Fed stands by stimulus, sees stronger US economy
WASHINGTON (AP) — The Federal Reserve isn’t yet convinced that the U.S. economy’s growth can accelerate without the Fed’s drive to keep borrowing costs at record lows. It wants to see sustained improvement.
That was the message Fed officials sent Wednesday, when they reinforced their plan to keep short-term interest rates at record lows at least until unemployment falls to 6.5 per cent.
The Fed will continue buying $85 billion a month in bonds indefinitely to keep long-term borrowing costs down. Fed chief Ben Bernanke said the Fed might vary the size of its monthly purchases depending on whether or how much the job market improves. The unemployment rate has fallen to a four-year low of 7.7 per cent, among many signs of a healthier economy.
Survey: Low-wage workers gloomy about future
WASHINGTON (AP) — While lower-wage American workers have accounted for the lion’s share of the jobs created since the 2007-2009 Great Recession, a new survey shows that they are also among the most pessimistic about their future career prospects, their job security and their finances.
A two-part Associated Press-NORC Center for Public Affairs Research survey of both employers and employees found high levels of anxiety among those earning $35,000 annually or less. Many of these workers say they’re worse off now than they were before or during the recession.
And there’s no question that workers see the world differently than do their bosses.
Seventy-two per cent of employers at big companies and 58 per cent at smaller ones say there is a “great deal” or “some” opportunity for worker advancement. But, asked the same question, 67 per cent of all low-wage workers said they saw “a little” or “no opportunity” at their jobs for advancement.
Cypriot officials: Plan B drawn up to get bailout
NICOSIA, Cyprus (AP) — Cyprus’ government has drawn up a new plan to raise funds needed for the country to secure a crucial international bailout, three top government officials said Wednesday.
The new bill could be voted on as early as Thursday evening, one of the officials said.
Parliament resoundingly rejected the previous plan, which involved taxing up to 10 per cent of people’s bank deposits.
The rejection threw Cyprus’ entire bailout into question, raising the possibility that the country’s banks could collapse, the government would be unable to pay its bills and Cyprus could be forced out of the euro.
Senate vote: OK $85 billion cuts, avert shutdown
WASHINGTON (AP) — The Senate approved legislation Wednesday to lock in $85 billion in widely decried spending cuts aimed at restraining soaring federal deficits — and to avoid a government shutdown just a week away. President Barack Obama’s fellow Democrats rejected a call to reopen White House tours scrapped because of the tightened spending.
Federal meat inspectors were spared furloughs, but more than 100 small and medium air traffic facilities were left exposed to possible closure as the two parties alternately clashed and co-operated over proposals to take the edge off across-the-board spending cuts that took effect on March 1.
Final House approval of the measure is likely as early as Thursday. Obama’s signature is a certainty, meaning the cuts will remain in place at least through the end of the budget year on Sept. 30 — even though he and lawmakers in both parties have criticized them as random rather than targeted. Obama argued strongly against them in campaign-style appearances, predicting painful consequences, before they began taking effect, and Republicans objected to impacts on Pentagon spending.
Both sides agree on tough new fracking standards
PITTSBURGH (AP) — Some of the nation’s biggest oil and gas companies have made peace with environmentalists, agreeing to a voluntary set of tough new standards for fracking in the Northeast that could lead to a major expansion of drilling.
The program announced Wednesday will work a lot like Underwriters Laboratories, which puts its familiar UL seal of approval on electrical appliances that meet its standards.
In this case, drilling and pipeline companies will be encouraged to submit to an independent review of their operations. If they are found to be abiding by a list of stringent measures to protect the air and water from pollution, they will receive the blessing of the new Pittsburgh-based Center for Sustainable Shale Development, created by environmentalists and the energy industry.
Freddie accuses big banks of rigging lending rate
WASHINGTON (AP) — Freddie Mac has sued 15 big international banks, including JPMorgan Chase, Bank of America and Citigroup, accusing them of rigging a key interest rate and causing huge losses for the government-controlled mortgage giant.
Freddie filed the lawsuit Thursday in federal court in Alexandria, Va. It names the banks that set the London interbank offered rate, known as LIBOR, which provides the basis for trillions of dollars in contracts around the world, including mortgages, bonds and consumer loans.
In a growing scandal, two big British banks and Switzerland’s largest have been fined hundreds of millions of dollars for manipulating LIBOR by U.S. and British regulators.
FedEx profit falls on weak airfreight business
DALLAS (AP) — FedEx said Wednesday that third-quarter profit fell 31 per cent as customers shifted to slower and less expensive international air-shipping options, and it cut its forecast of full-year earnings.
The company says it will cut capacity to and from Asia starting next month and might retire some of its older airplanes.
FedEx Corp. said its net income fell to $361 million, or $1.13 per share, in the three months ended Feb. 28. That’s down from $521 million, or $1.65 per share, a year earlier.
Airlines raise 2013 profit outlook
GENEVA (AP) — The global airline industry has forecast a modest improvement in global net profits for 2013, crediting a backdrop of rising optimism about the world’s economy — particularly in the United States and Europe.
The International Air Transport Association, whose 240 member airlines carry 84 per cent of all passengers and cargo, upgraded its financial outlook Wednesday to expected profits of $10.6 billion this year, mainly based on more passengers and cargo.
IATA said the industry’s overall revenue in 2013 is expected to rise to $671 billion from $637 billion last year, while costs will go up to $649 billion from $623 billion.
Chinese solar producer Suntech declares bankruptcy
BEIJING (AP) — Suntech, one of the world’s biggest solar panel manufacturers, was forced into bankruptcy court Wednesday, becoming the latest casualty of a painful slump in the global solar industry.
Suntech Power Holdings Ltd. said eight Chinese banks asked a court to declare it insolvent after the company missed a $541 million payment to bondholders last week. Suntech said it would not oppose the petition.
The development is a dramatic reversal for a company that was a leading force in China’s fast-growing renewable energy industry. Its founder, Shi Zhengrong, has seen much of his multibillion-dollar fortune evaporate.
Experts suspect North behind SKorea computer crash
SEOUL, South Korea (AP) — A cyberattack caused computer networks at major South Korean banks and top TV broadcasters to crash simultaneously Wednesday, paralyzing bank machines across the country and prompting speculation of North Korean involvement.
Screens went blank at 2:00 p.m. local time, the state-run Korea Information Security Agency said, and more than seven hours later some systems were still down.
Police and South Korean officials couldn’t immediately determine responsibility and North Korea’s state media made no immediate comments on the shutdown. But some experts suspected a cyberattack orchestrated by Pyongyang. The rivals have exchanged threats amid joint U.S.-South Korean military drills and in the wake of U.N. sanctions meant to punish North Korea over its nuclear test last month.
By The Associated Press(equals)
The Dow Jones industrial average closed up 55.91 points Wednesday, or 0.39 per cent, to 14,511.73. The Standard & Poor’s 500 index rose 10.37 points, or 0.67 per cent, to 1,558.71. The Nasdaq composite index rose 25.09, or 0.78 per cent, to 3,254.19.
Benchmark oil for April delivery gained 80 cents to finish at $92.96 a barrel on the New York Mercantile Exchange. Brent crude, used to price many kinds of oil imported by U.S. refineries, rose $1.27 to end at $108.72 a barrel on the ICE Futures exchange in London.
Wholesale gasoline rose 7 cents to finish at $3.12 a gallon. Heating oil rose 3 cents to end at $2.89 a gallon. Natural gas fell 1 cent to finish at $3.96 per 1,000 cubic feet.