic totaled $157 billion of imports and exports last year.</br></br>But the seeds of labor friction were sown in this growth, shipping-industry analysts say. As more ships have arrived, trade has relied increasingly on what is now believed to be about 6,500 truckers who haul containers between the harbor and delivery points. Mostly independent owners and operators of often-battered trucks, these drivers have been a low-paid and often-pressured link in a system that moved as many as 10,000 containers a day across a few dozen miles of freeway. The drivers are a largely immigrant, Hispanic group. Their numbers have grown with cargo volume. Competition kept haul rates low. And pay has effectively further declined in many cases, shipping insiders say, as truckers, paid by the haul, have been slowed by traffic with the growing cargo volume. | no | 0 |
A Year of Living on the Brink | History will mark down 2014 as the year predicted 49 years ago by Martha and the Vandellas. In 1965 the group recorded a Motown classic, "Nowhere to Run, Nowhere to Hide." We're there, at the brink.</br></br>Liberia, ISIS, Ukraine, Hong Kong, a hospital fighting Ebola infections in Dallas, the year's stock-market gains obliterated, and I almost forgot -- just last week Secretary of State John Kerry warned that climate change could end life as we know it.</br></br>Then this week the clouds parted and the year's best news arrived: Led by Europe's sinking economies, global economic growth is falling, taking stocks and bonds with it, and the world's central bankers say they have run out of ideas on doing anything about it.</br></br>How this is good news requires explanation.</br></br>The annual meetings of the International Monetary Fund concluded in Washington last weekend. This gathering of the world's finance ministers, central bankers and international financial organizations sets the tone for the direction of the world's economic prospects. | yes | 1 |
Benchmarks Reflect Economy's Modest Growth | New claims for unemployment benefits were down last week, showing some improvement for the still-weak labor market.</br></br>Separately, U.S. workers' productivity rose in the third quarter for the first time this year as the economy picked up some speed and labor costs declined. Meanwhile, factory orders rose for the third consecutive month in September, an unexpected gain for a key sector of the economy.</br></br>Initial jobless claims fell by 9,000 to a seasonally adjusted 397,000 the week ended Oct. 29, the Labor Department said Thursday. In the prior week, jobless claims were revised up to 406,000 from an originally reported 402,000, according to the newly released figures.</br></br>The four-week moving average of new claims, a more reliable indicator of the labor market's performance because it smooths out volatile weekly figures, dropped by 2,000 to 404,500 last week.</br></br>It was the first time weekly jobless claims fell below 400,000 since the week ended Sep. 24. Most economists believe jobless claims must fall below that mark for the economy to add more jobs than it is shedding. Economists surveyed by Dow Jones Newswires had forecast claims for last week would fall by 2,000 to 400,000. | no | 0 |
Further Discount-Rate Cut Predicted: Cut in Discount Rate Predicted | Former Federal Reserve governor Lyle E. Gramley predicted yesterday that concern about the pace of economic growth in the United States and elsewhere will cause the Fed to continue to ease monetary policy.</br></br>Gramley, now chief economist at the Mortgage Bankers Association, said that, if the Japan and West German central banks would agree to a coordinated set of interest-rate cuts, the Fed probably would reduce its 51/2 percent discount rate within four to six weeks. If the other nations do not agree, such a reduction probably still would come within two to three months, he said.</br></br>As recently as two weeks ago, many financial-market participants seemed to share GramleyÛªs view that the Fed would continue to reduce the discount rate, which is the interest rate it charges on loans to financial institutions. Since then, scattered signs of faster economic growth and new fears about inflation have turned market sentiment around; long-term interest rates, in particular, have been rising.</br></br>Prior to a rally yesterday, some long-term government bonds had dropped more than six points, with each point representing $10 in market value. Bond prices decline when investors demand higher yields before buying them.</br></br>Gramley worked at the Fed for many years as an economist and eventually as director of research before becoming a member of the Council of Economic Advisers and then returning to the central bank as a board member. | yes | 1 |
Stock Prices Up 0.22 In Moderate Trading | PROMOTEDÛÓSears, Roebuck and Co. has promoted Karl M. Globus, left, to sales manager of the Government, Industrial, Builders and Export divisions in its Washington-Baltimore-Annapolis area Contract Sales Division, and Alvin Talley contract interiors manager.</br></br>\K\V YORK, April 3 (AP) ÛÓThe lackluster tone of recent slock market sessions continued today as prices drifted upward in moderate trading.</br></br>Analysts attributed the sluggishness to an absence of economic news and to a wait-and-see attitude on the part of some investors who want to assess first-quarter earnings results before reentering the market.</br></br>The Dow Jones average of industrials finished up 0 31! at 940.92. Advances on the New York Stock Exchange were ahead of declines by a hairÛªs breadth.</br></br>Big Board volume rose to 14 99 million shares from 14 36 million shares Thursday. the last session before the three day holiday weekend | no | 0 |
Buying Microbrewery Stocks on a Beer Budget | For investors who have champagne taste in stocks, but only a beer budget, what's wrong with buying beer stocks?</br></br>Nothing at all, say the experts. The stock market has marked down the price of most beer stocks this year from their former heady levels, making them affordable buys.</br></br>Two Virginia investment firms recently have issued research reports suggesting that their clients sample some of the new microbrewery stocks.</br></br>Ryan, Lee & Co. in McLean recommends Frederick Brewing Co. in Frederick, Md., the maker of Blue Ridge Beer.</br></br>Wheat First Butcher Singer Inc. in Richmond studied four other microbreweries and expects three of them to outperform the market: the Boston Beer Co., best known for its Samuel Adams brand; Redhook Ale Brewery Inc. of Seattle, maker of Redhook Ale; and Pete's Brewing Co. of Palo Alto, Calif., home of Pete's Wicked Ale. | no | 0 |
Golden warning | On Jan. 31, the Federal Reserve Board announced that it was lowering the federal-funds rate and the discount rate by one-quarter of 1%. In making the move, the Fed cited the moderation in economic growth and chose to ignore the warning of gold moving above $400 an ounce. As a consequence, the markets have given the Fed a very unsatisfactory grade for its latest rate cut. In the wake of this rate cut, the price of gold has pushed higher to $415 an ounce, long-term interest rates have moved higher, the yield curve has steepened, and the dollar has slipped against the mark and the yen. In other words, interest rates on bonds went up even though the cost of borrowing money fell. Bond investors said, in effect: Pay me more interest to bribe me to own the bonds.</br></br>A rise in the price of gold is the best signal that we have to indicate that there is diminished confidence about the future purchasing-power reliability of money. The price of gold rises when the most savvy and suspicious investors believe the Fed has become a less reliable guardian of the value of our money. Or they may believe that in our democracy the president or Congress may pressure the Fed to lower interest rates. These suspicious investors would move out of dollars and into gold if they thought that the government was leaning on the Fed to lessen its commitment to price stability.</br></br>Last week's interest rate cut raises questions about whether it might have been a politically motivated deal. It was unusual that the discount rate was cut by only one-quarter of 1% -- you have to go back to 1978 to see such a small change in the discount rate -- and yet six Fed banks (including all five of the banks whose presidents have an Federal Open Market Committee vote) requested the move. Based on minutes from the Dec. 19 FOMC meeting, there were some members who would have preferred to leave rates unchanged and were unsure, after the rate cut at that meeting, what the direction of the next rate move would be. Where were their voices at the January meeting? Remember, the term of Fed Chairman Alan Greenspan runs out March 2, only eight months before the presidential election.</br></br>On Jan. 31, the Fed ignored the warning signal from the 8% rise in the price of gold above the 1995 average. The Fed effectively said that even though there is some move out of dollars into gold, it will declare inflation to be satisfactory and give another small shove toward growth. Since the discount rate announcement, the price of gold has risen $11, to $415 an ounce; 30-year bonds have fallen two points in price, taking the yield up to 6.17% despite economic data that ought to have been favorable for bonds; and the dollar has fallen two yen, to 105 yen. Why was the immediate response to this monetary policy change so adverse?</br></br>1. The rise in the price of gold was ignored by the Fed. Standing pat or doing nothing could have achieved a great deal. The Fed could have demonstrated its concern by leaving the funds rate unchanged at 5.5%. If the Fed had not ignored the signal, the suspicions that led to a preference for gold probably would have abated. | yes | 1 |
Blue Chips Jump 227.64 Points; Labor, GDP Data Fuel Optimism | The Dow Jones Industrial Average staged its strongest percentage gain since March, as a wave of optimism swept through the stock market following news of moderate third-quarter gains in inflation and labor costs.</br></br>Many investors still believe that the Federal Reserve will raise its interest-rate target by another quarter point on Nov. 16. But now they are hoping that the Fed will be able to leave rates alone for a while afterward. Some even think the Fed may avoid raising rates in November.</br></br>In the fourth-heaviest trading day ever on the New York Stock Exchange, the Dow industrials advanced 227.64 points, or 2.19%, to 10622.53, the highest percentage rise since they put on 2.84% on March 5, and the fourth-highest percentage gain of the year.</br></br>The blue-chip index still stands 6% below its Aug. 25 record. But the Nasdaq Composite Index, heavy in popular technology stocks, now has zoomed to within 40.76 points, or 1.4%, of its Oct. 11 record close of 2915.95. Yesterday, it rose 72.70, or 2.59%, at 2875.22.</br></br>Bonds also soared and the dollar was mixed. | yes | 1 |
Rebalancing Act: Why You Shouldn't Massage Your Portfolio Every Year | REGULAR REBALANCING is good. But even less would be better.</br></br>Around this time each year, many folks nudge their mutual-fund portfolio back into shape by lightening up on winning funds and adding to lackluster performers. And that's a smart thing to do.</br></br>It turns out, however, that rebalancing can be even more profitable if it's done less often. Here's why you should scale back your real- estate investment trusts and your small-stock holdings -- but leave your growth stocks and your Japan fund to run.</br></br>-- Reining in risk. Building and maintaining a fund portfolio can be reduced to three simple steps. First, pick the market segments you want to invest in and decide how much you will stash in each.</br></br>You might settle on a mix of, say, 30% large U.S. stocks, 10% small U.S. companies, 5% REITs, 10% developed foreign-stock markets, 5% emerging-market shares, 5% gold stocks, 25% high-quality U.S. bonds, 5% high-yield junk bonds and 5% foreign bonds. | no | 0 |
Fiscal '92 Budget Gap Now Is Estimated at $290 Billion, Smaller Than Expected | WASHINGTON -- Although the economy has long been in the doldrums, more money has been finding its way into the government's coffers than expected.</br></br>The result is that when the figures are all counted, the deficit for fiscal 1992, which ended Sept. 30, should turn out to be about $290 billion. While that would be a record, exceeding the previous year's $269 billion deficit, it's far below the $368 billion that the Congressional Budget Office originally had forecast. The White House budget office once had assumed that the gap would be even greater: a mammoth $399 billion.</br></br>Still, analysts say the surprising improvement for 1992 could prove to be short-lived, and they expect enormous deficits for the foreseeable future.</br></br>Last summer, the CBO and White House pared their deficit projections to $314 billion and $334 billion, respectively -- mostly to reflect delays in deposit-insurance spending for the savings-and-loan cleanup.</br></br>But in the short time since those revisions were made, the government has taken in more revenue than it thought it would, while spending has been somewhat less. The precise reason is unclear. Yet government budget officials say that, among other things, a surprising number of estimated tax payments have been rolling in. | yes | 1 |
Bank Holding Company In Virginia Gets Approval: Capital Commerce | up ** FcRera Board voted unanifoMisIy this week to approve a new registered bank holding company in Northern Virginia.</br></br>The new company, Northern Virginia Bankshares, Inc., will be headquartered at BaileyÛªs Crossroads, and will own 100 per cent of the stock in Hamilton Bank and Trust Co., of BaileyÛªs Crossroads, and First Manassas Bank and Trust Co., of Manassas.</br></br>Northern Virginia Bank-shares will be liie eighthÛÓ and smallestÛÓbank holding company in the state. On Dec. 31, Hamilton had deposits of $10.S million while First Manassas had deposits of $2.2 million.</br></br>First quarter earnings statements by five Maryland and Virginia bank companies yesterday reflected increased profitability.</br></br>Maryland National Corp. ÛÓwhose largest subsidiary is Maryland National Bank, largest in the D.C., Maryland, Virginia regionÛÓreported operating profits of $3.2 million (91 cents per share) compared to $2.97 million (83 cents) a year earlier. Net income after securities gains or losses was $3.57 million ($1.00 a share) compared to $3.37 million (95 cents). | no | 0 |
