Stocks indexes were mixed in early trading Monday after European leaders failed to agree on releasing more financial aid to Greece.
In order to get the aid, Greece has to agree to more budget cuts, which has been causing unrest and political upheaval there. The Greek government faces a confidence vote on Tuesday.
Prime Minister George Papandreou’s newly-reshuffled government is expected to prevail in the confidence vote, and officials say they expect Greece to get its next installment of emergency loans in July. If Greece defaults on its debt, it could trigger losses for the banks that hold Greek bonds and more turmoil in financial markets.
The S&P 500 fell 1 point in early morning trading to 1,270. The Dow Jones industrial average edged up 2 points to 12,006. The Nasdaq composite index fell 2 points to 2,613.
Greece has been at the center of Europe’s debt worries, but other countries are also facing troubles. Moody’s warned that it may cut Italy’s credit rating because of its mounting debt and sluggish growth prospects. The worries dragged down markets across Europe Monday: Italy’s FTSE MIB index sank 2.2 percent, France’s CAC 40 index dropped 0.7 percent and Germany’s DAX index fell 0 payday loans.3 percent.
Major U.S. stock indexes broke a six-week losing streak last week as prospects for a solution to Greece’s debt crisis improved.
In corporate news fertilizer producer Agrium Inc. raised its forecast for second-quarter earnings after record crop prices pushed up demand for its products. Its stock rose 2.7 percent.
Nabors Industries Ltd., a driller for oil and gas, warned that its pressure pumping and international businesses have been weaker than it expected. The stock lost 3.5 percent.
PNC Financial Services Group Inc. fell 2.3 percent after saying it would buy the U.S. retail operations of Royal Bank of Canada for $3.45 billion. The deal will make PNC the fifth biggest U.S. bank with 2,870 branches. The deal follows Capital One Financial Corp.’s $9 billion purchase last week of ING’s U.S. online bank.
The yield on the 10-year Treasury note fell to 2.94 percent as investors sought out the relative safety of U.S. debt. A bond’s yield falls when its price rises. The 10-year yield had been as high as 3.74 percent in February.
Renewed concerns about Europe’s debt, falling oil prices and U.S. technology company troubles steered Asian stocks lower Tuesday.
Oil prices fell to below $97 a barrel in Asia, extending a two-week sell-off amid investor concern that slowing U.S. economic growth could undermine crude demand. The dollar strengthened against the euro and the yen.
Hong Kong’s Hang Seng index was 0.7 percent lower to 22,794.46, with oil companies incurring losses on falling crude prices. PetroChina Co. Ltd. lost 0.6 percent, and China National Offshore Oil Corp., or CNOOC, slumped 0.9 percent.
Japan’s Nikkei 225 lost 0.4 percent to 9,516.03. Among the losers were utilities that may have to pitch in to help Tokyo Electric Power Co. cope with financial losses following a tsunami on March 11 that smashed into one of the company’s nuclear plants in northeastern Japan, all but destroying the facility.
TEPCO has been struggling for two months to bring a radiation leak from the crippled Fukushima Dai-ichi plant under control. Overall damages are expected to be in the tens of billions of dollars (trillions of yen). Kansai Electric Power Co. lost 4.2 percent, while TEPCO, the company at the center of so many troubles, plummeted 15.5 percent. Chubu Electric Power Co. Inc., which carried out a government request to shut down a nuclear plant considered vulnerable to tsunamis, dropped 6.6 percent.
South Korea’s Kospi index was down 0.4 percent to 2,095.22, with high-tech shares following their U.S. counterparts down. Hynix Semiconductor Inc. dropped 3.3 percent, and rival LG Electronics was 2.2 percent lower. In the U.S., technology companies sustained the largest losses in Monday trading. Yahoo! Inc. and Amazon.com Inc. fell by more than 4 percent.
Australia’s S&P ASX 200 eked out a gain of 0.1 percent to 4,655.10. Markets in Singapore, Thailand and Malaysia were closed for a holiday.
