Finance & Business World

Asian markets were mixed in light trading Monday, as traders refrained from big moves ahead of a slew of economic data from the U.S. this week while weighing the impact of an emergency aid package to prevent Ireland’s banks from going belly-up.

Oil prices rose above $84 a barrel as investors looked to this week’s key jobs report for evidence the U.S. economy is improving. In currencies, the dollar was up against the yen and the euro.

The Nikkei 225 stock average added 0.7 percent to 10,109.86, buoyed by a stronger dollar. Electronics, auto and other exporters led gains, as weakness in the yen can boost their profits from overseas.

South Korea’s Kospi fell 0.3 percent to 1,895.52 and Australia’s S&P/ASX200 index dropped 0.4 percent, to 4,615.1.

Hong Kong’s Hang Seng index rose less than 0.1 percent to 22,890.35. Smaller bourses were also mixed with Indonesia and Singapore down while India, Taiwan and New Zealand rose.

Jackson Wong, vice president of Tanrich Securities in Hong Kong, said many investors were holding back in anticipation of a slew of economic data due out of the U.S. this week.

The U.S. Labor Department will release third-quarter productivity data and U.S. employment data for November, while the Institute for Supply Management will release its manufacturing index for November. Vehicle and retail sales figures for November will also be released, along with factory orders for October.

“We have tons of economic data coming from the U.S. this week, so that is why the market is quiet, without major direction,” he said. Some issues _ such as tensions on the Korean peninsula and Europe’s debt woes _ have cast a pall over markets but not enough to freeze up trading.

Friday also marked the unofficial start of the U.S. holiday shopping season. The markets were responding positively to initial strong sales on Friday and over the weekend, Wong said.

Also helping ease market tensions was news over the weekend that the European Union had agreed to give euro 67 free business cards.5 billion ($89.4 billion) in bailout loans for Ireland to help it weather the cost of its banking crisis.

The rescue deal, approved by finance ministers at an emergency meeting in Brussels, means two of the eurozone’s 16 nations have now come to depend on foreign help and underscores Europe’s struggle to contain its spreading debt crisis. The fear is that with Greece and now Ireland shored up, speculative traders will target the bloc’s other weak fiscal links, particularly Portugal. Underlying all those concerns is that the contagion would spread to Spain, a major economy whose implosion would have serious repercussions for the euro.

Worries about an escalation between the Koreas weighed on some stocks, although Wong suggested that investors viewed the situation as stable. Joint military exercises involving a nuclear-powered U.S. aircraft carrier and a South Korean destroyer continued Monday, nearly a week after a deadly attack on a South Korean island sent tensions soaring in the region.

In New York on Friday, the Dow Jones industrial average fell 95.28, or 0.9 percent, to 11,092. The S&P 500 index was down 8.95, or 0.8 percent, to 1,189.40. The Nasdaq composite index fell 8.56, or 0.3 percent, to 2,534.56. Overall, stocks ended the week mixed. The Dow ended 112 points lower, and the Standard & Poor’s 500 index lost 10. However, the technology-heavy Nasdaq composite index gained 17 points for the week.

Benchmark oil for January delivery was up 51 cents to $84.27 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 10 cents to settle at $83.76 on Friday.

The dollar rose to 84.10 yen from 84.07 yen late Friday in New York, continuing to recover from its fall to 80-yen levels a month ago. The euro fell to $1.3217 from $1.3240.

(This version CORRECTS Friday levels for the yen and euro.)

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The economy grew a little faster over the summer than the government first thought. That modest pickup wasn’t nearly enough to significantly lower the nation’s high unemployment rate, and the Federal Reserve doesn’t expect the economy to improve much over the next couple of years.

The economy expanded at a 2.5 percent annual rate in the July-September quarter, the Commerce Department reported Tuesday. That was up from the 2 percent pace initially estimated, and better than the 1.7 percent growth rate in the April-June quarter.

Stronger spending by U.S. shoppers and better overseas sales of U.S. goods were the main forces behind an upward revision.

