Financial thoughts

How do you prepare for a financial cataclysm that may not happen?

That’s the question facing investors as an Aug. 2 deadline approaches for Washington to raise the government’s borrowing limit or risk a U.S. default on its debt.

Economists say a default could create a credit crisis similar to what happened after Lehman Brothers went bankrupt in 2008, causing interest rates to rise and harming the economy. But the reaction in the stock and bond markets has been muted.

The Dow Jones industrial average closed at 12,479 last week, about where it stood at the start of the month.

In the bond market, the yield on the 10-year Treasury note stood at 2.89 percent Monday. It was 3.74 percent in Feburary, when almost no one was talking about the debt limit.

In theory, Treasury bonds should have a higher yield when investors think there’s a greater risk they won’t get their money back, such as in the event of a U.S. government default.

So Wall Street appears to think a deal will be struck in time. But the alarming headlines are causing investors anxiety.

“We’re seeing clients growing nervous as they keep hearing about the deadline,” says Oliver Pursche, president of Gary Goldberg Financial Services in Suffern, N.Y. He says investors are asking him whether they need to change to their portfolios.

So what should you do if you’re worried about a default? Here are five things to keep in mind.

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1. Don’t abandon your long-term plan.

Most investors who had diversified portfolios in 2008 and stuck with them have made up their losses, despite a 57 percent drop in the Standard & Poor’s 500 from its peak in October 2007 to the market bottom in March 2009.

Investors who panicked and withdrew their money from the stock market have found it tougher to recover.

“Don’t get waffled around emotionally by all of this short-term noise,” says Michael Farr, chief investment officer of Farr, Miller & Washington, an investment firm in Washington, D.C.

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2. Be wary of bonds.

Conservative investors who sought to avoid the volatility of the stock market and flocked into bonds could get burned.

A default could drive up the cost of government borrowing for years to come and lead to higher interest rates for everyone else. If that happens, bonds would lose value because their prices move in the opposite direction of interest rates.

Even a brief default could be enough to hurt the credit rating of U.S. debt and usher in an era of higher interest rates, cautions Greg McBride, senior financial analyst for Bankrate.com.

If you want to position yourself for an impasse on the debt ceiling, consider Treasury bills with a maturity of six months or less. Look for those maturing sometime after August. Their short-term nature means their prices are less affected by an increase in interest rates. That’s because investors will receive their principal investment before there are larger changes in the economy. Investors should also steer clear of Treasury notes with a maturity of 10 years or longer because their prices may face steep price declines as interest rates climb. Bank CDs are another option, although the yields are minuscule.

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3. Remember that rebalancing can be risky.

Adjusting your 401(k) retirement plan to shift money out of the stock market and into cash is always an option for a nervous investors. But you should weigh the repercussions first.

If you pull money out of stocks now, you could miss a “relief rally” if the market climbs after a last-minute debt deal. Even if you’re correct, and move your money before a decline in the market, you’ll need to get the timing right a second time when you shift back into stocks. Otherwise, there’s a good chance you’ll find yourself on the sidelines when market momentum shifts.

If you have only a year until retirement or you find yourself fretting over your potential losses, playing it cautious may make sense.

“Pull back a little for peace of mind if you’re really worried,” says Tom Root, associate professor of finance and business at Drake University. “But if you have a long-term plan, stay with it.”

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4. Check your emergency preparedness.

In a period of uncertainty, it’s important to make sure you have access to cash in case of an emergency. Investors should set aside money for emergencies in an easily accessible account, like a money-market savings account. It’s important not to have this money in an investment account because market volatility could leave you unprotected.

Ideally, a single-earner family should have enough cash set aside to cover six months or more of living expenses. A two-income family should have at least three to six months’ worth, says Justin Sinnott, a financial consultant for Charles Schwab Corp. in Seattle.

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5. Watch for buying and selling opportunities.

This is a good time to remember Warren Buffett’s famous advice: “Be fearful when others are greedy, and be greedy when others are fearful.” As more fear creeps into the market with the deadline approaching, it may be a prime time to snap up bargain stocks.

And if steep cuts to government spending are part of an agreement on the debt ceiling, keep in mind the specific industries that could be hurt the most.

Goldman Sachs issued a note to investors last week listing companies that generate at least 20 percent of their revenue from government. Many are in the health care sector, both providers and equipment suppliers, plus defense contractors.

