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President Barack Obama

Stock prices are being increasingly influenced by the trading of exchange-traded funds, with real estate investment trusts as well as energy and consumer companies most affected, according to a Goldman Sachs Group Inc. study.

REITs and energy companies accounted for eight of the top 10 firms in the Standard & Poor’s 500 Index whose trading volume was most driven by trading in ETFs, Robert Boroujerdi, a Goldman Sachs analyst, and three colleagues wrote in a paper released Friday.

Consumer retailers accounted for the five most affected companies in the Russell 2000 Index, which tracks small-capitalization stocks.

ETFs bundle together investments in a particular market index, such as the S&P 500. Unlike mutual funds, they can be traded during daily sessions just like stocks.

They have come under increased scrutiny over whether their trading has increased market volatility and correlation between individual stocks business card. The growing impact of ETF trading on the price movements of individual stocks has discouraged some companies from publicly listing ETFs.

Correlation between the share prices of companies within the same industry groups has increased as ETF assets and trading volume have soared, the study said. Higher correlations indicate that stock prices are rising or falling in tandem.

The Goldman Sachs analysts also estimated the impact of ETFs on the trading volume of individual stocks. Smaller companies were more affected. Among companies belonging to the Russell 2000 small cap index, three had more than 60 percent of their volume driven by ETF trading., led by Houston-based retailer Stage Stores Inc. at 66 percent.

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President Barack Obama will nominate Harvard economist Jeremy Stein and Jerome Powell, an investment banker and former Treasury official, to the two empty seats on the Federal Reserve’s policy-setting board of governors.

The White House’s pick of candidates, who have Democratic and Republican credentials respectively, may help speed their nomination through Congress amid a sluggish economic recovery that has failed to put a major dent in the unemployment rate, now at 8.6 percent.

While neither has laid out detailed views on monetary policy, Stein wrote a paper earlier this year suggesting he would back the Fed’s unconventional efforts to keep down long-term borrowing costs, which have been controversial in Washington. The Fed for over three years has adopted an array of radical measures to keep interest rates low and spur recovery.

Stein, who previously worked for the Obama administration as an adviser to the Treasury secretary and a National Economic Council staff member, specializes in stock price behavior, corporate investment and financing decisions, risk management and capital allocation inside firms. He declined to comment on his nomination.

The choice of Powell, who served at the Treasury during President George H. W. Bush’s term in the late 1980s and early 1990s, could be aimed at mollifying Senate Republicans. They blocked Peter Diamond, a Massachusetts Institute of Technology economist, saying the Nobel prize winner was not qualified for the job and was too sympathetic to government intervention in the economy.

Powell is a lawyer by training and worked at Dillon, Read and Bankers Trust Co. after leaving the senior Bush administration and before joining Carlyle Group. His knowledge of financial markets could help him fill the gap left by Kevin Warsh, a former Morgan Stanley executive who acted as Chairman Ben Bernanke’s point-man for crisis negotiations cash advance america.

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However, Powell’s financial industry background may also be a source of criticism from analysts who already see the U.S. central bank as being too cozy with Wall Street.

Powell is currently a visiting scholar at the Bipartisan Policy Center in Washington, focused on federal and state fiscal issues. He was not immediately available to comment. Both Stein and Powell had already been flagged in various press reports as likely nominees.

In response to a deep recession and financial crisis, the Fed slashed interest rates to near zero and sharply expanded its balance sheet to $2.8 trillion to keep the economy afloat. Some analysts worry the Fed’s asset purchases could make it harder for the central bank to tighten monetary policy when it decides the time is right.

If Powell and Stein are confirmed, it would be the first time since April 2006 that all seven seats on the Fed’s board are filled. The term currently filled by Elizabeth Duke, the last remaining George W. Bush appointee on the board, is to expire at the end of January, though governors can choose to stay in office until a successor is confirmed.

Senate Banking Committee Chairman Tim Johnson, a Democrat, welcomed the most recent nominations.

“With the fragile state of the U.S. economy and a looming European debt crisis, Chairman Johnson believes it is imperative that our financial regulators operate at full strength,” his office said in a statement. “Chairman Johnson is committed to moving these nominations though the Banking Committee in a timely manner and is looking to schedule a hearing soon.”

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COLUMBIA, Mo.

President Barack Obama has signed legislation giving tax breaks to companies that hire unemployed veterans, telling businesses “if you are hiring, hire a veteran.”

Obama says Monday that the legislation will help about 850,000 veterans who are currently unemployed and tens of thousands who will be returning from Iraq and Afghanistan in the coming months.