In New York on Monday, technology company troubles and renewed concerns about Europe’s debt dragged stocks lower, the day that European finance ministers approved $110 billion in rescue loans to Portugal. They have yet to decide on a second rescue package for Greece.
The arrest of the head of the International Monetary Fund is expected to make solving Greece’s problems more difficult. The official, Dominique Strauss-Kahn of France, had been heavily involved in trying to fix the debt crises in Portugal and Greece. He is being held without bail on charges of sexually assaulting a hotel employee in New York City.
The Dow Jones industrial average lost 0.4 percent to close at 12,548.37. The Standard & Poor’s 500 index fell 0.6 percent to 1,329.47. The Nasdaq fell 1.6 percent to 2,782.31.
Benchmark crude for June delivery was down 47 cents to $96.90 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $2.28 to settle at $97.37 on Monday
In currencies, the euro weakened to $1.4131 from $1.4192 Monday afternoon in New York. The dollar was up at 81.19 yen from 80.84 yen.
Another dark note for the housing market came today, in new data from Fiserv.
Using the same modeling as the 20-city Case-Shiller Index, the technology firm projects that home prices in metro St. Louis will fall 3.7 percent this year. That’s on top of an 11.6 percent drop since the housing market here peaked in early 2007.
The numbers, which echo a variety of other studies and reports lately, are the latest sign yet of a “double-dip” in housing. Or, perhaps, the reality that absent the flood of federal money backing mortgages and tax breaks last year, home prices would have been falling for four years straight.
And while St. Louis has been spared the worst of the crash - prices are off 31 percent from their peak nationwide - the region isn’t poised to bounce back as quickly, either. Fiserv predicts prices here will bottm out in early 2012, compared with the third quarter of this year for the nation as a whole.
So it looks like it will be “a good time to buy” for some time to come - if you have good credit and a stable job, that is.
Air India pilots demanding more pay are on strike for a fifth day in defiance of a court order to return to work and spare the airline from further losses.
The strike has forced India’s national carrier to stop taking new bookings and to cancel all but 40 of its scheduled 165 flights Sunday. It has forced after similar cancelations each day since the strike started Wednesday.
The airline is also coping by hiring chartered flights for some routes. It says the action is now costing around 12 million rupees ($2.67 million) a day.
The Delhi High Court had ordered the 800 striking pilots last week to call off their “brazen” strike. It launched contempt of court proceedings Saturday when the pilots refused to go back to work.
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Stocks are opening higher on strong earnings reports from Ford and 3M.
Before the market opened Tuesday, Ford Motor Co. reported its best first quarter earnings since 1998. The automaker beat Wall Street’s earnings estimates with stronger sales of new vehicles.
3M Co. said its quarterly profit jumped 16 percent from a year ago, beating analysts’ estimates. 3M raised its full-year earnings expectations despite taking a hit from the earthquake in Japan.
The Dow Jones industrial average is up 22 points, or 0.2 percent, at 12,504. The S&P 500 index is up 5 points, or 0.4 percent, at 1,339. The Nasdaq composite is up 6 points, or 0.2 percent, at 2,832.
Weak earnings reports dragged the Dow and S&P 500 lower on Monday.
Congress sent President Barack Obama hard-fought legislation cutting a record $38 billion from domestic spending on Thursday, bestowing bipartisan support on the first major compromise between the White House and newly empowered Republicans in Congress.
“Welcome to divided government,” said House Speaker John Boehner of Ohio, Republican point man in tough negotiations with the president and Senate Majority Leader Harry Reid, D-Nev., that produced a bill no one claimed to like in its entirety.
Leader of a rambunctious new majority, Boehner said the cuts in domestic programs were unprecedented. Yet also described the measure as a less-than-perfect first step in a long campaign against federal red ink.
The White House also looked ahead to a struggle now beginning over national spending priorities in an era of soaring deficits and a $14 trillion national debt.
“We all know there are tough challenges ahead, from growing our economy to reducing our deficit, but we must build on this bipartisan compromise to tackle these issues and meet the expectations of the American people,” said an administration statement.
