Business and Finance

Unemployment rates fell in about three-quarters of large U.S. cities in September, a sign that the nation’s modest job gains that month occurred across most of the country.

The Labor Department said Wednesday that unemployment rates fell in 280 large metro areas from August to September. They rose in 61 and were unchanged in 31. That’s the largest number of cities to see a decline since April.

Nationwide, employers added a net 103,000 jobs in September. And the unemployment rate was 9.1 percent for the third straight month. The job gains were only about enough to keep up with population growth. The economy needs to generate at least twice September’s total to reduce the unemployment rate.

Unlike national and state data, metro unemployment figures aren’t adjusted for seasonal changes. Many of the areas with the sharpest drops in unemployment were cities with large universities. They likely added jobs at the start of the academic year.

State College, Penn., home to Penn State University, reported the biggest drop in unemployment in September. Its rate fell to 5.1 percent from 6.5 percent in August. Grand Forks, N.D., site of the University of North Dakota, reported the next-largest drop, to 4.1 percent from 5 percent.

Meanwhile, many of the cities with the biggest increases in unemployment were coastal cities, where many summer employees likely lost jobs Business Card Holders.

Unemployment in Ocean City, N.J., rose to 9 percent in September, from 7.9 percent the previous month. The second-biggest rise was in Gulfport-Biloxi, Miss., on the Gulf of Mexico, where the rate jumped to 9.8 percent from 8.7 percent.

Other cities with big increases included Myrtle Beach, S.C., a popular beach resort, and Barnstable Town, Mass., part of the Cape Cod area.

Bismarck, N.D., registered the lowest unemployment rate at 2.5 percent. The next-lowest were Fargo, N.D., at 3.3 percent and Lincoln, Neb., at 3.5 percent.

Among cities with 1 million or more residents, Oklahoma City had the lowest rate, 5.5 percent. Oklahoma has benefited from its oil and gas production and high prices for grains and other agricultural communities.

El Centro, Calif., reported the highest rate, at 29.6 percent, followed by Yuma, Ariz., at 27 percent. They are adjacent counties with heavy farm economies and large contingents of migrant labor.

Las Vegas had the highest unemployment rate among cities with populations of 1 million or more: 13.6 percent.

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The leaders of Germany and France, the eurozone’s two biggest economies, said Sunday they have reached an agreement about how to strengthen Europe’s shaky banking sector amid the region’s debt crisis.

“We are determined to do the necessary to ensure the recapitalization of Europe’s banks,” German Chancellor Angela Merkel following talks with French President Nicolas Sarkozy in Berlin.

A “comprehensive response” to the eurozone’s debt crisis will be finalized by month’s end, including a detailed plan on recapitalizing the banks, Sarkozy said at Berlin’s chancellery.

“The economy needs secure financing to ensure growth. There is no prospering economy without stable banks,” he said. “That is what is at stake.”

However, both leaders declined to name a price tag for the new measures or elaborate further, saying the proposal must first be discussed with other European leaders.

Analysts have urged the eurozone to identify all the banks in the region that need to replenish their capital reserves, then decide whether to compel them to raise that money on the open markets and to provide government financing to the ones that can’t.

Many experts say the capital cushions of many European banks must be strengthened in order to withstand a possible government bond default by Greece. Some analysts fear that a Greek default could cause a severe credit squeeze that would even threaten banks not exposed directly to Greece’s debt because banks could be afraid to lend to each other.

The credit freeze following the collapse of U.S. investment bank Lehman Brothers in 2008 choked off lending to the wider economy and caused a deep recession.

Merkel did not provide details Sunday about how the recapitalization would work, saying only that all banks across the eurozone would be measured by the same criteria in coordination with, among others, the European Banking Authority and the International Monetary Fund.

Any solution must be “sustainable,” Merkel added.

Sarkozy said the French-German accord on the proposal “is total.”

Germany and France will now submit their proposal to shore up Europe’s shaky banking sector to other European Union governments ahead of an Oct. 17-18 summit of the bloc’s 27 leaders in Brussels, they said.

Both leaders expressed confidence that a comprehensive European response to the crisis will be finalized before a summit of the G-20 most developed nations in France Nov. 3-4.

“The global economy needs this summit to become a success, and the European Union will do its part” to ensure a positive outcome, Merkel said.

The IMF has said banks across the continent might need up to euro200 billion ($267 billion) in new capital. The EU disputes the IMF’s estimate, but has warned that lending between banks and from banks to businesses is threatening to freeze up.

Earlier this week, Merkel said that banks must first seek to raise new capital on the market before turning to their government, insisting that the eurozone’s newly strengthened euro440 billion ($590 billion) bailout fund would then only serve as a backstop if a member state can’t cope with shoring up its banks’ capital.

