April Showers SEC steps up probes,expect a ripple affect
The Institute of Supply Management reports non manufacturing gains Closely watched sentiment index slips a bit after surging in March, but beats forecasts.
April
Import prices surge 1.1% on oil "These developments are encouraging signs..."
U.S. Leading Economic Index Increases 0.1 Percent GE see improvement in Q2
Payrolls gain 58,000 in March Vice Chairman Roger Ferguson said on Wednesday the U.S. economic outlook had "brightened"
"These developments are encouraging signs, but they are
no guarantee that a sustained solid expansion of final demand
has gained traction, and we will be monitoring economic developments
closely in coming months," he added.
Ferguson described the current federal funds rate of 1.75 percent -- a 40-year low for the bellwether rate after 11 interest rate cuts in 2001 -- as "accommodative" and said that monetary policy had "substantially cushioned" the blows that hit the economy last year.
Fed policymakers hold their next scheduled meeting on May 7 amid wide expectations they will leave borrowing costs untouched.
Ferguson noted the economic downturn had made conditions tougher for small businesses but said they do not yet face a situation akin to the 1990s, when credit was all but choked off.
Top securities regulators launch formal investigation
The SEC said it is conducting the probe with the help of the New York Stock Exchange, the National Association of Securities Dealers, Spitzer and state securities regulators.
"The SEC has commenced a formal inquiry into market practices concerning research analysts and the potential conflicts that can arise from the relationship between research and investment banking," the SEC said in a statement, notable for its rarity.
The SEC's practice generally is to not confirm an investigation is under way.
"The recent disclosures that resulted from the investigation by the New York State Attorney General, as well as the practices uncovered by the staff of the SEC, the NYSE and NASD, reinforced the commission's conclusion that further inquiry is warranted," the SEC's statement said.
Pitt,
the SEC chairman, called the probe "the next step --
and a critical one -- in the commission's year-long review
of analyst practices," according to the statement.
U.S. Leading Economic Index Increases 0.1 Percent
The Conference Board announced today that the U.S. leading index increased by 0.1 percent, the coincident index increased by 0.2 percent, and the lagging index decreased by 0.4 percent in March.
The
leading index has been posting strong gains, growing by 2.9
percent from September 2001 to March 2002, and by 2.2 percent
for each of the six-month periods ending January and February
2002. The gains would have been more robust had it not been
for the weakness in building permits and claims for unemployment
insurance.
Gains in industrial production in the last three months, coupled
with a recovery in employment, have helped push the coincident
index up. Negative trends in these indicators were largely
responsible for the decline in the coincident index last year.
US economic recovery appears to be underway. The combination
of rising energy prices, the current global instability, and
the more cautious consumer and business sectors, however,
might slow the pace of economic growth in the near term.
The figures are distorted by unemployed workers re-filing for extended benefits.
Since the federal law extending benefits was enacted in mid-March, average claims have risen from about 395,000 to nearly 450,000.
However, for March:
Both payroll employment and the unemployment rate reflected little change in the economic climate.
Manufacturing
and construction each lost nearly 40,000
jobs, but services employment grew substantially.
Both the manufacturing workweek and overtime hours rose over
the month.
Companies
posting better-than-expected results are U-S Airways, Sears,
McDonald's, Mattel and Marriott
Gainers outnumber losers by about three-to-two on the New
York Stock Exchange.
The Nasdaq Composite Index is up a fraction and the Standard-and-Poor's
500 Stock Index has added one poin
SAP Reports Earnings Down in First Quarter-Net profit at SAP,
the world's largest supplier of business-management software,
fell to 65 million euros ($57 million
Telecommunications stocks slumped after Nokia cut its sales
growth forecast for 2002, but upbeat news from IBM helped
restore some optimism to the market
The Senate approved the energy pac
kage 88-11. The vote sets up a showdown with the House, which last year passed an energy bill that focuses more on helping energy companies boost production, including drilling in the Alaska refuge.
This legislation "should increase our energy independence," said Majority Leader Tom Daschle, D-S.D. He called it "a far more responsible, progressive, consumer-friendly energy policy" than that outlined by the administration and passed by the House last August.
Workers' Wages Rise 0.8 Percent, points to mild inflation risk
U.S. workers' wages and benefits rose in the first quarter at the slowest pace in three years as the spotty economic recovery translated into less generous compensation packages.
The first-quarter increase in compensation was the smallest since a 0.4 percent gain posted in the first quarter of 1999.
The wages and salaries component of the index, viewed by economists as the best measure of changes in workers' compensation, grew 0.8 percent in the first quarter, slightly slower than the 0.9 percent rise recorded in the fourth quarter.
