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Show DoilysHerald PAGE6 FRIDAY, JUNE 26, 2009 BUSINESS EDITOR | Grace Leong - (801) 344-2910 - gleong@heraldextra.com Bernanke:| didn’t bully BofA to buy Merrill A A Dow Jones | Gold Silver Final Per ounce $939.10 +$5.00 Per ounce 8,472.40 +172.54 | EXCHANGING THE DOLLAR Yen Euro ound Canadian dollar $13,994 +$0.095 Thursday 95.88 $1.3987 WASHINGTON — Federal Reserve Chairman Ben Bernanke faced an unusualpoliticaltrial Thursdayanddisputed accusationsthat he presgured Bank of America to acquire Merrill Lynch in a deal that cost taxpayers $20billion Bernanke denied to a House committee investigating the matter that he threatenedaction against Bank of America’s CEO KennethLewis or the bank’s board members if they abandoned the takeover It markedBernanke's first public comments since the House committee launched aninvestigationthis yearinto whether he or other government officials bullied Bank of America to stick with its plan to combinethe two financial powers afterLewis learnedof Merrill's financial woes. Stocks jump, led by homebuilders, retailers NEW YORK Investors rushedback into stocks as profits at a handful of companiesindicatedthe economy might begaining strength Gains in homebuilders, retailers and other consumer discretionary stocks led the market sharply higher Thursday The Dow Jones industrial average surged173 points to 8,472.40 after four days of losses. Government bondprices jumped after anauction drew strong demand. Traders focused onseveral better-than-expected earnings reports and welcomednews that the Federal Reserve took thefirst step toward removing the numerous emergency lending programs it launched lastfall at the height of the financial crisis, Oil rises above $70 on Commerce Dept.report NEW YORK — Oil prices jumped above a barrel Thursday after the government said that the economy may be faring better thanpreviously thought Inarevisedreading on gross domestic product in the first quarter, the Commerce Departmentreporteda 5.5 per cent annualized decline from January to March, rather than the5.7 percentit reported a monthago. MARK LENNIHAN/Associsted Press Theslowing economy has slashed demandfor energy as factories shut down andfewer people drive to work or take Jared Tatum attends ajob fair Thursdayin NewYork. The Labor Department said Thursdaythat newjobless claims jumped unexpectedlylast week. Tatum,23, of the Bronx, is lookingfor a positionin customerservice. at a slower pacethis quarter, andrefinery closures com binedwithongoing political turmoilin oil producers Iran New unemploymentclaimsrise leisuretrips by car or plane. But it's thought to beshrinking and Nigeria helped boost crudeprices throughout the day Magistrate delays release for Stanford HOUSTON federal magistrate judgeset bondat $500,000 Thursday for Texas billionaire R. Allen Stanford but delayed her order until Friday to giveprosecutors timeto appeal her deci sion. Stanfordpleaded not guilty Thursday to charg out of $7 billion as part of a massiveinvestment scam. WASHINGTON Two family members The main forces behind the small upgradein thefirst quarter: Businesses Despitepersistent layoffs, the economy seems to be faring On Wall Street, investors shruggedoff the unexpectedrise in jobless claims and focused onpositive earnings reports from better thanit wasat thestart of the year homebuildet Lennar Corp. and homefurThe Labor Department said Thursday nishings store Bed Bath & BeyondInc. The that new jobless claims jumped unexpect Dow Jones industrial average added about edly last week. Andthe numberof people 145points in afternoontrading. Broader continuing to receive unemploymentaid indices also rose morethan | percent rose morethan expected Initial claims for jobless benefits rose Thefigures indicate that jobs remain last week by 15,000 to a seasonally adscarceevenas the economy shows some justed 627,000. Economists had expected signs of recovering from the longest re a drop to 600,000. Several states reported anda friend agreed to pay the bond, which includes $100,000 incash, set by USS. Magistrate Judge Frances Stacy At Stanford's bond hearing, prosecutor Paul ford, whofaces a potential the economyis shrinking at a slower pace about 2 percent in the current quarter didn't cut stockpiles of goods as much, and imports dropped moresharply than previously estimated. Jeannine Aversa andChristopher S. Rugaber es he swindled investors Pelletier argued Stanford should be held without bondbecause he might have access to billions of dollars in unaccounted investor funds and secret bank accounts. Pelletier also said Stan. GDPdips at slower pacein first quarter cession since World War II DAVID J. PHILLI R. Allen Stanford is escorted into the federal courthouse Thursday in Houston life sentenceif convicted, « has prided himself on secrecy, has experience bribing of Arevisedreading on gross domestic product thebroadest measureof the more claims than expected from teachers, cafeteria workers and other school em- ployees, a Labor Department analyst said. The numberof people who arecontinu nation’s output said the economy post ed a 5.5 percent annualizeddeclinefrom ing to receive