The bill passed Congress last week with rare bipartisan support.

The brief moment of unity was overshadowed by the apparent failure of lawmakers from both parties on a special panel to reach an agreement on $1.2 trillion in savings ahead of a Wednesday deadline low fee payday advance.

The legislation signed by Obama creates tax breaks for companies that hire jobless veterans and helps provide vets with job training and counseling. It also repeals a 2006 law that would require the federal, state and local governments to withhold 3 percent of their payments to contractors.

The veterans’ legislation is the first proposal included in Obama’s $447 billion bill to win congressional approval.

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SATURDAY

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The finance chiefs from the euro’s 17 countries hunkered down Friday to overcome differences over how to strengthen a bailout fund, which is key to preventing the currency union’s debt troubles from spinning out of control.

Giving the euro440 billion ($607 billion) European Financial Stability Facility much more firepower is considered essential before the eurozone can deal with its two other main problems: cutting Greece’s massive debts and forcing weak banks to boost their capital buffers to shore up their defenses against worsening market turmoil.

“Once we have the option for the leveraging (of the EFSF) then _ building on that _ we can develop all other points,” said Austrian Finance Minister Maria Fekter, as the arrived for the meeting in Brussels.

Markets appeared to be giving Europe the benefit of the doubt, trading substantially higher Friday even though a wide-ranging plan to deal with the crippling debt crisis won’t be in time for Sunday’s summit of EU leaders. A second meeting on Wednesday has been scheduled.

“Considering the importance of the discussions and there potential impact upon the European economy, global capital markets and the future of the EU itself a delay of a few days is neither here nor there in the overall scheme of things,” said Gary Jenkins, an analyst at Evolution Securities. “However the suggestions that they are still far apart on how to make best use of the EFSF is of some concern.”

Governments have ruled out increasing their financial commitments, but they acknowledge that with some euro140 billion already going to Ireland, Portugal and Greece, the EFSF isn’t big enough to both help recapitalize weak banks and keep big economies like Italy and Spain from being dragged into the crisis.

A failure to agree on the best way of maximizing the fund’s impact between Germany and France forced European leaders to call another crisis summit for Wednesday _ on top of the two-day talks between finance ministers and a first summit of EU leaders this weekend.

Austria’s Fekter said up to seven technical options for giving the EFSF more leverage were currently on the table and both she and German finance minister Wolfgang Schaeuble ruled out the possibility that the fund will be able to tap into the vast resources of the European Central Bank. That proposal is still being pushed by France, which sees ECB help as the best way of giving the EFSF the necessary force.

A high-ranking German official, who declined to be named, said that a combination of two options had crystallized as the most likely solution.

The first would involve the bailout fund acting as an insurer for bond issues from wobbly countries like Italy. That would essentially compensate investors against a first round of losses and help to support their bonds and keep the borrowing costs from rising too far.

In addition, the International Monetary Fund _ which has already provided about a third of the bailout cash for Greece, Ireland and Portugal _ would supply other stragglers with precautionary credit lines to make sure they have a ready access to cheap money.

Last weekend, at a meeting in Paris, the finance chiefs from the Group of 20 leading economies, opened the door for a larger role by the IMF, but only if the eurozone first does its part.

IMF Managing Director Christine Lagarde, who joined the ministers in Brussels Friday, said that her institution would do everything it could to help Europe.

“We will find solutions,” she said, without going into details.

Europe’s leaders have already told their counterparts in the G-20 that they will have a plan ready to present to them at their next meeting in Cannes, France, in early November.

But Jean-Claude Juncker, the prime minister of Luxembourg who also chairs the meetings of eurozone finance ministers, said the announcement to delay all decisions until the next summit on Wednesday looked “disastrous” to the outside world. He also canceled a press conference that had originally been scheduled for after Friday’s meeting, indicating that hopes were low of having clear results to present.

There appeared to be some progress on finding a solution on Greece, which has been paralyzed for much of this week. Sporadic outbreaks of violence during a two-day general strike against the government’s austerity program claimed the life of one person on Thursday.

The German official said the aim was to bring Greece’s debt down to about 120 percent of economic output, from more than 180 percent it is set to reach next year. That would most likely involve the banks taking a bigger hit on their Greek bond holdings, hence the need for a widespread recapitalization plan.

In nearly identical statements Thursday night, German Chancellor Angela Merkel and French President Nicolas Sarkozy asked Greece to immediately enter into discussions with private creditors on bringing its debt down to a sustainable level.

