On Monday January 10, 2011, 6:42 pm EST
Pressure on Portugal
heightens amid debt fears
LISBON, Portugal (AP) --
Europe's debt crisis flared up once again Monday, as Portugal's borrowing rates
briefly spiked to euro-era highs amid reports Germany and France are pushing it
to accept outside help to avoid contagion to other countries.
The yield on Portuguese
10-year bonds -- a key gauge of investor sentiment -- touched a potentially
unsustainable 7.18 percent at one stage Monday. It then fell back to 6.94 percent
on speculation that the European Central Bank was intervening by buying bonds.
Yields drop as prices rise.
Since the bailout of Greece
in May, the ECB has taken a more active role in Europe's debt crisis by buying
the bonds of the most imperiled eurozone countries. As of last week it had
bought euro74 billion ($96 billion) in government bonds. It doesn't have a
target or limit but withdraws that same amount of money from the economy to
avoid inflation risks. The U.S. Federal Reserve, by contrast, does not withdraw
any cash, meaning it effectively creates new money -- a step the ECB is still
loathe to take.
Monday's early spike in
yields followed a report in German newspaper Der Spiegel that France and
Germany are both pressing Portugal to tap a European rescue fund to keep the
crisis from spreading to much-bigger Spain.
Fed pays US Treasury record
$78.4B last year
WASHINGTON (AP) -- The
Federal Reserve is paying a record $78.4 billion in earnings to the U.S.
government, reflecting gains from the central bank's unconventional efforts to
lift the economy.
The payment to the Treasury
Department for 2010 is the largest since the Fed began operating in 1914. It
surpasses the previous record $47.4 billion paid in 2009, the Fed said Monday.
The bigger payment mostly
came from more income generated by the Fed's massive portfolio of securities,
which includes Treasury debt and mortgage securities.
Critics in Congress have
expressed concerns that the Fed's purchases could put taxpayers at risk by
reducing the amount turned over to Treasury. The Fed is funded from interest
earned on its portfolio of securities. It is not funded by Congress. After
covering its expenses, the Fed gives what is left over to the Treasury
Department.
Income from the Fed's
portfolio of securities came to $76.2 billion last year, up from $48.8 billion
in 2009, Federal Reserve officials said. Such income rose largely because the
Fed bought a greater number of securities. Increases in the value of securities
also played a role.
Global economy ticks
upward, say central bankers
BASEL, Switzerland (AP) --
The global economy is recovering faster than expected, the world's leading
central bankers said Monday, though they see dangers from inflation and rising
food prices in emerging markets.
The recovery is
particularly strong in emerging economies such as China, Brazil and India,
according to the group of central bankers that meets in Basel, Switzerland
every other month to assess the world economy.
The group includes Federal
Reserve Chairman Ben S. Bernanke and his Chinese counterpart, central bank
chief Zhou Xiaochuan. Europe has generally been lagging other regions due to
market concerns about its heavy debt loads and gloomy growth outlook.
Duke Energy buying Progress
Energy for over $13B
NEW YORK (AP) -- Duke
Energy Corp. is buying Progress Energy Inc. for more than $13 billion in stock
in a deal that would create the utility with the most customers in the U.S.
The new company's size will
allow it to better afford replacing aging transmission infrastructure and old
power plants that are struggling to keep up with tightening environmental
regulations.
The transaction announced
Monday by the two North Carolina companies would create a business with about
7.1 million electric customers in North Carolina, South Carolina, Florida,
Indiana, Kentucky and Ohio.
SEC charges 4 with insider
trading
WASHINGTON (AP) -- Federal
regulators on Monday charged the co-founder of a New York hedge fund and three
other individuals with insider trading, the latest action in what the
government has called the biggest insider-trading case in U.S. history.
The Securities and Exchange
Commission announced it filed a civil lawsuit against hedge fund Trivium
Capital Management, its co-founder Robert Feinblatt and analyst Jeffrey Yokuty.