Region Sustains Robust Patent Production | The economic slump has yet to damp innovation in Silicon Valley, at least not by one widely followed measure: patent production.</br></br>Silicon Valley denizens received 13,231, or 7.9%, of the total 167,350 "utility" patents granted in the U.S. in 2009, according to IFI Patent Intelligence, a unit of Wolters Kluwer Health that analyzes patent data from the U.S. Patent and Trademark Office. That is on par with Silicon Valley's share of patents nationwide in 2008 and 2007, according to IFI.</br></br>Utility patents are typically granted to those who invent or discover a new and useful process or machine.</br></br>Darlene Slaughter, IFI's general manager, said Silicon Valley's patent production was especially strong compared with other areas of the country, outstripping New York, for instance, which drew 5.3% of total utility patents in 2009. Texas generated 3.5% of such patents last year, and Massachusetts produced 2%.</br></br>The 2009 numbers could come as a relief to Silicon Valley executives and investors, who recall how the recession of the early 2000s crimped research and development. | no | 0 |
Dow Rises After 5 Losses in Row | Blue-chip stocks closed modestly higher today as investors shopped for bargains after five straight sessions of losses.</br></br>The Federal Reserve's decision to keep interest rates unchanged was widely expected and had little impact on stocks or bonds.</br></br>The Dow Jones industrial average ended 5.64 points higher at 4620.42. In the broader market, declining issues outnumbered advancing stocks by about 6 to 5 on the New York Stock Exchange. Volume was moderate at 290 million shares, down from 303.19 million on Monday.</br></br>"We've entered a trading range where the bulls and the bears don't have the strength to pull themselves out," said William Raftery, technical analyst at Smith Barney.</br></br>The Fed's decision to leave interest rates unchanged came amid signs that the economy is recovering from its brush with recession earlier this year. The Fed lowered rates on July 6 for the first time in nearly three years. | yes | 1 |
Leading the News: GE Plans Move Into Risky Area: Personal Loans | General Electric Co., which has sold appliances and light bulbs to consumers since its earliest days, is aggressively moving into a risky consumer arena: unsecured personal loans.</br></br>Starting this month, GE plans to send about one million letters during the next year offering unsecured personal loans of as much as $25,000. Marketed as the "GE FlexPlus Account," the loans are similar to credit lines and carry interest rates ranging from 7.99% to 18.99%. Consumers can either pay them off in a specified period or draw down on them again after repaying a portion of the principal.</br></br>The new venture is part of GE's strategy to extend its U.S. consumer-finance business beyond primarily private-label credit cards -- in which GE is a third-party provider for retailers like Gap Inc., Retail Brand Alliance Inc. unit Brooks Brothers and J.C. Penney Co. -- to direct interaction with customers. The Fairfield, Conn., company, which has seen profits fall amid the current economic climate, is seeking new growth engines as some businesses, including its power-generation unit, see slower growth.</br></br>GE has offered such loans in Europe and Asia for nearly a decade. But in the U.S., GE will enter a fiercely competitive business in a market already saturated with loan and credit-card offers, including some that have 0% interest rates for the first six to 12 months. GE's lowest rate of 7.99% is reserved for its best customers.</br></br>Moreover, GE is entering the business at a tricky time. Consumer defaults have been increasing along with rising unemployment, calling into question the quality of consumer credit and how much demand there is among debt-laden consumers for even more types of credit. Personal bankruptcy filings have jumped as well. | no | 0 |
Future May Find Many Without Pension;Economic Shifts Threaten to Make Retirement Plan a Thing of the Past | The prospect of a pension to supplement Social Security in old age is slipping out of reach for millions of Americans.</br></br>For a generation, the proportion of Americans working in jobs where they were earning credits toward a possible future pension had been rising. But during the last decade, this trend has reversed. It is now falling because some employers are not setting up retirement plans for their workers and other employers are curbing existing plans to save money. This imposes a sharp limit on how many future retirees will ever get a pension, according to pension experts.</br></br>The causes, they say, are many: Employers have less money to put into pension plans because of the economic slowdown and a decline in U.S. productivity growth; the labor force is increasingly concentrated in service businesses, which are less inclined and less financially able than large manufacturers to offer pension plans; expanding regulations and paperwork have made pension plans too complicated and expensive in the view of smaller employers; and a weaker trade union movement has been less able to obtain pension plans in collective bargaining.</br></br>The pension system has other problems as well. The benefits are low even for many who do qualify. Few plans include annual cost-of-living increases to offset inflation. Some people "cash out" pension rights before they retire and use the cash for something else, leaving themselves with no pension.</br></br>Finally, the government insurance system backing up private pension plans that collapse or fall short of their obligations is staring at potential liabilities beyond its capacity. | no | 0 |
Single-Tape Plan Unveiled | A proposal for a consolidated ticker tape ÛÓ the first step toward implementing a central nationwide stock marketÛÓwas made public yesterday by the Securities and Exchange Commission.</br></br>The plan ÛÓ jointly drafted by the New York Stock Exchange, American Stock Exchange, three regional exchanges and the National Association of Securities DealersÛÓcalls for a two-network tape system listing last sale prices ÛÏon a current and continuous basisÛ of all eligible securities.</br></br>A first-stage pilot program is proposed which would go into effect no later than 20 weeks after the SEC approves the plan.</br></br>Under the pilot program, the last sale prices of 15 stocks will be merged into the New York Stock Exchange tape, and the market in which the sale is executed will be identified.</br></br>The 15 common stocks to he selected will be among those listed and registered on the NYSE and traded as well on one or more of the regional exchangesÛÓthe Pacific, Midwest and the PBW. The plan further requires that ÛÏat least 10 of the most active dually traded issuesÛ be among the 15. | no | 0 |
Dry Farm Belt Raises Specter of Inflation --- Forecasts for Smaller Crops, Price Rises of Up to 8% Expected in Drought | CHICAGO -- Economists are likely to sharply increase their food-inflation forecasts in coming weeks if dry weather continues in the Farm Belt, as is expected.</br></br>Until recently, economists generally expected retail food prices to rise 3% to 4% this year. But if this spring's dry weather turns into a drought, says Vincent Malanga, president of LaSalle Economics Inc., it could reduce crop yields so much that by autumn the inflation figure may hit 7% to 8%.</br></br>Three big farm states -- Iowa, Illinois and Indiana -- have had their driest spring since the Dust Bowl year of 1934, says Peter Leavitt of Weather Services Corp., Bedford, Mass. Most forecasters expect the hot, dry weather to continue for several weeks.</br></br>"We think food can be a major catalyst of inflation in 1989," Mr. Malanga said.</br></br>The dry weather and growing fears of shortages are already setting off inflation alarms. Farm prices, buoyed by rallying hog and soybean prices, rose 3.1% in May alone, according to figures released yesterday by the Agriculture Department. | yes | 1 |
Blue-Collar Thrift Pitfall | Most of the government's 500,000 blue-collar workers will be able to set aside a bigger chunk of their salaries for the new federal investment plan-and also get bigger matching contributions from the government-than their white-collar colleagues.</br></br>That is possible because the law setting up the thrift plan permits employes whose pay has been limited by Congress to make larger contributions based on the prevailing local wage for their skills.</br></br>In the Washington area, for example, the average pay for electricians, mechanics, carpenters and other similar workers is $23,400, according to the Office of Personnel Management.</br></br>But federal officials say that the wage rate for those jobs here is now actually 14 percent higher than the government average.</br></br>Despite the fact that federal law requires the government to pay wages equal to the private sector's, Congress has limited raises in recent years to the same amount granted white-collar workers. | no | 0 |
Market Moves Up In Heavy Trading | The Dow Jones industrial averages started on the plus side and stayed there as it finished with a 5.26-point</br></br>Standard & PoorÛªs 500-stock composite was ahead 0.26 point to 96.53 and the New York Stock Exchange index rose 0.13 point to 53.61.</br></br>up the biggest increase in meanwhile. Xerox dropped 3:ii personal income since the he- lo 248, Polaroid gave up 4% ginning of the year. The pros- to iggy,, Telcclvno was down peel that labor strikes going 4rs t0 g-p.;, anci Uok ]ost 37* on around the country could to i3B. Scientific Data Systems end up with expensive wage rosc eu points to 105G. settlements ÛÓ highlighted lo- Reports lliat steel demand day by the teachers contract ,js holding steady despite the in Detroit ÛÓ also provided a strike at Ford ÛÓ and the pos-strong push. sibility of other walkouts in</br></br>Reports during the day ÛÓ the auto industry ÛÓ helped later confirmed ÛÓ that the that group. Jones and Laugh-Administration was preparing lin rose ll.'t lo 67 G, National to give the go-ahead on the? Steel was ahead lit to 53!-. on-again, oi'f-again Nikc-X and Rcpuhlic added half a anti-ballistic missile program point to 49'i>. Bethlehem Steel sent most of the stocks con- picked up some notice on its netted with the project to way through a chart point at good gains. 38, but fell back to finish at</br></br>Martin Marietta, which 37-G, up G. makes the sprint missile, was The price increase on 1968 ahead 1"a to 25l.->. Raytheon, models announced by general with the site radar system, motors helped that issue post backed off from a gain of al- ler, which announced price most two points lo close at hikes last week, lost half a 25 3-4, up 3-4, General Electric point to 53 G and Ford was was ahead Hi points to 115"åÇ off G to 521 i. American and Sperry Rand was up % to motors, on a six-day schedule 42,i. with its Javelin sports car, | no | 0 |
Getting It in Writing Is the Key to an Agreement That Locks In an Interest Rate | QWhile refinancing our home, I saw that mortgage interest rates were declining. I called my potential lender and we agreed that I would let the interest rate float rather than lock it in. My loan officer advised me that rates were not down at his company. When I told him that I was offered a lower rate when I called the financial institution's toll-free number, the loan officer just shrugged this off, saying, "That was probably just to draw new business." I was told that I could not get a lower rate because I was already "in the system." Is this usual or ethical?</br></br>AWe either have the classic situation of "bait and switch," or your loan officer was just trying to make you keep a higher mortgage rate.</br></br>However, your question has confused me. If your loan was not locked in, that is, you were to obtain a floating rate, then why did the loan officer indicate that you were already "in the system," supposedly at a certain rate? Let's look at the basic difference between a floating rate and a locked-in rate.</br></br>Take your chances that when you actually go to closing, the then- current mortgage interest rate will be equal to or less than the rate at the time you made the loan application.</br></br>Lock in the rate so that whether rates go up or down, you are guaranteed to get the rate you have agreed upon. The first choice is often referred to as a "floating rate"; the second is a "lock-in" rate. | no | 0 |
Tracking the Economy: Data This Week May Include Trade Gains --- But Declines Are Expected For Industrial Output, Inventories, Retail Sales | NEW YORK -- This week's economic data, which will shed more light on the much-discussed slowdown, may also bring some better trade figures.</br></br>October reports on industrial production and capacity utilization, due out tomorrow, are expected to show declines -- a move suggested in the recent October jobs data.</br></br>The report on October retail sales, also due out tomorrow, is expected to show a slide from the previous month. And Wednesday's data on September manufacturing inventories could show some declines from August levels.</br></br>The September trade deficit, due out Thursday, is thought to have contracted from August's $10.8 billion. The consensus view calls for a $9 billion deficit for September, according to MMS International, a unit of McGraw-Hill Inc., New York.</br></br>Last week, the Federal Reserve eased credit in what many economists saw as an effort to temper the slowdown that has been the number-one topic among economists for weeks. "This is one of those few times when people have a unanimous view that we're on a slow-growth track," said Michael Moran, economist at Daiwa Securities America Inc., New York. But the debate continues on whether the economy is sliding toward recession. | no | 0 |
Some of Wall Street's Favorite Stock Theories Failed to Forsee Market's Slight Rise in 1984 | It was a tough year on Wall Street. The Super Bowl theory got beat up pretty badly.</br></br>Ever since football's clash of the titans began in 1967, the Super Bowl theory has boasted a record for clairvoyance unmatched by any technical analyst, Ph.D. economist or money manager with a six-figure income. Every year the National Football Conference team won, the stock market -- as measured by the New York Stock Exchange composite index -- rose. Every year the American Football Conference team won, the market lost ground.</br></br>Last year, however, the AFC's Los Angeles Raiders won, and the New York composite unobligingly rose. The rise was only 1.26%, to be sure, but an indicator's an indicator, after all.</br></br>The Super Bowl theory wasn't the only harebrained indicator of market performance that had a tough year. The B.S. indicator didn't suggest much of anything would happen -- maybe it didn't do so badly after all -- while the hemline index wallowed in confusion. If you followed the index of men's tie widths, you probably got caught in a short squeeze.</br></br>The B.S. indicator, otherwise known as the Boston snow indicator, is the brainchild of David Upshaw, formerly of Drexel Burnham Lambert and now of Waddell & Reed, and Jody Simons, still with Drexel Burnham. It holds that snow on the ground in Beantown on Christmas Day is a bullish indicator. | yes | 1 |
