Business and Finance

The U.S. Treasury has named Richard “Chan” Peterson to the board of directors of Centrue Financial Corp. and its subsidiary, Centrue Bank, after the bank repeatedly failed to repay dividends owed through the federal Troubled Asset Relief Program (TARP).

In 2009, the Treasury bought $32 million of Clayton-based Centrue’s preferred stock through TARP, the federal government’s bank bailout program. Until the investment is repaid, participating banks make quarterly dividend or interest payments to the Treasury. They also have the option of deferring those payments.

Centrue Bank owes the Treasury more than $3.6 million in unpaid dividends and has deferred making payments nine times. The Treasury has the right to elect up to two board members after six dividend deferrals. 

Peterson is the managing principal and co-founder of Hermitage Capital Partners, a private equity venture that acquires and re-capitalizes troubled community banks in the Chicago area.

It’s the second time this year that the Treasury has named board members at local banks. In July, the Treasury appointed two directors to the board of Clayton-based First Banks, the holding company for First Bank. First Banks owes the Treasury more than $32 million in unpaid dividends on a $295 million investment the Treasury made in the bank in 2008.

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Investors on Wall Street and around the world sold stocks with abandon Thursday, more convinced than ever that the United States and perhaps the globe are headed for a new recession.

The Dow Jones industrial average fell more than 400 points, the second consecutive rout in the stock market since the Federal Reserve announced a change in strategy for fighting the economic slowdown.

One financial indicator after another showed that investors are quickly losing hope that the economy can keep growing. The price of oil and metals, both of which depend on economic demand, fell sharply. Traders bought bonds for safety.

“The probability of going back into recession is higher now than at any point in the recovery,” said Tim Quinlan, an economist at Wells Fargo. He put his odds of a recession at 35 percent, the highest yet.

By early afternoon, the Dow was near low of the day, on what was shaping up to be one of its worst days of the year. At 1:45 p.m. EDT, the average was down 429 points, or 4 percent, at 10,695.

Looking for a safe place to put their money, traders bought American government debt, which they see as less risky than stocks even as the nation wrestles with its long-term budget.

The yield on the 10-year Treasury note hit a record low of 1.76 percent, down from 1.86 late Wednesday. Yields fall as investors buy bonds and send their prices higher.

The Fed, adopting a new strategy to try to get the U.S. economy going, announced Wednesday that it would shuffle $400 billion of its own holdings in hopes of reducing interest rates on long-term loans.

The central bank hopes that allowing people and businesses to borrow money more cheaply will encourage them to spend it throughout the economy, providing a lift that could turn it around.

The Fed statement troubled investors. It offered a bleak assessment of the future of the U.S. economy, saying it sees “significant downside risks to the economic outlook,” including volatility in overseas markets.

“In financial markets, the thinking seems to be: If the Fed is worried, the rest of us ought to be really worried,” said Brian Gendreau, senior investment strategist at Cetera Financial Group.

Economists say the Fed action may help, but probably not much. The only thing that will help is for people and businesses to start spending more money, said Uri Landesman, president of Platinum Partners, a hedge fund.

“Counting on the Fed to get us out of this is a mistake,” he said.

The price of commodities like oil and metals dropped steeply because investors worried that demand for them would fall if the world economy keeps slowing or falls into recession again.

The price of oil fell 6 percent, more than $5 a barrel, to $80.68, its lowest since Aug. 19. The selling reflected concerns that world demand for oil would fall if the economy slows.

The price of silver fell 8.6 percent. And gold fell 3.6 percent. Earlier this summer, gold set one record high after another. Investors wanted it both as a safe place for their money and to cash in on what seemed an unstoppable run.

In a broader reading of the U.S. stock market, the Standard & Poor’s 500 index fell 41 points, or 3 instant payday loan.5 percent, to 1,125. The S&P is barely higher than its lowest point in August, 1,119. Last month was marked by extreme volatility in the market.

The Nasdaq composite fell 86, or 3.4 percent, to 2,452.

