Finance time

Reforms to U.S. financial regulation do not go far enough to remove the perception that large banking firms will be bailed out if they run into trouble, Richmond Federal Reserve Bank President Jeffrey Lacker said on Thursday.

Lacker told a forum of lawyers that more needs to be done to push back against the notion that certain financial firms are simply too large to be allowed to fail.

“This requires a credible restoration of the belief that financial firms’ creditors will not benefit from public sector support in the event of financial distress,” Lacker told an event sponsored by The Banking Institute of the UNC School of Law.

“To do this, however, we must face the fact that authorities often view the unassisted resolution of a failing or illiquid financial firm as intolerable, despite the acknowledged likelihood that such assistance erodes market discipline and distorts incentives,” he said guaranteed approval cash loans.

Lacker praised the portion of the Dodd-Frank financial reform legislation that forces firms to create a so-called “living will,” a tally of its assets that would make it easy for the authorities to wind down the firm if it needs to file for bankruptcy.

He said proposals to limit bankruptcy exemptions for risky securities like short-term financing instruments and derivatives are promising and should be actively considered.

Lacker singled out money market funds for taking advantage of an implicit government backing.

“Current regulations essentially prevent money market funds from structuring themselves in ways that reduce their fragility and vulnerability to runs,” he said. “We should eliminate regulations that keep these intermediaries from reducing their vulnerability.”

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Consumer confidence last week reached the second-highest level in four years as more Americans said it was a good time to shop.

The Bloomberg Consumer Comfort Index was little changed at minus 34.7 in the period to March 25, close to the minus 33.7 reading two weeks earlier that was the strongest since March 2008. Over the past three weeks, at least 30 percent of households said they had a favorable view of the buying climate, the longest stretch since early 2008.

An improving labor market is lifting the moods of those looking for work as the unemployed became more upbeat than at any time since January 2008. Job and income growth is providing consumers with the means to withstand higher fuel costs and underpinning sales of cars and other expensive items.

Fewer firings and more hiring

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Struggling cellphone maker Nokia launched its first smartphone design for China on Wednesday, looking to the world’s biggest mobile market to help drive a turnaround.

Nokia said its new Lumia 800C is designed to run on China’s CDMA networks and will be supported by China Telecom, one of the country’s three major state-owned carriers.

Finland-based Nokia launched a corporate turnaround effort one year ago after falling far behind Apple Inc. and other competitors in tapping into the new popularity of smartphones.

China is the world’s biggest mobile phone market with about 900 million accounts, and is Nokia’s biggest market.

“China is critically important for Nokia,” CEO Stephen Elop told a news conference.

The Lumia 800C will go on sale in early April for 3,599 yuan ($570), according to Elop.

He said Nokia and China Telecom plan to release a lower-priced model, the 610C, aimed at students and other budget users. The Lumia 900c and the 710C sold in other markets would also be brought to China over time.

Nokia has formed partnerships with leading China web portals and application designers, such as search engine Baidu, and portals Sina, Sohu and Tencent, to create the services that form a large part of the appeal of smartphones, Elop said fast cash online.

“We’re collaborating with local partners to meet global needs,” he said.

Elop was joined at the launch event with China Telecom Chairman Wang Xiaochu and executives of other partner companies.

Once the bellwether of the industry, Nokia has lost its dominant position in the global mobile phone market, with Android phones and iPhones overtaking it in smartphones. Asian manufacturers are also squeezing it at the low-end. Its market share plummeted to below 30 percent last year from 40 percent in 2008.

The company announced earlier this year that it would stop assembling cell phones in Europe by year-end as it shifts production to Asia and will cut another 4,000 jobs, its latest attempts to cushion itself from stiff competition.

The cuts come on top of nearly 10,000 layoffs announced last year.

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The U.S. economy needs to grow more quickly if it is to produce enough jobs to bring down the unemployment rate, Federal Reserve Chairman Ben Bernanke said on Monday, tamping down expectations of a quick reversal of monetary easing.

Bernanke said the recent decline in the jobless rate, which dropped to 8.3 percent in February from 9.1 percent last summer, was “somewhat out of sync” with the rather modest pace of economic growth.

U.S. gross domestic product grew 3 percent in the fourth quarter, but is expected to have slowed to just below 2 percent in the first three months of this year. For all of last year, it grew only 1.7 percent, which would normally be too slow to move the unemployment rate lower.