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Asian stock markets advanced Monday, bolstered by improved U.S. retail sales and Europe’s renewed efforts to contain its debt crisis.

Japan’s Nikkei 225 stock average rose 1.5 percent to 8,881.42, hitting a six-week intraday high at one point.

Hong Kong’s Hang Seng jumped 1.7 percent to 18,824.07, South Korea’s Kospi was up 1.2 percent at 18,824.07 and Australia’s S&P/ASX 200 climbed 1.8 percent to 4,282.30.

Sentiment brightened after stronger retail sales data in the U.S., leading to gains on Wall Street before the weekend. The Dow Jones Industrials rose 1.4 percent to close at 11,644.49 on Friday.

Retail sales, which are a key barometer of consumer spending, recorded the biggest gain in seven months in September and double what economists were expecting. The data added to signs that the world’s biggest economy may avoid another recession.

Worries about Europe’s debt problems also eased following a meeting of Group of 20 finance chiefs over the weekend in Paris.

The group opened the door for the International Monetary Fund to play a bigger role in fighting the escalating debt troubles among countries that use the euro common currency. It also said eurozone ministers will “decisively address the current challenges through a comprehensive plan” to be unveiled on Oct paydayloans. 23.

In currencies, the dollar edged up to 77.24 yen from 77.22 late Friday. The euro fell to $1.3851 from $1.3875.

With the dollar holding above the 77-yen line, investors sent Japanese exporters higher. Sony Corp. surged 4.6 percent, while Toyota Motor Corp. 2.4 percent.

Missing out on the rally was camera and precision instruments maker Olympus Corp., which plunged after firing its British CEO on Friday after just six months.

The issue tumbled more than 22 percent, following a double-digit slide before the weekend. Several ratings agencies issued downgrades, while media reports said Michael Woodford was dismissed after questioning Olympus executives about improper corporate governance and several acquisitions before he arrived.

Benchmark oil for November delivery was up 35 cents at $87.15 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $2.57 to settle at $86.80 in New York on Friday.

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Stock futures are rising, signaling another day of gains on Wall Street. Investors will assess fresh U.S. economic data and closely watch developments in Europe.

The government is expected to report Wednesday that factory orders for long-lasting manufactured goods fell in August after rising in July. Manufacturing has been one of the strongest parts of the economy since the recession ended.

Investors also remain focused on Europe. Stocks have soared this week on hopes that the region is moving closer to resolving its debt crisis.

About 90 minutes before the opening, Dow Jones industrial average futures are up 64 points, or 0.6 percent, at 11,184. Standard & Poor’s 500 futures are up 7, or 0.6 percent, at 1,176. Nasdaq 100 futures are up 11, or 0.5 percent, at 2,265.

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China will appeal a World Trade Organization rejection of its curbs on exports of industrial raw materials, the government said Wednesday, in a case that Washington and Europe hope will lead to an easing of its restrictions on rare earths sales.

“We still consider that China practice and China’s policies do not violate WTO rules,” Ministry of Commerce spokesman Shen Danyang at a regular news briefing. “We will appeal,” he said. Shen gave no details of when the appeal would be filed or on what specific grounds.

A WTO panel ruled July 5 that Beijing was improperly protecting its companies by limiting exports of nine materials used in the steel, aluminum and chemical industries.

The case did not mention rare earths, a group of 17 minerals used in mobile phones and other high-tech products. But the United States and the 27-nation European Union say they want China to apply its principles to rare earths and lift export restrictions.

China accounts for 97 percent of rare earths production and has alarmed foreign manufacturers by reducing exports while it tries to develop its own manufacturers of magnets and other products made with the minerals.

A European Union trade envoy, Karel De Gucht, said in July that Chinese officials indicated they might change their rare earths curbs due to the ruling easy payday loans. Chinese officials have not confirmed that.

The WTO ruling in a case brought by the United States, the EU and Mexico, applied to Chinese quotas and taxes on exports of materials including coke, bauxite, zinc and fluorspar. It rejected China’s argument that it was trying to protect the environment and said export restrictions should be removed.

China has about 30 percent of the world’s reserves of rare earths, which also are used in some weapons, flat-screen TVs, batteries for electric cars and wind turbines.

The United States, Canada and Australia have rare earths but stopped mining them in the 1990s as lower-cost Chinese ores flooded the market. Companies are developing mines in North America and elsewhere but the Chinese restrictions have pushed up global prices.

Beijing says it restricted exports to conserve scarce supplies and curb environmental damage caused by mining. But foreign governments complain similar limits were not applied to domestic manufacturers that use rare earths.

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