The turbulent market in the last three years has caused many investors to be overly cautious, says Erik Davidson, deputy chief investment officer for Wells Fargo Private Bank.

During the debt standoff, he says, investors should look for higher yields. In particular, the stocks of large companies are paying investors an average of 2 percent annually, and high-yield corporate bonds, which are paying an average of 7.26 percent.

Source

Saint John is in the grips of the most sensational crime to come along in decades, a senior source in New Brunswick legal circles said Wednesday.

The grisly murder of high profile businessman Richard (Dick) Oland — a one-time beer executive with Moosehead — is the talk of the Maritime city with many wondering when an arrest is going to be made.

“The Olands are a big deal with Saint John. The only ones that would trump them are the Irvings,” the source said, referring to the legendary Irving oil family.

Oland’s body was discovered nearly a week ago in his Saint John office and as of Tuesday still no warrant had been issued for the arrest of the person or persons involved in the axe murder, the Toronto Star has learned.

“There have been no applications for any kind of warrant for anything,” said the source, adding on Wednesday that that was not a particularly good sign.

“They may get it solved but we are a long ways into it now and there doesn’t seem to be a whole lot going on,” the source said. “The case could break wide tomorrow but as each day lapses the trail goes colder and colder and the person who is the perpetrator will be so much more difficult to be interviewed successfully.”

Saint John Police Chief Bill Reid issued a brief statement Wednesday in which he refused once again to comment on how Oland was murdered. The Star reported Tuesday he was bludgeoned to death with an axe.

“The Saint John Police Force will not be commenting on any media reports; only those which we have released or authorized,” Reid stated. “Information respecting the manner of death and any apparent motive, suspects or persons of interest must remain with the investigational team at this time faxless cash advance.”

Reid said the department’s first obligation was to the family of Richard Oland, and the integrity of the investigation, a statement that was seen by some as being in deference to the family.

“That’s in deference to a very high profile New Brunswick family,” the source said.

Norm McFarlane, former mayor of Saint John, said people there are “devastated” by Oland’s death and patiently waiting for someone to be arrested “and get what they deserve.”

Oland was a member of the family that owns Moosehead Breweries Ltd., but left the company in the 1980s.

In a strange twist, Joel Levesque, a spokesperson for Moosehead Breweries in Saint John, contacted the Star to complain that Oland’s connection with Moosehead should not be a focus of the story and even suggested that people were confusing Richard with his brother Derek, Moosehead’s owner and executive chairman.

“While there is certainly a family connection between the late Mr. Oland and the brewery that deserves mention and cannot be denied, it definitely should not be the focus of headlines and stories,” said Levesque, who described himself as a senior public affairs counsel.

“I would like to point out that Richard Oland left Moosehead in 1981 and put his association with the brewery behind him,” Levesque said. “Most of his accomplishments as a business and community leader have taken place since that time. People are confused about the connection, with some even thinking it is Richard’s brother Derek, Moosehead’s owner and executive chairman, who is dead.”

Source

World stock markets mostly rose Monday on the heels of a report showing a rebound in U.S. manufacturing, reinforcing the view that the slowdown in the world’s No. 1 economy was only temporary.

In early European trading, Britain’s FTSE 100 was up 0.1 percent to 5,995.47 and Germany’s DAX advanced less than 0.1 percent to 7,419.91. France’s CAC 40 was fractionally lower at 4,006.23.

U.S. stock markets are closed Monday for Independence Day.

In Asia, Japan’s Nikkei 225 index added 1 percent to 9,965.09, having breached the psychologically important 10,000 mark earlier in the day for the first time since May 5. Sentiment was lifted by optimism about the U.S. economy after manufacturing data for June from the Institute for Supply Management beat expectations.

Exporters were among the index’s major gainers. Honda Motor Corp. jumped 3.5 percent. Toyota Motor Corp. rose 1.5 percent. Consumer electronics giant Panasonic Corp. gained 1 percent.

South Korea’s Kospi added 0.9 percent to 2,145.30 and Hong Kong’s Hang Seng climbed 1.7 percent to 22,770.47.

Mainland Chinese shares extended gains as investors interpreted comments by vice premier Wang Qishan on the slowing economy, and news of stalling growth in non-manufacturing industries, as a sign Beijing may relax monetary policy, analysts said.

The Shanghai Composite Index jumped 1.9 percent to 2,812.82 and the Shenzhen Composite Index surged 2.3 percent to 1,188.91. Shares in lithium battery makers, gold miners and autos led the gains.