Still, the hiring picture hasn’t improved much — even with U.S. companies reporting their best quarterly profits after taxes on records dating back to 1947. After-tax profits climbed to $1.22 trillion in the July-September quarter, according to the Commerce report.

The nation’s unemployment rate has been stuck at 9.6 percent for the past three months. The Fed’s latest projections suggest that won’t change much for a few years.

The Fed predicts roughly 2.5 percent growth and between 9.5 percent and 9.7 percent unemployment for the rest of this year. Those are both downgraded forecasts from its June projections.

Growth will strengthen over the next three years, but not enough to bring unemployment down to more normal levels of around 5.5 percent to 6 percent, according to the Fed’s forecasts. At best, the Fed projects 3.6 percent growth in 2011, and 4.5 percent growth in 2012 and 2013.

The latest Fed projections also suggest no better than 8.9 percent unemployment next year, roughly 8 percent in the 2012 presidential election year and, at best, just under 7 percent for 2013.

Analysts generally say the economy would need to grow 5 percent for a full year to push down the unemployment rate by a full percentage point.

The Fed has acknowledged that progress in reducing unemployment has been “disappointingly slow.”

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Mutual fund company Janus Capital Group Inc. says it has received an inquiry in an investigation of insider trading on Wall Street.

In a regulatory filing Tuesday, Janus said the inquiry seeks “general information” in a probe that widened when federal investigators raided offices of three hedge funds on Monday.

The Denver-based manager of $161 billion says it intends to cooperate with the request, and “has confidence in the integrity of its processes and its people.”

Media reports on Tuesday also identified other mutual fund companies in connection with the probe, including Wellington Management, MFS Investment Management, Deutsche Bank and Prudential Financial.

An MFS spokesman told The Associated Press that the company has not received any requests for information in the probe. Representatives for Wellington, Deutsche Bank and Prudential declined to comment to AP.

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Hong Kong’s inflation rate held above 2 percent for a straight third month in October on higher rents and food prices.

Consumer prices increased 2.6 percent from a year earlier, the same as in September, the city’s government said today on its website. That was more than the median 2.4 percent estimate of nine economists in a Bloomberg News survey.

Hong Kong policy makers have blamed the U.S. Federal Reserve’s plan to buy $600 billion of Treasury securities for contributing to price pressures in the city, which maintains a pegged exchange rate with the American currency. The government earlier this month raised its full-year inflation forecast because of a falling dollar and escalating global food costs.

“While a weakening currency exposes the highly import- dependent Hong Kong economy to imported inflation, inflationary pressures are also building on rising food and housing prices,” Joanne Yim, a Hong Kong-based economist at Hang Seng Bank Ltd., said before today’s report.

In an effort to avert a property boom and bust, officials tightened lending standards in a Nov. 19 announcement that sent the stock market tumbling today. The Hang Seng index fell 0.4 percent. Li Ka-shing’s Cheung Kong (Holdings) Ltd. fell the most in six months, and Midland Holdings Ltd., the city’s largest realtor, plunged the most in more than a decade.

Echo of China

Hong Kong’s inflation battle echoes that of China, where the highest rate in two years has prompted Premier Wen Jiabao’s government to threaten price controls and release stockpiles of food reserves.

One-off government measures such as electricity subsidies and waivers of property rates and public housing rentals might have distorted Hong Kong’s inflation numbers cash advance loan. Excluding such effects, inflation was 2.3 percent last month, compared with 2.2 percent in September, today’s report showed.

“Inflation in Hong Kong is likely to go up further in the near term,” in part as prices climb across the region, the government said in today’s release.

Hong Kong this month boosted its 2010 inflation estimate to 2.5 percent from an August forecast of 2.3 percent. Economic growth that reached a 6.8 percent annual pace in the third quarter has contributed to price pressures, the government said.

The International Monetary Fund said Nov. 18 that higher rents will probably push up the city’s inflation rate to about 5 percent by the end of 2011. Private home rents rose 15 percent in October from a year earlier, according to data from Centaline Property Agency Ltd., the city’s biggest privately held real- estate broker.

