Peninsula Daily News for Friday/Saturday, November 5-6, 2010
Business
Page
C7
Politics & Environment
Wall Street jumps after boost from Fed Reserve
$ Briefly . . . State board to change ‘Plan B’ rule
By David K. Randall The Associated Press
NEW YORK — The Federal Reserve wanted to push interest rates lower and jump-start financial markets with its $600 billion economic stimulus plan. So far the Fed is getting the results it wants. Long-term interest rates sank and stocks indexes hit new highs Thursday, a day after the Fed announced its massive bond-buying plan. The Dow Jones industrial average soared more than 220 points, reaching another high for the year. All three main stock indexes have now reached 2010 highs this week. After five straight days of gains, the Dow Jones industrial average returned to levels last seen in early September 2008, before the collapse of Lehman Brothers and the worst days of the financial crisis. “Much of today’s gains comes as a result of the government pumping money into the market,” said Joe Kinahan, the chief derivatives strategist at TD Ameritrade. The dollar fell against other currencies as traders anticipated lower U.S. interest rates because of the Fed’s bond-buying program. Crude oil, gold and other commodities rose. The Dow rose 219.71 points, or 2.0 percent, to close at 11,434.84. The broader S&P 500 index rose 23.10 points, or 1.9 percent, to 1,221.06, and the technology-heavy Nasdaq composite gained 37.07 points, or 1.5 percent to 2,577.34. Retailers reported solid sales in October, sending
The Associated Press
A trader works on the floor to the New York Stock Exchange on Thursday in New York. Stocks indexes are setting new highs for the year, a day after the Federal Reserve announced a $600 billion plan to try to jumpstart the economy. shares of major retailing companies sharply higher. Gap Inc. rose 6 percent while Macy’s Inc. jumped 6.6 percent. “Those retail numbers are telling us that the holiday season is going to get off to a good start,” said Stephen Jones, the chairman of Jones Villalta Funds.
Fed gets aggressive On Wednesday, the Federal Reserve announced it plans to buy $600 billion in bonds in an effort to spur spending and ultimately lower the unemployment rate. The central bank was unusually detailed in its
announcement, saying it planned to spend $75 billion a month on bonds until at least the middle of next year. That’s on top of the roughly $35 billion a month its already buying. The Fed’s plan will increase the supply of dollars held by banks and most likely push the value of the currency down. The dollar is at its lowest level since December 2009 against a broad basket of currencies, and was down 0.8 percent against that index Thursday. Energy prices jumped, sending oil up $1.80 to $86.49. Finance ministers in
emerging economies like China and Brazil have criticized the Fed’s stimulus plan, arguing that low interest rates in the U.S. could fuel asset bubbles in their countries. Treasury prices have been climbing since the Fed’s announcement Wednesday afternoon. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 2.47 percent from 2.58 percent the day before. Five stocks rose for every one that fell on the New York Stock Exchange, where consolidated volume came to 5.8 billion shares.
Snack taxes end next month by the state Legislature. On Thursday, the state OLYMPIA — Taxes on Department of Revenue candy, gum, bottled water said it will notify retailers and pop will soon be gone. to stop collecting the sales Voters have approved tax on candy, gum and Initiative 1107, which bottled water after Dec. 1. repealed the tax increases The state will also approved earlier this year advise bottlers that the The Associated Press
last day they will pay an excise tax on carbonated drinks will be Dec. 1.
Carbonated drinks tax An earlier sales tax on carbonated drinks will remain in place.
The Associataed Press
NEW YORK — As more people visited Starbucks cafes and spent more at the end of summer, the company’s fourth-quarter net income nearly doubled, handily beating estimates, and the company raised its target Thursday for fiscal 2011 profit. The world’s largest cafe chain earned $278.9 million, or 37 cents per share, in the quarter that ended Oct. 3. That compares with $150 million, or 20 cents per share, a year earlier. Revenue rose 17.2 percent to $2.84 billion. Analysts on average expected the Seattle company to earn 32 cents per share on revenue of $2.77 billion, according to Thomson Reuters. The traffic increase was particularly strong in U.S. Starbucks stores, where 6 percent more people came in
and each spent 2 percent more, on average, than a year earlier. Abroad, 4 percent more people came in and spent an average of 3 percent more. Revenue at stores open at least a year rose 8 percent in the U.S. and around the world during the quarter, Starbucks said. The figure is key for retailers because it excludes stores that opened or closed during the year.