Benchmarks in Australia, Singapore, Taiwan and Indonesia also rose.

Thailand’s SET index soared 4.8 percent to 1,091.27 after the party backed by the country’s deposed Prime Minister Thaksin Shinawatra won a landslide election victory. The poll came a year after the government crushed protests by Thaksin supporters with a bloody crackdown that culminated in some of the worst violence in Thailand in 20 years.

Shares of Singapore-based Tiger Airways Holdings Ltd business card. plummeted 16 percent after Australian regulators grounded all Australian domestic flights of a Tiger subsidiary over safety concerns. Australia’s Qantas Airways, one of Tiger’s main competitors, soared 6.1 percent.

On Friday, the surprising rebound in the Institute of Supply Management’s U.S. manufacturing capped a weeklong rally that left the Dow up 5.4 percent for the week, its best week in two years. The Dow rose 1.4 percent to 12,582.77. The Standard and Poor’s 500 index gained 1.4 percent to 1,339.67. The Nasdaq composite added 1.5 percent to 2,816.03.

Also last week, Japan released data showing its industrial production posted the sharpest rise in nearly six decades in May. The improvement adds to signs that the world’s No. 3 economy is rebuilding after a March 11 earthquake and tsunami damaged factories and caused parts shortages for manufacturers.

Those developments came after many economists had began lowering their estimates for U.S. growth in May after a string of negative reports on U.S. manufacturing and hiring. Some analysts continued to caution against too much optimism, given a host of other lingering threats: galloping inflation in China, the European debt crisis and high oil prices.

“I think the environment that we are in _ there are still a lot of headwinds as far as equities go. I suspect this relief rally is going to be short-lived,” said Tey Tze Ming, a trader at Saxo Capital Markets in Singapore. “If growth slows any further, stocks are not going to be doing well.”

Benchmark crude for August delivery was up 16 cents to $95.10 in electronic trading on the New York Mercantile Exchange. The contract declined 48 cents to settle at $94.94 per barrel on the Nymex on Friday.

In currencies, the euro rose to $1.4526 from $1.4511 in late trading in New York on Friday. The dollar weakened to 80.59 yen from 80.84 yen.

Source

Stocks are headed for a correction. No, stocks are rallying. Wait, stocks are down again. Or up _ a lot.

For investors, June was one long seesaw ride that began with a deep plunge on the first day of the month. Six days of declines were followed by a week of give and take and then four days of gains. The month ended with strong earnings from a consumer bellwether and signs that a European debt crisis could be averted. That led to a 4-day advance in the three major stock indexes.

The Dow Jones industrial average rose 480 points, or 4 percent, the last four days of the month and the Standard & Poor’s 500 index is on track for its best weekly return for since July 2010.

That strong ending didn’t make June a winner. Stocks were down about 2 percent for the month, the second straight month that the market finished lower. Only the Dow Jones industrial average eked out a gain, of 0.8 percent, for the quarter.

All three indexes are still up for the year. The Dow is up the most, 7.2 percent. The S&P 500 and Nasdaq are up 5 percent and 4.6 percent respectively. The Dow was down 6.3 percent at this time last year.

Concerns about the strength of the U.S. economy and a possible debt default by Greece spooked investors much of the month. One the first day of June investors were greeted with reports that American manufacturing output had expanded at the slowest pace in 20 months, that auto sales had tumbled in May, and that private companies added the fewest number of employees since September. By June 15, the S&P had lost nearly all of its gains for the year, before dividends.

Market declines mean different things to different people. Rather than retreat further, some investors came to believe that stocks were relatively cheap. Stocks began to reverse course.

The upward climb continued this week when Nike Inc.’s earnings came in much higher than analysts had been expecting. That indicated that higher gas prices haven’t stopped consumers from splurging on things like pricey sneakers and sportswear. In the last four days of the month, the S&P rose 4.1 percent.

Even so, the S&P 500 lost 1.8 percent for the month, the Dow finished down 1.2 percent for the month. The Nasdaq composite fell 2.2 percent. For the second quarter, the Dow gained 0.7 percent between April and June. The S&P 500 and Nasdaq, however, lost 0.4 percent and 0.3 percent, respectively.

Most economists, analysts and investors agree that, at the very least, the U.S. economy has struggled through a soft patch. The weakness was brought on by gas prices that hit $4 a gallon, problems getting computer chips and auto parts from Japan and severe weather in the South. These factors weighed on consumer spending and confidence and made recession-weary companies reluctant to hire employees or expand domestically.

