Actual finance blog

A gender discrimination lawsuit filed two years ago by Francine Katz, a former high-ranking female executive at Anheuser-Busch, will finally go to trial in St. Louis Circuit Court after the Missouri Supreme Court declined the brewer’s request for a transfer.

Katz, a lawyer who formerly worked at the Armstrong Teasdale law firm, joined Anheuser-Busch’s legal division in St. Louis in 1988 and ultimately rose to vice president of communications and consumer affairs for the brewer. She also was a member of the company’s strategy committee. She resigned from A-B after it was acquired by Belgium-based InBev in late 2008. 

Katz filed a gender discrimination lawsuit against A-B in October 2009 that alleged she was given a smaller salary and bonuses than male executives and alleged the company had a “frat party” atmosphere that excluded females from informal social networks, in violation of the Missouri Human Rights Act personal loans for people with bad credit.

Anheuser-Busch sought to have the case go through arbitration rather than a trial, but the Missouri Court of Appeals ruled in Katz’ favor in June, allowing the lawsuit to proceed in the St. Louis Circuit Court. A-B sought a transfer to the state’s highest court, but on Tuesday, the Missouri Supreme Court denied A-B’s request.

Katz is seeking lost wages and compensatory and punitive damages.

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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

China’s Ministry of Land and Resources has ordered a further tightening of controls on strategically vital rare earths used in advanced manufacturing, for the sake of what it says is “sustainable and healthy development.”

The order seen Tuesday on the ministry’s website calls for tighter controls over unauthorized exploration, mining, processing and sales of such minerals, which are used in mobile phones and other high-tech products.

It cites vice minister Wang Min as calling the materials _ which are not rare but have unique qualities that make them useful for high-tech applications _ the “vitamins” of modern industry.

China accounts for 97 percent of world production of rare earth metals. It has alarmed global manufacturers by reducing exports while it tries to build up its own industry, prompting pressure from Europe and the United States to treat foreign and domestic buyers equally.

Wang emphasized the need for vigilance over use of China’s “21st century treasure trove of new materials.”

The crackdown is focused on three regions with abundant rare earth reserves _ Inner Mongolia, Shandong and Sichuan. Officials from those areas agreed to cooperate in controlling rare earths reserves, production and trading.

Generally, repeated crackdowns suggest earlier restrictions may not have been fully enforced.

The latest move followed an industry gathering in Baotou, a major center for rare earths and other raw materials such as coal.

Rare earths are a group of 17 minerals used in manufacturing flat-screen TVs, mobile phones, batteries for electric cars, wind turbines and weaponry.

China has about 30 percent of the world’s rare earths. The United States, Canada and Australia also have deposits but stopped mining them in the 1990s as lower-cost Chinese ores flooded the market. Companies are restarting production in North America and elsewhere but the Chinese restrictions have pushed up global prices.

China has said it is restricting exports of rare earths 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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The PC is dead. Long live the PC.

The personal computer marked its 30th anniversary as a mass-market product last month. To mark the occasion, Hewitt-Packard Co., world

The economy might not be on the brink of another recession after all.

Consumers, who drive most economic growth, spent more on cars, furniture, electronics and other goods in July _ and more in May and June than previously thought. That burst of activity is encouraging because it shows many Americans were willing to spend despite high unemployment, scant pay raises, steep gas prices and diminished wealth.

If it keeps up, the economy might rebound after growing at an annual rate of just 0.8 percent in the first half of 2011.

That’s a big if.

Whether Americans remain willing to spend freely despite the stock markets’ wild swings will determine whether the second half of the year is any better than the first. Their 401(k) retirement accounts have shrunk.

A sustained stock-market decline tends to slow consumer spending because it reduces wealth, especially for upper-income Americans. The richest 10 percent of Americans own 80 percent of stocks. And the richest 20 percent drive about 40 percent of consumer spending, analysts say.

That loss of wealth may help explain a report Friday that consumer sentiment hit a 31-year low in August. The Thomson Reuters/University of Michigan’s survey, completed early this week, showed that market turmoil and the political strife over raising the federal debt ceiling rattled consumers.

“The fact that retail sales held up over the last few months … is a positive economic development,” said Joseph LaVorgna, chief U.S. economist at Deutsche Bank. “However, the true test will be to see if consumer activity held up in the face of recent financial market gyrations and slumping economic confidence. So the August data will be of much greater significance.”

