Finance & Business World

NATO warplanes struck Moammar Gadhafi’s compound in Tripoli on Saturday, as the new rebel administration warned it was fast running out of money because countries that promised financial aid have not come through.

Ali Tarhouni, the rebel finance minister, complained that many countries that pledged aid have instead sent a string of businessmen looking for contracts from the oil-rich country.

“They are very vocal in terms of (offering financial) help but all that we have seen is that they are … looking for business,” Tarhouni told The Associated Press on Saturday.

Tarhouni recently returned to Benghazi, the rebel bastion, from a trip overseas to drum up aid that included a visit to Rome where the 22-nation Contract Group on Libya promised to set up a fund to speedily help finance the rebel administration.

“I think even our friends do not understand the urgency of the situation. Either they don’t understand, or they don’t care,” Tarhouni said.

Tarhouni singled out Qatar and Kuwait for their “generous, very generous help.” He did not specify the aid these countries have offered, but Qatar has sent fighter jets, airplanes full of food and medical aid as well as helping the rebels market their oil.

Tarhouni also praised France, which was the driving force behind the U.N. no-fly zone. But “other than that, everybody is just talking,” he said. “So far, nothing has come through and I am fast running out of cash.”

Tarhouni emphasized that the rebels’ National Transitional Council will be signing no long-term contracts. While the rebel administration will honor previously signed contracts, Tarhouni indicated a new democratically elected government might do otherwise.

“Right now, I am not going to sign any contract that has any consequences for the future of Libya, with the exception of what I need in terms of food, medicine, fuel,” he said.

Before the conflict, Libya, an OPEC member, produced about 1.6 million barrels per day, just under 2 percent of world production.

Meanwhile, nearly two dozen Libyan soldiers, including a colonel and other officers, fled their country in two small boats and took refuge in neighboring Tunisia, where thousands fleeing the fighting in Libya have taken refuge.

A person who met with some of them says they fled rebel-held Misrata, arriving at Ketf port, near Ben Guerdane, on the Tunisian side of the border. The person who met with them Saturday asked to remain anonymous for security reasons. The group turned over their weapons to the Tunisian Army.

The official TAP news agency said 22 military, some ranking officers, arrived Friday in boats carrying a dozen civilians, two with bullet wounds.

Three dissident officers from Moammar Gadhafi’s army reached Tunisia in a boat May 15.

Also Saturday, an alliance spokesman said NATO fighter jets struck Gadhafi’s Bab al-Aziziyah compound in Tripoli in the early hours Saturday. He said the Libyan leader was not a target and there was no way to know if he was there at the time of the attack.

The spokesman said that around noon a vehicle storage area in the same area was hit.

The strike sent a shuddering boom through Tripoli and rattled windows. Such a daylight attack is fairly unusual since NATO began its aerial attacks over Libya three months ago.

Airstrikes over the past week have pounded the large barracks area that lies close to the Gadhafi compound. The same compound was badly damaged by U.S. warplanes 25 years ago in response to a bombing that had killed two U.S. servicemen at a German disco.

Saturday’s airstrike came after leaders at a summit of the Group of Eight world powers reiterated that Gadhafi had to leave power.

Russia, a leading critic of the NATO bombing campaign and one-time Gadhafi ally offered to mediate a deal for the Libyan leader to leave the country.

Speaking at the summit in Deauville, France, Russian President Dmitry Medvedev, said Friday he was sending an envoy to the rebel stronghold of Benghazi immediately to start negotiating, and that talks with the Libyan government could take place later.

National Transitional Council head Mustafa Abdul-Jalil said Saturday the rebels would accept negotiations led by anyone willing to find a solution _ as long as it requires the departure of Gadhafi and his sons.

Speaking to reporters in Benghazi, Abdul-Jalil said the transition to democracy would take at most one year after Gadhafi’s removal from power. He also said the council had decided to ban all current members “from running for any positions in the transitional period following the fall of Gadhafi.”

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If you’re thinking of buying a car soon, here’s some advice: Don’t.

“If you can wait, wait,” says Jeremy Anwyl, CEO of Edmunds.com, the car-buying website.