Whether the late June rally continues into July depends partly on results from upcoming earnings reports and lingering effects of that soft patch.

Most stock analysts think the economy’s troubles are temporary. Few have lowered their estimates over the last month despite a dip in consumer spending and continued high unemployment. One reason: even if U.S. consumers spend less, American companies continue to make a significant portion of their profits overseas. As of 2010, 40 percent of the profits for U.S. companies in the S&P 500 came from overseas.

Alcoa Inc. is the first major U.S. company to report earnings every quarter. Many investors look to those results for indications of how the results of other major corporations might turn out. The aluminum maker, which tends to do well when the global economy is growing, reports its quarterly results on July 11.

Mark Schultz, portfolio manager for the $240 million MTB Mid-Cap Growth fund, believes that the impact of higher gas prices on U.S. corporate profits will be balanced out by growing revenue coming from sales in countries like China and Brazil, where companies are still expanding.

Some market strategists say the stock market is in for another up and down ride in July as earnings reports come out.

“We’re worried that the earnings season will capture the soft patch in the second quarter,” says Ron Florance, the managing director of investing strategy at Wells Fargo Private Bank. “If analysts haven’t factored that into their estimates then we could be set up for disappointments.”

Earnings season also gives investors a glimpse of what’s to come. When companies report for the quarter, their executives often lay out their expectations for revenue and earnings for the next quarter. Gloomy predictions from key companies like JPMorgan Chase & Co, IBM and Caterpillar could make a second-half stock rally difficult.

On the other hand, if those forecasts are more bullish, that will bolster the belief that effects from the Japanese earthquake and tsunami and high oil prices will be short-lived.

“The misses will probably not be repeatable because they could come from weather and commodity price spikes,” says Phil Orlando, the chief market strategist at Federated Investors. “We all know that the third quarter will be better.”

Of course, there’s one unknown looming: Politics. The federal government will reach its debt limit on Aug. 2. If Republicans and Democrats in Congress can’t reach a deal to prevent that from happening, the U.S. could find itself unable to borrow more money to meet all of its financial obligations.

The government would be forced to choose which payments it won’t make. Those could include Social Security checks to more than 52 million recipients or military salaries for the 1.4 million currently in the armed forces. Alarming, yes. But skipping bond interest payments could be even worse. A default would lead to a sharp rise in interest rates and possibly trigger a recession.

As of now, many investors are betting that a deal will be reached. But look for big swings in the market if a deal isn’t reached by mid-July, says Kevin Shacknofsky, co-manager of the $635 million Alpine Dynamic Dividend fund. “If we don’t have signs that there’s a deal by (then), you have to start positioning your portfolio for the worst.”

Source

Aircraft leasing company Air Lease Corporation says it has signed a commitment to order 50 of Airbus’ new A320neo aircraft, including options for another 14.

The A320neo is Airbus’ single-aisle mid-range jet engineered for fuel savings.

The Los Angeles-based company also made a firm order Monday for 11 Airbus 330s and one A321.

Excluding the options, the deal is valued at $6 billion at list prices, Airbus said.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.

LE BOURGET, France (AP) _ GE Capital Aviation Services has ordered 60 A320neo jets, a version of the workhorse jet revamped to be more fuel efficient, Airbus said Monday.

The European planemaker announced the deal at the Paris Air Show, where the search for a cheaper and cleaner way to fly is emerging as a major theme.

The deal would be worth about $5.5 billion at list prices, though buyers often strike discounts.

With airlines squeezed by skyrocketing fuel prices, Airbus has booked 390 orders and commitments for the A320neo since its commercial launch last December, even though the plane won’t be available until 2015 cheap credit report.

Airbus also announced an order for four of its A330-300 aircraft from Saudi Arabian airlines. The wide-bodied, twin-engined medium to long range A330-300 has a list price of euro223 million ($318 million). The Saudi airline already has 8 of the 330-300s in service.

Swedish airline group SAS ordered another 30 of Airbus’ A320neo aircraft for around 18 billion kronor ($2.8 billion) at list prices as part of an effort to renew its fleet.

SAS’s order includes an option to buy an additional 11 airplanes.

Delivery of the aircraft will start in the second half of 2016 and should be completed during 2019.

The acquisition is part of SAS’s move to concentrate its short-and medium distance fleet into two types of aircraft: Airbus A320 and Boeing’s 737NG.

