BUSINESS&SPORTS B FRIDAY, DECEMBER 17, 2010
THE MARKETS DOW 30
11,499.25
+41.78
S&P 500
1,242.87
+7.64
NASDAQ
2,637.31
+20.09
3.42
-0.11
$87.70
-$0.92
10-YR NOTE CRUDE OIL
Drop in jobless data lifts stocks BY MATTHEW CRAFT AND DAVID K. RANDALL
INTERNATIONAL EDITION
China agrees to import concessions BY HOWARD SCHNEIDER
Washington Post Service
China has agreed to lift its extensive limits on the import of U.S. beef, lower restrictions on imports of wind turbines and telecommunications equipment, and take an array of other steps that U.S. officials say could lead to a substantial boost in U.S. exports to the world’s second-largest economy. After two days of high-level talks, U.S. and Chinese officials unveiled a set of agreements Wednesday that address some of the core trade grievances raised by U.S. firms that do business — or want to — in the fast-growing Chinese economy. Although the U.S. side was hesitant to describe the talks as a major
breakthrough — the list of trade issues between the two countries remains long, and enforcement of prior trade promises has sometimes been lax — officials were clearly buoyed by the result as the Obama administration fights to boost U.S. exports. The agreements will produce “concrete and measurable” improvements in areas such as China’s protection of intellectual property rights, said U.S. trade representative Ron Kirk, who co-chaired the meetings with a Chinese delegation led by Wang Qishan, vice premier. Ranchers, effectively barred from the Chinese market since 2003 after a scare over mad cow disease, will get renewed access to China and potentially billions of dollars in
new sales. Alternative-energy companies will no longer have to build demonstration projects in China before bidding on wind projects there; telecommunications firms will avoid rules that favor locally developed technology; government industrial catalogs will be rewritten so they are not biased against imported equipment and capital goods; and software companies should benefit as Chinese government agencies are pressed to use only legally licensed software. That final commitment, U.S. officials said, will be overseen by Wang himself — elevating to a high-level of government an issue that has been of long-standing concern to U.S. firms that lose revenue to widespread piracy of
software and other intellectual property. Wang, who appeared jointly with Kirk, Commerce Secretary Gary Locke and Agriculture Secretary Tom Vilsack, called the session “highly productive and successful” and noted that the United States had pledged from its side to “seriously consider the views of China” when bringing cases before the World Trade Organization or taking other actions to impose duties on Chinese imports. In recent years, the United States has used WTO rules to tax Chinese imports that were considered unfairly priced or subsidized by the government. It recently won • TURN TO CHINA, 2B
Associated Press
NEW YORK — A small drop in unemployment claims and a higher profit forecast by FedEx helped push stocks to two-year highs Thursday. The U.S. Labor Department said first-time claims for unemployment benefits fell last week to 420,000, the third drop in four weeks. The four-week average of claims also slid for the sixth straight week, reaching the lowest level since July 2008. That was before Lehman Brothers collapsed and markets seized up at the height of the financial crisis. The Dow Jones industrial average rose 41.78, or 0.4 percent, to 11,499.25. The broader Standard & Poor’s 500 index rose 7.64, or 0.6 percent, to 1,242.87. The Nasdaq composite rose 20.09, or 0.8, to 2,637.31. Gains came across the market. All 10 company groups in the Standard and Poor’s 500 index rose. Separately, the Commerce Department said housing starts rose slightly last month, reversing a two-month decline. Card companies fell sharply after the Federal Reserve proposed as 12-cent cap on the fees that merchants pay every time a customer uses a debit card. Merchants now pay a fee that ranges between 1 to 2 percent of each transaction. The proposal could cut revenues for major banks and card networks like Visa and MasterCard Visa fell 12.7 percent to $67.19. MasterCard fell 10.3 percent to $223.49. FedEx rose 1.9 percent to $94.22 after the company raised its earnings predictions for next year because businesses and consumers are shipping more packages. Traders took that as a sign the economy is improving. Alcoa was the biggest gainer of the 30 stocks that make up the Dow index, rising 3.5 percent to $14.45. American Express fell the most. The company lost 3.4 percent to $44.57. Stocks have had a strong December. The Dow index has gained 4.5 over the last month. The S&P 500 has risen 5.3 percent. A bill to extend Bush-era tax cuts along with unemployment benefits was postponed by the House of Representatives Thursday afternoon. The Senate passed the bill Wednesday. The tax package, a compromise between the White House and Senate Republicans, is expected to boost economic growth next year but also widen the budget deficit. The yield on the 10-year Treasury fell to 3.42 percent from 3.53 percent the day before. Investors have been selling Treasurys as their outlook on the economy improves, sending yields on the bonds higher. The 10-year yield traded as low as 2.49 percent as recently as Nov. 4. The dollar fell 0.2 percent against an index of six heavily traded currencies. Gold fell 1.1 percent. Two stocks rose for every one that fell on the New York Stock Exchange. Consolidated volume came to 4.4 billion shares.