The Japanese earthquake is raising prices and cutting selection

Berkshire Hathaway CEO Warren Buffett says he doesn’t think his reputation has been hurt much by a former top executive’s questionable investment in Lubrizol shortly before Berkshire announced plans to buy the chemical company.

Buffett said Sunday he has made mistakes before and he will make more in the future. Now that the details of David Sokol’s Lubrizol investment are mostly out, Buffett says people can make their own judgments about him.

Buffett says Sokol’s behavior was inexcusable and clearly violated company possibilities.

Sokol, who resigned, denies any wrongdoing.

Buffett says there’s no way Berkshire can be free of problems with 260,000 employees, but the company will try to deal with any misdeeds swiftly and surely.

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Japan’s Nikkei 225 index was lower Friday on the back of a strengthening yen that could hurt exporters already struggling in the aftermath of last month’s devastating earthquake.

The Nikkei, one of a handful of exchanges open on the Good Friday holiday, was 0.5 percent lower to 9,639.16. Shares of major exporters slumped, including Canon Inc., by 2.3 percent; Sony Corp., by 1.5 percent; and Honda Motor Corp., down 1.1 percent.

South Korea’s Kospi index was flat at 2,198.50, and mainland China’s Shanghai Composite Index was down 0.2 percent to 3,022.17 as investors booked profits following a week where stocks generally moved up. The smaller Shenzhen Composite Index was also down, 0.3 percent to 1,278.70.

Markets in Hong Kong, the Philippines, Australia and New Zealand were closed for the holiday payday loan lenders.

On Wall Street, strong earnings from large companies like Apple Inc. and UnitedHealth lifted stocks broadly higher Thursday. Gains were spread across the market, with all 10 company groups that make up the S&P 500 index closing the day with gains.

The Dow rose 52 points to close at 12,506. The S&P 500 rose 7 points to 1,337. The Nasdaq rose 18 points to 2,820.

The euro rose $1.4555 from $1.4544 late Thursday in New York. The dollar dropped to 81.85 yen from 81.90 yen.

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China will continue tightening monetary policy for “some time,” central bank Governor Zhou Xiaochuan said a day after the world’s second-biggest economy reported inflation accelerated to the fastest pace since 2008.

“We will remove the monetary factors that are related to inflation,” Zhou said at a briefing today in the southern Chinese province of Hainan, where he’s attending the Boao Forum for Asia. “Our monetary policy will continue to move from moderately loose to prudent. This means properly tightening. The trend will continue for some time.”

China may increase the reserve requirement ratio for the nation’s banks this month in an effort to curb inflation, which the government said yesterday accelerated to 5.4 percent in March, according to Barclays Capital and Citic Securities Co. The People’s Bank of China has raised interest rates four times and increased reserve requirements six times since the third quarter of last year in a bid to rein in consumer prices.

“Policy tightening should remain firm,” Chang Jian, a Hong Kong-based economist with Barclays Capital, said by phone today. “Inflation risk remains significant. If they maintain the tightening stance and continue to withdraw liquidity and continue to control credit as well as the pace of lending, that at least gives you a higher chance of success.”

Economic Growth

China’s economy grew 9.7 percent in the first quarter, faster than the 9.4 percent median estimate in a Bloomberg survey, according to figures released by the National Bureau of Statistics yesterday.

The central bank reported a day earlier that M2 money supply grew a faster-than-expected 16.6 percent in March, and that new yuan loans for the month also exceeded economists’ estimates at 679.4 billion yuan.

China last increased the reserve requirement effective from March 25 and raised benchmark lending and deposit rates from April 6. The central bank has also imposed differentiated reserve requirements on the nation’s lenders. The reserve ratio is 20 percent for China’s biggest banks and the one-year benchmark for borrowing costs is 6.31 percent.

Zhou said today China would continue to use differentiated regulations for financial institutions based on their systemic importance. He also said there isn’t an absolute ceiling for the level of banks’ reserve requirements.

“I agree with the general view that there is no absolute line or limit for where to set the reserve requirement ratio,” Zhou said. “It depends on many conditions. When those conditions change, the force and room for reserve requirement ratio adjustments will also change.”

Inflation in March was largely driven by food costs, which rose 12 percent last month from a year earlier. Non-food inflation accelerated to 2.7 percent.