Bernanke said the recent drop in the jobless rate could reflect an effort by businesses to recalibrate their payrolls after unusually heavy job cuts during the recession. If this is the case, he said, progress may stall.

“To the extent that this reversal has been complete, further significant improvements in the unemployment rate will likely require a more rapid expansion of production and demand from consumers and businesses, a process that can be supported by continued accommodative policies,” Bernanke told the National Association for Business Economics.

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U.S. stock index futures extended their gains and government debt prices trimmed their losses after Bernanke’s comments. The dollar turned negative against the euro and trimmed its gains versus the yen.

The U.S. central bank lowered overnight interest rates to near zero in December 2008 and has bought $2.3 trillion in debt securities to drive other borrowing costs lower to spur faster growth and cut unemployment.

After its last two policy meetings, the Fed said it would likely keep rates near zero at least through late 2014.

However, upbeat economic signs, including solid employment growth, have led investors to anticipate an earlier move. Last week, interest rate futures showed dealers expected the first rate hike in July 2013. Bernanke’s speech appeared aimed at pushing back against those expectations.

The Fed chief reiterated his concern about long-term unemployment, which he said could cause workers’ skills to atrophy, and he argued against the notion that much of the problem was due to structural factors that monetary policy could not address.

“The continued weakness in aggregate demand is likely the predominant factor. Consequently, the Federal Reserve’s accommodative monetary policies, by providing support for demand and for the recovery, should help, over time, to reduce long-term unemployment as well,” he said.

The central bank chairman has made several public appearances in recent days, including giving a series of lectures to college students. This is part of an effort to burnish the institution’s public image, battered in the wake of the financial crisis.

Bernanke said much of the improvement in the U.S. labor market since the summer of 2009, when the economy began emerging from the deepest recession in generations, was due to a decline in layoffs rather than a robust pick up in the number of employers taking on new workers.

“To achieve a more rapid recovery in the job market, hiring rates will need to return to more normal levels,” he said.

Bernanke said U.S. wage growth is too soft to present an inflation risk and points to a labor market was still operating below its potential.

“Wages are not a major concern for inflation,” Bernanke said in response to questions from business economists. “We still need to be concerned about commodity prices and other factors but wages at this point remain quite subdued.”

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Hong Kong chief executive candidates Henry Tang and Leung Chun-ying today greeted committee members arriving to vote in a selection process that has underscored the city

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About 900,000 child safety locks produced by Dorel Industries are being recalled because the locks can be opened by young children, the government said Thursday.

The U.S. Consumer Product Safety Commission said that the recall applies to Push ‘N’ Snap Cabinet Locks. The commission said it’s received 200 reports about damaged locks and locks that "did not adequately secure the cabinet."

"Young children can disengage the cabinet locks, allowing access to cabinet contents and posing the risk of injury, due to dangerous of unsafe items," said the commission.

The commission said there were 140 incidents of children between the ages of 9 months and 5 years who "were able to disengage the locks and gain access to the cabinet’s contents no fax cash advance."

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This included three incidents in which children "swallowed or handled dishwashing detergent, window cleaner or oven cleaner, were treated, observed and released from emergency treatment centers."

The locks were imported through Dorel Juvenile Group of Columbus, Ind., the commission said.

The Dorel Juvenile Group released this comment: "Any recall is unfortunate but we act quickly to ensure the safety of children." 

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One day after the price of benchmark crude took the biggest one-day drop this year, it headed up again.

Oil rose Wednesday after the Energy Information Administration reported that U.S. crude supplies unexpectedly dropped last week. The Energy Information Administration said supplies fell by 1.2 million barrels. Analysts expected supplies to grow by 2.1 million barrels, according to Platts, the energy information arm of McGraw-Hill.

Oil prices also got some support from Federal Reserve Chairman Ben Bernanke, who told a congressional panel that U.S. banks are in good shape and could withstand shocks from Europe, even if the debt crisis there significantly worsened.

Benchmark West Texas Intermediate crude rose $1.20 to finish at $107.27 per barrel in New York. Brent crude, which is used by many U.S. refineries to make gasoline, rose by 8 cents to end at $124.20 per barrel in London.

On Tuesday, WTI tumbled by $2.49, or 2.3 percent, to $106.07. It was pushed down by a pledge from Saudi Arabia to pump more oil to cover supply shortages and stabilize prices. There were also more signs that China’s economy is slowing. China is the world’s second biggest consumer of oil behind the U.S.