Small stock focus: Nasdaq to start trading all stocks in sixteenths | The Nasdaq Stock Market, the nation's second-largest stock market after the New York Stock Exchange in market capitalization, expects to start allowing all of its stocks to be traded in 1/16-point increments starting Monday.</br></br>The change, while expected, is a milestone in the evolution of the markets -- and may, at least theoretically, lead to better prices for small investors.</br></br>The Securities and Exchange Commission's market-regulation division Tuesday evening approved the rule proposal, which Nasdaq submitted to the federal regulator April 10. The New York Stock Exchange, meanwhile, has so far steadfastly stuck to quoting in 1/8-point increments, though many market observers expect that will have to change once its competitors switch to sixteenths.</br></br>Currently, when Nasdaq dealers move their stock prices up or down, they change them in minimum "ticks" of 1/8 of a point, or 12.5 cents at a time. Thus far, only quotes for stocks that are priced at $10 or under are moved up or down in smaller increments, some as low as 1/32, or 3.125 cents.</br></br>Lowering the tick size for all Nasdaq stocks to 1/16 of a dollar, or 6.25 cents a share, could improve prices for individuals who will have the chance to buy for less or sell for more when investing in Nasdaq stocks -- from the market's giants like Intel and Microsoft, to the thousands of tiny stocks on the market. The reason is that "spreads" between the best possible price at which an investor can buy a stock and the price at which they can sell are likely to shrink. | no | 0 |
Cut in Prime Rate Fails to Boost Stocks: Prime Rate Cut Fails to Boost Stocks | Major U.S. banks lowered their prime lending rates yesterday to 11.5 percent from 12 percent in the wake of FridayÛªs half-point cut in the Federal Reserve BoardÛªs discount rate, but these latest declines in interest rates were not enough to boost the stock market, which closed sharply down on the day.</br></br>The Dow Jones Industrial Average finished down 21.25 points at an even 1000. The list of blue chip stocks on the New York Stock Exchange has lost 65 points</br></br>Chase Manhattan, the nationÛªs third largest bank, led the prime rate move yesterday. It was quickly followed by Chemical Bank, which had raised its prime to 12 percent only last week, after several weeks as the only major bank charging 11.5 percent. The last time the prime was generally as low as 11.5 percent was in September, 1980.</br></br>Banks can afford to lower their prime because the cost of funds that they borrow in the money markets has declined.</br></br>Yesterday the federal funds rateÛÓ charged on overnight money that the banks borrow from each otherÛÓwas below 9 percent. | no | 0 |
THE REGION; D.C. Officials Have 16,800 Reasons To Worry About Area's Slowing Economy | Barely three weeks into the second half of the year, economists and others are calling attention to the inevitable: The area's economy is beginning to show signs of slowing.</br></br>One need not be an economist, however, to conclude at some point that the region's economy can't possibly sustain the high level of growth that we've seen in recent years.</br></br>That's not to say, however, that slower growth will lead to a prolonged slump. It merely means the area's economy is "slowly slackening," Stephen S. Fuller, a professor of public policy at George Mason University, told The Washington Post recently.</br></br>Job growth, generally regarded locally as the bellwether of the area's booming economy, remains at an all-time high. Employment growth has nonetheless tapered off recently, recording a net increase of 13,100 in February and a gain of only 6,700 in April.</br></br>Meanwhile, the area's unemployment rate edged up slightly in May, rising to 2.6 percent, from 2.3 percent in April, according to the most recent figures compiled by the D.C. Department of Employment Services. | yes | 1 |
Exchange Seat Prices Show Steady Rise; Boom in Futures, Option Trading Cited | For investors seeking strong and steady returns, one commodity stands tall in terms of recent performance: exchange membership seats.</br></br>The price of doing business on most major U.S. futures exchanges has jumped this year, reflecting a 15% rise in futures trading and a 30% rise in options volume compared with the first half of 1986.</br></br>The seat-price surge continues a pattern that began nearly two years ago, when the weakening of the U.S. dollar started to cause some concern about a renewal of inflation. That concern triggered brisk activity on the commodity exchanges, and now many commodity prices, after sluggish activity stemming from a 6 1/2-year bear market, appear to have bottomed out.</br></br>Many investors "are convinced commodity prices have begun to move," John Urbanchuk, an economist for Wharton Econometrics in Bala Cynwyd, Pa., says. "People see an opportunity to make money in the markets to a much greater extent" than in recent years, he says.</br></br>Moreover, the consolidation of futures brokerages that had led to a glut of available seats in recent years has abated, industry officials and exchange executives say. | yes | 1 |
Lawmakers Call for Return to Cliff Talks | WASHINGTON--House and Senate leaders called for a return to negotiations to resolve the fiscal cliff before the year ends, but they continued to blame each other for the lingering impasse.</br></br>The posturing came a day after House Speaker John Boehner (R., Ohio) saw his "Plan B" alternative to avoid tax increases collapse in the House due to opposition in his own party.</br></br>"Instead of making hard choices or compromising, as President [Barack] Obama has been willing to do, Speaker Boehner retreated to his corner and resorted to political stunts," Senate Majority Leader Harry Reid (D., Nev.) said in a Senate floor speech. Mr. Boehner, meanwhile, at a press briefing earlier Friday said while he was ready to continue negotiations it was up to Mr. Obama and the Senate to come up with a plan.</br></br>"Republicans don't want taxes to go up," Mr. Boehner said. "But we only run the House. Democrats continue to run Washington."</br></br>Senate Minority Leader Mitch McConnell (R., Ky.) likewise pointed to Mr. Obama, also speaking from the Senate floor. "Look, it's the president's job to find a solution that can pass Congress. He's the only one who can do it," Mr. McConnell said. | no | 0 |
Stocks Hit Post-Crash High --- Bonds Join the Rally As Inflation Fear Ebbs | NEW YORK -- Investors declared the Federal Reserve the winner of the latest skirmish in its war against inflation, and pushed the Dow Jones Industrial Average to a post-crash high.</br></br>With the March consumer price index up 0.5%, slightly below expectations, investors exuberantly bid the industrials up 41.61 points to 2379.40 in heavy trading.</br></br>Bond prices rallied, too, with the yield on the Treasury's benchmark 30-year bond slipping below 9% for the first time in more than two months. But foreign exchange traders, seeing the U.S. economy slowing and the prospect for higher interest rates fading, pushed the dollar lower against major currencies.</br></br>"It looks like the Fed's won," said Robert J. Barbera, chief economist at Shearson Lehman Hutton. "It looks like the inflation numbers are manageable and the economy is clearly slowing."</br></br>The perception of a slowing economy was further bolstered by a surprising 5.4% drop in March housing starts and a 13.7% decline in building permits. Because the housing industry is hypersensitive to interest rates, investors interpreted the declines as evidence that higher interest rates are cooling the economy. | yes | 1 |
Rising Oil Prices Raise the Specter of a Double Dip | Author: Justin Lahart</br></br>A sustained and significant rise in oil prices could derail the U.S. economic recovery by stirring inflation and putting the brakes on spending.</br></br>Oil futures touched $100 a barrel at the New York Mercantile Exchange Wednesday--the highest since before the financial crisis hit in late 2008--before pulling back. Pricier oil drives up the costs of everything from gas at the pump to the raw materials used to make nylon and food packaging. That could mean higher inflation and prompt consumers, who lately have shown more willingness to spend, to cut back their purchases.</br></br>Oil prices have risen 7.35% since the beginning of the year, while gasoline futures have risen 10.67%.</br></br>The question now is whether turmoil in the Middle East and Northern Africa could lead to a sustained cutback in production or delivery disruptions that could drive those prices much higher and push the U.S. as well as other countries back into recession. Supply-driven oil shocks, like the ones that came with the 1973 oil embargo and the 1979 Iranian revolution, were factors in past recessions. | yes | 1 |
Gearing Down for a Computer Comeback --- Modest Upturn Is Seen On Cost-Cutting Drive | The computer industry, considerably leaner a year after its worst slump, appears poised for a modest comeback.</br></br>But unlike past rebounds in the highly volatile business, this one promises to be uneven and prompted mostly by cost cutting instead of rejuvenated sales. Gone, for now at least, are the huge annual sales increases that led many companies to overbuild capacity amid expectations of continued heavy growth. And while some major players -- including Digital Equipment Corp., NCR Corp. and Apple Computer Inc. -- are reporting improved earnings and others are predicting them for later this year, the salad days are over.</br></br>Last year's blood bath led to fundamental changes that will be reflected in some balance sheets. Thousands of workers were fired, plants were closed and inventories were slashed. The result: The computer makers that made these adjustments will be better able to show a profit even if sales grow slowly -- or not at all.</br></br>This reliance on profit margins instead of growth could prove crucial in 1986. Some analysts see an increase in computer sales between 7% and 13% from 1985, but that is a far cry from 1984's roughly 20% gain from 1983. The sales gain in 1985, the industry's darkest days thus far, has been variously estimated at 3% to 10%. Although improved margins should boost profits, some analysts argue that a sustained industrywide recovery won't occur without a significant upturn in sales.</br></br>"The recession in electronics in 1984 and 1985 was self-induced, not economy-induced," says Mark Boyer, the portfolio manager of Fidelity Investments' nearly $500 million high-technology fund. Mr. Boyer, like many other analysts, notes that the industry's downturn came when the U.S. economy otherwise was robust. The culprit, analysts agree, was the industry's own bad planning and overcapacity. | no | 0 |
Cutbacks 'Crushing' Blacks: Blacks' Economic State Reported as Disastrous | Black America, with a 17.8 percent unemployment rate in December and 35.6 percent of its people below the poverty line, remains ÛÏburied in a depression of crushing proportions,Û and the Reagan administration bears substantial blame, National Urban League President John E. Jacob charged yesterday.</br></br>ÛÏThe state of black America is disastrous,Û said Jacob in releasing his organizationÛªs annual report on the status of the nationÛªs 28 million blacks.</br></br>He was especially critical of administration cuts in social programs over the last three years, its opposition to affirmative action in civil rights and the recent report of the PresidentÛªs Task Force on Food Assistance that ÛÏplayed downÛ the ÛÏserious problem of hunger in America.Û ÛÏThe black poor have been relegated to an out-of-sight, out-of-mind status in American life,Û said Jacob.</br></br>To obtain relief, Jacob said, blacks must turn out heavily enough in the coming election to force the president and Congress to heed black demands for jobs, restoration of social services and strengthening of civil rights enforcement.</br></br>Û¢ Economic status. The black unemployment rate was 17.8 percent in December, compared with 8.1 percent for the nation as a whole; for black males aged 18 and 19, the rate hit 42.7 percent last fall. These official figures leave out workers too discouraged even to look for jobs. | no | 0 |
Martin Marietta Posts Higher Profit; Lafarge, Danaher, Mid Atlantic Medical Also Report Increases | Martin Marietta Corp. yesterday reported a third-quarter profit of $149 million ($1.18 per share), a 13.5 percent increase over the earnings of $131 million ($1.04) for the same quarter in 1993.</br></br>The firm said one reason for the jump in profit was the savings that came from consolidations following its purchase of the rocket division of General Dynamics Corp. and the aerospace division of General Electric Co.</br></br>Sales for the most recent quarter were $2.56 billion, 3.9 percent higher than revenue of $2.47 billion for the same period one year before.</br></br>The increase in sales was attributable in part to the firm's purchase earlier this year of General Dynamics Space Systems.</br></br>"These strengthened results are indicative of the streamlined company that emerged from combining Martin Marietta and the former GE Aerospace," said Norman R. Augustine, chairman and chief executive. | yes | 1 |
GAO: U.S. Foreclosure Review Could Have Generated Higher Payments; Review Could Have Delivered $1.5 Billion More to Consumers if Not Halted, Federal Watchdog Finds | WASHINGTON--A comprehensive review of major banks' foreclosure files could have delivered an additional $1.5 billion in cash to consumers if it wasn't halted last year, a federal watchdog has found.</br></br>The Government Accountability Office, in a report being released Tuesday, evaluated federal bank regulators' decision last year to cancel a prolonged review of foreclosure-processing and loan-assistance mistakes. A draft of the GAO report was reviewed by The Wall Street Journal.</br></br>The foreclosure probe has been controversial from its start three years ago. Many lawmakers said regulators should not have allowed banks to hire consulting firms who had done previous work for them. Some Democratic lawmakers also have been skeptical of regulators' decision to reach a settlement ending the review early last year, saying it was premature.</br></br>The GAO report shows that the settlement "was reached without adequate investigation into the harms committed by the servicers," Rep. Maxine Waters (D., Calif.) said in a prepared statement. "Many of the files did not contain complete data, making it impossible to know whether borrowers were disqualified from the possibility of the greatest cash payouts."</br></br>The foreclosure review could have provided up to $5.4 billion in cash to consumers, instead of the $3.9 billion ultimately agreed upon, the GAO report found. | no | 0 |