Stocks fell sharply even though the New York Stock Exchange executed a rule designed to smooth trading. The exchange invoked Rule 48, which limits how much information is released about stock trades.

Stock volatility rose anyway. The VIX, an index that measures investor fear, rose 8 percent to 40.4, well above average.

It’s common for stocks to move dramatically after the Fed makes a big announcement. But the number of trades that can be made instantly has also gone up in recent years, causing big swings to happen more quickly.

“These major moves are much more compressed, time-wise, than in the past,” Landesman said. “A 5 percent move can now happen in a couple of minutes as opposed to a week or two.”

Some analysts thought the heavy selling was an overreaction.

“The facts show we are not in a recession, and we are not borderline recession,” Chris Rupkey, chief financial economist with Bank of Tokyo-Mitsubishi, wrote in a report Thursday.

The U.S. economy grew at an annual rate of 0.7 percent in the first half of this year, the slowest growth since the end of the Great Recession in June 2009. It would take much healthier growth, 4 or 5 percent, to bring unemployment down significantly.

The government reported Thursday that fewer Americans filed new claims for unemployment benefits last week. But the decline wasn’t nearly enough to raise any real hope that the job market is getting better.

Elsewhere in the world, economic reports weren’t much better. A gauge of European business activity fell to its lowest level since July 2009, and industrial orders in Europe fell in July.

The data suggest that constant gloom surrounding a debt crisis among European nations is causing people and businesses to cut back on spending, which could push the region into recession.

“Odds of Europe falling into recession are uncomfortably high and rising,” said Ryan Sweet, an economist at Moody’s Analytics.

Asian stocks were hammered to start the world’s trading Thursday. The Nikkei index in Japan fell 2.1 percent. The main stock averages fell 2.9 percent in South Korea, 2.6 percent in Australia and almost 5 percent in Hong Kong.

Europe fared even worse. The stock market fell 5.3 percent in France and 5 percent in Germany. Besides the economic headache, Europe is wrestling with how to tame a big debt problem.

In the U.S., FedEx stock fell 9 percent after it said that it would earn less in 2012 than it had expected. The company is seen as an indicator because demand for shipping rises and falls with the economy.

The next big round of corporate earnings reports doesn’t start for several weeks, but many analysts expect big companies can’t sustain the strong profits they have posted for the last few quarters.

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Federal Reserve Chairman Ben Bernanke said Thursday that he’s surprised by how cautious consumers remain more than two years since the recession officially ended. But he offered no hints of further steps the Fed might take to try to boost the weak economy.

Bernanke noted that several factors have kept consumers from spending more: from high unemployment and falling home values to still-heavy debt loads and higher gasoline prices.

“Even taking into account the many financial pressures they face, households seem exceptionally cautious,” Bernanke said in a speech in Minneapolis to the Economic Club of Minnesota.

Bernanke said that higher prices for gas, cars and other consumer goods were due, in part, to temporary factors, such as supply disruptions stemming from Japan’s earthquake and nuclear crisis. As those factors continue to ease, the Fed chief said he expects inflation to moderate in the coming months.

He reiterated that the Fed will consider a range of options at its next policy meeting Sept. 20-21. Some economists have said the Fed must take further steps to drive down long-term interest rates and help the economy avoid another recession.

Bernanke’s remarks Thursday were similar to those he made last month in a speech in Jackson Hole, Wyo. As he did in that speech, Bernanke said he supported Congress’ push to reduce budget deficits over the long run. But he cautioned against cutting spending excessively while the economy remains so weak.

Congress, he said, “should not … disregard the fragility of the economic recovery.”

The economy barely grew in the first half of the year: It expanded at an annual rate of just 0.7 percent. And the government said last week that employers added zero net jobs in August.

Investors seemed disappointed that Bernanke didn’t outline further help the Fed might provide to the economy. The Dow Jones industrial average, which had been down about 20 points when Bernanke began speaking, was off 93 points once he finished.

Some economists suggested that Bernanke might be hesitant to elaborate on the Fed’s policy options because of the opposition he faces on its interest-rate setting panel. Three members of the panel dissented at the August meeting, when the Fed said it planned to keep short-term rates at record lows at least until mid-2013 as long as the economy remains weak. It was the first time since 1992 that as many as three panel members had dissented from a policy decision.