OLYMPIA — Regence BlueShield, after hiking its rates for individual health plans more than 16 percent last month, is asking for state approval to hike rates another 3.7 percent on Jan. 1. The insurer said costs related to preventive care benefits, removing lifetime benefit limits, and covering children with pre-existing conditions, as mandated by new healthcare reforms, contributed
Shares soar Starbucks shares soared on the news. After setting a new 52-week high of $30 during regular trading Thursday and closing at $29.75, up 2.2 percent, they rose to $30.52 in aftermarket trading. That’s another 77 cents, or 2.6 percent. Starbucks’ revenue has slumped during the recession partly because of new competition from McDonald’s Corp.’s expanding line
London Metal Exch. Copper - $3.8100 Cathode full plate, LME. Copper - $3.9065 N.Y. Merc spot Thu. Lead - $2489.50 metric ton, London Metal Exch. Zinc - $1.1003 per lb., London Metal Exch. Gold - $1381.00 Handy & Harman (only daily quote). Gold - $1382.70 troy oz., NY Merc spot Thu. Silver - $25.625 Handy & Harman (only daily quote). Silver - $26.039 troy oz., N.Y. Merc spot Thu. Platinum - $1743.00 troy oz., N.Y. (contract). Platinum - $1755.90 troy oz., N.Y. Merc spot Thu.
The Associated Press
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of fancy coffee drinks, and And last month, it the cafe chain closed stores launched a digital portal with free content such as the and laid off employees. Wall Street Journal. Now Starbucks is focusNew products ing on Via and other prodThe company created ucts sold in stores, with new new products such as Via flavors, including a Christinstant coffee and sold more mas Blend version, and offerings through grocery expanding Via to other stores to reach customers countries. who may be avoiding the Starbucks is also wooing cafes to save money. more customers with its This summer, to lure new products, including more customers into its cafes, newly customizable FrapStarbucks started offering puccinos and warm foods free wireless Internet. like oatmeal.
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ISSAQUAH — Costco Wholesale Corp., the largest U.S. warehouse club Housing sales KIRKLAND — Housing operator, reported a higher-than-expected 6 sales in the state are still percent rise in October lackluster, and agents say the market probably won’t sales, helped by an increase in gasoline prices drastically improve soon. The Northwest Multiple and strong foreign currencies. Listing Service said broSame-store sales at its kers are reporting yearU.S. locations increased 4 over-year declines in pendpercent, while internaing home sales. However, prices on sales tional sales rose 14 percent. that closed in September For the four weeks appear to be stabilizing ended Oct. 31, which compared with last year. included sales from its In King County, the Mexico joint venture, net median price for last month’s sales of single-fam- sales at the Issaquahbased company rose 11 ily homes and condominipercent to $6.3 billion. ums was $350,000, nearly Excluding the impact of identical to a year ago. gasoline price increase and Seven other counties strong foreign currencies, reported price gains. Multiple Listing Service comparable sales for Octodirector Frank Wilson said ber rose 5 percent. he did not expect a sudden Nonferrous metals change in the market. NEW YORK — Spot nonferHe said 2011 should be rous metal prices Thursday. slightly better than 2010, Aluminum - $1.0890 per lb., and 2012 a little better still.
Another rate hike
I-1107 also allows processors of food products that contain meat to pay a lower B&O tax rate. The state says there was no provision under the initiative for refunds on taxes already paid.
Starbucks: Fourth-quarter net income nearly doubles By Emily Fredrix
OLYMPIA — The state Board of Pharmacy has voted to go ahead with changing a rule that prohibits pharmacies from refusing to dispense all legal drugs, including the morning-after contraceptive “Plan B.” The board voted 3-2 on Thursday to have its staff help gather information to draft a rule change that would allow pharmacists to refer patients to someone else for “time-sensitive” medication, including Plan B and hundreds of other drugs. Public comments have been overwhelmingly against changing the rule set in 2007. But pharmacists who are morally against the Plan B drug have sued the state. Board member Dan Connolly said the state can’t afford to be involved in a lengthy lawsuit.
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