IMF: Premature Fed Exit Could Fuel $2.3 Trillion in Global Bond Losses | WASHINGTON--A premature exit by the U.S. Federal Reserve from its easy-money policies could cause $2.3 trillion in global bond portfolio losses, the International Monetary Fund warned Wednesday.</br></br>Although the IMF assumes in its latest economic forecasts that the U.S. central bank will unravel its policies at a tempered pace, the fund said the market's volatile reaction to Fed exit comments earlier this year show there is still a risk of moving too fast.</br></br>"Engineering a smooth transition to monetary normalization will require a clear and well-timed communication strategy by the Federal Reserve to minimize interest rate volatility," said Jose Vinals, the IMF's top financial counselor.</br></br>"Containing longer-term interest rates and market volatility has already proven to be a substantial challenge, as shown by the sharp rise in bond yields and volatility since May," he said.</br></br>Global stock, bond and currency markets took major hits earlier this year after Fed officials indicated they could soon begin withdrawing the bank's extraordinary stimulus, possibly before the end of this year. Markets have since calmed as the Fed tempered expectations for an earlier exit, but central-bank officials still aren't ruling out reducing their $85-billion-a-month bond purchases before the end of the year. | no | 0 |
Microsoft Calls Trade Briskly as Investors Bet on Stock's Resurgence | NEW YORK -- It is the world's largest software company and accounts for 10% of the Nasdaq 100 Index, but Microsoft has been overlooked by the recent rally.</br></br>The stock is basically flat for the year, compared with a 26% jump for the Nasdaq 100 and 15% rise for the Standard & Poor's 500-stock index. That lag has caught the attention of options traders and strategists, some of whom are seeking ways to position for a possible rebound of the software company relative to the broad market.</br></br>Neil Herman, Lehman Brothers' software analyst, said he believes the Redmond, Wash., company is well positioned for the coming quarter. Although summer can be a slow season for software revenue, Microsoft remains a good defensive play, he said in a research note; after all, it isn't clear if technology spending will pick up to the extent many investors had hoped as they loaded up on more volatile tech stocks.</br></br>Other strategists pointed out how Microsoft has underperformed compared with sectors such as biotechnology and semiconductors and could catch up if investors believed these other sectors were becoming overbought.</br></br>Meanwhile, implied volatility of three-month options on Microsoft is a bit below average levels during the past year, making its calls relatively inexpensive, Lehman options strategist James Hosker said. | no | 0 |
Dow Closes Up 10 in Mixed Trading | Stock prices ended mixed today as Wall Street waited for remarks this week by Federal Reserve Chairman Alan Greenspan before the Senate Banking Committee.</br></br>The Dow Jones industrial average closed up 10.43 points at 3963.97. Declining issues slightly outnumbered advancing ones on the New York Stock Exchange; trading volume fell to 308.1 million shares from Friday's 347.98 million. Financial markets were closed Monday for Presidents' Day.</br></br>Broader market indicators also were mixed. The Nasdaq index ended down 2.35 points to 784.62 and the American Stock Exchange index was off 0.09 to 447.51. But the NYSE composite index edged up 0.15 to 261.98 and the Standard & Poor's 500-stock index rose 0.77 to 482.74.</br></br>Traders attributed the rally in blue-chip stocks to the reversal of some of Friday's options-related selling that wiped out 34 points from the Dow average.</br></br>Analysts said most investors saw few incentives to get involved ahead of congressional testimony on Wednesday by Greenspan. Traders will be looking for hints on the direction of the Fed's monetary policy. | no | 0 |
Educators Largely Ignoring Declining Student Achievement: Last of three articles | Û¢ Little is being done at cither the jiational or state, level to determine the cause or extent of declining student achievement and rising grade inflation in the nationÛªs schools and colleges.</br></br>' Noticeably lacking is' government-sponsored research into these two phenomena, despite evidence of their existence for years.</br></br>Moreover, the relatively few school officials who concede that there is a decline in student achievement channel the blame for it everywhere but within the walls of the nationÛªs high Û¢ schools and colleges.</br></br>Virtually no official recognition of grade inflation. has been made in American high schools and although it is widely acknowledged in the countryÛªs colleges and universities, such 'acknowledgement has led to little action at the national and most state .levels.</br></br>Û¢. At various points across the country, plans are being made or action has been taken to reinstate academic requirements that were dropped during the last 10 years. And at some colleges and universities, steps are being taken to establish or expand remedial instruction. | no | 0 |
Auto List Leads Rally in Stocks: Far More Gainers CIT Off 8 Points Magma Copper Jumps | NEW YORK, Nov. 15ÛÓSelling pressure in the auto group let up today and allowed blue chips to get back into an upside groove with the rest of the stock market</br></br>The autos, prime culprits in pushing the Dow Jones industrial average back from its assault on its 1968 high, took in- some more selling in the morning and then moved higher.</br></br>The Dow sketched roughly the same path, slipping a couple of points early in the day before coming back to post its fifth advance in the last six sessions. The dayÛªs final figures showed the Dow ahead 1.99 points at 965.88.</br></br>Standard and PoorÛªs 500-stock composite was up 0.58 point at 105.77 and the New York Stock Exchange index rose 0.33 point to 59.65. Both those indicators were in profitable ground right from the opening.</br></br>-Trading volume held at a high level. The ExchangeÛªs ticker was late for a brief spell at the opening, but then trailed by three minutes at the close. In all, 15.04 million shares crossed the tape, slightly ahead of the 14.9 million traded on Thursday. | no | 0 |
Actuaries Respond as Policyholders, New Buyers Of Life Insurance Discover Ignorance Is Not Bliss | What life insurance buyers don't know about their policies can hurt them.</br></br>Just ask California businessman Eric Nielsen. He says he thought he had bought a policy that required three, or maybe four, big premium payments and then would be fully paid for life.</br></br>Three years after his purchase, however, the number of projected payments had ballooned to 10, and there were similar but less extreme changes in three policies covering his parents. "As we dug into it . . ., we were horrified," Mr. Nielsen says.</br></br>Mr. Nielsen and his parents are among many policyholders who are complaining about policies that are requiring more payments, or showing slower savings growth, than holders expected on the basis of computer-generated projections, or "illustrations." The policies are certain "whole life" and other cash-value plans combining a death benefit and a savings component. A major culprit: lower interest rates.</br></br>But the gripes also highlight an underlying problem: Many insurance policyholders don't have a clue as to their policies' basic workings and risks. "Consumers don't seem to understand what is guaranteed and what is not," says Judy A. Faucett, an actuary at Coopers & Lybrand who is head of a task force of actuaries looking into the problem. | no | 0 |
Options Report: Volatility in Options Market Ratchets Up 4.9% Amid Hedging Ahead of Producer-Price Data | NEW YORK -- Volatility rose sharply as options traders hedged stock portfolios and took profits as the long bond's yield rose above 6%.</br></br>With the exception of precious metals, most sectors declined as Wall Street sweated in front of today's release of the producer-price index.</br></br>Traders are worried the report could be stronger than expected, which would give the Federal Reserve's policy-setting committee more of a reason to raise interest rates when it meets at the end of June. "There's a real fear out there that we could have a very aggressive Fed," a trader at a top Wall Street firm said.</br></br>In anticipation of an interest-rate increase, traders reconsidered stock prices and defensively traded options. "Taking coin and running," is how a floor broker at the Chicago Board Options Exchange described the session.</br></br>The option market's fear gauge, the CBOE's Market Volatility Index, or VIX, rose 1.19, or 4.9%, to 25.39, below its intraday high of 27.35. | no | 0 |
World-Wide | CLINTON PLEDGED to push legislation on crime and welfare reform.</br></br>In his State of the Union address, the president said he would give those two issues near-equal billing with his top priority, health-care reform. He also issued his first veto threat, saying he would kill any health-care bill that doesn't provide coverage for every American. The speech was a marked departure for Clinton, who has focused on economic issues, particularly reducing the deficit and expanding trade. Last night, in effect, he declared victory on the economic front and prepared to move on.</br></br>The president signaled that he wants to set a new, socially conscious tone for his administration. He spoke of the need for family values and vowed to press for an end to violence on the streets.</br></br>---</br></br>The president will request an additional $6.6 billion for earthquake-hit California. Clinton will ask Congress to approve the emergency federal assistance for Southern California, on top of $900 million already released from contingency funds, White House Budget Director Panetta announced. | no | 0 |
The Tilting Yard: What's the Matter With Democrats? | It's no secret that the tea party faithful regard the Obama administration as a Constitution-shredding tyranny. But in a profile of the movement published last week, the New York Times reported the surprising news that many of the protesters have come to this view as a result of their experiences in the recession: "Their families upended by lost jobs, foreclosed homes and depleted retirement funds, they said they wanted to know why it happened and whom to blame."</br></br>An account of a conservative uprising published a few days later by the Washington Post under the headline, "Appalachia is slipping from grip of Democrats," told the story of a hard-bitten congressional district in western Virginia where the response to the recession has been a dramatic swerve to the right.</br></br>The free-market system blunders into recession; its victims flock to the free-market banner. And here we go again.</br></br>The backlash against liberalism has been going on for more than 40 years. It is as immediate as this morning's newspaper but as old as those "Silent Majority" buttons you find at antique stores. Since the days of George Wallace, conservatives have been leading rebellions against hippies, against busing, against Hollywood, against property taxes, against welfare, against evolution, against whatever.</br></br>The formula is familiar beyond the point of tedium: Middle-American righteousness, resentment of liberal "elites," weepy fantasies of persecution set to a country-music melody. Yet its power never wears off. Today conservatives are giddily anticipating another electoral disaster for the "Party of the People." | no | 0 |
A Special Summary and Forecast Of Federal and State Tax Developments | MORE STATES consider tax cuts as economic growth lifts revenues.</br></br>At least 20 states are seriously considering tax cuts, says Steven D. Gold of the Center for the Study of the States in Albany, N.Y. That is the largest number since 1985. "The stronger economy clearly is easing state budget pressures," Gold says. A few states, notably New Jersey, may cut individual income taxes sharply. But most states' reductions "won't be large enough to make a significant difference in people's take-home pay," he predicts.</br></br>State tax revenues rose 6.1% in 1993's second half from a year earlier, a report by the center says. Those gains came primarily from stronger economic growth. Rocky Mountain states, especially Wyoming, posted the biggest increases. Mississippi, helped by a "casino-related boom," also enjoyed strong growth, Gold says. But a Merrill Lynch report warns that California, struggling to emerge from a deep recession, still faces "severe" problems.</br></br>"California has a tax climate that is hostile to both businesses and individuals," says Donald Straszheim, Merrill Lynch's chief economist.</br></br>CONNECTICUT TRIES to fix a bizarre tax-law quirk. | no | 0 |
Weakening Dollar Worries Investors; Dow Dips in Light Post-Holiday Trading | Stocks fell Friday in light trading, ending a shortened week as the December holiday shopping season began and attention turned to retailers and a steep decline in the dollar against other major currencies.</br></br>The day after Thanksgiving appeared to be a busy one for retailers as shoppers seeking bargains flocked to stores. Without tallies from cash register receipts, however, investors were forced to examine little more than anecdotal evidence as they tried to determine how sales for the holiday season would fare.</br></br>With the stock markets closed Thursday for Thanksgiving and many investors taking a holiday Friday, Wall Street saw a quiet session that closed at 1 p.m.</br></br>The Dow Jones industrial average fell 46.78, to 12,280.17, the Standard & Poor's 500-stock index fell 5.14, to 1,400.95 and the Nasdaq composite fell 5.72, to 2,460.26.</br></br>Richard Sparks, an analyst at Schaeffer's Investment Research, noted stocks pulled off their lows of the session as investors pared concerns about the strength of retail sales and the dollar, though he noted some pessimism remained. "I think those concerns are keeping some traders on the sidelines." | no | 0 |
U.S. Stability Held Based On Controls | The basis for an optimistic outlook on business in 1956 is the powerful procedures developed to keep the economy from spiraling inflation or deflation. This reason was expressed yesterday by Arthur R. Upgren, dean of the Amos Tuck School of Business Administration, Dartmouth College in addressing the eighth regional conference of the American Savings & Loan Institute at the Sheraton-Park Hotel.</br></br>Dr. Upgren referred to the record of housing expenditures to emphasize the strength of the economy. He recalled that President Eisenhower said about a year ago that the gross ^national prodiction in 1956 might reach $500 billion, an estimate of the Joint Committee on the Economic Report. The output for 1965 was calculated at $535 billion.</br></br>When the estimates werei made housing expenditures! were at the annual rate of $11.8. billion. The housing estimate j ifor 1956 was $16 billion. In the) second quarter of 1955, total j housing expenditures were at [the annual rate of $16.3 billion,1 so that the actual rate of outlay in one year surpassed an [estimate made for 11 years ahead.</br></br>William J. Hallahan, member of the Federal Home Loan Bank Board cited the course which legislation affecting savings and loan association takes. It is not only studied by both the United States Savings & Loan League and the National Savings & Loan League, but also by other financial interests. In short, it is considered from every point of view, be said.</br></br>Ray Owen, first vice president, American Savings & Loan Institute referred to the rapid; [growth of the population and' stressed the need for training' personnel lo administer the pol-j icies of savings and loan institutions. | yes | 1 |
