On Thursday December 16, 2010, 6:14 pm EST
Strong week for economy
raises optimism for 2011
WASHINGTON (AP) -- Buoyed
by a string of hopeful government reports on layoffs, factory production and
consumer spending, economists are predicting that hiring and even housing will
pick up in 2011 and make it a better year after all.
The reports issued this
week, along with a tax-cut plan that Congress is set to pass, point to stronger
overall growth next year, experts say.
For 2011, Mark Zandi, chief
economist at Moody's Analytics, and other economists now expect growth at
roughly a 4 percent pace, up from earlier forecasts of around 2.7 percent.
With 4 percent growth, the
economy would at least be moving closer to the pace of expansion needed to
bring down unemployment. Growth of 5 percent is needed for a full year to lower
the jobless rate by one percentage point.
CEO Interview: Michael Dell
on shifting strategy
ROUND ROCK, Texas (AP) --
Michael Dell is in a very good mood.
Companies are buying new
computers, servers and other technology again. An improving economy helped push
Dell Inc. to a record third quarter. The company's leadership team shook off a
recent setback -- losing data-storage maker 3Par to Hewlett-Packard Co. -- and
are relentlessly optimistic about the company's transformation from purveyor of
commodity computers to provider of more profitable data center technology and
consulting. And in his pocket is a slick-looking phone prototype even Steve
Jobs might admire.
But Dell Inc. faces some
daunting challenges. As it enters new categories, such as tablet PCs and smart
phones, its products must hold their own against Apple's iPad and iPhone. To
supply corporations with data center technology, Dell is up against HP and IBM
Corp. Those seasoned rivals have more established reputations and a higher-end
selection of servers and other gear.
Banks smarten up branches
to woo customers
NEW YORK (AP) -- The
personal touch is making a comeback.
That old-fashioned habit of
stopping in at your local branch is being encouraged again as the banking
industry looks to put the spark back in service.
The push to cozy up to
customers is part of a strategy to compete in a radically changing marketplace.
Most notably, a battery of regulations signed into law this year will sharply
limit the credit and debit card revenue that fattened industry profits in
recent years.
To recoup some of those
lost billions, banks want to squeeze more from each customer. That means
convincing them to sign up for a wider range of services, including mortgages
and wealth management. And customers are still more at ease making major life
decisions in person.
It explains recent moves by
the industry's biggest players.
Fed proposes 12-cent cap on
merchant debit fees
NEW YORK (AP) -- The
Federal Reserve on Thursday proposed a 12-cent cap on the fees banks would be
allowed to charge merchants for debit card transactions, a limit that could
sharply cut into the revenue of the banks that issue debit cards.
Capping debit interchange
fees, sometimes called swipe fees, would help merchants by replacing the
current system, in which they generally pay between 1 percent and 2 percent of
the dollar value of each transaction.
The proposal also would
require that merchants have a choice of unrelated networks to process
transactions, like Visa Inc. and MasterCard Inc., which could limit revenue for
those companies.
Bank stocks were largely
unaffected by the news, but shares of Visa and MasterCard both fell sharply
following the announcement.
iPhone secrets among tips
that led to arrests
NEW YORK (AP) -- Secrets
about Apple Inc.'s iPhone were among insider trading tips that led to the
arrests Thursday of three employees at public companies and a sales executive
at a California expert-networking firm, authorities said as they boosted to six
the number of arrests in a wide-ranging Wall Street insider trading probe.
U.S. Attorney Preet Bharara
portrayed James Fleishman, 41, a networking executive who worked at Mountain
View, Calif.-based Primary Global Research, as central to the scheme that led
to the latest arrests. Fleishman was charged with wire fraud and conspiracy for
providing confidential information to the firm's clients, including hedge
funds, the prosecutor said.
Others charged were Mark
Anthony Longoria, 44, a supply chain manager for Advanced Micro Devices Inc.;
Walter Shimoon, 39, senior director of business development for Flextronics
International Ltd.; and Karunatilaka, an account manager at the Taiwan
Semiconductor Manufacturing Co. office in Burlington, Mass.