The Dow finished Friday with a gain of 125.71 points, or 1.1 percent, to close at 11,269.02. That means the turbulent week in the end dragged the market down just 1.5 percent after it had plummeted as much as 6.3 percent.

The Dow is still down about 11 percent since July 21.

Worries about the markets and the economy already seem to have caused some shoppers to pull back. The International Council of Shopping Centers-Goldman Sachs index, which tracks revenue at stores open at least a year, has shown two straight weekly declines.

Claire Sanders Swift, a Washington media consultant, said that after the stock market plunged, she “sent her baby sitter home early and called her broker.”

“I keep trying to remind myself we’ve been through this rodeo before,” she said early this week. “The fear is making me not want to spend.”

It’s a pivotal moment for the nation’s retailers. They’re in the midst of back-to-school season and are planning for Christmas sales. Together, the two shopping seasons represent up to half their annual revenue.

Retailers are concerned that the weak economy and stock market turmoil could cause shoppers to retreat as they did when the financial crisis hit in 2008. Back then, spending plunged so much that some retailers slashed prices up to 80 percent just to draw shoppers to stores. Others sold jewelry and clothing to liquidators for pennies on the dollar. Some went out of business.

This time, retailers seem better prepared. They’ve kept inventories lean to avoid being stuck with huge piles of marked-down products.

Jeff Landis of Chicago-based Montopoli Custom Clothiers said because business has been quiet the past few weeks, he’s decided to delay stocking up on fabric for custom suits for fall. And Geoff Stern, owner of Toy Professor, a toy store in Summit, N payday loans for bad credit.J., said sales this week were down about 25 percent from a typical August week.

Until late this week, a batch of poor economic data and a gloomy outlook from the Federal Reserve set off fears that the economy might be about to slide into another recession. That threat appears to have diminished. But it’s hardly gone away.

Still overhanging the financial markets and the U.S. economy is concern that Europe’s debt crisis will spread through the U.S. financial system. Investors worry that Italy and Spain, two of Europe’s biggest economies, might be unable to pay all their debts.

If they couldn’t, big European banks that hold huge amounts of government debt would be at risk of failure. That possibility, in turn, could harm many large U.S. banks with close relationships with their European counterparts.

The mildly positive economic figures in recent days have at least given economists cause for hope. Layoffs are down. Retail sales are up. Gas prices have fallen. Employers added 117,000 jobs last month. That isn’t enough to significantly lower the unemployment rate, now at 9.1 percent. But it was more than expected and was an improvement after two dismal months for hiring.

Retail sales rose 0.5 percent last month, the Commerce Department said Friday. It was the best showing since March. The government also revised up its estimates of sales for the previous two months. Even after excluding gas station sales, which were boosted by a rise in gas prices, sales rose 0.3 percent in July.

It was the second encouraging signal for the economy in as many days. On Thursday, the Dow rocketed up 423 points after the government said the number of people applying for unemployment benefits dropped below 400,000 for the first time since April.

Consumers may feel better later this month as gas prices drop further, economists said. That would help increase their confidence. Gas prices have fallen 10 cents to $3.60 a gallon in the past week _ down from nearly $4 a gallon in early May.

In addition, stock prices have rebounded slightly since the consumer sentiment survey was completed early this week, said Paul Dales, an economist at Capital Economics.

“Confidence is very unlikely to stay this low for long,” Dales said.

Most large retailers are remaining optimistic. Macy’s Inc., Kohl’s Inc. and Nordstrom Inc. have boosted their annual profit outlooks. Yet they’re also concerned about the risk that conditions will worsen.

J.C. Penney said Friday that it expects its earnings this quarter to trail Wall Street estimates.

“The tumultuous last 10 days or so haven’t given our core customer, the middle income family, any reason to be more confident,” said CEO Myron E. Ullman III.

The retail sales report is the government’s first read on consumer spending for the July-September quarter. In June, consumers cut spending for the first time in 20 months, a troubling sign.

Demand for cars has been low this year. But part of the reason is that dealers have had trouble stocking popular models because of parts shortages related to Japan’s earthquake in March. Those disruptions are easing, which could boost auto sales in August.

And that would confirm the optimism sparked by the retail-sales report Friday.

“At this point, a mild report is a good report,” said Chris Christopher, an economist at IHS Global Insight.