“Bernanke probably didn’t want to antagonize the hawks who voted against the decision at August’s meeting,” said Paul Ashworth, chief U.S. economist at Capital Economics, referring to members who fear that rates kept too low for too long can ignite inflation.

But Ashworth said he still expected the Fed to act further at the September meeting to provide support for the economy.

When Bernanke was questioned after Thursday’s speech about the high number of dissents at the August meeting, he said that disagreement within the Fed isn’t surprising in light of the historic economic challenges it’s confronting.

“My attitude has always been if two people always agree, one of them is redundant,” Bernanke said. “I have always tried to encourage … debate and discussion.”

Consumers and businesses are feeling less confident after a tumultuous summer. Lawmakers fought to the last hours over raising the federal borrowing limit, Standard & Poor’s downgraded long-term U.S. debt and stocks gyrated wildly after plunging in late-July and early August.

Minutes from the Fed’s Aug. 9 meeting showed that some officials pushed for more aggressive steps to try to help the economy.

One possibility is for the Fed to increase the percentage of long-term Treasury securities in the mix of securities it holds. That approach would have the advantage of exerting further downward pressure on long-term rates without swelling the Fed’s already record-level of securities holdings.

The worsening jobs outlook has escalated the pressure on President Barack Obama. He was expected Thursday night to introduce a $300 billion jobs package before a joint session of Congress. The plan will likely include extensions of the Social Security tax cut and long-term unemployment benefits, tax incentives for businesses that hire and money for public works projects.

But that effort faces opposition from congressional Republicans, who argue that Obama’s previous stimulus program was a failure. They want deeper spending cuts to fight the government’s soaring budget deficits.

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Several alleged victims of tabloid phone hacking in Britain will soon file lawsuits against a second newspaper group, Piers Morgan’s former employer Trinity Mirror PLC, their lawyer said Friday.

Mark Lewis said the claims would be filed in “a few weeks,” but would not disclose identities of his clients or say precisely when the papers would be presented at court.

Lewis represents the family of Milly Dowler, a 13-year-old girl abducted and murdered by a pedophile in 2002. The revelation a month ago that her voicemail messages had been accessed by the News of the World tabloid while she was still missing outraged British opinion, and triggered a crisis for Rupert Murdoch’s News Corp.

The phone hacking scandal centers on allegations that journalists eavesdropped on private phone messages, bribed police for information and hacked email accounts.

So far the crisis has centered on Murdoch’s media empire, leading him to shut down the News of the World and abandon a bid to take over British Sky Broadcasting. Several former executives of the newspaper have been arrested by police investigating the eavesdropping.

But there have also been allegations of hacking by other newspapers. This week Paul McCartney’s ex-wife, Heather Mills, claimed in a BBC interview that she was hacked by a Trinity Mirror journalist in 2001.

McCartney said Thursday that he planned to contact police over the claim.

“I will be talking to them about that,” McCartney told the U.S. television journalists by videolink from Cincinnati, Ohio.

The BBC did not identify the journalist cited by Mills, but said it was not CNN celebrity interviewer Piers Morgan, who was editor of the group’s flagship tabloid, the Daily Mirror, between 1995 and 2004.

Morgan has repeatedly denied ordering anyone to spy on voicemails or knowingly publishing stories obtained through hacking.

But in an article published by the Daily Mail in 2006, Morgan said that he had been played a tape of a message McCartney had left on Mills’ cell phone in the wake of one of their fights.

“It was heartbreaking,” Morgan wrote. “He sounded lonely, miserable and desperate, and even sang ‘We Can Work It Out’ into the answerphone.”

Questions over how Morgan came to hear the message have led several British lawmakers to call on him to return to the U.K. and explain himself.

Lawmaker John Whittingdale, chairman of a parliamentary committee that is investigating hacking by the News of the World, said Thursday that Morgan “absolutely should” come to Britain to answer questions.