Drop in jobless claims
helps send stocks higher
NEW YORK (AP) -- A small
drop in unemployment claims and a higher profit forecast by FedEx Corp. helped
push stocks up Thursday. The Dow Jones industrial average and the Standard
& Poor's 500 index closed at their highest levels of the year.
The Labor Department said
first-time claims for unemployment benefits fell last week to 420,000, the
third drop in four weeks. The four-week average of claims also slid for the
sixth straight week, reaching the lowest level since July 2008. That was before
Lehman Brothers collapsed and markets seized up at the height of the financial
crisis.
Separately, the Commerce
Department said housing starts rose slightly last month, reversing a two-month
decline.
FedEx sees stronger, more
balanced global recovery
NEW YORK (AP) -- FedEx
Corp. thinks the global economic recovery is becoming more balanced, as growth
improves in Europe and the U.S. while it moderates in Asia.
After the company on
Thursday reported lower quarterly earnings but raised its outlook for the
fiscal year, CEO Fred Smith said that shipping demand from both consumers and
businesses is picking up. And he expects stronger manufacturing and industrial
production to push shipping volume higher in the coming months.
Smith said Asian economic
expansion has slowed, but it's still growing faster there than elsewhere.
European economies are performing better-than-expected, he said, while the U.S.
economy is gaining steam.
FDA: Avastin should not be
used for breast cancer
WASHINGTON (AP) -- Federal
health authorities recommended Thursday that the blockbuster drug Avastin no
longer be used to treat breast cancer, saying recent studies failed to show the
drug's original promise to help slow the disease and extend patients' lives.
The rare decision by the
Food and Drug Administration is supported by many cancer experts but drew
fierce opposition from cancer patients and some doctors who defend the drug and
say it should remain available.
The ruling is a significant
setback for the world's best-selling cancer drug and will likely cost Swiss
drugmaker Roche hundreds of millions of dollars in lost revenue. Avastin is
also approved for various types of colon, lung, kidney and brain cancer.
Geithner says bailout will
cost less than $25B
WASHINGTON (AP) -- Treasury
Secretary Timothy Geithner said Thursday that the $700 billion financial
bailout will end up costing taxpayers less than congressional analysts have
estimated.
The Congressional Budget
Office has estimated that taxpayers will lose $25 billion on the rescue of
banks, other financial institutions and automakers that came in at the peak of
the crisis in the fall of 2008. Geithner told a hearing by a congressionally
appointed panel that it will cost less than that, but didn't provide another
cost estimate.
New report calls for online
privacy bill of rights
WASHINGTON (AP) -- The
Commerce Department is calling for the creation of a "privacy bill of
rights" for Internet users to set ground rules for companies that collect
consumer data online and use that information for marketing and other purposes.
The proposal, outlined in a
report Thursday, is intended to address growing unease about the vast amounts
of personal information that companies are scooping up on the Internet -- from
Web browsing habits to smart phone locations to Facebook preferences. That data
is often mined to target advertising.
The new report is intended
to guide lawmakers, industry and a White House group looking at the issues
surrounding Internet privacy.
By The Associated Press
The Dow Jones industrial
average rose 41.78, or 0.4 percent, to 11,499.25. The broader Standard &
Poor's 500 index rose 7.64, or 0.6 percent, to 1,242.87. The Nasdaq composite
rose 20.09, or 0.8, to 2,637.31.
Natural gas for January delivery
fell 17.4 cents to settle at $4.048 per 1,000 cubic feet on the New York
Mercantile Exchange. The price is down about almost 8 percent in the past week.
Benchmark oil for January
delivery fell 92 cents to settle at $87.70 a barrel on the New York Mercantile
Exchange. Heating oil lost 0.72 cent to settle at $2.4763 a gallon and gasoline
gave up 0.49 cent to settle at $2.3043 a gallon.
In London, Brent crude fell
49 cents to settle at $91.71 a barrel on the ICE futures exchange.