Source

Mariko and Razmik Der Avanesian bought a $3,000 vanity that showed water damage just after it was installed.

They were willing to settle for two new side panels, which cost about $60. Yet the dispute dragged on for a year until they contacted me.

It’s hard to believe a high-end bathroom fixture couldn’t withstand moisture. But Decotec Paris Inc. (Canada) wouldn’t accept responsibility.

The couple shopped online before ordering a green vanity with six drawers at Tubs, a specialty chain. It was made to accommodate two sinks.

Within two months of installation in March 2010, the side panels started cracking from water leakage.

“We went back to the store right away, but our salesperson told us to talk to the manufacturer directly,” Mariko told me.

Delayed by renovations and guests, they contacted Decotec last November.

“It seems clear that the problem comes from the water fixtures installed on the vanity — that is, the faucets or water lines — and not the vanity itself,” said Michel Cloutier, head of customer service.

The Der Avanesians said the manufacturer hadn’t supplied a gasket or seal to protect the vanity from water. (The unit came already assembled.)

Decotec then changed its story. The customers were to blame.

“The warranty clearly states that ‘the cabinets and/or furniture must be protected for water spray/splash.’ Unfortunately, it does not seem to have been the case with your vanity,” Cloutier said last December.

“Furthermore, we feel that the damage could have been appreciably lessened had proper attention been given to it early on.”

Earlier this year, the sinks’ two back drain pipes had broken and water had leaked into the cabinet drawers and onto the floor.

Frustrated with Decotec, the couple asked Tubs to deal with the manufacturer. They thought that new panels and drain pipes were coming soon.

However, Tubs was getting nowhere with Decotec and decided to stop selling its products Payday Loan for Bad Credit.

“The manufacturer wouldn’t step up to the plate. There’s no point in having a warranty if the customer is left hanging,” said Pierre Moreau, the general manager.

The couple, however, felt let down by Tubs.

They had spent $9,000 in total and felt the store should have stood up for them.

How could it sell a product with no built-in protection against water damage and not warn them to seal it?

After discovering the water damage in the upstairs bathroom, they had installed a single-sink Decotec vanity in a downstairs powder room and sealed it with silicone. No damage had resulted.

Aline Baron, Decotec’s general manager in Montreal, was happy to tell me that the model was one of her bestsellers.

“After six years in business in Canada, we never got a claim for that model until this one,” she said.

“We don’t sell the faucets and drains fixed on that vanity and we’re not responsible for plumbing installation.

“You will understand there is a kind of negligence where our warranty cannot be applied.”

One day later, Baron wrote to the couple with her response.

“Decotec Paris will, as a good will gesture, provide you with two replacement side panels for your vanity. This, of course, does not constitute any admission of responsibility on our part.

“Our factory in France will actually make a special effort to manufacture parts in a colour that has been discontinued for some time.”

The new panels and drain pipes will arrive in August, so the couple won’t be able to use their bathroom vanity for a few more months.

“If our story can encourage someone crying about a similar situation or help someone not take the path we did, our hassle will be rewarded big time,” Mariko said.

Ellen Roseman writes about personal finance and consumer issues. You can reach her at eroseman@thestar.ca.

Source

The number of claims for U.S. unemployment benefits unexpectedly rose last week, pushed up by auto-plant shutdowns and other unusual events that seasonal variations failed to take into account, the Labor Department said.

Applications for jobless benefits jumped by 43,000 to 474,000 in the week ended April 30, the most since August, Labor Department figures showed today. A spring break holiday in New York, a new emergency benefits program in Oregon and auto shutdowns caused by the disaster in Japan were the main reasons for the surge, a Labor Department spokesman said as the data was released to the press.

Even before last week, claims had drifted up, raising concern the improvement in the labor market has stalled. Employers added 185,000 workers to payrolls in April, fewer than in the prior month, and the unemployment rate held at 8.8 percent, economists project a Labor Department report to show tomorrow.

“We’re seeing so many distortions in the claims numbers week to week that it’s hard to say, but I’m willing to be patient and wait and see,” said Stephen Stanley, chief economist at Pierpont Securities LLC in Stamford, Connecticut. “Other reports show an improvement in the labor market. It’s going to take a while to dig out of the hole we have in relation to the jobs the economy lost during the recession.”