France, however, was reported to favor turning to the fund’s resources right away instead of relying on a national facility to re-capitalize its banks _ who are among the biggest holders of Greek bonds.

But Sarkozy sought on Sunday to dispel the notion of different approaches regarding the European Financial Stability Facility, saying “there are no disagreements.”

German Finance Minister Wolfgang Schaeuble and his French counterpart, Francois Baroin, also took part in the two leaders’ discussions.

Merkel and Sarkozy were set to have a working dinner following the news conference they gave at the chancellery.

Germany and France, which together represent about half of the 17-nation currency zone’s economic output, regularly hold talks before EU summits to chart out joint positions.

The implosion of Belgian lender Dexia following its sizable exposure to Greek and other eurozone sovereign debt, meanwhile, added a sense of urgency to the talks.

France, Belgium and Luxembourg announced Sunday they had approved a plan for the future of the embattled bank, but they offered no details. France and Belgium became part owners of the bank during a euro6 billion ($7.8 billion) 2008 bailout.

While an all-out Greek default appears unlikely, bondholders might still face severe losses, with some analysts maintaining that Greece’s debt must be cut by about 50 percent or more to attain a sustainable level.

Private bondholders agreed in July to take about a 20 percent cut on their holdings of Greek bonds as their participation in a second international euro109 billion bailout for the country.

But Finance Minister Schaeuble on Sunday joined Merkel and other eurozone officials in hinting that the agreement might have to be renegotiated.

“It is possible that we have so far assumed an insufficient percentage of debt reduction,” he told German newspaper Frankfurter Allgemeine Sonntagszeitung.

Such a move will be discussed after the so-called troika of Greece’s international creditors _ European Central Bank, European Commission and IMF _ submits its next progress report later this month, Schaeuble was quoted as saying.

Greece is currently struggling to meet budget and reform targets, but it needs an over all positive progress assessment by the troika to qualify for the next euro8 billion ($11 billion) installment of its euro110 billion package of international bailout loans to avoid bankruptcy.

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JEFFERSON CITY

World stock markets took a beating on Monday after a report showed U.S. companies stopped hiring in August, reviving fears that the world’s largest economy is heading back into recession.

The lack of hiring in the U.S. last month surprised economists, who were expecting about 93,000 jobs to be added. Previously reported hiring figures for June and July were revised lower. The unemployment rate held steady at 9.1 percent _ it has been above 9 percent in all but two months since May 2009.

The jobs crisis has led President Barack Obama to schedule a major speech Thursday night to propose steps to stimulate hiring.

Traders waited for signs that the U.S. Federal Reserve might take action at its September meeting to support the economy _ perhaps a third round of bond purchases, dubbed quantitative easing III or QE3, analysts said.

“Right now the possibility has increased,” said Linus Yip, a strategist at First Shanghai Securities in Hong Kong. “I think they have to do something. The markets are expecting QE3.”

Amid the uncertainty, traders pulled out of any risky investments _ such as stocks, particularly financial ones, the euro and emerging market currencies _ to pile into safe havens: U.S. Treasuries, the dollar, the Japanese yen and gold.

European shares opened sharply lower and closed with even heavier losses. Britain’s FTSE 100 shed 3.6 percent to 5,102.58. Germany’s DAX slumped a massive 5.3 percent to 5,246.18, and France’s CAC-40 tumbled 4.7 percent to 2,999.54.

Markets in the U.S. were closed for the Labor Day holiday.

Banking stocks were among the hardest hit after the U.S. government on Friday sued 17 financial firms for selling Fannie Mae and Freddie Mac billions of dollars worth of mortgage-backed securities that turned toxic when the housing market collapsed.

Among those targeted by the lawsuits were Bank of America Corp., Citigroup Inc., JP Morgan Chase & Co., and Goldman Sachs Group Inc. Large European banks including The Royal Bank of Scotland, Barclays Bank and Credit Suisse were also sued.

Renewed jitters over the eurozone debt crisis also contributed to the slump in financial stocks amid concerns they would need to raise new capital. Deutsche bank closed down 8.9 percent in Frankfurt while Societe Generale in Paris shed 8.6 percent.

An international debt inspectors’ review of Greece’s finances was interrupted on Friday amid disagreements over the country’s deficit figures. The review will be resumed in about 10 days and must be completed in order for the country to receive its bailout loans at the end of the month payday loans in 1 hour.

Signs that the Italian government’s commitment to its austerity program is wavering have also shaken investors. Prime Minister Silvio Berlusconi’s government has backtracked on some deficit-cutting measures, prompting EU economic officials to urge it to stick to its promised plan.

The yields in so-called peripheral eurozone countries, such as Greece, Italy and Spain, rose sharply while those of Germany _ whose bonds are widely considered a safe haven _ fell.