The bipartisan votes belied a fierce struggle that preceded passage and only narrowly avoided a partial government shutdown a week ago.
The tally in the House was 260-167. Among the supporters were 60 of the 87 first-term Republicans, many of them elected with tea party support.
The Senate added its approval a short while later, 81-19.
Even before the final votes, House Republicans pointed eagerly toward a vote Friday on their next move against mounting deficits, a comprehensive budget that claims cuts measured in the trillions, rather than billions, over the next decade. That vote is expected to be as partisan as the spending bill was not.
The measure approved Thursday will finance the government through the Sept. 30 end of the budget year, chopping $38 billion from current levels and $78 billion from the president’s request of more than a year ago.
Billions were saved by eliminating congressional earmarks, and billions more in funds from the Census Bureau, left over from the 2010 national head count, now finished.
The Environmental Protection Agency, one of the Republicans’ favorite targets, took a $1.6 billion cut. Spending for community health centers was reduced by $600 million, and the Community Development Block Grant program favored by mayors by $950 million more.
The bipartisan drive to cut federal spending reached into every corner of the government’s sprawl of domestic programs. Money to renovate the Commerce Department building in Washington was cut by $8 million. The Appalachian Regional Commission, a New Deal-era program, was nicked for another $8 million and the National Park Service by $127 million more.
While Republicans touted the cuts in the measure, Democratic supporters pointed to even deeper reductions or even outright program terminations that Republicans had been forced to give up in negotiations.
That list included a family planning program for lower-income families, federal support for National Public Radio and the funds needed to implement the health care law that Congress approved a year ago and Republicans have voted to repeal.
While Republicans were unable to muster a 218-vote majority for the spending cuts on their own, the huge freshman class broke heavily in favor, 60-27.
Normally vocal, GOP critics of the legislation did not speak during debate. “This is done. I’m prepared to move on to bigger issues,” said one of them, Rep. Bill Huizinga of Michigan.
While reaching across party lines, the legislation produced few if any enthusiastic supporters no fax payday advances.
Referring to a late lawmaker known for his sense of humor, Rep. Jim Moran, D-Va., told the House, “As Mo Udall once said, if you can find something everyone agrees on, you can count on it being wrong.”
Moran, a veteran Virginia Democrat, said the bill “does contain more good than bad.” That put him in the same category as Rep. Jeff Landry, a first-term Louisiana Republican who won office last fall with the support of tea party activists.
The bill does not cut enough, he said, but he added, “I came to Washington to cut spending.” He also cited a provision banning the District of Columbia from using its own money to pay for most abortions for lower-income women.
Liberals were unsparing in their criticism. “This bill is nothing more than a tea party checklist targeting programs that help the most vulnerable,” said Rep. Barbara Lee, D-Calif. She pointed to cuts in food programs for the poor, grants to local police departments and help for children of inmates. “It’s shameful, a moral disgrace.”
As expected, the Republican leadership swung behind the bill.
Democrats, consigned to the minority in last year’s elections, splintered. Rep. Nancy Pelosi of California, the party’s leader, voted against the bill without speaking on the floor. The second in command, Rep. Steny Hoyer of Maryland, supported it, and in doing so, cited a need to compromise for the government to function. Rep. Norm Dicks of Washington, the senior Democrat on the committee with jurisdiction over programs that were cut, also voted in favor.
The impetus for the cuts came from Republicans who took power in January, symbolized by the 87 first-termers.
Unhappy with the leadership’s first attempt at a bill, they rejected it. They then propelled a revised measure through the House in February, including $61 billion in reductions that would have cut deeply into education programs and other accounts that Obama vowed to protect.
By contrast, neither Obama nor most Democrats advocated any cuts through the remainder of the current fiscal year.
The earlier House bill included numerous other provisions unrelated to spending. Many were aimed at the Environmental Protection Agency, and would have blocked proposed rules to limit greenhouse gas, pollution into the Chesapeake Bay, mercury emissions from cement factories and more.
