Business and Finance

The latest evidence that the economy is making steady gains emerged Friday from a gauge of future economic activity, which rose in October at the fastest pace in eight months.

A string of better-than-expected economic reports this month has led some analysts to revise up their forecasts for growth. Still, they caution that their brighter outlook remains under threat from Europe’s financial crisis.

“Things are looking better than we thought they would _ not great, but better,” said David Wyss, former chief economist at Standard & Poor’s.

The most recent sign was Friday’s report by the Conference Board that its index of leading economic indicators surged 0.9 percent last month. It was the index’s best showing since February. And it was far faster than the increases of 0.1 percent September and 0.3 percent in August.

The index is designed to predict economic activity. The October figure marked the sixth straight increase.

The jump reflected gains in nine of the index’s 10 components. Leading the way: a surge in permits for home construction; a narrower gap between short- and long-term interest rates that suggested less concern about inflation; a recovery in stock prices; and growth in the U.S. money supply.

A longer average workweek and fewer applications for unemployment benefits also contributed to the rise in the index.

All told, the components of the index signaled that the economy is steadily, if still slowly, strengthening.

On Thursday, the government reported further improvement in the number of people seeking unemployment benefits for the first time. The number fell to 388,000, the fewest since April.

In October, the economy added a net total of 80,000 jobs. It was the 13th straight month of gains. Still, the additional jobs were fewer than the roughly 125,000 that are needed each month just to keep up with population growth.

Many economists said the October gain in the leading indicators offered further assurance that the economy is in no imminent danger of slipping back into a recession, so long as Europe doesn’t fall into a severe downturn.

“This was a very positive reading for the leading indicators,” said Mark Zandi, chief economist at Moody’s Analytics. “The economy seems to be holding its own.”

Steven Wood, chief economist at Insight Economics, said the string of positive readings suggests “the economy should continue to experience at least moderate growth over the next six to nine months.”

In the first six months of the year, the economy grew at an annual rate of just 0.9 percent. Growth expanded to a 2.5 percent rate in the July-September quarter.

Before this month, many economists had estimated that growth in the current October-December quarter would roughly match the 2.5 percent pace of the July-September period. But in recent days, based on the healthier economic news, some analysts have boosted their forecasts.

This week, the government said retail sales in October and factory production were picking up. U.S. builders started slightly fewer homes in October. But building permits, a gauge of future construction, surged nearly 11 percent. That gain was led by a 30 percent increase in apartment permits, to their highest level in three years.

Wyss said he expected the annual growth rate in the current quarter to amount to about 3 percent, up from his earlier expectation of 2.5 percent. Economists at JPMorgan Chase & Co. are also expecting a 3 percent growth rate for the October-December period.

Wyss said one reason for his increased optimism is that he thinks a modest rebound in consumer spending will trigger companies to restock depleted shelves.

Even so, an economy growing at a 3 percent rate would still fall shy of the 4 percent to 5 percent pace that economists say is needed to significantly reduce the unemployment rate, which remains stuck at 9 percent.

And without stronger job gains, analysts say consumer spending, which accounts for about 70 percent of economic activity, will remain constrained.

Source

The press likes to cast itself as society’s guardian. On Monday, the judge leading the investigation into Britain’s deepening phone hacking scandal vowed to find an answer to the question: Who guards the guardians?

For years, the British media’s answer has been that it mainly looks after itself. But following explosive allegations of pervasive criminality at Rupert Murdoch’s News of the World tabloid, Lord Justice Brian Leveson suggested it was time for a change.

“Guarding the guardians is not an optional add-on,” he said.

Britain’s phone hacking inquiry was set up by Prime Minister David Cameron shortly after the scandal boiled over in July, pulling the lid off illegal spying at the nation’s best-selling Sunday newspaper and exposing police corruption.

It’s one of several investigations spurred by public anger over unethical practices at the now defunct paper. The long-running scandal has threatened Murdoch’s global media empire, which includes the Wall Street Journal and dozens of other properties.