Is Greenspan Right About Your Mortgage?; As Industry Pushes ARMs, Fed Chief's Speech Underscores Savings and Possible Risks | THIS WEEK, no less an authority than Federal Reserve Board Chairman Alan Greenspan suggested that many Americans may have the wrong mortgage.</br></br>In a speech to credit unions, Mr. Greenspan said that Federal Reserve Board research showed that "many homeowners might have saved tens of thousands of dollars had they held adjustable-rate mortgages rather than fixed-rate mortgages during the past decade" as rates tumbled.</br></br>Yet the more expensive fixed-rate loans accounted for 81% of mortgage originations last year, according to the Mortgage Bankers Association. That's because most borrowers are risk-averse and fixed- rate mortgages protect them from the possibility that interest rates will rise over the life of the loan.</br></br>The problem is that as home prices soar, choosing a long-term loan is an increasingly costly decision. In the current market, borrowers can cut the rate on their mortgage drastically by opting for an adjustable-rate mortgage instead of a 30-year fixed-rate loan. Currently, rates average 5.71% on 30-year fixed-rate mortgages while they average just 4.53% on mortgages that carry the same rate for the first five years and then adjust yearly, according to HSH Associates, a financial publisher.</br></br>Lenders are increasingly pushing ARMs because they allow buyers to either trim their payments or buy more home for the same payment. At Washington Mutual Inc., ARMs accounted for 55% of home loan applications in the fourth quarter. At a time of rising home prices, the lower start rates on ARMs allow borrowers "to maximize their buying power," says Greg Sayegh, Washington Mutual senior vice president. | no | 0 |
Toys `R' Us Net For Fiscal Year To Miss Target | Toys "R" Us Inc. said it expects to report full-year earnings well below earlier expectations, reflecting weaker-than-expected holiday sales. The retailer's shares dropped 11% on the news.</br></br>The forecast for the company's fiscal year ending Jan. 29 was the latest setback in an attempted turnaround, and came after a favorable third quarter. Much of the retail world is celebrating big holiday sales, driven by a strong economy and a surging stock market.</br></br>Toys "R" Us told analysts it was "comfortable" with a reduced earnings-per-share estimate of about $1.10 a share for the year, down from about $1.40. The company said it expects to post an operating loss of 20 cents a share to 25 cents a share in its Internet business for the year, also wider than earlier expectations.</br></br>Toys "R" Us's retail Web site had trouble handling volume over the holidays, and to placate customers, it offered discounts and free shipping. Those moves contributed to the operating loss, said Louis Lipschitz, chief financial officer.</br></br>For the crucial nine-week holiday season ended Jan. 1, sales in U.S. stores open at least a year fell 2% compared with the year-earlier period. Analysts had been expecting same-store sales to rise to the mid single-digit range. In November, Wall Street had been buoyed by the retailer's robust third quarter when comparable-store sales were up 13% in the U.S. | no | 0 |
Bond Prices Edge Up on Light Volume As Investors Await Treasury Auctions | NEW YORK -- Bond prices edged higher yesterday. But trading volume was light as dealers and investors awaited a large supply of new U.S. government securities this holiday-shortened week.</br></br>The Treasury today is scheduled to auction $5.5 billion of new seven-year notes. On Thursday, it plans to sell $4 billion of new 20-year, one-month bonds.</br></br>That will complete the government's $15.5 billion midyear financing operation, which began last Tuesday with the sale of $6 billion of four-year notes at an average yield of 13.69%. Some analysts contend that yields will have to rise in order to attract investors to the new Treasury notes and bonds.</br></br>Yields on both issues "need to move closer to 14% before we get any significant investor" demand, said Samuel Kahan, a vice president of Heinold Commodities Inc., Chicago.</br></br>Late yesterday, the seven-year Treasury notes were trading in the when-issued market to yield about 13.85%. The 20-year, one-month bonds closed at about 13.75% in when-issued trading. | no | 0 |
Authorities Describe 'Lone Wolf' | A series of disappointments--arrests, marital separation and unemployment--beset Jose Pimentel's life before he turned to a radical strain of Islam and, authorities say, began planning a pipe-bombing plot targeting government workers.</br></br>He was arrested twice in two years--once at the age of 19 in New York City on charges of selling marijuana in 2004 and then again in 2005 on charges of using stolen credit-card information to buy a computer, according to court records.</br></br>In 2010, Mr. Pimentel, a Dominican Republic-born U.S. citizen, and his wife separated, said his mother. They have a 4-year-old son.</br></br>And though Mr. Pimentel found work doing odd jobs, he was mostly unemployed for the past several years, said his mother, Carmen Sosa. After moving back in with his mother in 2010, Mr. Pimentel spent most of his time in his bedroom, where authorities say he maintained a website that advocated violence against Americans and followed the teachings of the now-dead al Qaeda propagandist Anwar al-Awlaki.</br></br>"When I talk to him about what you're doing, he said, 'It's not your business,'" Ms. Sosa, 56, said in a televised interview. | no | 0 |
Boomer Bust; A Generation Learns That the World Doesn't Revolve Around It After All | PUBLISHED CORRECTIONS: A June 10 Style article incorrectly reported when the Nasdaq composite index reached its record high. It was 2000. (Published 6/13/03)</br></br>We'd follow our dreams right into the luxury midlife we once renounced. With the Dow Jones average at 36,000, we'd slow down and live it up, trading our K Street law practice for a bed-and- breakfast in Vermont, our Dodge Caravan for a Lexus SC 430. We, the magnificent Dr. Spock babies, would send our even more magnificent progeny to Princeton and Stanford.</br></br>We were born from 1943 to 1964, depending on who's talking. We were going to live forever, watched over by angels of infinite possibility.</br></br>What happened? How did it all go so wrong so fast in an era of unprecedented progress, prosperity and peace?</br></br>Earlier generations have suffered more -- think of the damage done in the Depression or World War II -- but typically, boomers act as if they've cornered the market on turmoil. Maybe it's not economics or war, though. Maybe it's just the sense of the earth moving under our feet, the way it used to feel on the observation deck of the World Trade Center. | no | 0 |
U.S. News: Retailers Head for Exits in Detroit --- Shopping Becomes a Challenge as Auto-Industry Collapse Adds to City's Woes | DETROIT -- They call this the Motor City, but you have to leave town to buy a Chrysler or a Jeep.</br></br>Borders Inc. was founded 40 miles away, but the only one of the chain's bookstores here closed this month. And Starbucks Corp., famous for saturating U.S. cities with its storefronts, has only four left in this city of 900,000 after closures last summer.</br></br>There was a time early in the decade when downtown Detroit was sprouting new cafes and shops, and residents began to nurture hopes of a rebound. But lately, they are finding it increasingly tough to buy groceries or get a cup of fresh-roast coffee as the 11th largest U.S. city struggles with the recession and the auto-industry crisis.</br></br>No national grocery chain operates a store here. A lack of outlets that sell fresh produce and meat has led the United Food and Commercial Workers union and a community group to think about building a grocery store of its own.</br></br>One of the few remaining bookstores is the massive used-book outlet John K. King has operated out of an abandoned glove factory since 1983. But Mr. King is considering moving his operations to the suburbs. | no | 0 |
Euro Gives Hedge Funds Headaches | The euro's gyrations this year have taken hedge funds by surprise, saddling some of the biggest names in the currency markets with losses.</br></br>FX Concepts, an $8 billion currency-focused hedge fund in New York, struggled with losses as Europe's shared currency unexpectedly surged last month. Other hedge funds in the U.S. and Europe, including Bridgewater Associates Inc. and Moore Capital Management, also have stumbled recently, several investors and bankers say.</br></br>For months, Wall Street banks have recommended that investors sell the euro while buying higher-yielding currencies, such as those of emerging-market economies. So far, these bets haven't panned out.</br></br>Sentiment on the euro changed suddenly and sharply in the middle of January as European leaders moved closer to working out details of a beefed-up fund to help finance struggling nations, and the European Central Bank even indicated it may raise interest rates sooner than expected. That would attract investors to euro-denominated assets.</br></br>Money managers scrambled to buy euros to close out their bearish bets, sending the shared currency higher. | no | 0 |
U.S. victory in trade talks with Japan would have little impact on deficit | AuthorAffiliation Staff Reporter of The Wall Street Journal</br></br>"This is already indicated by the fact that [U.S. trade officials] have suggested if they apply retaliatory measures, it'll only [affect] about $1 billion," said William Cline, an economist with the Institute for International Economics. "The direct effect would be small," he said.</br></br>Though European Union and Canadian trade ministers also will be represented at the talks, the auto dispute between the U.S. and Japan is by far the marquee event of this week's "quadrilateral" negotiations. The huge auto-trade imbalance is called the biggest glitch in their economic relationship and so, with the dollar at historic lows against the yen and the U.S. trade deficit at record highs, the talks have gained increased relevance.</br></br>U.S. officials say they will make a strong bid for settlement this week. But they insist there can't be one unless Japan agrees to a so-called "voluntary plan" for its auto makers to purchase more U.S. car parts. Last week, a Tokyo trade official insisted Japan won't do it.</br></br>"We have lots of room for negotiation and compromise in some areas, but there's no room for compromise on the voluntary plan," he said. | no | 0 |
Stocks End Mixed After Early Gam: Dow Average Loses 36.84 During Week | The Dow Jones average of-30 industrials, up more than 20 points in early trading, closed with a 2.94 loss at 2381.96.</br></br>Advancing issues outnuinbered declines by about 4 to 3 in nationwide trading of New York Stock Ex-change-listed stocks.</br></br>Volume on the floor of the Big Board came to 180.81 million shares, up from 153.13 million in the previous session. Nationwide, consolidated volume in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 212.39 million shares.</br></br>Losers among the blue chips included International Business Machines, down l'A at 109%; Exxon, down Ve at 42 Vi; DuPont, down 1 at 107%; Eastman Kodak, down 'A at 43, and General Motors, down % at 39%.</br></br>Pittston climbed l'/s to 20%. The company, faced with a challenge to its finances by striking coal miners, declared its first dividend since 1983. | no | 0 |
American Express Secretly Funded Newsletter: American Express Secretly Funded Newsletter | American Express Co. has for more than a year been secretly financing a newsletter that criticizes the interest rates charged by competing bank credit cards.</br></br>Bank Credit Card Observer, a frequently quoted publication produced in Kendall Park, N.J., has receivedÛÓand will continue to receive until yearendÛÓa subsidy "likely to approach $500,000,Û according to the American Banker, a trade publication that broke the story yesterday.</br></br>American Express began financing the newsletter a few months before it launched its own lower-interest Optima credit card to compete with MasterCard and Visa. The newsletterÛÓ like several similar publicationsÛÓhas given editorial credit to Optima for helping to drive down credit card interest rates.</br></br>American Express and John C. Pollock, the newsletter's publisher, yesterday confirmed the arrangement but declined to discuss the exact amount involved. Pollock acknowledged that he is getting a monthly grant of $20,000 from American Express.</br></br>Colleagues in the consumer credit and journalism fields expressed shock and dismay at the American Express link to Bank Credit Card Observer, although many defended the newsletterÛªs contents. | no | 0 |
DIGEST | Fed Chairman Alan Greenspan told the House Small Business Committee that he sees signs that an improving economy is finally beginning to break the grip of the "credit crunch" that has stifled business lending the past two years - but it is too soon to declare victory. He pledged that federal regulators would continue doing what they could to ease regulatory burdens that bankers have complained are a big part of the problem.</br></br>Chevy Chase Savings Bank established a $25 million fund to promote home ownership among low- and moderate-income residents of the Washington area. The thrift will use the money to offer mortgage loans at below- market interest rates through its B.F. Saul Mortgage subsidiary.</br></br>Mortgage rates fell this week. Thirty-year, fixed-rate mortgages averaged 7.50 percent, down from 7.57 percent last week, the Federal Home Loan Mortgage Corp. said. On one-year adjustable rate mortgages, the average initial rate was 4.75 percent, down from 4.82 percent last week.</br></br>Sales of existing homes tumbled 6.1 percent in February, the second monthly decline in a row, the National Association of Realtors said. The seasonally adjusted annual rate in February was 3.55 million units, down from the 3.78 million pace in January.</br></br>Lee Iacocca received nearly $14.6 million in compensation from Chrysler last year and $5.7 million more from cashing in old stock options, said a filing with the SEC. The amount - $20.3 million - rivaled Iacocca's biggest annual compensation package in 1986, when he received $20.6 million in cash and stock proceeds. | yes | 1 |