Keeping Peg

Financial Secretary John Tsang said yesterday the city won’t need to change its currency peg over rising risk of an asset bubble. The city’s interest-rate decisions track those of the U.S. because of the fixed exchange rate policy since 1983. He said last week the Fed’s plan had “distorted the market expectation regarding inflation.”

Three days ago, Tsang raised stamp duties and deposit requirements, and limited mortgage insurance, the toughest measures yet to rein in home values that soared 50 percent since January 2009.

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The House failed Thursday to pass a bill that would have given the unemployed three more months to file for extended jobless benefits.

The legislation would have extended the deadline to file for federal unemployment benefits to Feb. 28, sparing 4 million people from falling off the rolls. The deadline is currently Nov. 30.

Federal jobless payments, which last up to 73 weeks, kick in after the state-funded 26 weeks of coverage expire. These federal benefits are divided into tiers, and the jobless must apply each time they move into a new tier.

Congress has extended the deadline to file those applications four times in the past year. The last jobless benefits extension — which lasted six months and cost $34 billion — faced a lot of opposition on deficit conscious Capitol Hill before it finally passed in mid-July.

The $12.5 billion bill that was on the floor Thursday needed two-thirds approval, or 275 votes, a tough hurdle. The vote was 258 to 154.

Still, the bill was the opening salvo in what’s likely to be a highly charged debate on extending the safety net for the nation’s millions of unemployed. While the next step is unclear, it’s possible the extension will resurface in a larger bill, such as one that would extend the Bush tax cuts.

But it’s also likely lawmakers won’t meet the Nov. 30 deadline, meaning hundreds of thousands of people will start losing benefits. In the past, Congress has made the extension retroactive, so the jobless ultimately received all their checks.

Both House and Senate Democrats have said they would have liked to extend the deadline by a year, but the House settled on three months in hopes that it would pass more easily.

A growing chorus of Republicans say they will only support an extension if it is paid for — which it is not at this point. They point to unspent stimulus funds as a potential pot of money.

Lawmakers "ought to develop a consensus on how to extend these critical benefits in a fiscally responsible manner as we attempted to do in July," said Sen. Olympia Snowe, a Republican from Maine, who has supported previous extensions.

Those who support extending benefits are also racing to pass a bill before the Republicans take over control of the House in January, when it could become harder to bring the matter to the floor for a vote.

A $319 billion tab

The unemployed have collected $319 billion in jobless benefits over the past three years payday loans guaranteed no fax. Some $109 billion of that tab has been footed by the federal government, with the rest paid for by taxes levied on businesses.

The jobless now receive an unparalleled level of support while they look for new positions. Benefits last up to 99 weeks, far surpassing the previous record of 65 weeks during the recession of the mid-1970s.

"Terminating this emergency unemployment assistance will not only devastate families, but it also will hurt the entire economy by depressing consumer confidence and demand," said Rep. Sander Levin, a Michigan Democrat, the chairman of the House Ways and Means Committee,

Levin introduced the bill with Rep. Jim McDermott, a Washington Democrat, on Wednesday.

Some 8.5 million people are collecting unemployment benefits, including 4.8 million receiving federal benefits.

Advocates argue that this assistance is vital because it’s so tough to find work in today’s weak economy. The number of long-term unemployed, who have been out of a job for more than six months, stands at 6.2 million.

They note that the federal government has never ended extended benefits when the unemployment rate was above 7.4%. It’s now at 9.6%.

To bolster their position, lawmakers released two reports Wednesday that showed the importance of unemployment benefits to families and to the economy.

A non-partisan Congressional Budget Office report said that the benefits added a median contribution of $6,000 to families, meaning half received less and half received more, in 2009.

And a report by the Joint Economic Committee, a House-Senate panel now headed by Democrats, said ending the extended unemployment program would drain the economy of $80 billion and result in the loss of more than 1 million jobs over the next year. That’s because the unemployed are usually living so close to the edge that they spend their benefits immediately, generating economic activity.

