On Tuesday January 11, 2011, 6:32 pm EST
Portugal, refusing bailout,
faces key bond test
LISBON, Portugal (AP) --
Portugal insists that it does not need an international bailout to solve its
debt problems. It faces a bond auction Wednesday that could reveal the price of
going it alone -- and perhaps even add to the European financial crisis.
Investors have identified
the debt-burdened country as the potential next victim of the crisis and have
pushed its borrowing costs to barely sustainable levels by demanding higher
premiums to lend it money.
Market tensions were eased
slightly Tuesday after Japan, taking advantage of high interest rates and
echoing a similar pledge by China, said it would help finance European bailout
efforts.
Portuguese Prime Minister
Jose Socrates sought to soothe frayed nerves with evidence that his government,
which has introduced pay cuts and tax hikes, is reducing its budget deficit.
Preliminary data show last year's will be below the government target.
Businesses hiring in 2011
face a buyers' market
WASHINGTON (AP) --
Companies planning to ramp up hiring this year will have an added luxury: their
choice from a flood of applicants, without having to pay a premium for top
talent.
Unemployment remains near
double digits, and there are nearly five unemployed workers competing for each
available job. That is giving employers more confidence, while at the same time
enabling them to keep wages low.
The lack of opportunities
over the past three years means it's risky for jobseekers to be choosy,
particularly for those who have been out of work for more than six months. All
that makes for a buyers' market, leaving hiring managers with little incentive
to negotiate.
Employers advertised 3.25
million jobs in November, the Labor Department said Tuesday. That's 39 percent
higher than the number of jobs advertised in July 2009, a month after the
recession ended. But it's still far below the 4.4 million openings posted in
December 2007, when the downturn began.
Perhaps more important is
the number of people competing for those jobs. With 15 million unemployed in
November, the ratio was 4.6 unemployed workers for every open job. The ratio
reached 6.3 in November 2009, the highest since the department began tracking
job openings in December 2000. Still, in a healthy economy, it would fall to
between 1.5 and 2, economists say.
Goldman promises more
transparency with clients
NEW YORK (AP) -- Goldman
Sachs Group Inc. is promising to be more transparent about how it does business
following widespread criticism that it put its own interests ahead of its
clients.
In a report released
Tuesday, the New York investment bank said it would begin disclosing more
information about how it makes money and ensure that its business practices put
the interests of its clients first.
It's a bid to placate wary
clients and quell public anger against the firm, which is known for paying
large bonuses. Goldman agreed to reform its business practices as part of a
$550 million settlement with the Securities and Exchange Commission in July.
Goldman said the 63-page
report is the result of an eight-month internal review that began after Goldman
was accused of misleading clients about complex mortgage investments.
The SEC sued Goldman last
April, saying it sold an investment put together by hedge fund manager John
Paulson that was designed to fail. Goldman and Paulson made money from the
investment, while investors lost more than $1 billion.
Fed official: $600 billion
bond program could backfire
WASHINGTON (AP) -- A member
of the Federal Reserve's policymaking committee suggested Tuesday that the Fed
may need to scale back its $600 billion Treasury bond-buying program if the
economy grows more quickly than expected.
But Charles Plosser, who
becomes a voting member this year, is unlikely to sway the other members, based
on speeches and minutes from the Fed's last meeting.
Plosser has repeatedly
spoken out against the bond-buying program. He has raised concerns that the
risks -- namely the potential for unleashing inflation -- could outweigh any
benefits to the economy. Plosser was not a voting member when the Fed adopted
the program on Nov. 3, although he attended the meeting. Only five of the 12
regional presidents get a vote.
The president of the
Federal Reserve Bank of Philadelphia, who has been outspoken with his concerns
about inflation, is likely to put pressure on Federal Reserve Chairman Ben
Bernanke and his colleagues to shrink the program.
The Federal Reserve has
left open the door to buying less government debt if the economy were to
strengthen more than anticipated or buy less were it to weaken.
Japan may buy fifth of
eurozone bonds for Ireland
TOKYO (AP) -- Japan plans
to buy a major portion of the European bonds being auctioned this month to
finance emergency loans to Ireland, the Japanese government said Tuesday.
Finance Minister Yoshihiko
Noda said his government may buy one-fifth of the bonds being issued this month
by the European Financial Stability Facility, a last-resort fund for nations
that use the euro common currency.
The European Union created
the Luxembourg-based fund in May as it scrambled to save Greece from national
bankruptcy. In November, Ireland became the second euro member to require an
international bailout amid crippling debts at Dublin banks.