The SEC also filed charges against Sunil Bhalla, a former senior executive of
tech company Polycom, and Shammara Hussain, a former employee at a consulting
firm that did work for Google. The agency said Bhalla and Hussain provided confidential
information that enabled Feinblatt and Yokuty to make about $15 million from
trading on the information.
So far the SEC has filed
civil charges against 27 people and hedge funds in a wide-ranging probe of the
Galleon group of hedge funds and its founder. The government says Galleon funds
made about $69 million in illegal profits. Raj Rajaratnam, the one-time
billionaire founder of the Galleon funds, has pleaded not guilty. Federal
authorities have arrested 23 people on criminal charges in the case; 14 have
pleaded guilty.
Alcoa posts 4Q profit as
sales jump
DENVER (AP) -- Alcoa Inc.
said Monday its fourth-quarter earnings jumped on higher sales to a range of
businesses, from aerospace to commercial construction.
It marked the third
consecutive quarterly profit for the aluminum manufacturing giant, which
appears to have turned the corner after recording losses in 2008 and 2009
because of the recession. The company also expects business to continue to
improve, forecasting a 12 percent increase in global aluminum demand this year.
Alcoa said sales improved
in key markets; including aerospace, commercial construction, industrial gas
turbines and distribution. It also benefited from higher aluminum prices, but
that was tempered by increased energy costs and unfavorable currency exchange
rates.
Alcoa's performance can
reflect broader economic trends, because its products reach a broad range of
businesses. Its customer base includes automobile, trucking and aircraft
companies, consumer products and construction. Nearly 80 percent of its sales
are in the U.S. and Europe.
Ford plans to hire 7,000
workers by 2012
DETROIT (AP) -- Ford Motor
Co. says it will add more than 7,000 workers in the U.S. over the next two
years, including 750 engineers with expertise in batteries and other advanced
technology, as it begins producing several new vehicles.
The company plans to hire
4,000 manufacturing workers this year. Almost half those workers will be at the
Louisville Assembly Plant in Kentucky that will make the new Ford Escape
starting late this year. It expects to add at least 2,500 new manufacturing
jobs in 2012.
The 750 engineers that Ford
plans to hire will work on hybrid and electric vehicles.
The company said it is
beginning a recruiting effort this week in Detroit and either other cities,
including San Jose, Calif., and Raleigh and Durham, N.C.
CEO of AMD resigns as
company seeks growth
NEW YORK (AP) -- Chip-maker
Advanced Micro Devices Inc. said Monday that CEO Dirk Meyer has resigned so
that the company can try to grow more quickly.
AMD describes the
resignation of Meyer, 49, as "mutual." Thomas Seifert, 47, the
company's senior vice president and chief financial officer, will succeed him
on an interim basis while the company conducts a search for a permanent replacement.
In a statement, the
Sunnyvale, Calif., company praised Meyer for leading the company through an
ongoing legal battle with rival Intel Corp.
But AMD said the board
believes it has an opportunity to create increased shareholder value. The
company said the chip-maker will need significant growth and a change in
leadership to accomplish that.
By The Associated Press
The Dow Jones industrial
average ended the day down 37.31 points, or 0.3 percent, to close at 11,637.45
The Standard & Poor's
500 lost 1.75, or 0.1 percent, to 1,269.75. The Nasdaq composite gained 4.63,
or 0.2 percent, to 2,707.80.
Benchmark oil for February
delivery climbed $1.22 to settle at $89.25 a barrel on the New York Mercantile
Exchange.
In other Nymex trading in February
contracts, heating oil gained 6.98 cents to settle at $2.5561 a gallon, while
gasoline futures added 4.12 cents to settle at $2.4543 per gallon. February
natural gas futures lost 2.3 cents to settle at $4.399 per 1,000 cubic feet.
In London, Brent crude rose
$2.43 to settle at $95.70 a barrel on the ICE Futures exchange.