Futures Fall

Stock-index futures dropped after the report. The contract on the Standard & Poor’s 500 Index maturing in June fell 0.6 percent to 1,334.8 at 8:58 a.m. in New York. Treasury securities rose, sending the yield on the benchmark 10-year note down to 3.18 percent from 3.22 percent late yesterday.

Economists forecast 410,000 claims, according to the median estimate in a Bloomberg News survey. Forecasts ranged from 395,000 to 450,000 in the survey of 46 economists. The Labor Department revised the prior week’s figure up to 431,000 from an initially reported 429,000.

A spring break holiday at schools in the state of New York prompted workers to file claims, which the seasonal adjustment factors didn’t expect last week, the Labor Department official said. In addition, Oregon began a new emergency benefits program for the long-term unemployed that also pulled in some new claimants, he said. Finally, auto plant shutdowns due to parts shortages caused by the earthquake and tsunami in Japan also contributed to the increase, the official said.

The spokesman also said that any claims filed by workers throughout the South that lost their jobs due to the storms that spawned tornados would probably be reflected in a different set of data rather than in the initial claims figures.

Productivity Cools

The productivity of U.S. workers slowed in the first quarter and labor costs rose as a growing economy prompted companies to boost employment, another report from the Labor Department showed today.

The measure of employee output per hour increased at a 1.6 percent annual rate, after a 2.9 percent gain in the prior three months. Expenses per employee climbed at a 1 percent rate after dropping 1 percent.

The four-week moving average for jobless claims, a less- volatile measure, rose to 431,250 from 409,000.

The number of people continuing to collect jobless benefits rose by 74,000 in the week ended April 23 to 3.73 million. The continuing claims figure does not include the number of workers receiving extended benefits under federal programs.

Extended Benefits

Those who’ve used up their traditional benefits and are now collecting emergency and extended payments decreased by about 42,900 to 4.12 million in the week ended April 16.

The unemployment rate among people eligible for benefits, which tends to track the jobless rate, rose to 3 percent in the week ended April 23 from 2.9 percent, today’s report showed. Twenty states and territories reported an increase in claims, while 33 had a decrease.

Initial jobless claims reflect weekly firings and tend to fall as job growth — measured by the monthly non-farm payrolls report — accelerates. These data are reported with a one-week lag.

Employers announced fewer job cuts in April than the same month last year, Chicago-based Challenger, Gray & Christmas Inc. said yesterday. Planned firings decreased 4.8 percent to 36,490 last month from April 2010.

‘Signs of Improvement’

“Employment has begun to show signs of improvement,” Scott Davis, chief executive officer of United Parcel Service Inc., said during an April 26 call with analysts. “In the U.S., unemployment dipped below 9 percent for the first time in almost two years, further evidence that the recovery continues.”

While payrolls have grown each month since October, Federal Reserve Chairman Ben S. Bernanke said on April 27 that central bankers would like to see more strength in the U.S. labor market, noting that a recovery has been “quite slow.”

“The labor market is improving gradually,” Bernanke said to reporters during the first-ever press conference following a Federal Open Market Committee meeting. “We would like to make sure that that is sustainable. The longer it goes on, the more confident we are.”

Another report yesterday showed employment at U.S. companies increased 179,000 in April, the smallest gain in five months, according to ADP Employer Services.

Stimulus Necessary

Federal Reserve Bank of Boston President Eric Rosengren yesterday said record stimulus is necessary to spur the “anemic” economy and that raising interest rates to combat increasing food and fuel prices would impede growth.

“With significant slack in labor markets, stable inflation expectations, and core inflation well below our longer run target, there is currently no reason to slow the economy down with tighter monetary policy,” Rosengren said during a speech in Boston.

Cisco Systems Inc. (CSCO), the largest maker of computer- networking equipment, is among companies trying to cut costs. The San Jose, California-based company last week said it is offering early-retirement packages to some employees in the U.S. and Canada. The company didn’t specify how many workers it expected to take the packages or how much would be saved.

Source

It could take several more months to bring Japan’s tsunami-ravaged nuclear plant under control, a safety agency spokesman said Sunday as engineers tried to find a way to stop highly radioactive water from pouring into the Pacific.

The Fukushima Dai-ichi nuclear complex has been spewing radioactivity since the March 11 tsunami carved a path of destruction along Japan’s northeastern coast, killing as many as 25,000 people. The final death toll is not known because many are still missing.

Nuclear safety agency spokesman Hidehiko Nishiyama on Sunday offered the first sense of how long it might take to bring an end to the nuclear crisis, which has forced people within 12 miles (20 kilometers) of the plant to abandon their homes due to radiation concerns.