Trying to Light A Fire Under Chestnut Revival | Agricultural researchers at the University of Missouri at Columbia's Center for Agroforestry are experimenting with more than 50 varieties of chestnuts. The goal: to bring back the American chestnut.</br></br>A century ago -- before an Asian blight devastated most of the country's millions of chestnut trees -- chestnuts were a staple of American diets, particularly for recent immigrants. The trees' rot- resistant timber was used to build barns and beams, its bark provided tannin for leather.</br></br>While the chestnut remains an oddity for most Americans, commercial production is increasing, and so is demand.</br></br>"The American Chestnut Foundation has worked very closely with the Agriculture Department to come up with a disease-resistant strain of the American chestnut," President Bush said when he planted a 16-foot chestnut tree on the White House grounds to mark the 133rd annual celebration of Arbor Day on April 29. "One day the American chestnut . . . will be coming back. And this is our little part to help it come back."</br></br>For now, domestic production is a fraction of the global market, said Michael Gold, associate director of the Missouri center. He estimates that U.S. chestnut growers produced 1.5 million pounds last year, compared with 200 million pounds worldwide. | no | 0 |
Nasdaq Hits Another Record; Dow Off 58 | Stocks today diverged in familiar fashion, with technology shares leading the Nasdaq composite index higher for a sixth straight session while blue-chip industrials slumped.</br></br>The Dow Jones industrial average fell 58.01, to 10,905.79, and the Standard & Poor's 500 slipped 0.13, to 1424.24.</br></br>The Nasdaq, dominated by technology stocks, has risen nearly 6 percent so far this year, while the blue-chip Dow industrial average has fallen more than 5 percent.</br></br>"It's a very fragmented market, and you can understand why," said Larry Wachtel, market analyst at Prudential Securities.</br></br>General Electric, down 5-1/16 at 136 1/2, and Boeing, down 2-3/16 at 41-13/16, contributed most to the Dow's decline. | no | 0 |
Sensible Stimulus; A Case for Extending Jobless Benefits | It's an election year, and partisan acrimony has escalated. Democrats and Republicans portray themselves as the nation's saviors against all the programmatic atrocities of the other side. Can we find a refuge of common-sense agreement amid this self-serving political din? Well, here's a proposal for the economy: Enact a temporary extension of unemployment insurance from the standard 26 weeks to 39 weeks.</br></br>The proposal's virtue is precisely its modesty. Benefits have been extended in every recession except one since the 1950s. Although most unemployed usually find new jobs within the normal six months, the task becomes harder in a slump. Perhaps 3 million people will exhaust their benefits this year, estimates the Congressional Budget Office. The cost of added protection is also modest: about $13 billion for a proposal that recently passed the House Ways and Means Committee.</br></br>True, it's not yet clear that we're even in a recession. In the first quarter of 2008, the economy's output of goods and services (gross domestic product) increased at a 0.6 percent annual rate. Though meager, that's still growth and suggests the economy doesn't meet one basic test for a recession -- two consecutive quarters of negative GDP. But that verdict comes with a big caveat: The job market is already in retreat.</br></br>Look at the numbers. Though the April unemployment rate of 5 percent is not historically high (the average for the 1990s was 5.8 percent), it's way up from the recent low of 4.4 percent in October 2006. For much of 2007, the number of new jobs was actually increasing, though not fast enough to absorb all the new entrants into the labor force. Even this growth has halted, and the number of jobs has begun to decline. Since December, payroll employment has fallen by 260,000.</br></br>How does employment decline in an economy that's expanding, even if feebly? Easy. Weak companies fail or shrink; the survivors don't hire more people to handle the extra business. Productivity (a.k.a. efficiency) improves. Fewer workers do more work. By many indicators, the job situation may get worse before it gets better. | no | 0 |
The Afternoon Report: More Stress on Musharraf | Caught between increasingly assertive Islamic militants and louder calls for democratic reforms, the balancing act performed by Gen. Pervez Musharraf, Pakistan's president and a key U.S. ally, is becoming even trickier.</br></br>On Friday, Pakistan's Supreme Court reinstated the nation's top judge, ruling that his suspension by Gen. Musharraf was "illegal" and quashed a separate case of alleged misconduct by the chief justice, Iftikhar Mohammed Chaudhry. Chief Justice Chaudhry's suspension last March -- the government said he used his position to help secure a police job for his son and took advantage of privileges such as using government aircraft -- sparked protests by lawyers and political opponents that has since blossomed into a powerful democratic movement. The government insisted the case had no political motive and that Gen. Musharraf had little choice under the constitution but to suspend Chief Justice Chaudhry. But opponents accused Gen. Musharraf of plotting to remove an independent-minded judge to forestall legal challenges to his plan to ask lawmakers for another term. The army general -- who took control of the country in a 1999 coup -- faces widespread demands within Pakistan to resign from the military if he wants to be re-elected as president again. So far, he has resisted taking off the uniform, as he would be constitutionally required to do by the end of this year and also allowing the return to Pakistan of his chief political opponents.</br></br>But today's victory for the nascent democratic movement is just one of many challenges to Gen. Musharraf, a leader President Bush has called Washington's strongest ally in the fight against al Qaeda. Just last week Pakistani commandos stormed the Red Mosque -- a center of radical-and-fundamentalist teaching in Islamabad -- after a monthlong siege. About 100 people died. Pakistani officials said the action was taken after Gen. Musharraf recognized the threat of the growing "Talibanization" of Pakistan and senior U.S. and Pakistani officials have said it was part of a broader effort to push back the Taliban and al Qaeda. But it also led tribal leaders to call off the tentative truce in Pakistan's lawless border area and in recent days, militants there -- and in Islamabad -- have killed hundreds of Pakistani troops and citizens.</br></br>The border area is a subject of intense interest for the U.S. as its intelligence community says that region has become a haven for al Qaeda's senior leadership -- including perhaps Osama bin Laden and his deputy, Ayman al-Zawahiri. Al Qaeda leaders, according to U.S. officials, are using the border region to train recruits from Europe and Africa while reaching out globally to affiliate groups, particularly in Iraq and North Africa. But many counterterrorism officials wonder if Gen. Musharraf, who is also Pakistan's military chief, has the ability, will or political base to mount a major operation inside the tribal areas against al Qaeda and the Taliban, the Islamist fundamentalists who ruled Afghanistan until late 2001. Gen. Musharraf's troubles present some difficult choices for the Bush administration in its fight against Islamic extremism in the region. After the military's raid of the mosque, the U.S. government continued to offer statements of support. It recently pledged $750 million in aid over five years to help spur development in the tribal regions, the latest dollop in billions of dollars in military and economic assistance the U.S. has offered Pakistan since the Sept. 11 attacks.</br></br>--- | no | 0 |
Stock Prices End Mixed; Bonds Gain --- Investors Are Torn By Fears About IBM, Relief Over Rates | Stock prices recovered from an early shellacking to end mixed, as investors were torn between disappointment over bleak corporate earnings and relief that interest rates fell.</br></br>The Dow Jones Industrial Average slipped 1.56 points, ending at 2953.94 in moderate trading. But several broader indexes eked out small gains, bolstered by a bond market rally.</br></br>The latest earnings stunner came from International Business Machines Corp., which disclosed that second-quarter profit would be below analysts' estimates. IBM's stock tumbled 1 7/8 points to 99 1/8, a low for the year.</br></br>Concern about IBM's woes were compounded by a government report early yesterday showing an unexpected increase in jobless claims in the first week of June. But this news also sparked fresh hopes that inflation will remain in check, triggering a rally in Treasury bonds and pushing short-term interest rates down slightly.</br></br>Prices of long-term government bonds gained nearly 1/2 point, or almost $5 for each $1,000 face amount. The yield on the government's 30-year bond fell below 8.5%. | yes | 1 |
Union Head Urges U.S. To Check Recession Now | President David J. Mc-j Donald of the AFL-CIO' Steelworkers said yesterday tliatj immediate Federal action is!</br></br>President David J. Mc-j Donald of the AFL-CIO' Steelworkers said yesterday tliatj immediate Federal action is! neccs sary to check a recession that may prove to be the \v orst s incc World War II, M cDon aid told a conference of union r e p r e s e nta-livcs that the Nation's economy ÛÏentered a d angerous downward driftÛ before the* Soviet Union launched the! first satellite and is growing! steadily worse. He said hun-l dreds of thousands of union j members face a ÛÏcriticalÛ sit-( uation. ;</br></br>He said the result is a ÛÏweak-; cningÛ of national defenses at a time when Russian strength and productive output ,ve ris-iing. McDonald pointed to a So-' viet Union report that its in-, Idustrial production increased j .10 per cent in 1957. j McDonald proposed a sweep-1 mg program of Federal measures to halt the decline.</br></br>These included: A tax reduction in the form of an increase in the 600-dollar credit for dependents. a large-scale school and public construction, plan, land expanded housing pro-jgram. greater foreign aid, and ,increased Social Security bon-</br></br>He said steel facilities capa-j ble of turning out 50 million; tons of ingots a year are shut [down, and that 125.000 Steelworkers are unemployed and I an additional 200,000 working part time. | no | 0 |
What's Left of Big Steel? After Years of High Wages, High Prices and Protectionism, an Industry Struggles To Survive | A trip through the Monongahela Valley gives a picture of what the "restructuring" of the American economy in the 1980s is all about. Ten years ago, the aging mills of this valley were still producing vast quantities of steel-but not very efficiently. They were a symbol of a high-cost, featherbedded steel industry, in which labor and management had united to seek protection from foreign competition.</br></br>Today, the Mon Valley looks like Atlanta after Sherman's March. The vast steelworks that lined the banks of the river-Homestead, the Carrie Furnaces, Edgar Thompson, Duquesne, Clairton, Pittsburgh Works-are rusted and shuttered. The mills are gone, the workers are gone; but more than that, an entire culture is gone.</br></br>The new, "restructured" steel industry is leaner and more profitable. Steel employment has plummeted, from about 400,000 in 1980 to about 155,000 last year. At USX, the industry leader, the steel workforce has fallen from 100,068 people in 1980 to 19,657 last year. Meanwhile, productivity has increased sharply. At USX, it now takes 3.8 manhours per ton of steel shipped, compared to 10.8 manhours in 1983. Five years ago, labor costs ate up over half the sales dollar at USX; today, it's less than 20 percent. Across the industry, steel executives are aggressively managing their plants and retrenching to their best facilities.</br></br>These changes are breathing life back into an industry that, 10 years ago, seemed to be dying on its feet. And the simple truth is that if the industry and the union had succeeded in their demands for protection from "unfair" foreign competition-if the Dick Gephardts of the day had triumphed, in other words-this essential cost-cutting might never have happened.</br></br>But there's a dark side to restructuring, too. As the industry has gotten leaner, it has also gotten meaner. With the bosses determined to cut costs, labor-management relations at some companies are returning to the confrontational model of the 1930s. The big companies, which once bargained jointly, now confront the union individually and haggle over concessions. Wages have fallen across the industry. And the jewel of steel's labor relations, the no-strike "Experimental Negotiating Agreement," has disappeared, with USX taking a long and bitter strike in 1986 in an effort to cut costs. | no | 0 |
Myths And the Middle Class | Almost all Americans see themselves as "middle class." To declare yourself middle class is to say you've succeeded without openly bragging that you're superior -- a no-no in a democratic culture. You're like everyone else, only a little more or less so.</br></br>Not surprisingly, a recent poll done for the Economic Policy Institute, a liberal think tank, finds that only 2 percent of Americans put themselves in the "upper class" and a mere 8 percent consider themselves "lower class." The large majority classify themselves as "upper-middle class" (17 percent) or "middle class" (45 percent). The rest (27 percent) see themselves as "working class," a stepping stone to the middle class.</br></br>Because the "middle class" isn't really the middle -- it's a huge blob -- describing how "it" feels and thinks is usually an act of simplification, exaggeration or invention. Yet that's routine because politicians and commentators want to show that they grasp the hopes and fears of everyday Americans.</br></br>The middle class today is said to be angry and anxious. It's worried about jobs, health insurance and retirement income. The EPI poll explores these discontents. Up to a point, it confirms conventional wisdom. One question asked respondents to agree with one of the following statements:</br></br>Most people today face increasing uncertainty about employment, with stagnant incomes, paying more for health care, taxes, and retirement, while those at the top have booming incomes and lower taxes. | no | 0 |
Mortgage Rates Climb to 8.15%; Real Estate Notes | Mortgage rates started off 2000 by hitting their highest levels since August amid fears that the Federal Reserve will raise interest rates next month.</br></br>The average interest rate on 30-year fixed-rate mortgages climbed to 8.15 percent for the week ending Jan. 7, up from 8.06 percent last week, according to a weekly survey released Thursday by Freddie Mac.</br></br>Before late August, the last time mortgage rates were this high was April 18, 1997, when they reached 8.16 percent.</br></br>Fifteen-year mortgages, a popular option for refinancing, also were up this week with an average rate of 7.73 percent this week, up from the average rate of 7.66 percent last week.</br></br>On one-year adjustable-rate mortgages, lenders were asking an average initial rate of 6.60 percent this week, up from 6.56 percent the previous week. | yes | 1 |