–Eva Woo, Henry Sanderson. With assistance from Huang Zhe in Beijing. Editors: Bloomberg News, Reinie Booysen

To contact Bloomberg News staff on this story: Eva Woo in Beijing at +86-10-6649-7537 or ewoo9@bloomberg.net

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Service industries in the U.S. grew less than forecast in March, showing higher fuel costs are raising concern sales will cool.

The Institute for Supply Management’s index of non- manufacturing companies fell to 57.3 from 59.7 in February, lower than the 59.5 median forecast of economists surveyed by Bloomberg News. Readings greater than 50 signal growth.

Unrest in the Arab world has caused gasoline prices to climb to the highest level in more than two years, representing a headwind for consumer spending, while the aftermath of the disaster in Japan may disrupt supplies to American factories. Minutes of the Federal Reserve’s meeting last month, which took place before the latest run-up in prices, showed policy makers were divided over when to begin removing record stimulus.

“Global events of elevated uncertainty have taken something of a toll,” said Richard DeKaser, an economist at Parthenon Group in Boston. “It looks like April is continuing to struggle under some of these clouds. We’re seeing a little bit of a slowdown” in the economy, he said.

Estimates in the Bloomberg survey of 69 economists ranged from 57.7 to 61. The Tempe, Arizona-based group’s index of the industry, which accounts for about 90 percent of the economy, averaged 56.1 in the five years to December 2007, when the last recession began.

Last month’s drop in the services index was led by a 7- point slump in the business activity component, that measure’s biggest decrease since November 2008. The gauge is a reflection of sentiment among purchasers, according to economists.

Gasoline Prices

The average price of a gallon of regular gasoline at the pump advanced to $3.69 yesterday, the highest since September 2008, according to data from AAA, the nation’s biggest motoring group.

While the Fed’s decision to continue their $600 billion bond-purchase program was unanimous, minutes of the March 15 meeting showed a few of the 10 voting members of the central bank’s policy-making committee thought evidence of a stronger recovery, higher inflation and rising inflation expectations “could make it appropriate to reduce the pace or overall size” of the plan. “Several others” said they “did not anticipate making adjustments,” the report showed.

Stocks trimmed earlier gains after the minutes on concern Fed officials will begin to remove stimulus. The Standard & Poor’s 500 Index was little changed at 1,332.63 at the 4 p.m. close in New York. Treasury securities fell, pushing the yield on the 10-year note up to 3.48 percent from 3.42 percent late yesterday.

Breakdown of Index

The ISM’s measure of new orders at service providers decreased to 64.1 from 64.4 in February. The group’s employment gauge dropped to 53.7 from 55.6 a month earlier. The index of prices paid declined to 72.1 from 73.3.

The ISM services survey covers industries that range from utilities and retailing to health care, finance and transportation. Today’s report follows the group’s April 1 figures that showed manufacturing grew in March at close to the fastest pace in almost seven years.

The services gauge has averaged 53.1 since the recovery started in June 2009 through March, trailing the 56.2 reading on the group’s factory measure during the same period.

The factory rebound is generating more demand for services, which account for almost 90 percent of the economy, benefiting companies such as FedEx Corp. (FDX), which operates the world’s biggest cargo airline.

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A drop in the unemployment rate to a two-year low sent stocks higher Friday.

The Labor Department said the unemployment rate fell to 8.8 percent, the lowest since March 2009, as companies added workers at the fastest two-month pace since before the recession began. Approximately 216,000 new jobs were created last month, offsetting layoffs by local governments. Economists had expected the unemployment rate to remain at 8.9 percent.

“We are clearly seeing a breakout in the labor market,” said Paul Zemsky, the head of asset allocation at ING Investment Management. “The jobless recovery is ending and we are moving into a job expansion stage of the economy.”

The report helped send the Dow Jones industrial average to a new 2011 high during early trading. Stocks then pared those gains in the afternoon as oil prices hit new 30-month highs. Crude oil jumped $1.22 to settle at $107.94.

The Dow’s 100-point gain early in the day seemed unwarranted because the employment report was just slightly better than expected, said Jack Ablin, chief investment officer at Harris Private Bank in Chicago. “There’s a relief that the job gains were continuing, but it’s not a huge surprise,” he said. “It’s worth maybe 40 points on the Dow.”

Stocks rose across the market. Eight of the 10 company groups that make up the S&P 500 index moved higher, led by a 0.9 percent rise in industrials shares.

The Dow rose 56.99 points, or 0.5 percent, to 12,376.72. The average of 30 large company stocks gained 1.3 percent for the week.

The Dow has already risen 6.9 percent this year. That’s the best start since 1999.

The Standard & Poor’s 500 index rose 6.58, or 0.5 percent, to 1,332.41. The Nasdaq composite rose 8 online payday loan lenders.53, or 0.3 percent, to 2,789.60.

All three indexes made gains for the second week in a row. The S&P 500 rose 1.42 percent and the Nasdaq 1.7 percent.

“This jobs report shows that we are in the early stages of a sustainable recovery in employment, and that is what’s letting the market put the recent correction behind us,” said Phil Orlando, chief equity strategist at Federated Investors.

The Institute of Supply Management reported a slight slowing in manufacturing growth during March. The trade group’s index of manufacturing activity slipped to 61.2 from February’s 61.4. The drop was largely expected after manufacturing hit its highest level since May 2004 during February.

The Commerce Department delivered more bad news on the construction industry. The government said construction spending fell in February to its lowest level since 1999.

Ford rose 1.7 percent after the carmaker said sales jumped 16 percent in March as its new fuel-efficient cars proved popular. Ford also outsold General Motors in the U.S, the second time that’s happened since 1998.

General Motors gained 4.5 percent after the company said its U.S. sales rose 11 percent in March.

Nasdaq OMX Group and IntercontinentalExchange said early Friday that they are making a bid for NYSE Euronext, offering what they say is a 19 percent premium to the deal the company struck with the operator of the German stock exchange. NYSE shares jumped 12.6 percent.

Two shares rose for every one that fell on the New York Stock Exchange. Trading volume was 4 billion shares.

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On the top floor of St. John’s Mercy Medical Center, doctors and nurses watch banks of video feeds, peering in on intensive care patients at rural hospitals across the Midwest.

Two critical care doctors and nine nurses in the St. Louis area oversee more than 400 patients at St. John’s Mercy and a dozen other hospitals in four states faxless cash advance. In round-the-clock shifts, they scan patients’ vital signs and review their medications, lab work, X-rays and medical records. They conduct real-time quality control audits to ensure best practices are being followed.

From this control room, they can operate high-resolution cameras mounted in doorways of patients’ rooms

A French judge filed preliminary charges of manslaughter Friday against Air France over a 2009 crash that killed all 228 people aboard a jet that plunged into the Atlantic Ocean.

Air France vigorously protested the move, an unusual step in an emotional investigation into the worst-ever accident for France’s No. 1 airline.

Judge Sylvie Zimmerman filed the preliminary charges a day after doing the same against Airbus, the maker of the doomed jet and one of Europe’s biggest manufacturers.

Air France Flight 447 dived into the Atlantic on June 1, 2009, amid an intense, high-altitude thunderstorm while flying from Rio de Janeiro to Paris.

The cause of the crash remains unclear, and may never be determined without the “black box” flight recorders, somewhere in the ocean depths. A fourth search operation aimed at looking for them starts next week.

Automatic messages sent by the Airbus 330 jet’s computers show it was receiving false air speed readings from sensors known as pitot tubes. Investigators have said the crash was likely caused by a series of problems, and not just sensor error.

“We are protesting this,” CEO Pierre-Henri Gourgeon told reporters at the courthouse. “It seems to us that it is unfounded.”

“We do not understand and we do not recognize the reason or any good reason to justify the fact that we are prosecuted today,” he said.

Under French law, preliminary charges mean the investigating magistrate has sufficient reason to suspect wrongdoing. The step allows the magistrate to continue investigating before determining whether to send the case to trial.

Air France lawyer Fernand Garnaud said the judge did not elaborate on reasons for the move.

Gourgeon said the pitot problems were “a contributing factor but not the principal cause” of the crash. He said Air France had taken all necessary measures to fix faulty sensors.

Airbus knew since at least 2002 about the pitot problems, but air safety authorities did not order their replacement until after the crash.

The tubes, about the size of an adult hand and fitted to the underbelly of a plane, are vulnerable to blockage from water and icing. Experts have suggested that Flight 447’s sensors, made by French company Thales SA, may have iced over and sent false speed information to the computers as the plane ran into a thunderstorm at about 35,000 feet (10,600 meters).

In November, Air France issued a memo to investigators saying the carrier had counted 15 incidents in which the sensors had iced over on the same aircraft type in the 10 previous months before the crash.

The airline said it had informed Airbus and Thales about those findings, and estimated that about 16 documents that traced Air France’s exchanges with Airbus showed that the planemaker didn’t respond to its concerns.

Air France and Airbus will finance the estimated $12.5 million cost of the new search effort, in which three advanced underwater robots will scour the mountainous ocean floor between Brazil and western Africa, in depths of up to 4,000 meters (13,120 feet).

Gourgeon said Friday that the specialists in charge “feel convinced that they have a chance of finding some elements, of finding the wreckage, and if everything happens in ideal conditions, we might even envisage finding this famous black box.”

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Norway’s central bank kept its benchmark interest rate unchanged while signaling it may start tightening policy earlier than previously indicated as policy makers try to cool credit growth without fueling krone gains.

Oslo-based Norges Bank kept the overnight deposit rate at 2 percent, the bank said today. The decision was expected by 17 of the 18 economists surveyed by Bloomberg. One economist foresaw an increase to 2.25 percent. The krone gained as the bank, which has left rates unchanged since May, raised its forecast for future rate increases “slightly,” Deputy Governor Jan F. Qvigstad said at a press conference. The “normalization” of interest rates is proceeding faster than expected, he said.

“Norges Bank is now indicating that the rate will be raised in May or June and then again in October, December and January, by 25 basis points at each meeting,” said Kyrre Aamdal, an Oslo-based senior economist at DnB NOR Markets.

The bank is trying to steer an economic rebound in the world’s seventh-largest oil exporter without spurring a krone appreciation that may hurt exporters such as Europe’s third- biggest aluminum producer Norsk Hydro ASA. At the same time, Norway’s financial regulator has warned low borrowing costs risk fueling a credit-driven property bubble as house prices exceed a pre-crisis peak.

“The projections in the March 2011 Monetary Policy Report imply that the interest rate should gradually be raised towards a more normal level,” Qvigstad said in the statement.

Jobs, Prices

Europe’s lowest unemployment rate, which slipped to 3 percent last month not including seasonal swings, and house- price growth have yet to feed through to higher consumer prices. Underlying inflation, which adjusts for the impact of taxes and energy, was 0.8 percent in February, and has remained below the central bank’s 2.5 percent target since August 2009.

“Should economic activity or inflation rise more than expected, the increase in the key policy rate may be more pronounced than currently envisaged,” Qvigstad said business card. “In the event of a marked slowdown in world economic growth, heightened financial turbulence abroad or a further appreciation of the krone, the increase in the key policy rate could be deferred further ahead.”

The bank targets an interest rate interval of 1.75 percent to 2.75 percent until its June 2011 meeting, it said.

Krone Gains

The krone was trading 0.7 percent higher against the euro at 7.8687 at 3:12 p.m. in Oslo. Against the dollar, the krone was up 0.3 percent at 5.6462.

“The currency is key to what they are going to do, as long as inflation is quite low,” said Knut Magnussen, a senior economist at DnB Markets in Oslo. “Obviously they would like to hike rates in the months going forward but that depends very much on the currency.”

Norway’s mainland economy, which excludes income from oil, gas and shipping, expanded 2.2 percent last year and will grow 3.3 percent in 2011, Statistics Norway estimates. Financial Supervisory Authority Director Bjoern Skogstad Aamo said developments in the country’s property market make him “nervous,” in Oslo last week. The regulator estimates that household debt levels are rising faster than incomes.

The central bank today raised its forecast for mainland economic growth for this year to 3.25 percent from 3 percent previously. Output will expand 3.75 percent next year, versus an October estimate for 3 percent, it said. It also raised the outlook for 2013 and now sees 3.25 percent growth versus 2.75 percent previously.

House prices rose an annual an annual 9.2 percent in February, after gaining 7.6 percent in January, according to the Association of Norwegian Real Estate Agents.

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