That bill also included a ban on federal funding for Planned Parenthood. That was a priority of lawmakers who object to the organization as the country’s largest abortion provider, although federal law already bans the use of federal funds to perform most abortions.
In the compromise negotiations, Democrats won the deletion of all of the EPA-related provisions as well as the proposed restriction on Planned Parenthood.
One non-spending provision that remains would take gray wolves off the endangered species list across most of the northern Rocky Mountains.
Wolf hunting would resume this fall in Idaho and Montana, where an estimated 1,250 of the animals have been blamed in livestock attacks. The issue would be returned to state management in Washington, Oregon and Utah.
Thursday’s legislation drew the support of 179 Republicans and 59 Democrats in the House.
Another 59 Republicans and 108 Democrats opposed the bill.
In the Senate, 48 Democrats, 32 Republicans and independent Joseph Lieberman of Connecticut voted in favor, while three Democrats, 15 Republicans and independent Bernie Sanders of Vermont were opposed.
Feuding lawmakers have found another small chunk of the federal budget they agree can be cut.
But don’t break out the champagne just yet.
By agreeing to a three-week spending bill that would cut $6 billion, lawmakers are kicking the can down the road while they attempt to negotiate a spending plan for the rest of the fiscal year.
On Friday, House Republicans introduced a bill that would reduce or terminate 2011 funding for 25 government programs, for savings of $3.5 billion; it would eliminate an additional $2.6 billion in earmarks.
The Republicans identified the programs to cut by combing their own budget plan and Obama’s 2012 budget proposal for spots where they agreed.
And for that reason, the top Democrat in the Senate was quick to say he supported the measure.
"I am glad that we were able to come to an agreement with Republicans on a three-week continuing resolution made up of cuts already proposed by Democrats that will also be free of any ideological, special-interest legislation," Sen. Harry Reid said in a statement.
On the chopping block are programs within the National Park Service, Environmental Protection Agency and Social Security Administration that both Obama and House Republicans want to cut.
It’s the second time Congress has agreed to cut the budget this way, and when enacted, it will be the sixth short-term budget fix of the year no teletrack payday loan. (How Congress is failing to pass a real budget)
For lawmakers, the real difficulty will start when the parties run out of things they both agree should be cut. In one section of the budget, they are already scraping the bottom of the barrel.
In the most recent budget compromise, lawmakers agreed to cut $2.7 billion in earmarks. Friday’s bill would cut another $2.6 billion for a total of $5.3 billion.
After those reductions, pretty much all that’s left to cut is defense earmarks, according to Steve Ellis, vice president of Taxpayers for Common Sense, a nonpartisan spending watchdog group.
And defense spending is a third rail in budget negotiations.
If Republicans get their way, Democrats will make the next move as the parties try to strike a budget deal that would cover the seven remaining months of the fiscal year.
"The short-term funding measure introduced in the House today will give the American people another round of spending cuts as they wait for the Democrats who run Washington — in the Senate and White House — to determine a position other than the status quo," House Speaker John Boehner said in a statement.
Belarus has violated an international arms embargo by sending three attack helicopters to military forces supporting Ivory Coast’s longtime ruler who refuses to cede power, the U.N. chief said, in a dramatic escalation of the nation’s political conflict.
Belarus denied the allegations, which come after a week of intensified street battles in Abidjan and the country’s west that left several dozen dead.
The clashes between the army controlled by Gbagbo and a new armed group fighting on behalf of his political rival prompted the United Nations to warn that the country was on the brink of re-igniting civil war.
The U.N. refugee agency said on Monday that as many as 30,000 civilians had fled the Abobo neighborhood of Abidjan where the fighting raged over the weekend. They could be seen streaming out of the affected area carrying suitcases on their heads.
The office of the United Nations Secretary-General Ban Ki-moon said that the first delivery of helicopters from Belarus reportedly arrived Sunday, and additional flights were scheduled for Monday.
