On Wednesday January 13, 2010, 5:58 pm
Fed: Recovery spreads but doesn't spur
hiring
WASHINGTON (AP) -- The economic
recovery is spreading to more parts of the country even as a growing number of
people can't find full-time jobs.
The duality of the recovery is
underscored in a Federal Reserve survey released Wednesday: The economy is
growing, and the recovery is extending its reach geographically. Yet 27 million
people are either unemployed, forced into part-time jobs or so discouraged that
they've stopped looking for work.
The Fed said that while the economy is
still sluggish, conditions have improved modestly. But it also said the job
market in most of the Fed's 12 regions remained "soft" as the new
year began.
Market advances as financial stocks
rebound
NEW YORK (AP) -- The stock market
closed higher, following the lead of financial stocks as the heads of several
big banks testified before Congress about the financial crisis.
Stocks fluctuated early Wednesday but
strengthened as the questioning of bank officials proceeded with little in the
way of confrontation. Industries seen as safer in a weak economy, like health
care and utilities, posted some of the biggest gains.
The Dow Jones industrial average closed
up 54 points to 10,680.77 after trading above 10,700 for the first time in 15
months. Broader indicators also advanced. Treasury prices fell, pushing
interest rates higher, after jumping on Tuesday.
Bankers apologize for actions that led
to crisis
WASHINGTON (AP) -- Challenged by a
skeptical special commission, top Wall Street bankers apologized Wednesday for
risky behavior that led to the worst financial crisis since the Great
Depression. But they still declared it seemed appropriate at the time.
The bankers -- whose companies
collectively received more than $100 billion in taxpayer assistance to weather
the crisis -- offered no regrets for executive pay that is now likely to
increase as a result of their survival. They did say they are correcting some
compensation practices that could lead to excessive risk-taking.
The tension at the first hearing of the
Financial Crisis Inquiry Commission was evident from the outset.
Google's China threat is a rare show of
defiance
BEIJING (AP) -- Google's threat to end
its operations in China over censorship and computer-security concerns could
embarrass communist leaders who crave international respect. Yet it appears
unlikely that many other companies would follow suit and try to change how
business is done in China.
"As long as you aren't involved in
politics, the media or pornography, the government will leave you alone,"
said Siva Yam, president of the United States of America-China Chamber of
Commerce, which primarily represents U.S. companies in China.
Such high-tech companies as Microsoft
Corp. and Cisco Systems Inc. had no comment on Google's announcement Tuesday
that it would stop censoring results on its Chinese search engine at Google.cn
and might leave the country entirely.
AP source: Hershey works on solo bid
for Cadbury
HARRISBURG, Pa. (AP) -- The Hershey Co.
is assembling a bid to acquire British candy maker Cadbury PLC without the help
of Italian candy maker Ferrero International, a person familiar with Hershey's
plans told The Associated Press on Wednesday.
Meanwhile, the company that bid first,
American food giant Kraft, continued to defend its offer and issued an earnings
forecast that may have been intended to show off its strength.
Hershey has been working on two
parallel bids for Cadbury -- one with Ferrero and one on its own. But Ferrero
reportedly has withdrawn. Hershey is still crafting its own potential bid, one
designed to top the $16.5 billion hostile offer from Kraft Foods Inc., the
person familiar with Hershey said.
December budget deficit sets record
WASHINGTON (AP) -- The federal budget
deficit hit an all-time high for the month of December, and the red ink for the
first three months of the current budget year is rising at a more rapid pace
than last year's record clip.
The massive tide of red ink, reflecting
the continued fallout from a deep recession and a severe financial crisis,
highlights the challenge facing President Barack Obama as he pledges to get
control of runaway deficits.
The Treasury Department said Wednesday
that the deficit last month totaled $91.85 billion, the largest December
deficit on record and a bigger imbalance than the $92 billion that economists
had expected.
US insurers have limited exposure in
Haiti
CHARLOTTE, N.C. (AP) -- U.S. insurers
may have very little exposure to the massive losses caused by the earthquake
that struck Haiti.
Haiti is one of the smallest insurance
markets in the Americas, with a total non-life insurance premium income of just
under $20 million, "which reflect the country's poverty," according
to a report Wednesday from Newark, Calif.-based Risk Management Solutions Inc.
By comparison, the total net premiums for property and casualty coverage in the
U.S. in 2008 totaled nearly $441 billion, the most recent figures available
from the Insurance Information Institutes 2010 Fact Book.
Oil and gas prices tumble to lowest
levels of 2010
NEW YORK (AP) -- As energy prices
surged this month, economists told motorists to brace for the return of
$3-a-gallon gasoline.
But that's hardly a guarantee,
especially after a three-day sell-off that pushed oil and gas prices to their
lowest levels of the year.
Energy prices rallied this winter as
frigid temperatures blanketed parts of the country. China also said last week
that it increased oil imports by nearly 14 percent in 2009, fueling
expectations that world oil demand will continue to grow.
SEC names new enforcement unit heads
WASHINGTON (AP) -- The Securities and
Exchange Commission named six people on Wednesday to lead new investigative
units and unveiled a new policy for rewarding prompt cooperation by those with
knowledge of misconduct as the agency reorganizes its enforcement efforts.
The SEC was scorched by its failure to
detect the stunning, long-running fraud by money manager Bernard Madoff despite
numerous red flags and credible warnings.
The new units and their leaders are:
asset management, headed by Bruce Karpati and Robert Kaplan; market abuse, led
by Daniel Hawke; structured and new products, Kenneth Lench; foreign corrupt
practices, Cheryl Scarboro; and municipal securities and public pensions,
Elaine Greenberg.
China moves to rein in lending, cool
economy
SHANGHAI (AP) -- China's lavish bank
lending spurred a recovery but also pumped up markets as speculators scooped up
stocks and property and even dabbled in garlic, dried chilli peppers and luxury
Pu'er tea.
Now, China is reining in its
spendthrift banks, shifting toward an exit strategy that aims to avoid a bust.
After a brief slowdown a year ago,
China's economy has bounced back rapidly, with growth forecast at 8.3 percent
for this year. Yet the stimulus spending that led that revival -- supported by
more than 9 trillion yuan ($1.3 trillion) in new bank loans last year -- has
spurred speculation, raising alarm over a potential housing bubble.
By The Associated Press
The Dow rose 53.51, or 0.5 percent, to
10,680.77. The index traded above 10,700 for the first time since Oct. 3, 2008,
rising as high as 10,709.26.
The broader Standard & Poor's 500
index rose 9.46, or 0.8 percent, to 1,145.68, and the Nasdaq composite index
rose 25.59, or 1.1 percent, to 2,307.90.
Benchmark crude for February delivery
gave up $1.14 to settle at $79.65 a barrel on the New York Mercantile Exchange.
In other Nymex trading in February
contracts, heating oil fell 3.72 cents to settle at $2.0946 a gallon and
gasoline dropped 3.76 cents to settle at $2.0602 a gallon. Natural gas futures
added 14.2 cents to settle at $5.733 per 1,000 cubic feet.
In London, Brent crude for February
delivery fell 99 cents to settle at $78.31 a barrel on the ICE Futures
exchange.