unemployment insurance January through March. That wasslightly rose by 29,000 to 6.74 million, slightly better thanthe5.7 percent estimate made above analysts’ estimates of 6.7 million. a monthago. Economists generally think Thefour-week average of claims, which smooths out fluctuations, was largely unchanged, at 616,750, Most economists still expect the num- berofinitial unemployment claims, whichreflects the level of layoffs, to decline slowly in coming monthsas the recession bottomsout “Westill firmlybelieve that the underly ing trends in claimsis downwards, but it is slowand uneven,” lan Shepherdson, chief U.S. economist for High Frequency Sconomics, wrote in a client note. The number of people continuing to receive unemploymentaid remains below the peak of 6.8 million reached May 30. That meansjob losses arelikely slowing, economists said. Meanwhile, the reboundin consumer spendingin the first quarter wasslightly less vigorousthan previously reported Consumersboosted their spending at a 14 percentrate, down from a 1.5 percent growth rate estimated last month. Still, that markedthe strongest showing in nearly twoyears and a huge improve ment from the fourth quarter, when skit- tish consumersslashed spending by the most in nearly three decades. ficials, hid from authorities that he had a passport to the Ca ribbean island of Antigua, where his bank was based, and hasaninternational network of wealthy acquaintances who wouldhelp him STOCKS OF LOCAL INTEREST Banks up borrowing from Fed Ceithner pushing Jeannine Aversa Vesterday’s performance of selectedpublicly traded companies (Ast Gunce LAST CHANGE one programintendedto sup- port money market mutual funds WASHINGTON Banks have increased their bor- used whichhasn't been to expire Oct. 30. And it's reducing the maximum it will lend to banks under two rowing from the Federal Reserve's emergency lending other programs. program, but the use of other The weekly lending report programscreatedto ease the showedthe Fed’s net hold credit conditions. The Fed, in a weekly re- the week that ended Wednes $39.1 billion in daily borrow ing over the week that ended crucial short4erm debt that companies use to pay every- from $36.2 billion in the week ended June 17 Investment firms didn't draw any loans for the sixth began buying underthe first financial crisis has decreased. ings of “commercialpaper presenting a mixedpicture of averaged $12 billion over SCO GRP INC (THE saa Heine Comp DaeTO ETL IAC port issued Thursday, said commercial banks averaged Wednesday. That was up straight week. The last time they drew any money just $482 million — was in the week that ended May13. The identities of the financial institutions are not released. They pay just 0.50 percentin interest for the emergency loans. day, a decrease of $7.9 billion from the previous week Commercjalpaper is the day expenses, which the Fed of its-kind program on Oct 27, a time of intensified credit problems. The central bank However, mortgagerates resumed their upward march this week. Rates on 30-year homeloans rose to 5.42 per- financial reform Martin Crutsinger WASHINGTON Treasury cent, from 5.38 percent last week, Freddie Mac reported Secretary Timothy Geithner said Thursday the administra: Thursday tion will send legislative lan- Someanalysts worried that a recent run-up in rates on mortgages and Treasury securities — if prolonged — could choke off prospects for an economic recovery. However, the Fed didn't appear to buythat notion. The central bank on Wednesdayopted not to expand purchases of government debt or mort- gagesecurities beyond the guage to Congressin the next few days to create a consumer financial products agency, one of the key parts of its overhaul plan. Following a meeting with the president's working groupon financial markets, Geithner told reporters the administration was moving quicklyto get the measure through Congress and to amounts already announced. Squeezed banks have promote better coordination Fed stepped up its purchases tors have cut them off and shifted their money into safer by Citigroup Inc. of its plans to modifyits salary arrangements Mae, Freddie Mac and Gin- cial institutions are hoarding has said about $1.3 trillion worth of commercial paper been borrowing from the would qualify Fed because they couldn't The report also showed the get money elsewhere. Invesof mortgage-backed securi ties guaranteed by Fannie nie Mae They averaged Separately, the Fed moved $467 billion overthe past Thursday to scale back some programs it launched last fall at the height of the financialcrisis. It will allow mortgage rates and help the housing market week, up $118 billion from the previous week. The goal of the program, which start ed on Jan. 5, is to drive down among regulators But he refused to answer a Treasury securities. Finan- for many bank employees. much of their cash, rather than lending it to each other or customers. The lockup in lending has contributed to the longest recession since World War fl. unveiled a sweeping plan to The administration last week overhaul the way the government regulates financial mar. kets in the wake of the worst economic crisis to hit the U.S. in seven decades. |