“It would take a few months until we finally get things under control and have a better idea about the future,” Nishiyama said. “We’ll face a crucial turning point within the next few months, but that is not the end.”

Bringing the reactors at the plant under control will require permanently restoring cooling systems knocked out by the tsunami that prevent reactors from dangerously overheating. That task has been complicated by dangerous conditions at the plant that have often forced workers to stop what they are doing.

Some new problem crops up at the complex nearly every day. Workers discovered an 8-inch (20 centimeter) crack in a maintenance pit Saturday and said they believe water from it may be the source of some of the high levels of radioactive iodine that have been found in the ocean for more than a week.

They have had trouble telling where the water is coming from, and this is the first time they have found it leaking directly into the sea. A picture released by plant operator Tokyo Electric Power Co. shows water shooting some distance away from a wall and splashing into the ocean, though the amount is not clear.

The contaminated water dissipates quickly in the ocean but could pose a danger to workers at the plant.

Engineers tried to seal the crack with concrete on Saturday, but that didn’t work. So on Sunday they injected a mix of sawdust, shredded newspaper and a polymer that can expand to 50 times its normal size when combined with water quick pay day loan. The polymer mix had not yet stopped the leak Sunday night but engineers have not given up hope and should know by Monday morning whether it will work.

TEPCO on Sunday confirmed the first tsunami deaths at the plant itself, saying a 21-year-old and a 24-year-old were conducting regular checks when the 9.0-magnitude earthquake that preceded the tsunami hit.

They apparently ran to a basement turbine room, which is where they were when the massive wave swept over the plant.

“It pains us to have lost these two young workers who were trying to protect the power plant amid the earthquake and tsunami,” TEPCO Chairman Tsunehisa Katsumata said in a statement.

The high levels of radioactivity at the plant made searching for the men dangerous. Their bodies were not discovered until Wednesday and had to be decontaminated. The announcement was delayed while authorities notified their families, TEPCO spokesman Kazufumi Suzuki said.

The nuclear crisis has compounded the suffering of people in the northeast and, at times, overshadowed their plight. Tens of thousands have lost their homes and are living in shelters, 200,000 households do not have water, and 170,000 do not have electricity.

Running water was just restored in the port city of Kesennuma on Saturday, and residents lined up Sunday to see a dentist who had flown in from the country’s far north to offer his services. Many were elderly and complaining of problems with their dentures.

Overhead and throughout the coastal region, meanwhile, helicopters and planes roared by as U.S. and Japanese forces finished their all-out search for bodies.

The effort, which ends Sunday, is probably the final hope for retrieving the dead, though limited operations may continue. It has turned up nearly 50 bodies in the past two days.

In all, more than 12,000 deaths have been confirmed, and another 15,500 people are missing.

Source

(Corrects index levels in second paragraph of article published on March 3.)

U.S. consumer confidence last week held close to the highest level in almost three years as more Americans said their finances were in good shape.

The Bloomberg Consumer Comfort Index, formerly the ABC News U.S. Weekly Consumer Comfort Index, was minus 39.7 in the period to Feb. 27, compared with minus 39.6 the prior week, a report today showed. Respondents’ view of their financial situation climbed to an almost two-year high.

A two-percentage-point cut in payroll taxes this year, part of the compromise reached by President Barack Obama and Congressional Republicans, is trickling into consumers’ bank accounts. The extra cash and an improving job market are helping cushion the pinch from the biggest one-week jump in gasoline prices since the aftermath of Hurricane Katrina in 2005.

“Consumers are comfortable with where we are right now,” said Lindsey Piegza, an economist at FTN Financial in New York. “It’s very likely we’ll see the income from the tax cuts seep into retail sales. There’s increasing optimism on better times to come, even though rising gas prices are a cause for some concern.”

Stocks rose as an unexpected drop in jobless claims bolstered confidence the labor market is improving. The Standard & Poor’s 500 Index gained 1.3 percent to 1,325.36 at 11 a.m. in New York. Treasury securities dropped, pushing the yield on the benchmark 10-Year Treasury note up to 3.53 percent from 3.47 percent late yesterday.

Employment Forecast

Payrolls rose by 195,000 workers in February, the biggest advance since May, after a 36,000 gain the previous month, according to the median forecast of economists surveyed before a Labor Department report tomorrow. The acceleration in hiring reflects a pickup in growth and a rebound from the weather- depressed January level, economists said.