The economic indicators, meanwhile, were mostly downbeat. Although retail sales in the eurozone rose unexpectedly in July, a survey of the services sector showed a slowdown across the continent for the fifth consecutive month.

The purchasing managers’ index for the eurozone showed the services sector was still growing _ unlike the manufacturing sector _ but only barely. That will add pressure on the European Central Bank to keep interest rates on hold when it meets this week.

“Indeed, the latest data and surveys suggest that the ECB’s eventual next move could actually be to trim interest rates, although it is likely to need sustained eurozone economic weakness and possibly even GDP contraction to get the ECB to perform a U-turn on interest rates,” said Howard Archer, economist at IHS Global Insight.

In Asia, indexes closed sharply lower. Japan’s Nikkei 225 stock average sank 1.9 percent to close at 8,784.46, with sentiment also undermined by the persistent strength of the yen, which hurts exporters.

Australia’s S&P/ASX 200 fell 2.4 percent and South Korea’s Kospi slid 4.4 percent. Hong Kong’s Hang Seng slid 3 percent. Benchmarks in Singapore, Taiwan, New Zealand and the Philippines also were down.

Shanghai’s benchmark Composite Index down 2 percent to 2,478.74, its lowest close in 13 months. The Shenzhen Composite Index lost 2.4 percent.

In currencies, the euro weakened to $1.4100 from $1.4187 in New York late Friday. The dollar was roughly flat at 76.87 yen. Last month, the dollar fell under 76 yen, which was a new post-World War II high for the Japanese currency.

Benchmark oil for October delivery was down $2.12 to $84.33 a barrel in electronic trading on the New York Mercantile Exchange. Crude fell $2.48 to settle at $86.45 on Friday.

In London, Brent crude for October delivery was down $1.63 at $110.70 on the ICE Futures exchange.

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A proposed combination of two Canadian patent licensing companies will make it easier to extract lucrative licensing deals from technology giants, would-be buyer WiLan said on Thursday.

WiLan, which makes money by developing and licensing intellectual property for the communications and consumer electronics markets, has offered $38 a share for smaller rival Mosaid just as tech majors pay heavily for patents to use as weapons in litigation and cross-licensing.

ask the expert

Nick Lombardi, manager, risk services practice Brown Smith Wallace LLC

314-983-1323

nlombardi@bswllc.com

Are solar panels a good investment for a business in the St. Louis area?

The answer today is a resounding “Maybe.”

Not long ago, the response would have been a hushed, “Not really, but you might pursue them to be seen as ‘green.’”

The combination of higher tax incentives, lower installation costs, greater efficiency and rising utility rates are boosting the advantages of solar electricity. Around the world, there is a massive upsurge in solar panel manufacturing capability and installations. The industry is now well established and truly competitive.

So how to assess an investment in solar panels?

They tend to hold their value, have a long life of more than 20 years and provide a monthly cash stream with almost no maintenance cost.

Unlike most other business investments, they are a long-term and low-risk investment. While it is fair to expect a reasonable return on a solar energy investment, it is not fair to expect the return demanded of higher-risk projects.

Solar electric projects should be evaluated using a discounted cash flow analysis covering at least 10 years. The analysis should consider the initial installation cost, energy revenue, capacity revenue, tax incentives, rebates, depreciation, maintenance cost, marginal tax rate and internal cost of capital. A great source to help with the incentives and rebates is www.dsireusa.org.

The installing contractor should provide an estimate of monthly revenue along with guarantees of minimum performance. A business that lacks the expertise to validate such information might seek outside help to verify it and help with paperwork and tax issues.

An independent verification of system performance is also a good idea should a business decide to install a solar energy system.

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The Toronto stock market tumbled almost 500 points Monday after an unprecedented credit rating downgrade of U.S. government debt by Standard and Poor’s helped give added momentum to a four-week-old selloff.

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.

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Italian opposition parties and the media claimed Tuesday that a measure buried in Italy’s euro47 billion ($68 billion) austerity package would allow Premier Silvio Berlusconi’s family investment company to avoid a heavy fine, at least temporarily.

Opposition politicians and magistrates expressed outrage at the measure that would suspend any payments until appeals process is exhausted.

Fininvest, the holding company for Berlusconi’s family assets, was ordered two years ago to pay euro750 million ($1.09 billion), to a rival for alleged corruption in the takeover of publishing house Mondadori in the 1990s. A decision on the appeal in the Mondadori case is expected later this week. Italian media say Fininvest has not yet paid any part of the fine.

Italian newspapers said the measure only came to light during a review of the austerity package by the Italian president’s office.