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The Senate emphatically passed emergency legislation Tuesday to avoid a first-ever government default, rushing the legislation to President Barack Obama for his signature just hours before the deadline. The vote was 74-26.

Obama planned to sign the bill promptly and also was making remarks at the White House.

Tuesday’s vote capped an extraordinarily difficult Washington battle pitting tea party Republican forces in the House against Obama and Democrats controlling the Senate. The resulting compromise paired an essential increase in the government’s borrowing cap with promises of more than $2 trillion of budget cuts over the next decade.

Much of the measure, which the House passed Monday night, was negotiated on terms set by House Speaker John Boehner, including a demand that any increase in the nation’s borrowing cap be matched by spending cuts. But the legislation also meets demands made by Obama, including debt-limit increases large enough to keep the government funded into 2013 and curbs on growth of the Pentagon budget.

“We’ve had to settle for less than we wanted, but what we’ve achieved is in no way insignificant,” said Senate GOP leader Mitch McConnell of Kentucky. “But I think it was the view of those in my party that we’d try to get as much spending cuts as we could from a government we didn’t control. And that’s what we’ve done with this bipartisan agreement.”

Many supporters of the legislation lamented what they saw as flaws and the intense partisanship from which it was forged. In the end, it was a lowest-common-denominators approach that puts off tough decisions on tax increases and cuts to entitlement programs like Medicare.

“What troubles me about it is that the bipartisan compromise also represents a kind of bipartisan agreement by each party to yield to the other party’s most politically and ideologically sensitive priority,” said Joseph Lieberman, I-Conn. “In the case of Democrats, it’s to protect entitlement spending. … In the case of Republicans, it’s to not raise taxes.”

The measure would provide an immediate $400 billion increase in the $14.3 trillion U.S. borrowing cap, with $500 billion more assured this fall. That $900 billion would be matched by cuts to agency budgets over the next 10 years.

The Senate vote was never in doubt after Majority Leader Harry Reid, D-Nev., and McConnell signed on. But like Monday’s House vote, defections came from liberal Democrats unhappy that Obama gave too much ground in the talks, as well as from conservative Republicans who said the measure would barely dent deficits that require the government to borrow more than 40 cents of every dollar it spends.

“This is a time for us to make tough choices as compared to kick the can down the road one more time,” said freshman GOP Sen. Jerry Moran of Kansas.

The measure sets up a fall drama that promises to again test the ability of Obama and Republicans to work cooperatively. It establishes a special bipartisan committee to draft legislation to find up to $1.5 trillion more in deficit cuts for a vote later this year. They’re likely to come from such programs as federal retirement benefits, farm subsidies, Medicare and Medicaid. The savings would be matched by a further increase in the borrowing cap.

There’s no guarantee the committee, to be evenly split between the warring parties, will agree on such legislation. But there are powerful incentives to do so because more budget gridlock would trigger a crippling round of automatic cuts across much of the budget, including Pentagon coffers.

And questions linger about the effect the grueling political free-for-all will have on the U.S. credit rating.

Treasury Secretary Timothy Geithner told ABC News that he didn’t know whether the debt-limit fight would cause America’s AAA credit rating to be downgraded. “It’s not my judgment to make,” he said. Geithner also said he fears world confidence in the United States was damaged by “this spectacle.”

Enactment of the measure provides welcome closure for Obama, who has seen his poll numbers sag during the debt-limit battle.

GOP presidential candidates such as Mitt Romney and Michele Bachmann issued statements opposing the legislation.

“As with any compromise, the outcome is far from satisfying,” Obama conceded in a video his re-election campaign sent to millions of Democrats.

In a tweet, the president was more positive: “The debt agreement makes a significant down payment to reduce the deficit _ finding savings in both defense and domestic spending.”

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Prime Minister George Papandreou has called for a fall referendum on “changes to the political system,” including to the country’s constitution.

Opening a three-day parliamentary debate that will culminate in a confidence vote late Tuesday, Papandreou blames Greece’s bloated state sector for bringing the country to its knees and has vowed to effect deep changes.

He also says the constitutional revision will make it easier to prosecute delinquent government officials saving account pay day loan.

He also says Greece is in talks for a new bailout package “roughly equal” to the first package of euro110 billion ($155 billion) agreed to in May 2010.

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Stocks are poised for another day of losses ahead of several key economic reports.