Can Economists Be Taken Seriously? | Can political leaders depend on consistent, reliable advice from economists? Probably not, says a distinguished member of the profession, Henry J. Aaron of the Brookings Institution.</br></br>In a thoughtful lecture at their annual meeting, Aaron said that fashions among economists change so quickly that it is "difficult for political leaders to know when to listen to us, even if they are inclined to do so. . . . The intellectual history of our profession and theirs makes it hard for {politicians} to take us quite as seriously as we take ourselves."</br></br>Yet another failing he cited is that many economists tend to ignore political realities, pleading no "special expertise or insight into politics." Wrong attitude, says Aaron. "What the political system can do becomes at least as important a component of policy advice as what it should do."</br></br>On the question of reliability, Aaron pointed not only to the longtime inability of the profession to decide whether monetary or fiscal theory is more effective, but to indecision on the seriousness of the current budget deficit.</br></br>Many economists seem to agree that, under Reagan, the national debt has soared to dangerous heights. But some others do not. The outgoing president of the American Economics Association, Robert Eisner of Northwestern University, debunks the deficit as a big problem. Eisner also argues there is no danger in America's new status as a debtor nation. In fact, "by meaningful measure, the United States is not a debtor nation at all." | no | 0 |
Price, Rate Fears Send Dow Down 48 | Stocks closed lower as investors' nervousness about inflation and interest rates again overshadowed upbeat earnings news. But Intel got a boost as it and Microsoft were picked as new components of the Dow Jones industrial average.</br></br>At the close of trading on Wall Street, the Dow was down 47.80 at 10,302.13, having surrendered an earlier 59-point gain. The blue chips fell 120 points on Monday amid uneasiness over higher rates.</br></br>Broader indicators were mixed. The Standard & Poor's 500-stock index was down 11.72 at 1281.91, and the Nasdaq composite index was off 4.48 at 2811.47.</br></br>Stocks were hampered by continuing concerns about inflation, especially as the Federal Reserve's next policy-setting meeting approaches on Nov. 16. The jitters have caused investors to look past better-than-expected earnings reports, including news today of strong earnings from Lucent Technologies.</br></br>"The market is still under pressure, and the interest-rate question is probably a big part of it," said Charles White, president and portfolio manager at Avatar Associates. | no | 0 |
Many Businesses Are Taking Longer To Pay Their Bills | NEW YORK -- Many businesses are taking longer to pay their bills, a sign they aren't convinced that economic recovery is at hand.</br></br>For the third quarter in a row, a Dun & Bradstreet Information Services survey shows worsened bill-paying performance. Those three quarters follow five quarters of steady or improving behavior, according to the survey, which is to be released today.</br></br>"Businesses are concerned about the recovery, and sometimes that means `I'm not going to pay as quickly as I have to,'" said Frank Lourenso, a Chemical Bank executive vice president in charge of the middle-market banking group. "People are trying to stay as liquid as possible."</br></br>D&B's quarterly survey is based on payment records of one million companies as reported by their suppliers to Dun & Bradstreet Corp. The survey compares the length of time it takes companies to pay their bills relative to the year-earlier period.</br></br>For the three months ended Sept. 30, the survey found that the number of companies taking longer to pay their bills exceeded the number paying more promptly by 7.2%. In the second quarter, the number of cash-hoarding companies exceeded the number of faster-paying companies by 6.2%. | no | 0 |
Shares Climb Sharply as Investors Seek Stocks That Will Prevail in Soft Economy | NEW YORK -- Over-the-counter stocks rebounded sharply as investors sought out the shares of smaller companies likely to shine in a shaky economy.</br></br>The Nasdaq Composite Index jumped 5.10 to 534.51, a 0.96% gain, as volume rose to 182.3 million shares from 145.9 million Monday. Advancing shares led decliners, 1,135 to 841, as 129 stocks rose to new highs and 29 fell to new lows.</br></br>Third-quarter earnings reports indicate that small companies are coping better with the recession than larger ones, Prudential Securities Inc. analyst Claudia Mott said in an interview. Profits among 539 smaller companies surveyed by Prudential are down 0.9% from the year-earlier quarter, compared with a 12% drop among larger companies tracked by the firm.</br></br>"Small-company profits may be telling us that these companies have been experiencing a recovery," Ms. Mott said. She's particularly encouraged by a rebound in earnings among smaller concerns in basic industries such as manufacturing, trucking, mining, chemicals and paper. After two years of anemic earnings, third-quarter profits in that group rose 1.5% from a year earlier and are ahead of expectations, she said. Smaller makers of auto parts, household furniture and other economically sensitive goods also exceeded hopes with a 4.2% rise in third-quarter profits, she added.</br></br>Makers of consumer staples and healthcare related companies continued to march ahead, with profits up 45.1% and 42.8%, respectively -- but some health-care earnings came in below expectations, she warned. Smaller financial service concerns turned in rosy earnings for the third quarter. Technology companies, however, continued to disappoint analysts with a 38.7% drop in third-quarter profits. | yes | 1 |
Highs Again Posted, but Early Surge Is Trimmed: Trade Contracts Slightly | New York, April 23 (AP)ÛÓThe stock market chugged ahead haltingly today and made new records in some averages because they already were at histohic high levels. Trading was active.</br></br>The list rose from the start and reached its highest level around mid-session. Thereafter, gains were pared somewhat.</br></br>The Dow-Jones industrial average was up as much as 3.70 at 12:30 p.m. but cut this gain to 1. 5 by the close, nevertheless posting a historic high of Û÷.16.41.</br></br>The big financial event of the day was ChryslerÛªs offering to subscribe to 5,611,360 shares of its common stock at $48 a share, at the rate of one share for each seven shares held of record today.</br></br>Chrysler common was steady to a little higher at the start of trading but gradually wilted. It closed with a loss of 1 at 54% on turnover of 120,200 shares, making it the most active issue. | no | 0 |
Greenspan Didn't Endorse Clinton Plan, but Helped It | Despite charges that he compromised the Federal ReserveÛªs vaunted independence by sitting next to Hillary Rodham Clinton when her husband delivered the State of the Union address, Chairman Alan Greenspan would do it again, in similar circumstances.</br></br>Many think Greenspan made a tactical error in accepting Clinton's invitation to sit in her box on Feb. 17. Greenspan doesn't agree.</br></br>There is little doubt that GreenspanÛªs presence, and his positive words in congressional testimony two days later on ClintonÛªs proposals for deficit reduction, gave the presidentÛªs program a cachet of immediate respectability. The Clinton White House was overjoyed with GreenspanÛªs remarks, which helped trigger a rally in the bond market, bringing long-term interest rates down.</br></br>But Greenspan revealed on March 24 before the Senate Finance Committee his frustration over the continued perception that he earlier had given the Clinton program an outright endorsement.</br></br>In his testimony Feb. 19 before the Senate Banking Committee, Greenspan was explicit in refusing to endorse the specifics of the Clinton program. He was enthusiastic over the prospect, for the first time in more than a decade, that a serious attack on the budget deficit had been proposed, | no | 0 |
New Bullishness Pushes Dollar Mostly Higher --- An Increase in Interest Rates, Optimism on Economy Lead to U.S. Unit's Gains | The new bullishness for the U.S. dollar that began to jell late last week firmed yesterday as the dollar gained against most other major currencies.</br></br>Traders attributed the increased purchases of dollars to higher U.S. interest rates -- the result of a bond market slump -- and raised expectations for economic growth in the U.S.</br></br>However, traders called the dollar's rise a temporary move in a prolonged decline. "I hesitate to say that we're seeing a turnaround," said Leslie A. Puth, a trader at Credit Suisse, New York. "But it is the first time in a couple of months that we've seen any sustained buying of dollars; that is, over two days," she said.</br></br>By late New York trading, the dollar had risen 1.2% against the West German mark, the bellwether European unit, to 2.0745 marks from 2.0508 Friday. The dollar also rose to 155.96 Japanese yen from 155.70.</br></br>In early trading in Tokyo Tuesday the dollar rose against the Japanese currency to 156.35 yen from 155.96 in New York yesterday afternoon. | no | 0 |
Miller Criticizes Recession Talk By Economists: Small Rise in Jobless Rate Seen by Chairman | The chairman of the Federal Reserve Board predicted yesterday that unemployment will rise moderately next year as the economy slows down, but said there is no evidence that a recession will occur ÛÏunless we talk ourselvesÛ into one.</br></br>G. William MillerÛªs prediction of an increase in unemployment next year is at variance with the official administration position.</br></br>Officials such as Charles L. Sehultze, chairman of the Council of Economic Advisers, say the economy will grow 3 percent or slightly more in 1979, fast enough to keep the unemployment rate from rising above 6 percent where it has hovered most of this year.</br></br>Miller said that because of actions already taken to fight inflation and to support the dollar, the economy will grow between 2.5 percent and 3 percent in 1979.</br></br>The projected growth, Miller said, may result in ÛÏsome modest increase in unemployment,Û but It also provides time to combat inflation without experiencing big increases in demand pressure. | yes | 1 |
Traders Believe Dollar Is Poised To Move Higher | Foreign-exchange traders, who have been divided the past couple of weeks about whether the U.S. dollar would weaken or strengthen, now appear convinced that the currency is once again headed upward.</br></br>Their view was reinforced yesterday when, despite the absence of the U.S. and Canada from the currency market for the Labor Day holiday, the dollar soared in European trading to 2.9120 West German marks, the highest level since Aug. 7, when the dollar hit an 11-year high of 2.9255 marks in New York.</br></br>"This new pattern of strength will be carried over into the U.S. when trading resumes (today)," said Ronald H. Holzer, an assistant vice president and chief dealer of Harris Trust & Savings Bank, Chicago. Mr. Holzer said the dollar took off yesterday after rising through a technical resistance point at 2.8940 marks. Stronger Eurodollar interest rates and expectations of rising U.S. interest rates, which make dollar-denominated investments more attractive, were responsible for the general dollar strength, he added.</br></br>At the London afternoon gold fixing yesterday, gold declined to $344.50 an ounce from the morning fixing of $346.20 and from the Friday close of $348.40 on the Commodity Exchange in New York. Traders said the dollar's strength in Europe was responsible.</br></br>In early trading in Hong Kong Tuesday, gold was quoted at $344.25 an ounce. | no | 0 |
Allen Wants to Tie Tuition to Inflation: Democrats Blamed for Soaring College Costs | MEDIAN TUITION FEES FOR ALL VIRGINIA PUBLIC COLLEGES AND UNIVERSITIES; FIGURES IN THOUSANDS OF DOLLARS FOR IN-STATE TUITION AND REQUIRED FEES</br></br>RICHMOND, Aug. 25ÛÓRepub-lican gubernatorial nominee George F. Allen, taking Virginia Democrats to task (or soaring tuition at public colleges and universities, said today students should be guaranteed that such fees wonÛªt rise more than the inflation rate in the four years after they enroll.</br></br>Allen criticized Democratic rival Mary Sue Terry for supporting Gov. L. Dougins WilderÛªs policy of passing on cuts in state funding to students by raising fees an average of nearly 50 percent over the last three years.</br></br>"When the Wilder-Terry Democrats could not make ends meet within the state budget,Û Allen said during a news conference here, "they took advantage of a captive group: those who were already in college or whose children were already in college."</br></br>Terry has pledged to "hold the lineÛ on tuition increases, but she refused to endorse AllenÛªs idea of guaranteeing that any tuition increases be tied to inflation. | no | 0 |
Bond Woes Lead to Fall In Stocks --- Personal-Income Rise Contributes to Slide; Dollar Gains Sharply | A souring bond market pulled stock prices lower, but the dollar posted sharp gains against most major currencies.</br></br>Analysts said bond prices began to weaken shortly after the government reported that personal incomes rose an unexpectedly strong 1.8% in January. The report included a measure of inflation that rose 0.6%, further evidence that inflation remains a problem.</br></br>The slide in bonds, exacerbated by some technical factors, spread to stocks as the day wore on. The Dow Jones Industrial Average, which rose about 15 points in early trading, ended 15.35 lower at 2243.04 in moderate trading.</br></br>Investors are hypersensitive to any hint that inflation may be getting out of control. They were shaken late last week when the Federal Reserve pushed short-term interest rates aggressively higher in an effort to restore confidence in the central bank's anti-inflation fight.</br></br>While financial markets seemed to stabilize Monday and Tuesday, analysts said yesterday's performance is evidence of continuing skittishness. | no | 0 |