Those opposed to extending the deadline are concerned about the impact on the deficit and about whether prolonged benefits keep the jobless from looking for work.

CNN Congressional Producer Deirdre Walsh contributed to this report. 

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Qantas’ chief executive says that up to 40 Rolls-Royce Trent 900 engines will need to be replaced in the global fleet of Airbus A380 superjumbos following an incident in which an engine broke apart in midair.

Qantas CEO Alan Joyce reportedly told journalists on Thursday that the airline was in discussions with Airbus about its fleet of A380s, which have been grounded since the Nov no teletrack payday loan. 4 incident. Qantas spokesman Simon Rushton confirmed Joyce’s comments.

Qantas, Singapore Airlines and Lufthansa all fly A380s powered by Trent 900 engines. Singapore Airlines and Lufthansa briefly grounded some of their superjumbos after the Qantas incident but returned almost all of them to service after conducting safety checks cheap payday loan online.

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The government is urging owners of recalled Ford Motor Co. minivans to get their vehicles fixed.

About 575,000 Ford Windstar minivans from the 1998 to 2003 model years were recalled in August over concerns that the rear axles could corrode and potentially break.

The recalled vehicles were sold or registered in regions where heavy use of road salt can cause more corrosion. That includes Canada, New England, the Mid-Atlantic states and the Great Lakes region cash advance today.

The National Highway Traffic Safety Administration said only about 75,000 of the minivans had been fixed by the recall, leaving a large number of vehicles still to be repaired.

Typically, 70 percent of recalled vehicles get fixed in 18 months.

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Sales at U.S. retailers climbed in October by the most in seven months, brightening the outlook for holiday shopping even as unemployment holds near 10 percent.

Purchases rose 1.2 percent, exceeding the highest forecast among economists surveyed by Bloomberg News, according to data from the Commerce Department issued today in Washington. Another report showed manufacturing in the New York region unexpectedly shrank in November as orders dropped.

Stock gains over the past two months and growing employment are helping households repair finances, indicating consumer spending will play a bigger role in the recovery. At the same time, merchants from J.C. Penney Co. to Wal-Mart Stores Inc. are offering promotions to guard against any letdown in the last two months of the year, typically the biggest shopping season and hiring time for retailers.

“We expect the holiday shopping season to really ramp up in November,” said Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia, who forecast a 1.1 percent gain in sales. “The breadth of discounting” and steady income gains are “providing some support,” he said.

The improvement in spending comes as other parts of the economy show signs of cooling.

Manufacturing in the New York region contracted in November for the first time in more than a year, according to the Federal Reserve Bank of New York’s so-called Empire State Index. The measure, which covers New York, northern New Jersey and southern Connecticut, fell to minus 11.1 from 15.7 in October. Readings less than zero signal declines in activity.

Shares Climb

The Standard & Poor’s 500 Index fell 0.1 percent to 1,197.75 at the 4 p.m. close in New York as increasing concern over Fed policy and the government budget deficit wiped out earlier gains. The S&P Consumer Discretionary Index, which includes auto dealers, hotels and restaurants where sales are more sensitive to the economic outlook, fell 0.3 percent after having been up as much as 0.7 percent.

The median estimate of 74 economists surveyed projected retail sales would increase 0.7 percent. Forecasts ranged from increases of 0.4 percent to 1.1 percent. The Commerce Department revised the September rise up to 0.7 percent from the 0.6 percent gain previously reported.

Nine of 13 categories in today’s report showed an increase in demand, led by a 5 percent gain among auto dealers. Vehicles sold at a 12.25 million seasonally adjusted annual rate last month, the strongest performance since the government’s cash- for-clunkers program in August 2009, according to industry data released earlier this month.

Effect on Growth

Sales excluding automobiles advanced 0.4 percent, matching the median forecast of economists surveyed.

Excluding autos, gasoline and building materials, which are the figures used to calculate gross domestic product, sales improved 0.2 percent after a 0.4 percent gain the prior month.

Non-store merchants, which include Internet retailers, sporting goods and building material stores, were among the other categories that showed increasing demand.