Parallel inquiries launched by police, prosecutors and parliamentarians have called Murdoch to Britain for dramatic testimony before lawmakers, led to more than a dozen arrests and the resignation of several top-ranking Murdoch executives, including News International CEO Rebekah Brooks and The Wall Street Journal publisher Les Hinton.

The first part of Leveson’s inquiry seeks to go beyond assigning blame to individual journalists or newspapers to evaluate the media’s wider role: Is the press above the law? Is it too close to police and politicians? Does society’s guardian need a powerful guardian of its own? These are some of the questions on his agenda.

Although the News of the World has few defenders, editors and broadcast bosses have publicly voiced concern that recommendations from any inquiry could leave Britain’s press less aggressive _ and less free. Few if any want more government regulation _ especially since Britain’s press already labors under strict libel laws and contentious new privacy rules.

While inquiry counsel Robert Jay said that the importance of a free press was “almost self-evident,” he warned that the media may not necessarily like the solutions the inquiry finds for tricky ethical issues.

“These solutions will not necessarily have been the solutions which the press themselves would have devised,” he said.

Leveson said he hoped to have the first part of his inquiry wrapped up by the end of 2012.

He’s expected to recommend either scrapping or radically reforming the Press Complaints Commission, the self-regulatory body whose failure to get to grips with the hacking scandal has been roundly criticized. The scope of his inquiry’s recommendations will hinge in part on whether illegal behavior is found to have been limited largely to the News of the World or whether it was practiced more widely.

There seemed to be plenty of evidence that shady practices were widespread at Monday’s hearing.

Jay told the inquiry _ whose proceedings were broadcast live over the Internet _ that it appeared that illegal interception of voicemails went beyond the News of the World. He said that the inquiry had seen the names of no fewer than 28 News International employees in the notes kept by Glenn Mulcaire, the private investigator which the News of the World paid to illegally eavesdrop on its victims.

The words “The Sun” _ a possible reference to the News of the World’s sister-title _ also cropped up in Mulcaire’s notes, Jay said. So, too, did a name linked to the Daily Mirror, the Sun’s left-wing rival.

Jay said that the evidence on phone hacking pointed to what he described as “at the very least, a thriving cottage industry.”

The inquiry was briefly disrupted when David Sherborne, a lawyer for phone hacking victims, said that a Trojan, or data-stealing virus, had been found on his computer _ raising the possibly that he was being hacked.

The otherwise cool and clinical Leveson briefly seemed speechless.

“I’m not often thrown, but Mr. Sherborne has managed to do that,” he said. Sherborne later said the problem was being dealt with.

Sherborne was one of several dozen lawyers and journalists packed into a room at London’s neo-gothic Royal Courts of Justice, with more in a spillover tent pitched into a nearby courtyard.

A handful of members of the public came to watch the proceedings as well _ among them Bob Dowler, whose daughter Milly had her phone hacked by the News of the World at the height of the media frenzy over her disappearance in 2002.

Dowler’s case was the first to arouse broad public anger when it was reported by the Guardian newspaper in July, though several celebrities had earlier won settlements from News International. Among the people who will be legally represented at the hearings are “Harry Potter” author J.K. Rowling, singer Charlotte Church, actor Hugh Grant and actress Sienna Miller.

Katriona Ormiston, a 21-year-old journalism student, said she was there to see media history being made.

“Obviously it’s got quite a big impact on the future,” she said.

Source

The complex network of flood defenses erected to shield Thailand’s capital from the country’s worst floods in nearly 60 years was put to the test early Saturday as coastal high tides hit their peak. No major breaches were immediately reported.

Fear gripped Bangkok early in the day as tides along the Gulf of Thailand crested at about 9 a.m. and pushed the city’s main waterway, the Chao Phraya river, to its brink. Overflows so far have lightly inundated riverside streets from Chinatown to the famed Temple of the Emerald Buddha.

