Stocks at one-month high; eyes on Greece - TheBull.com.au Stocks at one-month high; eyes on Greece - TheBull.com.au

Sunday, June 17, 2012

Stocks at one-month high; eyes on Greece - TheBull.com.au

Stocks at one-month high; eyes on Greece - TheBull.com.au

Stocks recorded their third big gain of the week and closed at a one-month high on Friday because of expectations that the central banks of countries around the world will step in to limit the damage from a debt crisis in Europe.

The Dow Jones Industrial Average climbed 115 points.

Now investors wait for a crucial election on Sunday in Greece that will help determine whether that country stops using the euro as its currency. Such an exit would destabilise financial markets.

Mario Draghi, president of the European Central Bank, said his institution stood ready to support Europe's banking system by continuing to lend money to solvent banks. He also appeared to leave open the possibility of an interest rate cut.

Draghi said in Frankfurt that the ECB has a "crucial role" in extending credit to banks in times of instability, when banks can't always borrow money on financial markets.

On Thursday, Reuters reported the ECB, the US Federal Reserve, the Bank of England and other global financial authorities were ready to act in concert to limit the fallout from Greece.

Investors also are more confident about the election itself, said Peter Tuz, a money manager, at Chase Investment Counsel, which runs mutual funds.

"There's a growing sense of optimism," he said. "The betting now is that the 'let's stay in the euro' segment of the population will win."

Borrowing costs for Spain were unchanged. They fell slightly for Italy, an indication that investors are feeling a little better about that country's solvency. They have been worried that Italy will have to seek financial rescue.

The Dow rose 115.26 points to close at 12,767.17, its highest finish since May 11. The Standard & Poor's 500 index climbed 13.74 points to 1,342.84, also its highest since May 11. The Nasdaq composite index rose 36.47 points to 2,872.80.

For the week, the Dow rose 0.9 per cent, the S&P one per cent and the Nasdaq 1.3 per cent.

The week included four moves of 100 points or more for the Dow, the first time that has happened since April:

- On Monday, the Dow lost 142 points as enthusiasm faded for a $US125 billion ($A125.2 billion) rescue of Spanish banks.

- On Tuesday, the Dow climbed 162 after a Federal Reserve official said he supported more measures to stimulate the economy.

- On Thursday, the Dow gained 155, primarily because of late reports about possible coordinated action by central banks.

Energy stocks rose the most Friday. OPEC oil ministers agreed Thursday to keep their production target steady, a compromise meant in part to soothe economically troubled countries.

A pair of weak economic reports helped push Treasury prices up and yields down.

A report on US factory production showed a drop in manufacturing, a key driver of economic growth. A gauge of manufacturing in New York sank to its lowest level since November.

The yield on the 10-year Treasury note fell to 1.60 per cent from 1.64 per cent Thursday. Traders have been shifting money into the safety of the Treasury market ahead of the Greek election. That higher demand has kept yields near all-time lows.

Among stocks making big moves:

- Microsoft rose 68 cents, or 2.3 per cent, to $US30.02 following reports that the company is in talks to buy Yammer, a developer of social networks within companies.

- Capital One Financial rose 80 cents, or 1.5 per cent, to $US53.81 after the company said uncollectable and delinquent loans at its credit card business dropped last month.

- Defence contractor AAR plunged $US1.23, or 10.6 per cent, to $US10.34. The company updated its forecast for fourth-quarter and fiscal-year earnings, and they were weaker than Wall Street expected.

- YPF, Argentina's state-controlled oil and gas producer, rose 72 cents, or 6.9 per cent, to $US11.17 after Mexican telecommunications billionaire Carlos Slim said he had acquired an 8.4 per cent stake in the company.



Business groups warn Welsh government on 'living wage' - BBC News

The Welsh government is looking at how devolved public sector bodies could be encouraged to become 'living wage' employers.

Business leaders have warned the Welsh government not to push for private sector pay rises as ministers investigate public sector wage levels.

Labour has a manifesto commitment to find ways of making sure all Welsh workers are paid a "living wage".

Business groups say it may stop firms taking on staff or even mean layoffs.

The Welsh government says it is beginning to examine how devolved public sector employers can be encouraged to pay a living wage.

A policy group of interested parties is expected to meet over the summer.

Start Quote

I'm afraid it just isn't realistic in the environment we live in”

End Quote Robert Lloyd Griffiths Institute of Directors

Academics at Loughborough University have estimated a living wage is at least £7.20 an hour. The current statutory minimum wage is £6.08 an hour for workers aged 21 and over.

Welsh NHS workers and Welsh government civil servants are already paid at least the living wage.

A number of big private sector employers, including Barclays Bank and accountants KPMG, are also signed up to paying it.

But business organisations warned Welsh ministers not to try to force them to raise wages, for example by inserting living wage clauses in government contracts.

Robert Lloyd Griffiths of the Institute of Directors said he was concerned the living wage would effectively become the new minimum wage.

"Businesses would like to take on more staff and lots of companies that I talk to would love to be in a position to be able to take on more employees," he said.

'Very difficult'

"It's very difficult out there and anything that now will hinder them from doing that, which they'd like to do, is going to cause problems.

"I'm afraid it just isn't realistic in the environment we live in."

Anna Milewski, of the Federation of Small Businesses, said: "We have to look at it from the employers' perspective, we've surveyed them.

"They say that an increase can, at best, deter them from taking on staff at worst actually result in them laying off staff, which would not be a positive outcome, of course."

Start Quote

If we're the trailblazers we hope the private sector won't be so frightened of it”

End Quote Julie James Labour AM

The Welsh government said: "Unlike the minimum wage, the living wage is not statutory.

"However, any employer in the UK is free to sign up to the Living Wage Foundation's campaign. The Welsh government is starting to look at how devolved public sector organisations have been engaging with the idea and what it would take to encourage those organisations to become living wage employers.

"This is a key reason the Minister for Local Government and Communities [Carl Sargeant] has decided to set up a policy group, so that consideration of the benefits, in much the same way as they were in London, can be given collaboratively. That group has yet to be brought together, but it is anticipated that this will happen over the summer."

Labour AM Julie James said: "If we're the trailblazers we hope the private sector won't be so frightened of it and will actually see the benefit of a workforce which when they're happy and healthy work harder, stay longer, are more and actually do better work. So it's a win win, really."

Young campaigners, working with Save the Children, recently petitioned the assembly for a living wage above the minimum wage.

Iram Shahzad, a 13-year-old pupil at Fitzalan High School in Cardiff, told BBC Wales Sunday Politics that people in her community were working long hours but not earning enough money to cover their everyday essentials.

"It's not fair that they don't get to live a happy life," she said.

James Pritchard, head of Save the Children in Wales, said a living wage would be a "direct way of starting to tackle child poverty".

Sunday Politics is on BBC One Wales at 12:00 BST.


Money laundering cases tough, critical - Lubbock Avalanche-Journal

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McALLEN — When it comes to arresting drug traffickers and dismantling organized crime, the investigation into a U.S. horse racing operation allegedly laundering money for one of Mexico’s most powerful cartels is rare — and difficult to ...

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