The Luxembourg fund, which
is backed by the European Investment Bank and Germany's debt management agency,
is expected to auction about euro5 billion ($6.5 billion) of bonds this month
to fund the first stage of its planned euro22.5 billion ($29.2 billion)
contribution to the emergency loan for Ireland.
November inventories see
decline as sales rise
WASHINGTON (AP) --
Businesses at the wholesale level trimmed their stockpiles in November for the
first time in nearly a year, but the decline likely reflected their inability
to keep up with strong gains in sales.
The Commerce Department
says wholesale inventories dipped 0.2 percent in November, the first decline
since December 2009. Sales rose 1.9 percent after a 2.6 percent surge in
October -- the largest monthly gain since March.
Private economists said the
small drop in inventories was not worrisome because it probably reflected an
inability of companies to keep up with unexpectedly strong sales demand.
Companies had increased
their inventories for 10 straight months before they dipped in November to a
level of $425.5 billion. Even with the decline, wholesale stockpiles are 10.1
percent above the lowest point since the recession began -- $386.3 billion in
September 2009.
CEO says GM a year behind
on product development
DETROIT (AP) -- A big cut
in research and development spending while General Motors was in bankruptcy
protection set the company's new product plans back by about a year, its top
executive said Tuesday.
Chairman and CEO Daniel
Akerson told reporters GM is working to accelerate vehicle plans that were
postponed when R&D spending was cut to $5 billion per year as the company
was trying to save money during its 2009 stay in bankruptcy protection. The spending
has since been restored to $7 billion.
GM executives have been
scrambling to get the new products back on track, trying not to fall too far
behind competitors such as Ford Motor Co. as they update cars and trucks on a
more regular basis. Newly redesigned cars and trucks tend to sell faster
because they take advantage of new technology and are quieter, handle better
and generally are more efficient.
Akerson wouldn't identify
which vehicles have been fast-tracked for development. The company had delayed
its next-generation Chevrolet Silverado and GMC Sierra pickup trucks during its
financial crisis, and its Impala full-size sedan also is among its older
vehicles.
Greece raises $2.5 billion
in debt sale
ATHENS, Greece (AP) --
Greece on Tuesday successfully raised euro1.95 billion ($2.5 billion) in a
treasury bill auction, easing some concern in the troubled eurozone country a
day after its bond yields hit a record high.
The country's Public Debt
Management Agency said the 26-week bill auction for the starting amount of
euro1.5 billion was oversubscribed 3.4 times.
The sale -- considered an
important test of market sentiment -- resulted in a yield of 4.9 percent, only
slightly higher than the 4.82 percent in the previous auction of 26-week
treasury bills, on Nov. 9.
On Monday, Greek bond
yields touched another record high, exceeding the 10-year equivalent German
yield by 10 percentage points for the first time, amid a broader flare-up in
Europe's debt crisis.
Greece has launched a major
effort to cut borrowing costs in exchange for bailout loans worth euro110
billion from the IMF and other countries using the euro. Despite being in
recession, it's ambitious deficit-reduction targets were broadly met last year.
The government insists it
wants to return to long-term bond markets -- 2-year maturities and above --
sometime this year.
China's foreign reserve
soar to $2.8 trillion
BEIJING (AP) -- China's
central bank says its foreign reserves, already the world's biggest, soared to
$2.8 trillion at the end of 2010.
Tuesday's announcement came
as Beijing faces demands by Washington and others to ease currency controls
that have swelled its reserves.
The reserves rose $199
billion during the final quarter of the year and were up 18 percent over a year
earlier.
The reserves have soared as
Beijing controls the exchange rate of its yuan by buying up money that flows
into China. Washington and others complain that keeps the yuan undervalued,
giving Chinese exporters an unfair price advantage and hurting foreign
competitors.
By The Associated Press
The Dow Jones industrial
average rose 34 points, or 0.3 percent, to close at 11,671. The S&P 500
gained 4, or 0.4 percent, to 1,274. The Nasdaq rose 9, or 0.3 percent, to
2,716.
Benchmark oil for February
delivery rose $1.86, or more than 2 percent, to settle at $91.11 a barrel on
the New York Mercantile Exchange.
In other Nymex trading in
February energy contracts, heating oil fell 5.27 cents to settle at $2.6088 a
gallon, and gasoline futures gained 2.41 cents to settle at $2.4784 per gallon.
February natural gas futures added 8.2 cents to settle at $4.481 per 1,000
cubic feet.
In London, Brent crude rose
$1.91 to settle at $97.61 a barrel on the ICE Futures exchange.