“This is a serious violation of the embargo against Cote d’Ivoire, which has been in place since 2004,” Ban’s statement said, using the country’s French name. “The violation has been immediately brought to the attention of the Security Council’s committee charged with the responsibility for sanctions.”
Belarusian Foreign Ministry spokesman Andrei Savinykh rejected the accusations on Monday, calling them “groundless.”
“Belarus hasn’t supplied any weapons to Ivory Coast in violation of U.N. sanctions,” Savinykh told The Associated Press, adding that the country has strictly observed all decisions by the U.N. Security Council and has efficient controls over arms trade.
The Belarusian authoritarian leader Alexander Lukashenko is often called Europe’s last dictator and has led the ex-Soviet state since 1994. He was declared the winner of an election widely regarded as fraudulent that took place just weeks after the Ivory Coast vote.
Gbagbo’s air force was destroyed by the French military during the country’s earlier civil war, which erupted in 2002. The arrival of the attack helicopters means that the Gbagbo regime now has air power, which could not only endanger civilian areas but also the Golf Hotel where the man considered to be the legitimate president of Ivory Coast is holed up with hundreds of his supporters.
Alassane Ouattara was declared the winner of the Nov. 28 presidential election by the country’s electoral commission. Gbagbo refused to accept defeat even though the U.N. reviewed the results from over 20,000 polling stations before certifying Ouattara’s victory. Ouattara was forced to take refuge inside the hotel, where he is now under 24-hour U.N. guard.
Several hundred U.N. peacekeepers are stationed on the grounds, but it is not clear if the U.N. is set up to protect the hotel from an air assault.
The hotel houses Ouattara’s government, including his Cabinet, as well as his newly launched TV station which is attempting to act as a counterweight to the pro-Gbagbo propaganda disseminated on state-owned TV.
Gbagbo already has demanded that the U.N. leave the country. He accuses them of bias and last week, a militant youth leader allied with Gbagbo called on supporters to stop and search all U.N. vehicles. Three peacekeepers were wounded over the weekend and four of their cars were sabotaged, U.N. spokesman Hamadoun Toure said.
Multiple delegations of African leaders have come through Abidjan in an attempt to persuade Gbagbo to leave peacefully. He has rejected all their proposals, including offers of amnesty and a comfortable exile abroad.
A regional body of 15 countries in West Africa has said it will consider a military assault as a final resort if Gbagbo does not step down.
He is being strangled financially because the European Union has prohibited European ships from docking in its port. The regional central bank headquartered in the neighboring country of Senegal also has frozen Gbagbo’s access to state accounts and it is unclear if he will be able to pay civil servant employees in February.
General Motors will pay bonuses of at least $4,000 each to its factory workers — by far the largest bonuses the automaker has ever paid its blue-collar employees.
Before this, the biggest bonus GM (GM) ever paid its union employees was $1,775 in 1999. Exact details of the bonus amounts paid will be revealed after GM outlines its annual profit later this month.
"This payout is a good example of how we are sharing in the success of the New GM," the automaker said in a letter to its factory employees who are member of the United Auto Workers union.
The text of the letter was published by the Flint Journal.
GM is also paying bonuses to its non-union white collar employees. Those bonuses could be as much as 50% of a worker’s salary in some cases. For the vast majority of those workers, bonuses will be between 4% and 16% of the employee’s base pay.
Ford Motor Co. (F, Fortune 500) is expected to pay its factory workers bonuses of about $5,000 each poor credit personal loans.
GM received a bailout of $50 billion by the U.S. government, starting in early 2009, a plan that included giving the government a 61% stake in the company.
The government recouped much of this money when it sold GM shares during the automaker’s successful initial public offering in November. But about $27 billion in bailout funds remain unpaid. Much of that will be repaid as the government sells more of its shares.
The bailout and restructuring relieved GM of the bulk of its debt, helping the automaker to become profitable. Meanwhile, GM sales have increased as the automaker’s product line-up has become more competitive with foreign rivals in terms of quality and fuel economy.
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