Why worry? Less aid by Fed would point to recovery
WASHINGTON (AP) — Investors have grown nervous that the Federal Reserve will scale back its efforts to boost the U.S. economy sooner than many expected.
Yet almost lost in the anxiety that gripped the stock market this week is that whenever the Fed slows its drive to keep interest rates low, it will be cause for celebration: It would mean policymakers think the economy is strong enough to accelerate with less help from the Fed.
Over the past five years, the Fed has acted aggressively to try to boost the economy. Among other steps, it cut short-term interest rates to record lows and said it planned to keep them there at least until unemployment falls to 6.5 per cent (from 7.5 per cent in April).
Stocks edge lower as investors reassess Fed fears
NEW YORK (AP) — Investors recovered their poise after a shaky start to trading on Wall Street that sent stocks sharply lower.
U.S. markets plummeted immediately after the opening bell Thursday following a global slump prompted in part by an unexpectedly weak report on manufacturing in China. Concern that the Federal Reserve might ease back on its economic stimulus program sooner than expected had also riled investors.
The dip gave investors who had missed this year’s rally in stocks an opportunity to get into the market, and by midday stocks had recouped most of their early losses. The market even climbed into positive territory by midday, before ending the day marginally lower.
Japan gyrations underline economy’s vulnerability
TOKYO (AP) — Japan’s financial markets gyrated wildly Thursday, underscoring the vulnerability of its economy to a loss of investor confidence as Prime Minister Shinzo Abe attempts shock monetary easing to end two decades of stagnation.
Interest rates, or yields, on 10-year Japanese government bonds briefly topped 1 per cent for the first time in a year on Thursday, following news that some U.S. Federal Reserve officials are willing to scale back the American central bank’s stimulus efforts as soon as June if the economy perks up.
Thursday’s spike, which came despite the Bank of Japan’s aggressive efforts to keep borrowing costs down, is unnerving some investors at a time when Japan’s already overburdened government finances are vulnerable to rises in interest rates. A sustained rise would push up the cost of borrowing for the government.
Between economy and trouble, Obama approval steady
WASHINGTON (AP) — The economy is recovering, the White House is dealing with multiple controversies, and President Barack Obama appears generally unaffected either way.
He’s getting no significant uptick in approval from gains in housing, jobs and the stock market. Likewise, he has so far seen no downtick from the recent storms over the terror attack in Benghazi, Libya, the targeting of conservative groups by the IRS and a leak investigation that has swept up the phone records of Associated Press journalists.
All in all, recent polls show the president sustaining an overall approval rating around 50 per cent.
Stricken Japan nuke plant struggles to keep staff
TOKYO (AP) — Keeping the meltdown-stricken Fukushima nuclear plant in northeastern Japan in stable condition requires a cast of thousands. Increasingly the plant’s operator is struggling to find enough workers, a trend that many expect to worsen and hamper progress in the decades-long effort to safely decommission it.
Tokyo Electric Power Co., the utility that runs the Fukushima Dai-ichi plant that melted down in March 2011 after being hit by a tsunami, is finding that it can barely meet the headcount of workers required to keep the three broken reactors cool while fighting power outages and leaks of tons of radiated water, said current and former nuclear plant workers and others familiar with the situation at Fukushima.
Construction jobs are already plentiful in the area due to rebuilding of tsunami ravaged towns and cities. Other public works spending planned by the government, under the “Abenomics” stimulus programs of Prime Minister Shinzo Abe, is likely to make well-paying construction jobs more abundant. And less risky, better paid decontamination projects in the region irradiated by the Fukushima meltdown are another draw.
US companies challenging contraception mandate
DENVER (AP) — Hobby Lobby Stores Inc. is challenging the part of the federal health care law that requires for-profit companies to offer employees health coverage that includes products the business owners find morally objectionable, such as certain types of contraception.
Few large American employers have weighed in on this because it’s a nonissue for them. A survey by the Kaiser Family Foundation found 85 per cent already offered such coverage before the Obama administration mandated it as part of its health care overhaul last year.
But a number of firms like Hobby Lobby, which is owned by an evangelical Christian family, argue the regulation violates their religious freedom.
Hobby Lobby, for example, already provides coverage of almost all contraceptives as part of its employees’ health insurance. It objects to the requirement that it now cover the so-called morning-after and week-after pills, saying that paying for those two treatments would violate its owners’ belief that life begins at fertilization.
Applications for US unemployment aid fall to 340,000
WASHINGTON (AP) — The number of Americans applying for unemployment benefits fell 23,000 last week to a seasonally adjusted 340,000, a level consistent with solid job growth.
The less volatile four-week average ticked down just 500 to 339,500, the Labor Department said Thursday. That’s close to the five-year low of 338,000 reached during the first week of May. The four-week average is 9 per cent lower than in November.
Unemployment claims are a proxy for layoffs. The decline in claims has coincided with steady job growth over the past six months. Since November, employers have added an average 208,000 jobs a month. That’s up from just 138,000 jobs a month during the previous six months.
US new home sales up 2.3 per cent in April
WASHINGTON (AP) — U.S. sales of new homes rose in April and nearly matched the fastest pace in five years, driving the median price to a record high. The gains suggest the housing recovery is strengthening.
New-home sales increased 2.3 per cent in April from March to a seasonally adjusted annual rate of 454,000, the Commerce Department said Thursday. That’s only slightly below January’s pace of 458,000, which was the fastest since July 2008.
Steady job creation and near-record-low mortgage rates are spurring more Americans to buy homes. Sales are still below the 700,000 pace consistent with healthy markets, but they have risen 29 per cent over the past year.
NJ: Caramel-colored rubbing alcohol sold as scotch
TRENTON, N.J. (AP) — At one bar, a mixture that included rubbing alcohol and caramel coloring was sold as scotch. In another, premium liquor bottles were refilled with water — and apparently not even clean water at that.
State officials provided those new details Thursday on raids they conducted a day earlier as part of a yearlong investigation dubbed Operation Swill.
Twenty-nine New Jersey bars and restaurants, including 13 TGI Fridays, were accused of substituting cheap booze — or worse — for the good stuff while charging premium prices.
Ralph Lauren’s 4Q profit rises 35 per cent
NEW YORK (AP) — Ralph Lauren Corp. reported a 35 per cent increase in fourth-quarter profit as the luxury retailer benefited from lower cotton prices and cost controls.
But the seller of Polo and other brands saw its stock fall Thursday because its revenue fell below Wall Street expectations amid poor weather, economic challenges in the U.S. and abroad and the move to eliminate some businesses to focus on the most profitable ones.
The results, announced Thursday, show how the New York based luxury company is seeing increasing profits since the first half of its fiscal year, when cotton costs soared and the company was bearing the brunt of the costs of eliminating certain businesses such as its Rugby brand. But it’s still navigating the rough patches of a choppy global economy.
By The Associated Press(equals)
The Dow Jones industrial average ended the day just 12.67 points lower, or 0.1 per cent, at 15,294.50. The Standard & Poor’s 500 index closed down 4.84 points to 1,650.51, or 0.3 per cent. The Nasdaq composite fell 3.88 points, or 0.1 per cent, to 3,459.42.
Benchmark oil for July delivery fell 3 cents to close at $94.25 a barrel on the New York Mercantile Exchange. Brent crude, a benchmark for many international oil varieties, fell 16 cents to $102.44 a barrel on the ICE Futures exchange in London.
Wholesale gasoline rose 1 cent to $2.83 a gallon. Heating oil lost 1 cent to $2.86 a gallon. Natural gas rose 8 cents to $4.26 per 1,000 cubic feet.