Actual finance blog

Banks and homebuilders pulled the stock market higher Tuesday, overriding early jitters about a potential stalemate in Europe over a bailout for Greece.

Bank of America Corp. rose 7 percent in early afternoon trading after it beat Wall Street earnings expectations for third quarter thanks to accounting gains and the sale of a stake in a Chinese bank. Goldman Sachs rose 2 percent, even after reporting only its second quarterly loss since going public in 1999.

There was also positive news in the housing sector, which has rattled banks since the real estate collapse.

A survey of U.S. homebuilders showed they are less pessimistic about the struggling market. The National Association of Home Builders said its index of builder sentiment this month rose from 14 to 18, the highest level since May 2010. But any reading below 50 reflects overall pessimism.

Building company stocks jumped on the news. D. R. Horton Inc. soared 9 percent. Lennar Corp. and PulteGroup Inc. both gained more than 8 percent.

The Dow Jones industrial average was up 54 points, or 0.5 percent, to 11,451 at 12:15 Eastern. International Business Machines tugged on the Dow average, falling 5 percent, the most of any Dow stock by far.

The Standard & Poor’s 500 index rose 10, or 0.8 percent, to 1,210. The Nasdaq composite rose 14, or 0.6 percent, to 2,629.5

Markets wavered in early morning trading after some disappointing corporate earnings reports and concerns that France and Germany may not reach an agreement on additional support for Greece.

Moody’s said late Monday that the stable outlook for France’s top-notch credit rating is under pressure. On Tuesday, that country’s finance minister said that the French economy will likely grow a rate of less than 1.5 percent next year. France is Europe’s second-largest economy.

Investors were troubled by reports that France and Germany remain divided on a plan to provide more support for Greece. An agreement between the two countries, the two largest economies that use the euro, is seen as the bedrock for a rescue package that can pass all 17 countries that share the euro.

The Greek government is widely expected to go through some kind of default or restructuring of its debt. European banks could face big losses on Greek government bonds and that could ripple overseas, jolting global credit markets.

Tuesday brought full day of corporate earnings reports in the U.S.

UnitedHealth Group Inc.’s fell 4 percent after its third-quarter profit dipped. The country’s largest health insurer by sales said medical costs climbed and more patients visited their doctors’ office.

Coca-Cola Co. lost 0.6 percent after narrowly beating Wall Street’s earnings estimates. Johnson & Johnson rose 0.2 percent after posting a 6 percent in decline in third-quarter profit, roughly in line with analyst expectations.

Apple Inc. and Intel will report their results from the last quarter after the market closes.

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U.S. stocks fell sharply in afternoon trading after seesawing through most of the morning. The Dow Jones industrial average dropped nearly 190 points and the S&P 500 hit a new low for the year.

European markets slumped, dragging U.S. stocks down along with them, after Greece said it will miss deficit reduction targets it agreed to as part of its bailout deal. Benchmark indexes in Germany, France and Spain all fell 2 percent.

The Dow briefly turned higher after 10 a.m., when the Institute of Supply Management said its gauge of U.S. manufacturing did better than Wall Street had predicted in September. The Dow and S&P turned mixed within 20 minutes, then took a sharp slide shortly after noon.

The Dow Jones industrial average was down 186 points, or 1.7 percent, to 10,729 at 1:15 p.m. Eastern.

The S&P 500 lost 22, or 2 percent, to 1,109. That’s below its closing low of 1,119 for the year, reached on Aug. 8.

The Nasdaq composite fell 52, or 2.2 percent, to 2,362.

All 10 company groups in the S&P index fell. Banks, energy, and consumer discretionary stocks had the steepest declines. The yield on the 10-year Treasury note fell to 1.79 percent from 1.91 percent late Friday as investors piled into lower-risk investments.

“The market is continuing to trade based on what is happening in Europe, and that is going to overshadow everything else,” said Quincy Krosby, market strategist at Prudential Financial. “The math (for the Greek bailout) didn’t add up a year ago, and the math doesn’t add up today. The market knows that and is waiting for the Europeans to acknowledge it.”