The National Retail Federation has forecast November- December holiday sales will rise by 2.3 percent from a year ago, the most since 2006.

J.C. Penney, the third-largest U.S. department-store company, last week said third-quarter profit rose 63 percent. Fourth-quarter sales at stores open at least a year will rise 3 to 4 percent, the Plano, Texas-based company said in a Nov. 12 statement, adding that the holiday shopping environment will “remain highly promotional.”

Rebuilding Inventories

Companies may be stocking up ahead of the holidays in anticipation of better sales, another report showed today. Inventories rose 0.9 percent in September, more than forecast, according to figures from the Commerce Department. Auto dealers and building material stores led the advance.

The pace of job growth and Americans’ drive to pay down debt and boost savings may remain hurdles for retailers. Payrolls grew by 151,000 workers in October, the first gain in five months, and the unemployment rate held at 9.6 percent, the Labor Department said Nov. 5.

Joblessness will average 9.3 percent in 2011, according to the median forecast of economists surveyed by Bloomberg this month.

Shares over the past two months rallied in anticipation of more action by the Fed to spur growth. Policy makers this month announced a plan to buy an additional $600 billion of Treasuries through June with the aim of reducing joblessness and averting a drop in prices that would hurt the recovery.

The government may also be poised to extend support for American households.

Tax-Cut Extension

President Barack Obama has said he’s committed to extending tax cuts for middle-class Americans that are due to expire by the end of the year and indicated he’s willing to negotiate with Republicans an extension for the country’s highest earners.

The Democratic Party this month lost control of the House of Representatives to Republicans amid voter discontent over the outlook for the economy.

“It is good to see consumer spending coming back,” Rebecca Blank, the Commerce Department’s undersecretary for economic affairs, said in an interview. “If middleclass Americans see their taxes increase, that is going to have a negative effect. I’m very hopeful that we are going to maintain the current tax setting.”

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The International Monetary Fund stands ready to help Ireland if needed, its managing director said, as market concern about the country’s debt crisis continues.

“Everybody knows that the situation with Ireland, it’s a difficult situation,” IMF Managing Director Dominique Strauss- Kahn told reporters today in Yokohama, Japan. “So far I haven’t received any kind of request. I think they can manage well. If at one point in time, tomorrow, in two months or two years, the Irish want support from the IMF, we will be ready.”

In a conference call of European Central Bank officials around noon Frankfurt time yesterday, Ireland was pressed to seek outside help within days, said a person briefed on the discussion who spoke on condition of anonymity.

Ireland could draw on the 60 billion euro ($82 billion) segment of the broader 750-billion-euro fund set up by the European Union and International Monetary Fund in May, Irish state broadcaster RTE said, without saying where it obtained the information. The smaller pool is funded directly by the European Commission, the EU’s Brussels-based executive branch.

Bailing out Ireland’s financial system could cost as much as 50 billion euros under a “stress case” scenario compiled by the Finance Ministry and central bank. The country’s gross funding need for 2011 will be 23.5 billion euros, falling to 18.6 billion euros in 2014, the nation’s debt agency said yesterday.

Irish bonds rose from a record low yesterday, gaining for the first time in 14 days as traders bet a bailout was near.

Strauss-Kahn, who is attending this weekend’s Asia-Pacific Economic Cooperation forum, also told reporters today that Ireland’s debt problems are mostly linked with “one big bank” and are different from those of Greece.

“It’s not the same thing as Greece’s problem,” which was caused by a lack of economic competitiveness in addition to fiscal woes, he said.

The Irish government nationalized Anglo Irish Bank Corp. in January 2009 as loan losses spiraled. The government also has taken a 36 percent stake in Bank of Ireland Plc and is preparing to take a majority stake in Allied Irish Banks Plc.

EU countries established the bailout fund in May to protect the euro area from the fallout of the Greek-led debt crisis. Speculation has grown that Ireland would need it after a housing-led recession and the need to save its biggest lenders plunged it into fiscal turmoil.