The comfort reading for week ended Feb. 20 was the highest since April 2008.

The comfort index of personal finances rose to 2.4 last week, the highest since May 2009, from minus 2.3. Fifty-one percent of those polled held positive views on their financial situation, up from 49 percent the previous week and the first time since January 2010 that the reading topped 50 percent.

A gauge of Americans’ views of the economy fell to minus 70.6 last week from minus 69.4. The share of households with a positive view of the economy held at 15 percent for a second week, matching the highest since September 2008.

An index of the buying climate fell to minus 50.9 from minus 47.1. Those people saying it was a good time to buy needed items dropped to 25 percent from 27 percent the previous week.

Improving Sales

J.C. Penney Co., Kohl’s Corp. (KSS) and Ross Stores Inc. (ROST) were among retailers today reporting February same-store sales that topped analysts’ estimates. Purchases at stores open at least a year climbed 6.4 percent at J.C. Penney, 5 percent at Kohl’s and 3 percent at Ross, company data showed payday loans online.

“We are encouraged by our solid start to the year,” Michael Balmuth, chief executive officer of Pleasanton, California-based discounter Ross Stores, said in a statement. Even so, “the much more important March/April holiday selling period is still ahead.”

The average price of regular gasoline at the pump jumped 20 cents to $3.37 a gallon in the week ended Feb. 27, according to AAA, the nation’s biggest motoring organization. It was the biggest increase since the period ended Sept. 5, 2005, after Katrina slammed into New Orleans.

“The key question is what lies ahead for prices at the pump,” Gary Langer, president of Langer Research Associates LLC in New York, which compiles the index for Bloomberg, said in a statement. “A long run-up will do far more damage than a short spurt.”

Bernanke’s View

Federal Reserve Chairman Ben S. Bernanke echoed that view in testimony before Congress this week.

“Sustained rises in the prices of oil or other commodities would represent a threat both to economic growth and to overall price stability, particularly if they were to cause inflation expectations to become less well anchored,” Bernanke told legislators in his semiannual comments on monetary policy.

Gasoline prices and the comfort index have shown a strong inverse correlation since 2004, according to calculations by Joseph Brusuelas, a senior economist at Bloomberg LP in New York. Additionally, changes in the four-week average of claims for jobless benefits have been in sync with the comfort gauge about 72 percent of the time.

Jobless Claims

Another report today showed claims unexpectedly declined last week to the lowest level since May 2008. Applications decreased by 20,000 to 368,000 in the week ended Feb. 26, according to the Labor Department. Economists forecast claims would climb to 395,000, according to the median estimate in a Bloomberg survey.

Renters, who have less at stake as home prices fall, were among the categories in the comfort survey that showed the most improvement last week, according to today’s report. Their outlook gauge rose to minus 41.1 last week, the highest since March 2008.

The Bloomberg Consumer Comfort Index is based on responses to telephone interviews with a random sample of 1,000 consumers aged 18 and over.

Each week, 250 respondents are asked for their views on the economy, personal finances and buying climate; the percentage of negative responses is subtracted from the share of positive views and divided by three.

Margin of Error

The comfort index can range from 100, indicating every participant in the survey had a positive response to all three components, to minus 100, signaling all views were negative. The margin of error for the headline reading is 3 percentage points.

The responses are broken down by participants’ sex, age, income level, race, region of residence, political affiliation, marital and employment status.

Readings of minus 40 for the index, which is based on a four-week average, have historically been the threshold indicating Americans think a recovery from recession has begun, said Langer.

Field work for the index is done by SSRS/Social Science Research Solutions in Media, Pennsylvania.

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Corporate earnings are once again taking the focus on Wall Street. Investors are also keeping a wary eye on the stand-off in Egypt.

Exxon Mobil Corp. and Gannett Co. are both releasing their quarterly results Monday. United Parcel Service Inc., Yum Brands and Merck & Co. report their earnings later in the week.

Investors will also get reports on auto sales, construction spending, factory orders and employment throughout the week.

Meanwhile, the unrest in Egypt continues, and traders worry that it could impact oil supplies or lead to protests elsewhere cheap pay day loans.

Ahead of the opening bell, Dow futures are up 19, or 0.2 percent, at 11,794. Standard & Poor’s 500 futures are up 4, or 0.3 percent, at 1,275. Nasdaq 100 index futures are up 7, or 0.3 percent, at 2,275.

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