The renewed concerns about Europe’s debt problems pushed the U.S. dollar up 0.8 percent against the euro. That could hurt large U.S. companies that rely on exports by making their products more expensive overseas. Coca-Cola Co. fell 3 percent. Caterpillar Inc., which sells construction equipment globally, lost 3.8 percent.

Concerns that the U.S. economy is headed for another recession helped send the S&P 500 index, the basis for most mutual funds that invest in U.S. stocks, down 14 percent over the three months that ended in September. It was the worst quarter for the stock market since the financial crisis of 2008.

In corporate news, Yahoo gained 2.3 percent to $13.45, after the head of Chinese Internet company Alibaba Group Holdings said he would be interested in buying the company. Yahoo, which recently ousted Carol Bartz as its CEO, has been trying to decide whether to sell parts of the company.

Bank of America fell to its lowest price since the financial crisis in 2008. The bank lost 4.8 percent to $5.83. The company has fallen 56 percent since January.

Netflix rose 0.2 percent after an analyst from Morgan Stanley upgraded the company following a sharp drop in its stock price. Netflix has plummeted 60 percent from its recent high of $304 because of a drop in subscribers and a plan to split its streaming service from its DVD-by-mail business.

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The European banking system is teetering. Congress lurches from one government shutdown crisis to another. Unemployment in the U.S. is stuck at 9 percent with no improvement in sight.

Amid it all, the stock market has gone manic-depressive, jumping one day and tanking the next business card. The Dow Jones industrial average is off 5.7 percent for the year.

That leaves the risk-shy investor yearning for shelter

A China Cargo flight carrying 80 tons of manufactured products touched down at Lambert-St. Louis International Airport on Friday afternoon.

The Boeing 777 marked the inaugural cargo flight between St. Louis and Shanghai, China. In the future, weekly cargo flights will arrive in the form of larger 747 jets, said Lambert Director Rhonda Hamm-Niebruegge.

“This is the start of what could be a big thing for St. Louis and a big thing for Shanghai,” St. Louis Mayor Francis Slay told a group of dignitaries who gathered near the airport cargo facilities to welcome the first flight.

The plane will return to Shanghai with a fairly large shipment of components from 3M and a large shipment of compressors manufactured by St. Louis-based Emerson, Hamm-Niebruegge said.

Emerson President Edward Monsor told a group of business leaders earlier in the day that the region could turn the weakness of an underutilized airport into a potential strength

LONDON — World stocks and the euro fell sharply on Monday as investors feared a messy Greek default within weeks unless Athens implements the austerity measures demanded by its international lenders.

International lenders told Greece on Monday that it must shrink its public sector and improve tax collection to secure a vital 8 billion euro rescue payment next month.

After a rare four-day rally in world stocks last week, markets fear the crisis is worsening again after Greece’s prime minister cancelled a U.S. trip to chair an emergency cabinet meeting at home and German Chancellor Angela Merkel suffered a regional election loss.

EU finance ministers also failed to make progress on the debt crisis at the weekend, and the focus is now shifting to a conference call between Greece and its international lenders at 1600 GMT to see how Greece plans to make up its budget shortfall and avoid a disorderly default.

With the gloom so widespread, investors took little comfort from expectations that the Federal Reserve would introduce new measures to stimulate the U.S. economy later this week.

“It’s no more a link between markets and economics, but a link between markets and politics. The politicians should have seen the crisis coming and done more, but the problem is they are not proactive,” said Koen De Leus, strategist at KBC Securities, in Brussels.

“We are just going from one crisis to another. It’s a nightmare for the markets.”

The MSCI world equity index fell 1.1 per cent on the day, after posting its biggest weekly gain since early July last week in buying largely driven by short-term players.

Long-term asset managers have been either staying on the sidelines, or steadily cutting back on exposure to risky assets. The MSCI index is around 5 per cent above its one-year low hit earlier in September.

European stocks lost nearly 2 per cent, led by sharp losses on the banking sector, while emerging stocks dropped nearly 2.2 per cent. U.S. stock futures pointed to a weaker open on Wall Street later.