The government will release figures on the number of people who applied for unemployment benefits for the first time last week. Economists expect that the number fell to 420,000 from 427,000 the previous week. Separate reports will shed light on the construction of new homes and manufacturing growth in the Philadelphia region.

Ahead of the opening bell, Dow Jones industrial average futures are down 32, or 0 bad credit payday loans.3 percent, to 11,799. S&P 500 futures are down 3, or 0.2 percent, to 1,257. Nasdaq 100 futures are down 4, or 0.2 percent, to 2,201.

The Dow fell nearly 180 points Wednesday after unrest in Greece rattled financial markets.

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Americans are finally getting some relief from high gas and food prices.

Wholesale food prices fell last month by the most in nearly a year, and gas prices keep dropping after peaking in May. A separate survey suggests CEOs are feeling more optimistic and will hire more in the second half of this year.

It amounted to welcome news Tuesday after a rough patch that has stoked worries the economic recovery is slowing. More jobs and lower prices would both give Americans more money to spend on other things and rejuvenate economic growth.

Food prices at the wholesale level fell 1.4 percent, the Labor Department said. It was the largest drop since last June. About 40 percent of that decline resulted from steep declines in vegetable and fruit prices.

The drop in food prices followed harsh winter freezes, which had driven up prices of tomatoes and other vegetables in February. Even if prices don’t fall further, economists say they probably won’t go much higher, at least.

It may take as long as six months, but lower wholesale prices should work their way to the grocery store.

“That’s a good thing for consumers, and it’s even better that it comes in parallel with lower energy prices,” said Gregory Daco, U.S. economist at IHS Global Insight.

Overall, the producer price index, which measures price changes before they reach the consumer, rose 0.2 percent in May. That’s much lower than April’s 0.8 percent gain and signals that inflation is in check.

Gas prices at the wholesale level rose in May by the smallest amount in eight months. At the pump, they’re coming down. On Tuesday, the national average was $3.70 a gallon, according to AAA. Gas has fallen steadily since the national average almost hit $4 a gallon in early May. It’s still about a dollar more expensive than a year ago.

For now, Americans remain cautious about spending. Another report Tuesday showed that retail sales fell 0.2 percent in May. It was the first decline in 11 months and came mostly because Americans bought fewer cars.

Auto sales fell 2.9 percent, the sharpest drop in 15 months. The decline was attributed to temporary factors, including fewer incentives offered by dealerships and a shortage of popular fuel-efficient cars because of disrupted shipments after the Japan earthquake.

Excluding the drop in car sales, retail sales rose 0.3 percent. That gain seemed to please investors, who were expecting broad declines because of high gas prices. The Dow Jones industrial average, which has fallen six weeks in a row, closed up 123 points, or 1 percent.

Mark Vitner, an economist at Wells Fargo Securities, said the retail-sales report shows that household budgets are still tight, forcing people to put off buying expensive items. Sales at electronics and furniture stores dropped in May.

Some of the biggest sales gains were reported by thrift shops and other stores that sell used goods, Vitner said, and by online retailers, which many shoppers use to find the best deals.

Lower food and gas prices “should provide some near-term relief,” Vitner said, “but a sustainable pickup in spending will not likely occur until job growth picks up and the unemployment rate falls.”

There were some encouraging signs that hiring could pick up in the second half of the year. The Business Roundtable, which represents CEOs for the 200 biggest U.S. companies, said 51 percent of chief executives plan to step up hiring in the second half of the year.

Last quarter, the figure was 52 percent said they planned to hire more over the following six months, the highest since the trade group began polling its members in 2002.

The survey began in mid-May and ended June 3, the day the government released a report that showed a steep pullback in hiring in May. The unemployment rate rose to 9.1 percent in May from 9 percent in April.

ManpowerGroup, one of the nation’s largest staffing companies, said the proportion of businesses that plan to hire in the next three months is higher than at any time since the end of 2008, during the recession.

Melanie Holmes, vice president at ManpowerGroup, said the company’s employment outlook is still at only about half the level associated with a healthy economy.

The Commerce Department said businesses added to their inventories for the 16th straight month in April, another sign that companies are confident people will spend more in the second half of the year.

The pace at which businesses sold those goods was the slowest in 10 months, but economists said it wasn’t a concern because inventories are still historically small compared with sales. Companies are unlikely to get stuck with huge stockpiles of goods.

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