Whittingdale said “there is evidence to suggest that other newspapers were involved in phone hacking” _ and that police should investigate.

Both Trinity Mirror and the publisher of Britain’s Daily Mail newspaper, eager to stop the scandal spreading to them, have announced reviews of editorial procedures in the wake of the revelations about the scale of wrongdoing at the News of the World.

Meanwhile, an activist who hit Murdoch with a shaving foam pie as the mogul testified to British lawmakers last month had his jail sentence reduced on appeal Friday.

Jonathan May-Bowles was sentenced Tuesday for assaulting the 80-year-old media tycoon as he gave evidence to the House of Commons Culture, Media and Sport Committee.

A judge rejected May-Bowles attempt to overturn the sentence, but reduced it Friday to four weeks.

A lawyer for May-Bowles, 26, argued that the attack was in the tradition of comics “from Laurel and Hardy and the Three Stooges to Monty Python.” Defense attorney Piers Marquis said the foam pie had been a “staple of slapstick comedy” for years.

But Judge Anthony Pitts said there had been nothing funny about the attack.

“It was intended, it seems to us, to cause fear and it must have caused fear,” the judge said.

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Frazier Moore and Noaki Schwartz in Los Angeles and David Stringer and Raphael G. Satter in London contributed to this report.

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British lawmakers on Friday demanded James Murdoch clarify why testimony he gave to a parliamentary committee probing the phone hacking scandal conflicted with a statement from two former executives.

Murdoch, News Corp’s deputy chief operating officer, and his father, media tycoon Rupert Murdoch, testified about the widening allegations of phone tapping and bribery at the Murdoch-owned News of the World tabloid.

The Culture, Media and Sport Committee said Friday it now wanted more information from the younger Murdoch because his testimony was disputed by Colin Myler, former News of the World editor and Tom Crone, and former lawyer of the tabloid’s holding company, News International.

The two men released a statement contradicting Murdoch’s claim that he was not aware of an email containing information about hacked voicemails, saying they did inform him of the document.

John Whittingdale, the parliamentary committee’s chair, said he was writing Murdoch, Myler and Crone for clarification.

“We are going to write to ask for further details from various areas where evidence is disputed,” Whittingdale said.

He said the committee decided not to take the additional step of recalling Murdoch to another hearing, saying they wanted to consider his written answers first.

“We want to hear exactly how they dispute that. I suspect it very likely that we will want to hear oral evidence. If they do come back with statements that are quite plainly different from those given by James Murdoch, we will want to hear James Murdoch’s response to that,” he said.

James Murdoch had said he stood by his testimony but would provide a written response to follow-up questions.

His father said during last Tuesday’s hearing that he accepted no responsibility for wrongdoing amid widening claims that News of the World illegally accessed cell phone messages and bribed police to get information on celebrities, politicians and crime victims.

Earlier Friday, a British man who interrupted the hearing when he threw a shaving-cream pie at the tycoon was convicted of assault and causing harassment.

Jonathan May-Bowles hurled a paper plate with a pile of shaving cream at Murdoch on July 19 as he was giving evidence to a committee. The activist, who admitted the crime during an appearance at the Westminster Magistrates’ Court, was due to be sentenced on Aug. 2.

Also Friday, the head of Britain’s press watchdog stepped down amid heavy criticism about the organization’s handling of the scandal.

Peta Jane Buscombe said she will not continue as chairman of the Press Complaints Commission after her term ends next year.

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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.

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Hopes that the Federal Reserve could provide new economic stimulus gave stocks a much-needed boost Wednesday, a day after markets were shaken by fears Europe’s debt crisis was spreading to large economies like Italy.

Fed Chairman Ben Bernanke said the U.S. central bank is prepared to provide additional stimulus if the current economic lull persists. Delivering a report to Congress, he indicated that monetary policy was likely to remain loose for the foreseeable future as labor market improvements remain weak.

While his comments were not a promise for more economic stimulus, investors were encouraged by the notion the Fed would not let the world’s biggest economy slow down too quickly without offering more support.