Lycos Shares Slide Despite Strong Net On Fear Over Deal | Lycos Inc. reported better-than-expected results for its fiscal third quarter, but its shares plunged more than 20% amid concerns about the proposed takeover by Spain's Terra Networks SA.</br></br>Lycos shares closed at $57.6094 apiece on the Nasdaq Stock Market, down $15.0156 and almost $40 below the proposed takeover price of $97.55. The sharp drop was highly unusual, and suggests that some Lycos shareholders are worried that Terra isn't a good strategic partner. It may also be a bet that Terra shares will fall further, which could lower the price that Lycos shareholders will receive under the pact.</br></br>Separately, Waltham, Mass.-based Lycos reported that net income for the period ending April 30 hit $122.4 million, or $1.05 a diluted share, aided by a $270.2 million gain from investments. That reversed a net loss of $13.2 million, or 15 cents a share, in the year-earlier quarter. Operating profit totaled $7.9 million, or seven cents a share, higher than the five cents a share analysts were expecting.</br></br>The Internet portal reported that revenue more than doubled to $78.6 million, compared with the year-earlier $35.8 million and higher than the $75 million analysts had been expecting. Revenue from advertising, a key yardstick on the Internet, more than doubled to $51.6 million.</br></br>Paul Noglows, of Chase Manhattan Corp.'s Chase H&Q unit, called it a "good quarter," but pointed out that most investors are focusing on the Terra deal. | no | 0 |
Dow Slips 10 Points as Inflation Concerns Persist | Stocks slipped again today, even as interest rates backed away from 13-month highs, reflecting persistent inflation worries and a negative outlook for the computer industry that dragged down computer stocks.</br></br>The Dow Jones industrial average fell 10.34 points, to 5657.95, rebounding from a midday loss of 28 points as interest rates began to ease. The Dow, a barometer of 30 big U.S. companies, has fallen every day this week, but the total decline of less than 40 points demonstrates investor confusion about signals on inflation and interest rates.</br></br>Bond prices, which had slid the past four sessions in the aftermath of Friday's strong employment report, drew some early strength from a report showing that retail sales rose 0.8 percent, to $205.5 billion in May, which was slightly below analysts' projections.</br></br>But the bond market worsened by midday, sending interest rates higher and stocks lower, reflecting worries about an upward revision in the April sales tally and concerns that May's advance was robust regardless of projections.</br></br>The price of the Treasury's main 30-year bond rose 3/4 point, or $7.50 per $1,000 in face value. Its yield fell to 7.12 percent from 7.19 percent late Wednesday, which was the highest level since early May 1995. | yes | 1 |
Economic Review ..Gold Exports Partially Offset FRB Efforts | XpOR the third time within * two months, the Federal Reserve Board took action to reduce the reserves which</br></br>XpOR the third time within * two months, the Federal Reserve Board took action to reduce the reserves which the member banks are required to set aside for the protection of deposits. Each iof these i moves by the | Federal Re-j serve to in-1 crease the size of the funds available to mem- : ber banks for lending and in-ÐÊ vesting had its own signifi-, canoe, especially last week's ! action.</br></br>| Reserves required for the : member banks in New York ; and Chicago were reduced by a full one percentage point.</br></br>' The reserves required in the other reserve cities were reduced one half of one per cent. There was no change i in the requirements of the ' so Û¢ called ÛÏcountry banksÛ</br></br>Jt will be recalled that the first cut in reserve requirements announced Feb. 19 made an approximately $500 million of additional basic , bank credit available. The I second reduction of one half 1 of one per cent in require-j ments announced March 18 made another $500 million of basic bank credit available. | no | 0 |
U.S. Government Bonds Strengthen; Treasurys on Pace for Biggest Annual Rally Since 2011 | Benchmark Treasury bonds strengthened on Monday, underscoring the appeal of highly-liquid assets as the end of the year approaches.</br></br>In late-afternoon trading, the yield on the benchmark 10-year note fell to 2.157% from 2.178% Friday.</br></br>When bond yields fall, their yields rise.</br></br>Traders said the buying reflected some tweaking of bond portfolios and that the price moves might have been exaggerated by thinner trading before Thursday's Christmas holiday.</br></br>"It just shows a continuation of demand for longer-dated Treasury bonds'' which have rallied during the course of 2014, said Scott Buchta, head of fixed-income strategy at Brean Capital LLC. "Trading volumes have begun to settle down as many accounts begin to close out their books for 2014." | yes | 1 |
Fed Requests Probe to Find Source of Leak: Justice Asks FBI Aid In Interest Rate Case | The FBI has been called in to help the Federal Reserve investigate the source of a leak that eight of 12 Fed banks have recommended an increase in a key interest rate, according to sources familiar with the inquiry.</br></br>The Fed late last week asked the Justice Department for help in finding the origin of the leak, sources said, and the FBI was assigned to the task. The decision to pursue an investigation with the help of the Justice Department was an indication of how seriously top Fed officials viewed the leak.</br></br>The request to involve the FBI also appears to confirm the accuracy of the leak, which came in the form of a Reuter news service report. The story caused bond prices to fall and interest rates to jump as analysts and investors concluded that Fed policymakers were more likely than the analysts and investors had thought to raise short-term rates.</br></br>Fed spokesman Joseph R. Coyne declined to comment on any aspect of an investigation or even to confirm such an inquiry was in progress.</br></br>Someone privy to such inside information as the requests to raise rates could use it to make investments that might rise in value when it became public or after the Fed had acted. Alternatively, a number of analysts said, a Fed official might have provided the facts to a reporter in hopes of affecting the outcome of tomorrowÛªs meeting of the central bank's top policymaking group, the Federal Open Market Committee. | no | 0 |
Cash Becomes A Hot Investment; Stock Volatility, Rising Rates Prompt Investors To Shift Into Money-Market Funds and CDs | YOUR CASH is no longer trash.</br></br>Thanks to a string of 16 consecutive Federal Reserve interest-rate increases since June 2004, investors have been earning substantially more on their money. In recent weeks, yields on some money-market mutual funds and short-term Treasury bills have crossed 5% -- their highest levels since 2001. That follows earlier moves by some banks to boost yields on certificates of deposit past 5%.</br></br>After a number of years in which historically low interest rates caused investors to overlook cash -- if not shun it outright -- Wall Street is once again treating it as a serious option, as are individual investors, who are pouring money into it. And higher yields aren't the only lure. Stocks have swooned in recent weeks, with the Dow Jones Industrial Average dropping 199 points yesterday, and investors have grown skittish about inflation and higher interest rates and their effect on stock and bond returns.</br></br>Yesterday the government issued a new batch of six-month Treasury bills paying 5%. Money-market mutual funds managed by Morgan Stanley and the asset-management division of Credit Suisse, a unit of Credit Suisse Group, began paying 5% late last month. These funds are primarily geared to pension funds and institutions, although some high-net-worth investors may get access to them through their advisers or private bank.</br></br>If the Federal Reserve raises short-term interest rates from the current 5% when it meets later this month -- as Chairman Ben Bernanke has signaled he may well do -- then many of the retail money-market funds open to small investors are likely to cross the 5% threshold within weeks. That is because the rates on money-market funds, which invest in short-term debt, are determined by market rates. If the Fed declines to raise rates, then yields on money-market funds are likely to stall out just under 5%, says Peter Crane, publisher of Money Fund Intelligence. | no | 0 |
Sports: Hockey's Delay May Check Rise In Its Popularity | Gary Bettman runs a sport with an attractive new TV contract, new corporate sponsors -- and for now, no games.</br></br>In postponing the scheduled start of the National Hockey League by at least two weeks, to Oct. 15, its new commissioner put himself on thin ice. He may be passing up a unique chance to showcase the NHL -- at a time when baseball is canceled and basketball is dormant -- in favor of a tough stance on labor relations.</br></br>"They have a hell of an opportunity, but they're liable to blow it," says Jon Mandel, a Grey Advertising Inc. executive and sports marketing expert. "Hockey has a chance to grow tremendously, but if they don't seize it they may not see it again for 15 or 20 years."</br></br>Hockey's hiatus could stretch far beyond Oct. 15 if owners and players haven't reached or neared a new labor contract by then. They've been without one for a year, and Mr. Bettman doesn't want to start a new season without a new system. He proposes to tax high-paying teams' payrolls, using the proceeds to aid poorer teams. He'd also like to cap rookies' pay and scrap salary arbitration. But the two sides are so far apart they can't even agree what to call Mr. Bettman's action. The union terms it a lockout, the commissioner a postponement.</br></br>There is much agreement outside hockey, however, that Gary Bettman has a bear of a job. He is trying to bring the NHL back from decades of dismal leadership, and he is struggling to reconcile the economics of clubs in flush New York and struggling Edmonton. He is trying to check salary inflation, which has seen average player pay triple to more than $500,000 the past four years and left the majority of NHL teams in the red. And he's only been on the job 19 months. | no | 0 |
Canada Growth Beats Expectations; Data Suggest Canada is Benefiting from Pickup in U.S. Demand, Weaker Currency | OTTAWA--Canadian economic growth slowed in the third quarter from the second, but beat market expectations and the central bank's forecast by a wide margin, led by exports and household spending.</br></br>The positive surprise suggested Canada is reaping some benefits from improved U.S. demand and a weaker currency. However, a sharp drop in the price of oil--one of Canada's biggest exports--hovers over the economy as a wild card that could weigh on growth. Economic weakness in Europe and Japan and a slowdown in China could also reinforce the Bank of Canada's view that ultra-low interest rates are required for the foreseeable future.</br></br>Canada's gross domestic product expanded 2.8% on an annualized basis in the third quarter, Statistics Canada said Friday. Market expectations were for 2.1% growth, according to a report from Royal Bank of Canada. The Bank of Canada had forecast a 2.3% advance for the third quarter.</br></br>The report was solid, and the gain didn't rely on a big buildup in inventories. But the oil-price drop marks a new, unexpected headwind for Canada in the coming months, BMO Capital Markets said in a note to clients.</br></br>The "bounty of good news is almost precisely countered by the coming hit to incomes, government revenues, consumer prices and growth from sagging crude prices, which is a net negative for Canada overall. The good news is that the economy was in a surprisingly very good place heading into the energy price storm," said Douglas Porter, BMO's chief economist. | no | 0 |
For Dollar Seen, Fed Chief Says | Kcdcral Hehwve Board chairman Arthur F. Burns told Congress yesterday that the government has. intervened in foreign exchange markets In support the dollar ÛÏon a minimal scale only" and does not plan to try to support I lie price of the dollar unless the situation changes dramatically.</br></br>Burns, testifying before the House Banking Committee, told chairman Henry S. It cuss (D-Wis.) Ilial. the soundness of the American dollar is important to the Federal Jicserve. lie said, however, that the central bank has neither conducted domestic monetary policy nor intervened in foreign exchange markets with a view to pushing up the international price of ihe dollar.</br></br>Burns said that the Fed does not intervene in foreign exchange markets ÛÓ buying dollars with foreign currencies to boost the demand for dollarsÛÓwithout consulting with the Treasury Department, lie said the government has no intention of changing its policy on inter- jij *)fyW>"cy naiTOts^uJipry'cWrin^ÛªAiWlfw *v/u.. Burns said. "But no two of us may ]jc saj{| y1(, central bank lias made perhaps agree as to the precise dcfinbasieally no change in its targets. The tion of an orderly market. When I sebirget for the basic money supply (M-the dollar depreciating against currcipÛÓ'Checking accounts plus currency cies of economies demonstrable1 circulationÛÓwas changed lrorii a</br></br>weaker than ours, 1 sometimes asfeå¡ ^n4'5'K^M,U Û÷å¡ 6?pcr?fin<to ........... Ûª , . . C per cent to G.5 per cent. currencies, meaning that imports 1>11^ P0,nt from he iower range of the come more expensive and exports lcsfe11^ ni('ani little to the agency s op-expensive. Part of the dollar's slide iå¤r3iititf stance. ... .</br></br>due to big balance of trade deficits I'or which adds savings depos-tlic nation has chalked up in rcccniJs at commercial banks to M-l, the months. Fed's goal is unchanged: a range from | no | 0 |
N.Y. Fed Taps IMF Official; Geithner a Former Treasury Undersecretary | Timothy F. Geithner, a high-ranking official at the International Monetary Fund and a former Treasury undersecretary for international affairs, yesterday was named president of the New York Federal Reserve Bank, one of the most influential positions in the Fed system.</br></br>For the past two years, Geithner, 42, has been director of the IMF's Policy Development and Review Department, which plays a key role in the design and implementation of the organization's policies. He will assume his new job in the middle of November, succeeding William J. McDonough, who resigned in June to become chairman of the Public Company Accounting Oversight Board.</br></br>Peter G. Peterson, chairman of the New York Fed's board of directors, announced the appointment. The bank's board names the president, with the approval of the Federal Reserve Board.</br></br>Geithner, who joined the Treasury Department as a civil servant in 1988, was the first such employee to hold an undersecretary's job there. He became a deputy assistant secretary in 1995, then assistant secretary and finally undersecretary in 1998.</br></br>At Treasury he represented the United States at international meetings and helped negotiate assistance packages that helped calm financial crises in South Korea, Brazil and other countries. He was also involved in major negotiations about financial services trade among nations. | no | 0 |
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