The Finance Ministry had no immediate comment, though it canceled a presentation of the austerity plan on Tuesday, while President Giorgio Napolitano told reporters that he would not comment on the package until the review was complete.

Meanwhile, Berlusconi ally Foreign Minister Franco Frattini, said the measure was general and not aimed at protecting anyone in particular. “If I understand correctly, it is a general measure,” Frattini was quoted by the news agency LaPresse as saying, adding that it didn’t receive much attention in the Cabinet.

The government approved the austerity measures last week to show financial markets and the European Union that it is serious about balancing its budget. It must be approved by Parliament.

The three-year-plan aims to bring the government’s budget deficit of 3.9 percent this year to near-balance by 2014. It includes new taxes on financial transactions, tax breaks for young entrepreneurs, extending a public sector hiring freeze and cutting ministries’ budgets, as well as measures to fight tax evasion.

Opposition politicians said the measure benefiting Berlusconi’s family violated the wishes of voters, who demonstrated in last month’s referendum that they think the premier does not deserve special treatment. Voters overwhelmingly killed a law that partially shielded Berlusconi and other top officials from prosecution while in office.

“If this is confirmed, it will be proof that the austerity measures will be a problem for all Italians and a solution for Premier Berlusconi,” Pierluigi Bersani, leader of the main center-left party, was quoted as saying by il Sole 24 Ore financial daily.

Shares of Berlusconi’s Mediaset media company, controlled by Fininvest, were down 1.6 percent to euro3.25 in Milan.

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SAN FRANCISCO—Google Inc, frustrated by a string of failed attempts to crack social networking, is taking another stab at fending off Facebook and other hot social sites with a new service called Google Plus.

Google designed the service, unveiled Tuesday, to tie together all of its online properties, laying the foundation for a full-fledged social network. It is the company’s biggest foray into social networking since co-founder Larry Page took over as chief executive in April.

Page has made social networking a top priority at the world’s No 1 Internet search engine, whose position as the main gateway to online information could be at risk as people spend more time on sites like Facebook and Twitter.

To set its service apart from Facebook, which has more than 500 million users, Google is betting on what it says is a better approach to privacy, a hot-button issue that has burned Facebook, as well as Google, in the past.

Central to Google Plus are so-called “circles” of friends and acquaintances. Users can organize contacts into different customized circles — family members, co-workers or college friends, say — and share photos, videos or other information only within those smaller groups.

“In the online world there’s this ’share box’ and you type into it and you have no idea who is going to get that, or where it’s going to land, or how it’s going to embarrass you six months from now,” said Google Vice President of Product Management Bradley Horowitz.

“For us, privacy isn’t buried six panels deep,” he added.

Facebook, which has been criticized for confusing privacy controls, introduced a feature last year that lets users create smaller groups of friends. Google, without mentioning Facebook by name, said other social networking services’ attempts to create groups were “bolt-on” efforts that do not work as well.

Google Plus will be rolled out to a limited number of users in what the company is calling a field trial. Only those invited to join will initially be able to use the service. Google did not say when it would be more widely available.

Google’s stock has been pressured by concerns about rising spending within the company and increasing regulatory scrutiny — not to mention its struggles with social networking. The Federal Trade Commission, among others, is currently reviewing its business practices.

Its shares are down almost 20 per cent this year after underperforming the market in 2010.

To create Google Plus, the company went back to the drawing board in the wake of several notable failures, including Google Wave and Google Buzz, a microblogging service whose launch was marred by privacy snafus.

“We learned a lot in Buzz, and one of the things we learned is that there’s a real market opportunity for a product that addresses people’s concerns around privacy and how their information is shared,” said Horowitz.

Google, with $29 billion in revenue last year, drew more than 1 billion visitors worldwide to its websites in May, more than any other company, according to Web analytics firm comScore. But people are spending more time on Facebook: The average U.S. visitor spent 375 minutes on Facebook in May, compared with 231 minutes for Google.

Google Plus seems designed to make its online properties a pervasive part of the daily online experience, rather than being spots where Web surfers occasionally check in to search for a website or check email.

As with Facebook’s service, Google Plus has a central Web page that displays an ever-updating stream of the comments, photos and links being shared by friends and contacts.

A toolbar across the top of most of Google’s sites — such as its main search page, its Gmail site and its Maps site — allows users to access their personalized data feed. They can then contribute their own information to the stream.

Google Plus will also offer a special video chat feature, in which up to 10 people can jump on a conference call. And Google will automatically store photos taken on cell phones on its Internet servers, allowing a Google Plus user to access the photos from any computer and share them.

When asked if he expected people to switch from Facebook to Google Plus, Google Senior Vice President of Engineering Vic Gundotra said people may decide to use both.

“People today use multiple tools. I think what we’re offering here offers some very distinct advantages around some basic needs,” he said.

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