That helped market sentiment, which had earlier been supported by data out of China showing its economy grew by 9.5 percent in the April-June quarter. Although that is lower than the previous quarter’s 9.7 percent growth rate, it alleviates concerns of an abrupt slowdown and gives Beijing room to tighten controls to fight inflation.

The Chinese government has been trying to tame its economy _ the world’s second-largest _ where inflation hit a three-year high in June. Beijing has hiked interest rates five times since October and tightened controls on lending and investment.

“Today’s data should dampen fears that the economy is heading into a hard landing,” said Mark Williams, senior China economist at Capital Economics.

The news helped soothe investors’ nerves after days of volatile trading, particularly in Europe, where fears grew that the debt crisis would infect core countries such as Italy, the eurozone’s third-largest economy.

Investors were spooked by EU governments’ failure to agree on a second rescue package for Greece and their insistence on getting banks to contribute to bailouts, even at the cost of a debt default.

The uncertainty left markets fearing the worst _ stocks, bonds and the euro plummeted. Italian bond markets seized up and its main stock index swung wildly. Prices stabilized only after the Italian government said it would accelerate approval of its austerity plan and increase its size.

Bolstered by the news, markets brushed off a downgrade of Ireland’s bonds to junk status by ratings agency Moody’s on Tuesday. The agency said it sees a growing risk the country will need a second bailout once its current rescue package expires at the end of 2013 free business cards.

Analysts said the report was not a shock after Moody’s had downgraded Portugal a week earlier for much the same reasons.

The recovery was strongest in Milan, where the main index rallied to close 1.8 percent higher and Italy’s bond yields edged down further. Britain’s FTSE 100 rose 0.6 percent to 5,906.43, while Germany’s DAX gained 1.3 percent to 7,267.87 and France’s CAC closed up 0.5 percent at 3,793.27.

Shares in British Sky Broadcasting closed 2 percent higher in London after News Corp. pulled its takeover bid for the company in the face of vociferous opposition in the U.K. parliament. The stock initially slumped on the announcement but then recovered as longer-term investors bought into what had become a relatively cheap stock.

In the U.S., Wall Street advanced, with the Dow Jones up 1.2 percent to 12,595.26 while the S&P 1.2 percent higher at 1,329.83.

The euro rallied 1.4 percent to $1.4177 by late afternoon in Europe, while the dollar was down 0.5 percent at 78.96 yen.

In Asia, indexes mostly closed higher thanks to the strong Chinese growth data.

Hong Kong’s Hang Seng index added 1.2 percent to 21,926.88, the Shanghai Composite index rose 0.5 percent to 2,768.21, and South Korea’s Kospi gained 0.9 percent at 2,129.64.

Japan’s Nikkei 225 stock average finished up 0.4 percent at 9,963.14 after the yen pulled back from its highest level against the U.S. dollar since mid-March earlier in the day.

After the dollar fell under the 79-yen level, Japanese Finance Minister Yoshihiko Noda described the move as “slightly one-sided.” His comment triggered speculation that Japan might intervene in currency markets.

Australia’s S&P/ASX 200 rose 0.4 percent to 4,514.80, while New Zealand’s benchmark slipped 0.2 percent to 3,424.35.

Oil prices rose above $98 a barrel after a report showed U.S. crude supplies unexpectedly rose last week, suggesting demand is weak.

Benchmark oil for August delivery was up $1.05 to $98.48 a barrel in electronic trading on the New York Mercantile Exchange. Crude gained $2.28 to settle at $97.43 on Tuesday.

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Stocks were trading mixed Tuesday morning as investors weighed the prospect that Italy, Europe’s third-largest economy, could be the next country to need help managing its debts.

The yields on the government bonds of Italy and Spain have shot up this week as investors lost confidence in the quality of their debt. Some of the concerns about Italy eased Tuesday after a successful auction of new government debt.

Meanwhile, international lenders have not yet confirmed terms for a Greek rescue package. That has reignited concerns that Greece might default on its debt, setting off a chain reaction of European defaults.

