Friday April 2, 2010
DOW JONES 10,927.07 + 70.44
NASDAQ 2,402.58 + 4.62
S&P 1,178.10 + 8.67
Business: Pam Haynes PHaynes@hpe.com (336) 888-3617
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Economic reports offer some hope Manufacturing growth revs up, construction down BY TALI ARBEL AP BUSINESS WRITER
NEW YORK – The U.S. manufacturing sector expanded in March at its strongest pace in 5 1/2 years, leading the rebound from the recession on growth in exports and inventory rebuilding. Another drop in construction spending in February, however, underscored weakness in real estate. Meanwhile, the number of people filing first-time claims for unemployment benefits slipped last week as the economy moves closer to generating more jobs. The Institute for Supply Management, a trade group of purchasing executives, said its gauge of industrial activity rose to 59.6 in March from 56.5 in February. It is the eighth straight month of expansion and the fastest growth since July 2004, when the index was 59.9. Economists polled by Thomson Reuters had expected a reading of 57. A level above 50
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VW seeks truck maker cooperation FRANKFURT (AP) – Volkswagen AG’s supervisory board chief says he wants truck builders MAN SE and Scania AB — which both count VW as their biggest shareholder — to cooperate. Ferdinand Piech, who spoke at MAN’s annual general meeting Thursday, is also supervisory board chairman of MAN, based in Munich. Scania is headquartered in Sodertalje, Sweden.
Court revives Tiffany false ad claim NEW YORK (AP) – An appeals court says EBay Inc. might be violating laws meant to guard against false advertising. The Manhattan court on Thursday revived part of a lawsuit brought by jeweler Tiffany & Co. It says sellers using the online auction site offer some Tiffany knockoffs billed as the real thing. A lower court judge had tossed out the lawsuit Tiffany brought in 2004.
JPMorgan offers outlook on dividend NEW YORK (AP) – JPMorgan Chase’s CEO Jamie Dimon says the bank could hike its dividend if economic conditions improve and potential regulatory reform is settled. In an annual letter to shareholders, Dimon says JPMorgan could increase its annual dividend to a range of 75 cents to $1 per share. ENTERPRISE NEWS SERVICE REPORTS
AP
People shop for lawnmowers at the Sears retail store in Burbank, Calif. A private trade group said Thursday the manufacturing sector expanded in March at its strongest pace since July 2004. indicates growth. Factories are boosting production for exports and their customers are slowing the drawdown of their inventories, helping power the economic recovery worldwide.
Manufacturers said their inventories grew after 46 straight months of contraction, according to ISM. Letting inventories rise is a signal that companies expect factory activity and
orders to increase. Manufacturing surveys Thursday in China, Britain and the 16 countries using the euro all showed factory activity surging. “The export-orientated factory sector is evidently enjoying the benefits of the rebound in world trade, whereas other sectors more dependent on domestic sales are still struggling,” Paul Ashworth, U.S. economist at Capital Economics, said in a research note. Seventeen of the 18 industries that the ISM surveys reported growth last month, led by the apparel sector. Only makers of plastics and rubber products reported contraction. But even as export-oriented activities strengthened, weakness persisted within the U.S. construction market. The Commerce Department said construction spending fell 1.3 percent in February to a seasonally adjusted annual rate of $846.23 billion. That was the lowest level since November 2002 and the fourth straight month of decline. Economists were predicting builders would pare spending by 1 percent. The housing market led the country into a recession and despite some improvements at the end of last year, the sector this year is showing fresh signs
of weakness. “The construction sector continues to be a weight on the broader recovery and there are few indications this decline is reaching a bottom,” said U.S. economist Julia Coronado of BNP Paribas. Even as manufacturing recovers, ISM’s employment index grew slightly less slowly in March. The construction and manufacturing sectors have together lost about 4 million jobs during the recession. Still, the jobs market is improving. The Labor Department said Thursday that new jobless benefit claims dropped 6,000 to a seasonally adjusted 439,000 last week, nearly matching analysts’ estimates. It’s the fourth drop in five weeks. The four-week average of claims, which smooths volatility, fell by nearly 7,000 to 447,250, the lowest total since the week of Sept. 13, 2008, just before Lehman Brothers collapsed and the financial crisis intensified. The report adds to evidence that the job market is slowly healing as the economy improves. The government is scheduled to release a report on March employment today. Economists expect the unemployment rate to stay at 9.7 percent.
Big deals lure car buyers DETROIT (AP) – Car shoppers flocked to showrooms last month, lured by big promotions from Toyota and other automakers that could persist into the spring. Toyota’s unprecedented incentives, including low-interest financing, cheap leases and free maintenance for return customers, pushed up its U.S. sales 41 percent in March and helped it recover from a dismal February. They also touched off an incentive war that drew in buyers to rival dealers.
General Motors Co. reported a 21 percent jump in new vehicles sales on Thursday, while Ford’s climbed nearly 40 percent and Honda Motor Co. rose 23 percent over March last year. The sales point to one conclusion: March was a good time to buy a new car. Automakers ramped up promotions, with incentive spending up $100, or 4 percent, from February to $2,742 per vehicle, according to Edmunds.com. That’s still down from a record high of $3,165 last March.
Interest rates rise on trends NEW YORK (AP) – Interest rates rose in the bond market Thursday after stronger reports on manufacturing eroded demand for safe investments. A trade group said that U.S. manufacturing grew at the fastest pace in March in 5 1/2 years. Manufacturing figures from China and Europe also signaled improvement. The Labor Department’s report that a four-week average of unemployment claims fell to its lowest level in 18 months helped push Treasury prices lower. The drop in prices sent yields higher.
Traders were cautious ahead of the government’s March jobs report on Friday. The stock market will be closed for Good Friday but the bond market will be open for a shortened day. Economists expect that employers added 190,000 jobs in March. That would be only the second month of jobs gains since the start of the recession in December 2007. The yield on the benchmark 10year note maturing in February 2020 rose to 3.86 percent from 3.83 percent late Wednesday. Its price fell 8/32 at 98 2/32.
AP
Treasury Secretary Timothy Geithner (center) walks with United Steelworkers President Leo Gerard (right) into a news conference at the United Steelworkers headquarters in Pittsburgh Wednesday.
Geithner defends actions BY DANIEL WAGNER AP BUSINESS WRITER
WASHINGTON – Treasury Secretary Timothy Geithner said Thursday it’s “deeply unfair” that some financial institutions that got taxpayer-paid bailouts are emerging in better shape from the recession than millions of ordinary Americans. He acknowledged public outrage over that
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and said people watched with disdain as Washington protected highrisk banks and investment houses, even as the national unemployment rate was soaring to double-digit levels for the first time in a generation. But in a nationally broadcast interview, Geithner also argued that President Barack Obama had no choice when facing a financial
crisis but to support then-President George W. Bush’s “unpopular” bailout plan. Geithner said the other option was to “stand back” and do nothing, “and that would have been calamitous for the American economy.” Geithner was president of the Federal Reserve Bank of New York at the peak of the crisis. The New York Fed managed bailouts.