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DEFENSE MECHANISM ECB BOOSTS CAPITAL AS EU LEADERS SPAR OVER CRISIS BY GABRIELE STEINHAUSER AND GEIR MOULSON Associated Press
BRUSSELS — The European Central Bank said Thursday it would almost double the size of its capital coffers, gaining more firepower in its struggle to stabilize the euro, while European leaders gathering in Brussels disagreed over how to fight the continent’s crippling debt crisis. The ECB’s gesture sends a strong political signal to the European Union’s 27 leaders that they need to do more to salvage their joint currency and their unity, amid street protests and bitterness in richer countries about having to bailout poorer neighbors. The ECB, which directs monetary policy for the 16 countries that use the
euro, said the increase will take its capital base to ¤10.76 billion ($14.3 billion), from ¤5.76 billion currently. It is the first time in its almost 12-year history that the ECB has asked national central banks for a capital injection. The move comes after the Frankfurt-based bank splashed out about ¤72 billion buying bonds from governments with shaky finances such as Greece, Ireland and Portugal. The bond purchases have stabilized market turmoil, but the ECB has been under pressure from politicans to do more, as European policy makers are scrambling to figure out what to do after multibillion bailouts for Greece and Ireland failed to end the crisis. But the bank has moved reluctantly, and the request for more capital was seen as its demand to government leaders that it would not shoulder the risk alone. A two-day EU summit was not expected to result in any new shock-and-awe decisions to contain the smoldering debt crisis — such as boosting the ¤750 billion • TURN TO EUROZONE, 2B
CRUCIAL: European Central Bank President Jean-Claude Trichet arrives at the EU summit on Thursday in Brussels. GEORGES GOBET/AFP-GETTY IMAGES
China at hub of debate over wind power Tax cuts BY TOM ZELLER JR. AND KEITH BRADSHER New York Times Service
PIPESTONE, Minn. — Finishing the 20-story climb up a ladder inside a wind-turbine tower, Scott Rowland opened the top hatch to reveal a panorama of flat farmland dotted with dozens of other turbines. Two of the closest, like the tower he was standing on here, were built by Goldwind USA, where Rowland is vice president for engineering. “These are very sophisticated machines,” he said. They are also the only three Chinese-made wind turbines operating in the United States. That could soon change, though, as Goldwind and other Chinese-owned companies plan a big push into the U.S. wind power market in coming months. While proponents say the Chinese manufacturers should be welcomed as an engine for creating more green jobs and speeding the adoption of renewable energy in the United States, others see a threat to workers and profits in the stillembryonic U.S. wind industry. “We cannot sit idly by while China races to the forefront of clean energy production at the expense of U.S. manufacturing,” Sen. Sherrod Brown, D-Ohio, said during a debate this year over federal subsidies for wind energy. Such sentiments help explain why Goldwind is putting a distinctly U.S. face on its efforts — and is diligently highlighting plans to do more than • TURN TO WIND POWER, 2B
JASON ALDEN/BLOOMBERG NEWS
have $55B in benefits BY DAN EGGEN
Washington Post Service
WASHINGTON — A host of industries, from Caribbean distilleries to Hollywood producers, would gain billions in tax breaks and other subsidies under compromise tax-cut legislation now moving its way through Congress. The $858 billion package approved by the Senate Wednesday is focused primarily on continuing the Bush administration tax cuts for two years, extending unemployment benefits and other large-scale expenditures. But buried inside the legislation are more than $55 billion in other giveaways and tax reductions for some of Washington’s most influential industry groups. The energy and agricultural industries, for example, would continue to receive a generous ethanol tax credit at a cost to taxpayers of about $6 billion in 2011. The 45-cents-per-gallon credit goes to fuel blenders — including large oil and gas companies such as Shell — who count it against income tax owed to the United States. U.S. technology companies such as Microsoft would continue to benefit from a tax credit for research and development carried out in the United States, costing • TURN TO TAX CUTS, 2B
12/17/2010 5:34:48 AM