But the white-walled royal Grand Palace was dry, less than 24 hours after being ringed by ankle-deep water, and the landmark remained open to tourists. Many visitors carried parasols to protect themselves from the blistering sunshine.

Prime Minister Yingluck Shinawatra said in her weekly radio address that floodwaters that had wreaked havoc to provinces north of Bangkok in the last several weeks had started to recede, and she urged citizens to let the crisis take its course.

“We have the good news that the situation in the central region has improved as runoff water gradually decreased,” she said. “I thank people and urge them to be more patient in case this weekend is significant because of the high tide.”

She also said that the government had implemented a plan to accelerate the drainage rate and that water in the greater Bangkok area should recede by the first week of November.

Meanwhile, the streets of downtown Bangkok _ the country’s financial heart _ were bone-dry and bustling with taxis, restaurant-goers and tourists snapping pictures. But the city remained in peril, as high tides along the gulf were expected to crest again late in the day, threatening to obstruct the flood runoff from the north. The government also is worried major barriers and dikes could break.

Also on Saturday, the government’s Flood Relief Operations Center was forced to move its headquarters from its base at Don Muang airport, which is used mostly for domestic flights, to a government building nearby after a power transformer malfunctioned. Authorities were forced to shut down the airport this week after floodwaters rushed in.

On Friday, saffron-robed monks and soldiers piled sandbags outside the capital’s most treasured temples and palaces as the Chao Phraya swelled precariously beyond its banks. Most of the water receded at low tide, but worried Bangkokians were buying up bright orange lifejackets and inflatable boats, fearing the worst is yet to come.

“You have to prepare,” said Fon Kanokporn, a banker who bought a rubber boat from a store that had several hanging from trees out front as advertisements.

Employees at the shop said they had sold well over 3,000 boats in the last week. The brisk business is a measure of the fear gripping Bangkok and a reflection of the tragedy of neighboring provinces that have been submerged for weeks. Several buyers said they needed boats because their submerged homes outside the capital were no longer accessible by road.

Three months of relentless monsoon rains have caused the worst flooding in Thailand in more than half a century, triggering a national crisis that has overwhelmed Yingluck’s government online payday loans.

The water has crept from the central plains south toward the Gulf of Thailand for weeks, engulfing a third of the country and killing nearly 400 people and displacing 110,000 more. Now, Bangkok is in the way _ surrounded by behemoth pools of water flowing around and through the city via a complex network of canals and rivers.

On Friday, army trucks dumped thousands of sandbags outside the riverside Siriraj Hospital, where Thailand’s ailing and revered King Bhumibol Adulyadej has stayed since 2009.

Elsewhere along the Chao Phraya, dozens of monks at the 200-year-old Temple of the Dawn stacked hundreds more along a secondary barrier to protect against river overflows.

“It’s likely going to get higher, but I don’t think its going to get high enough to cause chaos,” said Phramaha Abhin, a 42-year-old monk. Still, he said, “we cannot neglect the risk to this temple. It’s one of the country’s landmarks, one of the things Thailand is known for. We have to protect it.”

The State Railway of Thailand said all train services from Bangkok to southern Thailand were suspended after the tracks in Bangkok’s suburbs were submerged by floodwaters.

Thais and expatriates alike continued to leave Bangkok as foreign governments urged their citizens to avoid the threatened city, citing transportation difficulties and shortages of certain food items.

Seven of Bangkok’s 50 districts _ all in the northern outskirts _ are heavily flooded, and residents have fled aboard bamboo rafts and army trucks and by wading through waist-deep water. Eight other districts have seen less serious flooding.

New flooding was reported Friday in the city’s southeast when a canal overflowed in a neighborhood on the outer parts of Sukhumvit Road. And high tides briefly touched riverside areas closer to the city’s central business districts of Silom and Sathorn. But the day passed without major incident.

“It is clear that although the high tides haven’t reached 2.5 meters (8.2 feet), it was high enough to prolong the suffering of those living outside of the flood walls and to threaten those living behind deteriorating walls,” Bangkok Gov. Sukhumbhand Paribatra said.