The Standard & Poor’s 500 index fell less than a point to 1,319 in early trading. The Dow Jones industrial average edged up 3 points to 12,508. The Nasdaq composite fell 6 points, or 0.2 percent, to 2,796.

Investors had assumed Italy would be able to manage its heavy debt load in part because of a high personal savings rate among its citizens. But after concerns arose last week that Italian and Spanish banks might not pass upcoming stress tests, stock in those countries’ largest banks fell sharply. Results of the tests are expected to be announced Friday guaranteed high risk personal loans.

At the center of the panic over European government debt is the fear that the European banking systems could be infected. That would affect a global network of financial institutions, potentially freezing up lending and affecting U.S. companies that do business internationally.

Investors are also worried about U.S. debt. The looming Aug. 2 deadline to resolve contentious budget negotiations and signs that the U.S. economy could be in for an extended downturn are also pushing stocks lower.

Alcoa Inc. edged up 0.4 percent after reporting its second-quarter earnings Monday night. The aluminum maker beat analyst expectations for its revenue, but fell short of expectations for net income.

Technology companies were among the weakest in the S&P 500. Microchip Technology Inc. fell 12 percent after the chip make said it expected lower quarterly revenue and income because of waning demand from car makers. That pushed the stocks of other chip makers lower too. Novellus Systems Inc. fell 7 percent, and Texas Instruments Inc. fell 3.9 percent.

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Swedish fashion retailer Hennes & Mauritz AB on Wednesday blamed higher procurement costs as well as campaigns and special offers for an 18 percent drop in second-quarter profits.

The Stockholm-headquartered retailer said Wednesday that net profit in the three-month period fell to 4.3 billion kronor ($673 million) from 5.2 billion kronor in the same quarter a year ago.

Sales in the quarter rose to 32.4 billion kronor from 31.6 billion kronor however, while gross margin shrank to 61.7 percent from a previous 65.9 percent.

“Increasing interest rates, higher energy prices and austerity measures in many economies have decreased consumer spending power,” the company said. “This has led to many price campaigns and special offers in the fashion retail industry during the spring.”

Purchasing costs were also higher than usual in the quarter, it said. This was mainly attributed to currency effects related to the strong krona and the weak U.S. dollar, cost inflation in the sourcing markets as well as lower spare capacity with suppliers no credit check payday loans.

“H&M chose not to pass on the increased purchasing costs to the customers,” it said, adding it had instead profited from increased market share as it strengthened its pricing position.

A one-off cost of 248 million kronor for its staff incentive program also affected bottom-line figures.

CEO Karl-Johan Persson said that despite the challenges faced in the sales and sourcing markets, his company sees “great potential for future growth in existing as well as in new markets.”

The company is planning 178 new stores in the second half of this year, with China, Britain and the U.S set to be the main expansion locations. Nineteen shops will be closed in the same period.

“Our business concept works well in all our markets as seen for example in recently added and fast growing markets such as China where we expand more rapidly,” Persson said.

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A five-hour computer outage that virtually shut down United Airlines Friday night and early Saturday is a stark reminder of how dependent airlines have become on technology.

Passengers saw their flight information vanish from airport screens, and thousands were stranded as United canceled 36 flights and delayed 100 worldwide.

The airline still had no explanation Saturday afternoon for the outage. But things could have been much worse.

A blizzard in the Northeast wiped out more than 10,000 flights over three days in December, a mid-January storm led airlines to cancel nearly 9,000 flights.

Friday’s shutdown occurred late enough in the day that many of the canceled flights were the last planes out for the day, said Henry Harteveldt, an airline analyst with Forrester Research. On a Monday morning, the results could have been catastrophic.

“It happened as a lot of the airline was going to sleep for the night,” Harteveldt said.

That doesn’t mean affected travelers were happy.

“I’m just amazed at how catastrophic the failure was,” said Jason Huggins, 35, who was trying to fly home to Chicago after a week working at his software company’s San Francisco headquarters. “All the computer screens were blank, just showing the United logo.”

Huggins paid $1,200 to book one of the last three seats left on an American Airlines flight home.