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Group of 20 leaders agreed to develop early warning indicators to head off economic turmoil as emergency talks on Ireland’s debt reminded them the recovery from the global financial crisis remains fragile.

Finance ministers from the G-20 will work next year on a set of so-called indicative guidelines designed to identify large economic imbalances and actions needed to fix them, according to a joint statement released as the Seoul summit came to a close.

“Uneven growth and widening imbalances are fueling the temptation to diverge from global solutions into uncoordinated actions,” the leaders said in the statement. “Uncoordinated policy actions will only lead to worse outcomes for all.”

The agreement may shift the focus away from the U.S.-China dispute over the value of the yuan because it puts pressure on all G-20 nations to work to limit their trade and savings imbalances, Morgan Stanley nonexecutive Asia Chairman Stephen Roach said.

“It really gives the G-20 a far more workable framework to address the broad subject of imbalances,” Roach said in an interview. “This is a far more reliable alternative than to try to resolve a multilateral problem through a bilateral currency” dispute.

A U.S. government official said the meeting also produced a consensus that exchange-rate changes are to happen gradually. The American official, speaking to reporters on condition of anonymity, said the U.S. was encouraged by progress on the Chinese currency.

Ireland Gatecrashes

Global leaders, including U.S. President Barack Obama and Chinese President Hu Jintao, met as global markets were giving a reminder of the financial crisis that led to the first G-20 meeting in November, 2008.

EU members of the G-20 are meeting today as Irish bond yields are soaring on concern the European Union will need to step in with a bailout. The leaders are discussing the Irish debt crisis and will probably issue a joint statement later today, said Steffen Seibert, a spokesman for Merkel.

China’s benchmark Shanghai Stock Exchange Composite Index fell 5.3 percent today, the most since August 2009, and commodities tumbled amid speculation China is preparing to raise interest rates to curb inflation.

The new guidelines will be worked out with the help of the International Monetary Fund and will be developed next year when France holds the presidency of the G-20, according to the statement.

Capital Controls

The statement may also have provided some countries with cover to enact capital controls to limit exchange rate swings.

“In circumstances where countries are facing undue burden of adjustment, policy responses in emerging market economies with adequate reserves and increasingly overvalued flexible exchange rates may also include carefully designed macro- prudential measures,” the statement read.

The agreements emerged after leaders struggled to find ways to address trade imbalances as China rejected policy prescriptions that fault its exchange-rate policy and directed criticism at monetary easing in the U.S.

“The Chinese jealously hold their right to be flexible, their right to adjust,” said Donald Brean, co-director of the G20 Research Group at the University of Toronto. “They would not want to commit to something that is so rigid with respect to their trade imbalances. That is not to say they don’t understand the underlying forces that are causing them.”

China has run up a $201 billion trade surplus with the U.S. for the first nine months of this year, more than the U.S. deficit with the next seven-largest trading partners combined, according to Commerce Department data.

Obama, Hu

The pivotal roles China and the U.S. must play to get a breakthrough at the G-20 was underscored by an 80-minute meeting between Presidents Barack Obama and Hu Jintao yesterday dominated by a discussion about exchange rates.

U.S. Treasury Secretary Timothy F. Geithner has said that the yuan remains undervalued and that China needs to show a continued commitment to allow its currency to rise further over time. China has argued that a quick increase in the yuan’s value would cause economic and social disruption.

The People’s Bank of China set the reference rate for yuan trading at 6.6239 per dollar today, the strongest since a peg ended in July 2005. The yuan has risen about 3 percent against the U.S. currency since June 19, when China said it was allowing a resumption of appreciation that was frozen in 2008.

Geithner said last month that a ratio for current-account surpluses or deficits of 4 percent of gross domestic product was “likely to emerge as the basic benchmark countries look to.” Governments from China to Germany rejected any move to set a target for current-account surpluses or deficits as a percentage of GDP.

“We agreed that we can’t measure sustainable growth and imbalances with one indicator, but that we need a number of indicators,” German Chancellor Angela Merkel told reporters. “These indicators will now have to be discussed, and that’s what the finance ministers will in detail next year.”

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