Including Wednesday’s gain, WTI is up more than 8 percent this year while Brent is up about 16 percent. That’s the biggest reason for rising pump prices no faxing 1 hour payday loans. The national average jumped by nearly 2 cents to $3.864 per gallon on Wednesday. That’s the highest ever for this time of year. Gas has risen 59 cents per gallon since Jan. 1.

The average pump price is above $4 a gallon in California, Connecticut, Illinois, New York, Oregon, Washington, Alaska, Hawaii and the District of Columbia. Wyoming has the lowest average in the U.S. at $3.45 per gallon.

The drop in crude supplies in the EIA report doesn’t mean Americans are using more gasoline and other fuels. It mainly reflects a decline in imports to refineries that have slowed operations for seasonal maintenance. Gasoline demand at the wholesale level is down nearly 8 percent from the same time last year. A report Tuesday from the private research firm MasterCard SpendingPulse showed that Americans has bought less gasoline in each of the past 52 weeks, when compared with the same period a year earlier.

In other energy trading, heating oil fell 2 cents to finish at $3.22 per gallon. Gasoline futures lost less than a penny to end at $3.36 per gallon. Natural gas rose 2.5 cents to finish at $2.36 per 1,000 cubic feet.

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Asian stock markets were mostly lower Tuesday amid concerns Chinese economic growth could slow more than expected this year.

Trading volume was low because Japan’s markets were closed for a national holiday.

Hong Kong’s Hang Seng index fell 0.9 percent to 20,921.44 and South Korea’s Kospi dropped 0.4 percent to 2,039.66. Australia’s S&P ASX/200 shed 0.4 percent and China’s Shanghai Composite Index was down 0.8 percent at 2,390.45.

Stocks in Asia leapt higher in the first two months of the year as an improving U.S. economy bolstered investor confidence. But China’s announcement earlier this month that it had lowered its economic growth target to 7.5 percent from 8 percent has spooked investors.

In another sign of cooling growth in the world’s No. 2 economy, new home prices dropped in 45 Chinese cities in February as the government implemented measures to cool property speculation.

The rising cost of crude is also a threat to the global economic outlook as it could spark inflation and hurt consumer spending. On Tuesday, China raised the price of retail gasoline for the second time in two months paydayloans.

“The worries over lower growth and inflation risks with oil prices moving up have led to this pause,” said Lorraine Tan, director of Asian equities research for Standard & Poor’s in Singapore. “What we’re seeing now is a needed breather because stocks have run up a fair bit.”

The Dow Jones industrial average rose less than 0.1 percent to 13,239.13 on Monday while the Standard & Poor’s 500 rose 0.4 percent to 1,409.75, its highest close since May 20, 2008.

Benchmark oil for May delivery was down 52 cents to $107.57 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.03 to settle at $108.09 per barrel on Monday.

In currency trading, the euro was steady at $1.3228 while the dollar was little changed at to 83.40 yen.

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Stocks finished higher Thursday, with the S&P 500 topping the 1,400 mark for the first time in nearly four years, as investors considered a batch of better-than-expected economic news.

Reports showed that jobless claims are at their lowest level in four years, manufacturing activity continues to expand and inflation remains tame.

"The economic data has dramatically improved over the last couple of months," said Ryan Detrick, senior technical strategist at Schaeffer’s Investment Research. "The jobs numbers are gradually getting better, and that’s the most important factor for the economy and stock market."

But the day’s gains were slight after investors had already pushed stocks up more than 2% this week.

The Dow Jones industrial average () rose 59 points, or 0.4%, logging its seventh straight day of gains and finishing at its highest level since December 2007.

The S&P 500 () gained 8 points, or 0.6%, ending above the 1,400 level for the first time since June 2008. The Nasdaq () added 16 points, or 0.5%, closing at the highest level since November 2000.

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All three major indexes are on track to post their best weekly gains since mid-January. The Dow has climbed more than 2.5% this week. The S&P 500 and the Nasdaq have risen about 2.3%.

Detrick also noted that March and April are seasonally very bullish months for stocks, so the recent strength is likely to continue. During the last 5 years, the S&P 500 has gained an average of 3% in March and 5% in April, he said.

Bank stocks have been in focus this week following the results of the Federal Reserve’s latest stress tests, which said a majority of the nation’s largest banks would be able to weather another deep recession. Bank of America (, Fortune 500) and JPMorgan Chase (, Fortune 500) have been the best performing stocks on the Dow on Thursday.