The euro fell more than 1 per cent to $1.3632.

POLICY RISKS

Events this week promise a heavy dose of policy action.

Finance ministers of the BRIC emerging economies — Brazil, Russia, India and China — meet later this week to discuss steps to offer support to the euro zone.

Market sentiment may change if they buy euro-denominated bonds, as suggested in preliminary talks, after the European Central Bank’s 70 billion euro bond-buying spree over the last five weeks or so failed to stop the crisis from spreading to Spain and Italy.

Investors will also be watching U.S. President Barack Obama’s deficit-reduction plan on Monday aimed at covering the cost of his recent jobs bill.

U.S. crude oil was down 1.4 per cent to $86.76 a barrel.

Bund futures rose 78 ticks.

The dollar gained 0.7 per cent against a basket of major currencies, supported by expectations that new Fed measures would be focused on the maturities of the debt it buys rather than on expanding its already swollen balance sheet.

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President Barack Obama is keeping up his appeal for public support of his $447 billion proposal to boost jobs and consumer spending by urging Americans to press Congress to pass the legislation. “No more division or delay,” he said.

In his weekly radio and Internet address Saturday, he focused on a message that has become central to a presidency struggling to address stubbornly high unemployment numbers and dipping approval of his handling of the economy.

The president announced his jobs legislation to a joint session of Congress last week and has since gone outside Washington to build a case for its passage. He has been to Virginia, Ohio and North Carolina.

“The No. 1 issue for the people I meet is how we can get back to a place where we’re creating good, middle-class jobs that pay well and offer some security,” he said.

His address Saturday came in the face of sobering public opinion ratings for the president.

A New York Times/CBS News poll released Friday showed nearly half of those surveyed worried the economy was headed for another recession and nearly three out of four said they believe the country is on the wrong track.

Obama’s proposal would reduce payroll taxes on workers, cut them in half for most businesses and offer incentives for employers to hire. It would spend tens of billions of dollars on new public works projects, extend unemployment benefits for long-term jobless and help states and localities avoid layoffs of teachers and emergency workers.

On Monday, Obama plans to spell out a long-term debt stabilizing plan that aims to cut the deficit by about $2 trillion over 10 years. Obama is making his proposal to a special congressional committee that has been charged with lowering deficit by $1.2 trillion to $1.5 trillion.

“But right now, we’ve got to get Congress to pass this jobs bill,” Obama said.

Obama’s jobs plan has received a tepid reception from Republicans, who are willing to consider some of his tax relief proposals, but not his spending plans. His proposal to pay for the plan with limits on tax deductions and closing corporate tax loopholes is facing stiff GOP resistance and even Democrats have pushed back on some of those provisions in the past.

In an interview with MSNBC that aired Saturday, House Minority Leader Nancy Pelosi, D-Calif., said simply approving tax cuts without including spending on public works and local and state government assistance would not do enough to spur the economy.

“To take one piece or another, it doesn’t create the dynamism we need,” she said.

Still, despite his demand for quick passage, Obama is not likely to get immediate action even in the Democratic-led Senate, where Majority Leader Harry Reid has said there are some other issues that need to be dealt with first, including transportation money.

In the Republican address, Rep. Peter Roskam of Illinois called on Obama to reduce regulations on businesses, saying government agency rules were choking off hiring. “Washington has become a red tape factory,” he said.

He acknowledged Obama’s decision to scrub a clean-air regulation that aimed to reduce health-threatening smog. “He can cancel more,” Roskam said.

He pressed Obama to push the Democratic-controlled Senate to adopt House Republican initiatives, including legislation that would give Congress veto power over certain high-cost regulations.

“Job creators should be able to focus on their work - not on Washington’s busy-work,” he said.

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Ameren Missouri Vice President Mark C. Birk went to considerable lengths in a Post-Dispatch guest column last week to explain why the utility’s leaking coal ash pond at the Labadie power plant doesn’t pose a risk to groundwater — an argument that members of the Labadie Environmental Organization still don’t accept.

So it was surprising to see on Ameren’s website Wednesday afternoon a statement that the utility planned to place monitoring wells around all of its Missouri coal ash ponds.

