On Friday October 15, 2010, 6:03 pm EDT
Fed's plan for short-term
fix brings long-term risks
WASHINGTON (AP) -- Federal
Reserve Chairman Ben Bernanke is balancing a short-term fix for the economy
with a long-term gamble: His plan to buy Treasury bonds to fight high
unemployment and super-low inflation now could ignite inflation later.
But Bernanke is signaling
that doing nothing would pose the biggest risk of all. The Fed chief on Friday
made his strongest case yet for injecting billions more dollars into the
economy. Purchasing the bonds could further drive down rates on mortgages,
corporate debt and other loans.
Lower rates could lead
people and companies to borrow and spend. And higher spending might help ease
unemployment and invigorate the economy.
The Treasury purchases
would have another aim, too: to dispel any notion that consumer prices will
stay flat and might even fall. In his speech Friday in Boston, Bernanke
indicated that Fed policymakers favor raising inflation, which has all but
vanished.
Gov't: No increase for
Social Security next year
WASHINGTON (AP) -- Another
year without an increase in Social Security retirement and disability benefits
is creating a political backlash that has President Barack Obama and Democrats
pushing to give a $250 bonus to each of the program's 58 million recipients.
The Social Security
Administration said Friday inflation has been too low since the last increase
in 2009 to warrant a raise for 2011. The announcement marks only the second
year without an increase since automatic adjustments for inflation were adopted
in 1975. This year was the first.
House Speaker Nancy Pelosi
promised to schedule a vote after the Nov. 2 election on a bill to provide
one-time $250 payments to Social Security recipients. Obama endorsed the
payment, which would be similar to one included in his economic recovery
package last year.
GE 3Q profit drops 18 pct,
sales of equipment fall
NEW YORK (AP) -- General
Electric's return to its roots as an industrial company continues to proceed
unevenly.
The industrial and
financial giant said Friday that sales of industrial equipment -- everything
from wind turbines to jet engines to locomotives -- lagged in the third
quarter. Revenue of $35.9 billion was about $1.7 billion shy of Wall Street
estimates and investors drove the stock down 5 percent.
GE has been de-emphasizing
its finance unit, GE Capital, which accounted for more than half of GE's profit
in 2006 during a boom in financial services, but recorded billions in
write-offs when the economy went into recession. Instead, it's focusing on
making products ranging from wind and natural gas turbines to sonogram machines
to energy-efficient appliances. So far the results are mixed.
Dow falls, but Google helps
Nasdaq
NEW YORK (AP) -- Concerns
about banks and a disappointing drop in revenue at General Electric halted a
broad market rally Friday, but spared the tech sector.
Thanks to a surge that sent
the shares of Google Inc. up more than 11 percent, the tech-focused Nasdaq
composite index rose by more than 1 percent.
Stocks jumped early after
Federal Reserve Chairman Ben Bernanke reiterated that the central bank is ready
to do more to stimulate the economy. But that burst of optimism couldn't fully
overcome worries about how banks like Bank of America Corp. and JPMorgan Chase
& Co. handled the foreclosure process on mortgages. Both banks, along with
General Electric Co., were the primary culprits in sending the Dow Jones
industrial average down more than 30 points.
Countrywide CEO Mozilo
settles with SEC for $67.5 million
LOS ANGELES (AP) --
Countrywide Financial Corp. co-founder Angelo Mozilo and two other former
executives have agreed to pay tens of millions of dollars to avoid a trial on
civil fraud and insider trading charges, a federal judge said in court Friday.
Mozilo and the others were
to face trial on the Securities and Exchange Commission's charges next week.
Mozilo agreed to repay $45
million in ill-gotten profits and $22.5 million in civil penalties. Former
Countrywide President David Sambol will repay $5 million in profits and pay
$520,000 in civil penalties, and former Chief Financial Officer Eric P.
Sieracki will pay $130,000 in civil penalties.
Administration delays China
currency report
WASHINGTON (AP) -- The
Obama administration announced Friday it will delay a scheduled report on
whether China is manipulating its currency to gain trade advantages until after
an upcoming meeting of the world's major economies next month.
The Treasury Department
said the administration will wait until after President Barack Obama meets with
other leaders of the Group of 20 nations in Seoul in early November.
The administration's
announcement was certain to disappoint U.S. manufacturing companies, labor
unions and lawmakers who contend that China is keeping its currency undervalued
to gain trade advantages.
Government reports $1.3
trillion budget deficit
WASHINGTON (AP) -- The
Obama administration said Friday the federal deficit hit a near-record $1.3
trillion for the just-completed budget year.
That means the government
had to borrow 37 cents out of every dollar it spent. Tax revenue continued to
lag while spending on food stamps and unemployment benefits went up as
joblessness neared double-digit levels in a struggling economy.
While expected, the eye-popping
deficit numbers provide Republican critics of President Barack Obama's fiscal
stewardship with fresh ammunition less than three weeks ahead of the midterm
congressional elections. The deficit was $122 billion less than last year, a
modest improvement.
Gannett newspaper woes
eclipse TV's upside in 3rd quarter
SAN FRANCISCO (AP) -- An
unrelenting decline in Gannett Co.'s newspaper business overshadowed a
third-quarter upturn in its broadcasting revenue that was driven by heavy
political advertising at its television stations.
Friday's bad news from
Gannett's print operations trumped the good news in television because the
company gets almost three-fourths of its revenue from publishing.
The July-September period
marked the 15th consecutive quarter that Gannett's publishing segment has
produced less revenue than the prior year, and the company's executives aren't
making any predictions when the slide might end.
Cablevision, Fox dispute
may affect baseball fans
Cablevision customers
missed part of the Oscars this year because of a broadcasting fee dispute. Are
the baseball playoffs next?
By the time the Phillies
take the field against the Giants on Saturday night, baseball fans hope a
programming dispute between Fox and Cablevision will be only a distant memory.
Both companies are digging in ahead of the expiration of their programming deal
just after midnight Friday. Such deals spell out how much a cable TV system
pays the broadcaster to carry its signals over the cable lineup.
Usually, disputes over carriage
fees get resolved at the last minute. But if the standoff continues, some 3
million Cablevision subscribers in the Northeast could lose access to Game 1 of
Major League Baseball's National League championship series.
By The Associated Press
The Dow Jones industrial
average fell 31.79, or 0.29 percent, to 11,062.78. It had been up as much as 47
points shortly after the opening bell. It was up 0.5 percent for the week.
The Nasdaq jumped 33.39, or
1.37 percent, to 2,468.77. It was up 2.8 percent for the week.
The Standard & Poor's
500 index rose 2.38, or 0.2 percent, to 1,176.19. It was up 1 percent for the
week.
Benchmark oil lost $1.44 to
settle at $81.25 a barrel on the New York Mercantile Exchange.
In other Nymex trading,
heating oil fell 5.31 cents to settle at $2.2308 a gallon, gasoline lost 3.27
cents to settle at $2.1038 a gallon and natural gas gave up 12.2 cents to
settle at $3.535 per 1,000 cubic feet. Natural gas hit a 52-week low of $3.520
during the session.
In London, Brent crude
dropped $1.75 to $82.45 a barrel on the ICE Futures exchange.