Social workers Penny Nordstrom, 57, and Emily Schaefer, 42, who were trying to get home from Cancun, Mexico, to Spirit Lake, Iowa, said their delays started with a computer problem at midday Friday in Mexico.

“We’re way past 24 hours now,” Nordstrom said about noon Saturday before she boarded a rebooked flight from Chicago O’Hare International Airport to Detroit for a connection to Sioux Falls. She expected to get home about midnight but hoped her travel insurance would offer some compensation.

United spokesman Charles Hobart said late Saturday afternoon that the airline didn’t expect to cancel any more flights this weekend due to the computer problems, though delays might continue.

Business travelers are usually hurt less by such disruptions than people flying for vacation or personal reasons because airlines first help passengers with elite status in frequent flier programs and those who bought more-expensive, unrestricted tickets.

Jon Ryan, who had planned to fly nonstop from San Francisco to London on business Friday evening, was rebooked on partner airline Air Canada after two hours on the phone. His new itinerary: San Francisco to Toronto to Halifax to London.

“The poor, poor ticket agents were just bewildered and sitting behind the counter. Everybody was just staring and didn’t know what to do,” Ryan said. “The line grew and grew and then people went from sitting down to lying down.”

On a typical day, United, a subsidiary of United Continental Holdings Inc., cancels 15 to 30 flights for reasons ranging from fog to maintenance problems or staffing shortages. Those are understandable. Passengers and others said a computer glitch should not have grounded the airline.

“They’re infrequent, but the fact that they happen at all is puzzling. These are mission-critical,” said airline analyst Robert Mann cheapest personal loan rates. “The idea that they would fail is troubling.”

College student Jamela Wilson, on her way from Los Angeles home to Roanoke, Va., was curled inside of her hoodie sweatshirt at a gate in Chicago Saturday after an overnight wait.

“I don’t know what happened, but it shouldn’t have impacted me to the point I’m not home right now. It’s a good 12 hours later,” Wilson said.

Mary Clark, a United spokeswoman, said she couldn’t say how many passengers were delayed or how many still needed to reach their destination by midday Saturday. About the outage itself, she and other airline personnel said only that it was caused by “a network connectivity issue.”

Airlines rely on computers today more than ever. Reservations and customer service are largely automated, even flight paths are increasingly computer-generated. Most passengers are asked to check-in online, at airport kiosks or via mobile phone _ not with an agent _ and paper tickets are a thing of the past.

Airplanes also are flying fuller this summer than ever before. United’s were 86.8 percent booked on average in May, which in reality meant many flew without a single empty seat. So rebooking passengers from canceled flights is much trickier and more time-consuming than in the past.

United and Continental merged in May 2010. They are slowly integrating their systems but still operate independently. So Continental was able to dispatch flights normally, though some of its airport kiosks were affected.

Naveena and Vidya Maddali’s Continental flight from Seattle into O’Hare arrived on time at 5:30 a.m. Saturday. But their connecting United flight to Saginaw, Mich., was delayed repeatedly and then canceled. With the earliest flight at 1 p.m., the software engineers were fairly sure they would miss the noon high school graduation party they were traveling to attend.

“The whole purpose of the trip got ruined because of the delays,” said Naveena Maddali, 27.

The couple was particularly frustrated United didn’t provide more information sooner because they initially had enough time to rent a car to finish their trip.

Dave Sertich, 29, a financial analyst who lives in San Francisco, slept in a chair at an O’Hare gate Friday night but said many people had it worse. He was just puzzled by the lack of information from the airline.

“There were no agents around, no communication to passengers about what was going on, no announcements,” Sertich said.

United passengers flying the rest of the weekend have been advised to print out their boarding pass at home instead of at airport kiosks in case of continuing backlogs. By 3 a.m. Eastern time, United had announced on Twitter that things were returning to normal: “Flight status and flight rebooking are fully refreshed on united.com. Thanks again for your patience.” Officials did not elaborate.

The airline’s customer service line at O’Hare was only four passengers long by noon, and United was letting people with tickets for travel Saturday change them for free to alleviate the crunch.

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