March Stock Mania

But the Fed said four institutions — including Citigroup (, Fortune 500) and Metlife (, Fortune 500) — would likely need to raise more capital in the event of a severe financial shock or economic downturn.

Overall, U.S. stocks ended mixed Wednesday, one day after a big advance, as declines in bank stocks vied with strength in the technology sector.

Economy: Initial unemployment claims for the week ended March 10 fell to 351,000, compared to 365,000 the prior week. That was slightly less than the forecast of 355,000, according to a survey of analysts by Briefing.com.

Producer prices for February increased 0.4%, which was slightly less than the expected increase of 0.5%. In January, the PPI ticked up by 0.1%.

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The Empire Manufacturing survey for New York state rose to 20.2 in March, much higher than the reading of 15 that analysts were expecting. The index was 19.5 in February.

The Philadelphia Fed’s Business Outlook Survey index climbed in March to its highest level since last April at 12.5.

Companies: Cisco Systems’ (, Fortune 500) shares slipped after the San Jose, Calif.-Internet connectivity company announced its $5 billion bid to buy NDS Group Ltd., a British provider of video software with 5,000 employees.

NDS is privately held by News Corp. () and Permira.

Scholastic () shares surged after the publishing company reported revenue of $468 million, fueled by strong sales of its Hunger Games book series ahead of the film version’s release next week. The results were much better than analysts had expected.

Discount retailer Ross Stores (, Fortune 500) reported fiscal fourth-quarter results in line with analysts’ expectations, sending shares slightly lower.

Capital One Financial (, Fortune 500) shares rose after the company announced a $1.25 billion common stock offering on Wednesday to help finance its acquisition of HSBC’s () U.S. credit card business.

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Apple (, Fortune 500) jumped to touch an all-time high above the $600 per share benchmark in morning trading, but slipped into the red in the afternoon.

Demandware’s () stock jumped more than 50% in its stock market debut. The company priced 5.5 million shares at $16 per share in its initial public offering late Wednesday.

World markets: European stocks closed mixed. Britain’s FTSE 100 () shed 0.2%, while the DAX () in Germany added 0.8% and France’s CAC 40 () edged up 0.1%.

Asian markets ended mixed. The Shanghai Composite () lost 0.7%, while the Hang Seng () in Hong Kong rose 0.2% and Japan’s Nikkei () gained 0.7%.

Currencies and commodities: The dollar lost ground against the euro, the British pound and the Japanese yen.

Oil for April delivery fell 32 cents to settle at $105.11 a barrel.

Gold futures for April delivery rose $16.60 to settle at $1,659.50 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury dropped, pushing the yield up to 2.28% from 2.27% late Wednesday.  

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The market struggled for direction Friday morning, signaling what could be a mundane ending to an electrifying week.

The Dow Jones industrial average was up five points at 13,258 in the first half-hour of trading. The broader Standard & Poor’s 500 rose two points to 1,404. But the Nasdaq composite index fell 4 points to 3,052.

Investors this week have been encouraged by signs that the U.S. economy is healing, helped by better reports about the unemployment rate and retail sales. The Greek debt crisis, while far from solved, has briefly faded from the headlines.

However, high gas prices remain a key concern and could derail any nascent recovery. Gas is currently $3.83 per gallon, on average, 31 cents more than a month ago, spiking higher over concerns about Iran’s nuclear program.

The Labor Department did say Friday that inflation in other prices had been relatively mild. Food prices, which had been rising, were unchanged for the first time in 19 months.

Apple, which released the iPad 3 Friday, fell 1 percent in early trading, though it’s still up a staggering 44 percent for the year.

It’s been a big week for the market, which hit several key psychological milestones. While it’s debatable how much those markers mean, there’s no denying that they caused a stir.

On Tuesday, the Nasdaq closed above 3,000 for the first time since December 2000. On Thursday, the Standard & Poor’s 500 closed above 1,400 for the first time since June 2008. As of Thursday, the Dow had climbed for seven straight up days, its longest streak so far this year.

Markets in Europe were mostly up. Spain climbed despite a report signaling its debt load is growing heavier. Germany, which has been one of the strongest euro countries throughout the debt crisis, rose after Chancellor Angela Merkel said she opposed a big increase in Europe’s financial rescue fund.

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