The flood walls protecting much of the inner city are 8.2 feet high, and Saturday’s high tide was expected to reach 8.5 feet (2.6 meters).

International charity Save the Children said it was concerned that crocodiles and snakes were lurking in stagnant floodwaters it said are growing filthier by the day.

“Every day we see children playing in the water, bathing or wading through it trying to make their way to dry ground,” said Annie Bodmer-Roy, the group’s spokeswoman in Thailand.

The aid group said many families have been left without access to running water or clean toilets.

“There is a very real risk of waterborne or communicable diseases such as diarrhea and skin infections taking hold if families can’t maintain basic standards of hygiene,” Bodmer-Roy said. “It is essential that the risks facing children in this crisis are understood and steps taken to keep them safe.”

Source

MetLife Inc. says its net income increased tenfold in the third quarter, boosted largely by its acquisition of Alico last year.

The nation’s biggest life insurer says it earned $3.55 billion, or $3.33 per share, in the three months ended Sept. 30. That’s compared with $286 million, or 32 cents per share, in the year-ago period.

Excluding one-time items, the company earned $1.11 per share. Analysts had forecast a profit of $1.05 per share, according to FactSet.

The New York company said total international sales more than doubled as a result of its acquisition of American Life Insurance, or Alico, from American International Group Inc. last year.

Alico operates in more than 50 countries and was expected to help MetLife expand in Japan, Europe and Latin America.

Source

Swiss bank UBS says its chief executive has resigned over a $2.3 billion rogue trading loss.

The bank says its Europe chief Sergio P. Ermotti will take over as interim chief executive until Gruebel’s replacement is appointed.

UBS board president Kaspar Villiger said in a statement Saturday that Oswald had considered it his duty to take responsibility for the massive loss caused by unauthorized trading at its London-based investment banking unit.

Source

SAN FRANCISCO

President Barack Obama is taking his case to the public as the clock ticks down to an Aug. 2 deadline to raise the government’s borrowing limit or default on U.S. obligations.

The president holds a town hall meeting Friday morning at the University of Maryland, College Park campus. It’s a quick trip from the Beltway but will be Obama’s first public appearance this month outside what he calls the White House “bubble.” The president has been occupied with near-daily negotiations with congressional leaders on a deal to raise the debt limit freecreditscore.

The town hall session comes amid some signs of progress. But Obama still faces a big selling job, given Democratic unease with cuts to Medicare and other entitlement programs and Republican opposition to tax increases.

Source

A late rally Friday prevented the stock market from having its worst week in nearly a year.

Investors seemed to largely ignore the ongoing debate in Washington over raising the country’s borrowing limit. Troubling questions over Europe’s financial health and manufacturing in the U.S. weighed down stock prices for much of the day, overwhelming a very strong earnings report from Google Inc.

Google jumped nearly 13 percent, the most of any stock in the Standard and Poor’s 500 index, after the company said its revenue hit a record last quarter. Google’s earnings pushed tech stocks in the S&P index broadly higher. Microsoft Corp. and Cisco Systems Inc. each gained 1 percent.

Worries about Europe and weak factory output in the U.S. have kept traders’ expectations and stock prices relatively low since early this spring, said Ryan Detrick, senior technical strategist Schaeffer’s Investment Research. If corporate earnings remain strong and Europe stabilizes, he said, stocks might rally in the second half of the year. That happened last year, after fears about Europe held the stock market back all summer.

“With all the talk about European debt and the U.S. issues, the fact that earnings are coming in pretty strong is a good sign,” Detrick said. “Once those issues work their way through the system, long-term growth is going to come from earnings.”

Most investors believe a deal to raise the country’s debt ceiling will be reached before the Aug. 2 deadline. Standard & Poor’s said Thursday there is a 50 percent chance it will downgrade the government’s triple-A rating within three months because of the impasse. Moody’s made a similar warning on Wednesday. Even so, there has been little visible progress in negotiations between President Barack Obama and Congressional Republicans.