Specifically, Ameren’s website said:

We have also volunteered to implement the Utility Solid Waste Activities Group’s (USWAG) Action Plan. USWAG is a consortium of more than 80 utility operating companies that generate more than 70% of the electricity used in the United States. Compliance with the USWAG Action Plan will result in the placement of monitoring wells around our Missouri ash ponds and other surface impoundments.

The mention of a groundwater monitoring plan (you can see a cached version of the web page on the left) prompted several questions, such as: When would monitoring wells be installed? When did Ameren commit to the USWAG plan? How often would sampling be done? What pollutants would be tested for?

On Thursday, after a Post-Dispatch inquiry, the company deleted the paragraph. Utility spokeswoman Rita Holmes-Bobo explained that the web page was out of date payday loan companies. Ameren has no plans to monitor groundwater at existing Labadie ash ponds.

Holmes-Bobo said that Ameren put the monitoring plan on hold when the Environmental Protection Agency began developing rules for coal ash disposal.

Mike Menne, an Ameren vice president, told the Post-Dispatch last month that the utility was part of an industry group, presumably USWAG, that was working with the EPA to voluntarily implement groundwater monitoring before the 2008 Kingston, Tenn., ash spill.

It was that disaster that renewed the debate over coal waste and prompted the EPA to propose the first national rules for coal ash disposal. Two coal ash disposal rules were issued in May 2010, but implementation of a final rule has been delayed.

Meanwhile, the utility does plan to fix the leaks, or “seeps,” as it calls them.

And discussion over a proposed coal waste landfill at Labadie continues. A draft of proposed land use regulations to accommodate utility waste landfills was supposed to be complete by July 19. But the Franklin County counselor went on medical leave for a month before the draft was complete. There’s no word yet on when the draft will be complete.

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When I last checked in with the fellows at Aisle411, they had just launched their first smartphone application that helps users to locate products

The NFL Players Association executive board and 32 team reps voted unanimously Monday to approve the terms of a deal with owners to the end the 4 1/2-month lockout.

Owners overwhelmingly approved a proposal last week, but some unresolved issues still needed to be reviewed to satisfy players; the owners do not need to vote again.

The sides worked through the weekend and wrapped up the details Monday morning on a final pact that is for 10 years, without an opt-out clause, a person familiar with the deal told the AP on condition of anonymity.

Owners decided in 2008 to opt out of the league’s old labor contract, which expired March 11. That’s when the owners locked out the players, creating the NFL’s first work stoppage since 1987.

NFLPA head DeMaurice Smith stepped outside of the group’s headquarters in Washington at about 2 p.m. to announce that players approved the pact.

“I know it has been a very long process since the day we stood here that night in March,” Smith said. “But our guys stood together when nobody thought we would. And football is back because of it.”

As he spoke, Smith was flanked by NFLPA president Kevin Mawae, Saints quarterback Drew Brees, Colts center Jeff Saturday and Ravens defensive back Domonique Foxworth, key members of the players’ negotiating team instant payday loan lenders. Brees is one of 10 plaintiffs in the antitrust lawsuit that players filed against the league.

Moments later, NFL Commissioner Roger Goodell walked into the building, joined by owners Bob Kraft of the New England Patriots, John Mara of the New York Giants and Jerry Richardson of the Carolina Panthers.

“I believe it’s important that we talk about the future of football as a partnership,” Smith said.

A tentative timeline would allow NFL clubs to start signing 2011 draft picks and rookie free agents on Tuesday. Conversations with veteran free agents also could start Tuesday, and their signings could begin Friday.

Under the proposed schedule, training camps would open for 10 of the 32 teams on Wednesday, 10 more on Thursday, another 10 on Friday, and the last two teams on Sunday.

Both sides set up informational conference calls for Monday afternoon to go over the details of the agreement. The NFLPA told player agents they would be coached in particular on the guidelines and schedule for signing free agents and rookies; the NFL alerted general managers and coaches they would be briefed in separate calls.

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The tax credit package put forth by House and Senate leaders Wednesday includes: