White House Chief of Staff Jack Lew said hundreds of billions of dollars in spending for roads and bridges, education and manufacturing are necessary to keep the U.S. economy growing.
President Barack Obama announced a package of proposals designed to jolt the housing market, his latest effort to reignite the economy after four years of foreclosures and falling home prices.
China is allowing the nation
A former executive of KV Pharmaceutical Co. has accused the Bridgeton-based drug maker of cheating her out of stock options.
Melissa Hughes, the company’s former vice president of human resources, filed a lawsuit Oct. 28 in the Circuit Court of St. Louis County. Her suit was transferred recently to federal court in St. Louis.
Hughes, who resides in St. Charles County, worked at KV from 2003 until 2010.
KV executives could not be reached for comment.
According to the lawsuit, KV awarded Hughes a stock option plan in February 2009, which granted her the right to purchase 40,000 shares of KV’s Class A common stock at $2.95 per share. Two months later, the suit alleges, KV gave her a “retention incentive” that granted her the right to purchase an additional 10,000 shares of Class A common stock at $1.52 per share.
The retention incentive, the suit alleges, was given “for the purpose of retaining her as a key employee with critical and confidential knowledge concerning the financial well-being of the company” because the loss of Hughes and other key workers would have resulted in an exodus of talented employees.
In exchange for continuing to work at KV, the suit alleges, Hughes continued to work at the drug maker “and diligently pursued their economic objectives, and did so at great peril to her long term financial well-being” as the company verged on bankruptcy during the period from April 2009 through September 2010 payday loan lenders.
KV officials acted in bad faith by failing to inform her that her stock options could not be exercised due to the company’s delays in filing its 2009 and 2010 annual reports with the Securities and Exchange Commission, the suit alleges. In addition, the suit alleges that KV officials repeatedly blocked Hughes’ attempts to exercise her stock options in 2010 and 2011.
According to the suit, KV’s former chief executive David Van Vliet told Hughes that her stock options “would be worth $2 million,” but the suit did not specify what period of time Vliet may have referenced. Vliet could not be reached Friday for comment.
Hughes claims that during the time period when she attempted to exercise her stock options from June 2010 to June 2011, the fair market value of KV stock was well above the option purchase price as set forth in her stock option agreements.
According to Bloomberg News, the average price of KV’s common shares during that time period was $3.17, with a low of 61 cents and a high of $13.07.
Hughes was notified last June that KV’s board of directors had canceled her stock options because they had expired before being exercised, the suit alleges.
Property and casualty insurer Alleghany Corp. has agreed to buy the insurer Transatlantic Holdings Inc. in a cash-and-stock deal valued at about $3.4 billion.
The companies say the deal values Transatlantic at about $59.79 per share. That’s a 10 percent premium to the company’s $54.43 Friday closing stock price.
New York-based Transatlantic had been courted by several businesses, receiving takeover offers from Validus Holdings Ltd. and a unit of Warren Buffett’s Berkshire Hathaway Inc., National Indemnity Corp. It also said in October that it had started confidential talks with an unnamed party.
In the deal with Alleghany, Transatlantic stockholders will receive 0.145 shares of Alleghany and $14.22 in cash for each share they own.
The companies say the deal announced Monday is expected to close early next year.
U.S. workers increased their productivity this summer by the largest amount in a year and half, and they cost their employers less. The trend is good for corporate profits but not necessarily for job growth.
The Labor Department says productivity rose at an annual rate of 3.1 percent in the July-September quarter after two straight quarterly declines. Labor costs dropped at an annual rate of 2.4 percent in the third quarter, the first decline since late 2010 pay day loan lenders.
Productivity is the amount of output per hour of work. The big jump in productivity in the third quarter reflected the fact that economy had its best quarterly growth in a year while hours worked were little changed.
Global stocks gave up some of their recent gains Monday amid concerns over Italy’s ability to get a handle on its colossal debt pile, while the yen slid in the wake of another attempt by the Japanese monetary authorities to weaken the currency.
Last week, stocks enjoyed one of their best weeks in months as investors breathed a sigh of relief that eurozone leaders finally presented the broad outlines of a convincing anti-crisis strategy. The three-pronged strategy of boosting the bailout fund, getting private creditors to take a bigger hit on their Greek debt holdings and the banks to raise more capital was largely viewed favorably by the markets, though details need to be ironed out.
Many analysts, however, think that Europe will end up having to do more, especially if bond market investors continue to ask for more in return for buying up Italian debt _ a poorly received auction last Friday has fueled concerns over the country.
Italy is the eurozone’s third largest economy and only Greece has more debt as a percentage of national income. Its debts dwarf the euro1 trillion ($1.4 trillion) Europe’s bailout fund will have at its disposal if last week’s commitments are delivered.
“We remain sceptical that the plan will prove enough to restore financial market stability for long, with some signs of disappointment already starting to creep into the market as Italian 10 year yields continue to march above 6 percent,” said Lee Hardman, an analyst at The Bank of Tokyo-Mitsubishi UFJ.
Investors more cautious view of last week’s plan weighed on stock markets Monday.
In Europe, the FTSE 100 index of leading British shares was down 1.1 percent at 5,641 while Germany’s DAX fell 1.6 percent to 6,260. The CAC-40 in France was 1.1 percent lower at 3,282.
Wall Street was also poised for a lower opening _ Dow futures were down 0.8 percent at 12,070 while the broader Standard & Poor’s 500 futures fell 1 percent to 1,268.
Earlier, the main point of interest in financial markets was the Bank of Japan’s latest intervention to weaken the yen, which had hit a new post World War II high against the dollar.
The strong yen has dented earnings of Japanese corporations such as Nintendo Co. and Toyota Motor Corp. and hurt the economy’s recovery from the March 11 earthquake and tsunami. Finance Minister Jun Azumi said monetary authorities could continue intervening.
The dollar surged about 5 percent to above 79 yen for a while, before slipping back to 77.81 yen. Japan’s export sector _ whose fortunes are largely tied to the relative strength of the yen _ rose abruptly. Isuzu Motors Corp. jumped 3.7 percent. Canon Inc. rose 1 percent and Nikon Corp. added 1.8 percent. Nintendo Co. gained 1.5 percent.
Those gains helped limit the losses on Tokyo’s Nikkei 225 index. It closed 0.7 percent lower at 8,988.39.
Analysts are skeptical over whether the intervention will have a long-lasting impact. Previous efforts this year have provided short-term relief.
The intervention is likely to feature at a summit of leaders from the Group of 20 industrial and developing nations in Cannes, France, later this week. How to get the global economy moving again is likely to the main topic of debate.
There’s also a lot of U.S. economic data to digest this week, culminating in Friday’s monthly jobs report on Friday.
“This month is going to be another watershed insight into whether we are looking at a low growth environment or something worse,” said Ric Spooner, chief market analyst at CMC Markets in Sydney. “To maintain the low growth environment view, the market is going to want to see positive employment growth.”
The Federal Reserve and the European Central Bank also meet to decide on their monetary policies this week. Mario Draghi will on Thursday hold his first meeting and press conference as chief of the ECB and successor to Jean-Claude Trichet. Investors will be looking for signs that the bank is considering cutting interest rates and that it will continue its program to buy bonds. The program, used intermittently by the ECB, has helped keep bond yields down so far this year in Italy and Spain.
Elsewhere in Asia, mainland Chinese shares were mixed. The benchmark Shanghai Composite Index snapped a five-session winning streak by falling 0.2 percent to 2,468.25, while the Shenzhen Composite Index added 0.5 percent to 1,040.93.
In Sydney, shares of Australian flag carrier Qantas Airways Ltd. jumped 4.3 percent after a court ordered employees of the world’s 10th-largest airlines back to work. The airline had grounded its entire fleet on Saturday following weeks of strikes by its workers, but an arbitration court on Sunday ordered an end to the strikes and canceled the staff lockout.
Oil prices tracked equities lower, with the benchmark rate for December delivery down 49 cents at $92.85 a barrel in electronic trading on the New York Mercantile Exchange.
The personal computer industry, already reeling from depressed demand, has been dealt another setback: Massive flooding in Thailand has curtailed production of a critical component
TORONTO