The Standard and Poor’s 500 stock index finished with a gain of 7.27, or 0.6 percent, to 1,316.14. Most of the gains came in the last hour of trading.

The Dow Jones industrial average added 42.61, or 0.3 percent, to 12,479.73. The Nasdaq composite rose 27.13, or 1 percent, to 2,789 guaranteed online payday loans.80.

The late gains Friday trimmed the S&P 500’s weekly losses to 2.1 percent. Had the index closed where it was at 2:30pm it would have been down 2.6 percent for the week, making it the worst week for the widely used market measure since last August.

The S&P 500 has only had two up days out of the last six as Italy appeared to be the next European country headed for a fiscal calamity. Those concerns ebbed Friday after Italy passed new austerity measures and Europe’s banking authority said only eight banks out of 90 failed the latest round of “stress” tests designed to measure how they would stand up under severe financial strains.

Energy stocks rose 2.4 percent after Australian natural-resource giant BHP Billiton Ltd. said it would buy Petrohawk Energy Corp. for $12.1 billion, feeding speculation about which company might be the next takeover target. BHP was attracted to the long-term value of Petrohawk’s U.S. natural gas reserves. Chesapeake Energy Corp., Cabot Oil & Gas Corp and Pioneer Natural Resources Co. each rose 10 percent. Natural gas prices rose 3.7 percent.

Mattel Inc. rose nearly 2 percent after the company said its income jumped 56 percent in the second quarter, helped by strong demand for Barbie and “Cars 2″ toys. Clorox Co. jumped 9 percent after billionaire investor Carl Icahn offered to take the company private in a deal that values the household products company at $10.2 billion. Icahn offered 12 percent more for shares than they were worth at Thursday’s close.

Bank of America closed at $10 after briefly dipping below that mark for the first time since May 2009. The company, which is expected to report Tuesday that it lost money in its most recent quarter.

Three stocks rose for every two that fell on the New York Stock Exchange. Volume was slightly higher than average at 4 billion shares.

The Dow average fell 1.4 percent for the week, the Nasdaq 2.4 percent.

Source

Rupert Murdoch has arrived at the offices of his U.K. newspaper division amid the phone hacking scandal engulfing the News of the World tabloid, which has been shut down and published its last edition.

TV footage showed the News Corp. CEO being driven into the east London offices of News International on Sunday. He was seated in the front passenger seat with a copy of the last issue of the News of the World in his hands.

Allegations the paper’s journalists paid police for information and hacked into the voicemails of young murder victims and the grieving families of dead soldiers prompted Murdoch’s News International to shut down the paper.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.

LONDON (AP) _ Rupert Murdoch has arrived at the offices of his U.K. newspaper division amid the phone hacking scandal engulfing the News of the World tabloid, which has been shut down and published its last edition.

TV footage showed the News Corp. CEO being driven into the east London offices of News International on Sunday. He was seated in the front passenger seat with a copy of the last issue of the News of the World in his hands.

Allegations the paper’s journalists paid police for information and hacked into the voicemails of young murder victims and the grieving families of dead soldiers prompted Murdoch’s News International to shut down the paper.

Source

A senior White House adviser says Democrats and Republicans must “get out of their comfort zone” to avert a government default.

David Plouffe (pluff) acknowledges on NBC’s “Today” show that President Barack Obama essentially is responsible for the economy. But he says the deep recession wasn’t just “a run of bad luck,” but rather the result of bad government policies by the preceding Republican administration.

He says no deficit reduction deal is likely as long as tax increases are ruled out instant credit report. Asked if the Aug. 2 deadline is real, Plouffe says, “There’s very little debate that that’s going to change. We’re in a danger zone now.”

Plouffe says there can be no deficit reduction deal without some “balance,” meaning tax increases must be considered as well as spending cuts.

Source