Finance and Economic

In another sign of a strengthening economy, U.S. companies say they are planning to hire more workers, and expect economic growth to pick up in the first months of 2011, according to a survey released Monday.

The National Association for Business Economics said the hiring outlook for the next six months is at a 12-year high.

"The number of firms expressing positive hiring plans is at a level not seen in over a decade — a sign of improving labor-market dynamics," Shawn DuBravac of the Consumer Electronics Association said in a statement.

Forty-two percent of companies surveyed said they expect to hire more workers in the next six months, a 13% increase over the same time last year. Meanwhile, 51% expect no change in hiring, while only 7% expect a decrease.

The survey of 84 NABE members also showed that industry demand continues to move higher, and profit margins are expanding.

GDP projections are also at moderate to high levels, with 62% of respondents planning for real GDP growth of 2% to 3% in 2011, and one in five expecting GDP growth in the 3% to 4% range.

In total, 82% of respondents expect GDP growth in excess of 2%, a sharp increase over the 54% who expressed the same level of optimism last year.

Respondents were also asked to assess the impact of the sweeping package of tax cuts passed by Congress late last year.

A slight majority of companies surveyed said they expect sales to improve as a result of the package, while 45% said they anticipate the law will have no effect.

Companies are expecting less of a boost in the areas of employment and investment spending, with 68% of firms saying the tax deal will have no effect on hiring, while 37% said it would have a positive effect. Only 1% said hiring would be negatively effected. 

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The Toronto stock market could find some lift at the open from higher mining stocks Thursday as copper prices pushed deeper into record territory.

The Canadian dollar was ahead 0.05 of a cent against the American currency to US99.99 cents.

U.S. futures indicated a lower open ahead of economic data on manufacturing, housing and employment with the Dow Jones futures down 12 points to 11,520, the Nasdaq futures slipped a point to 2,228 while the S&P 500 futures declined 1.50 points to 1,254.

Investors will take in weekly unemployment insurance claims along with a Midwest manufacturing index and a report on pending home sales.

The March copper contract gained six cents to US$4.37 a pound. Prices for the metal resumed climbing following a pause Wednesday in the wake of data showing China

Copper and U.S. stocks retreated amid concern that demand from China will slow, while the U.S. dollar weakened against Australian and New Zealand counterparts as reports showed increased orders for durable goods. Oil rose.

Copper futures retreated 0.4 percent to $4.2585 a pound, while the Standard & Poor’s 500 Index slipped 0.2 percent to 1,256.77 at 4 p.m. New York time after a five-day rally drove its valuation to 15.7 times reported earnings, the highest since June. The U.S. dollar fell 0.5 percent versus Australia’s currency, 0.9 percent against New Zealand’s and 0.7 percent compared with the yen. Crude oil futures climbed 1.1 percent to $91.51, the highest settlement price since October 2008.

London Metal Exchange data show copper inventories rose for a ninth straight day, reaching the highest level since Oct. 29, signaling slowing demand. China is the world’s biggest metals user. Orders for U.S. capital equipment rebounded in November, sapping demand for the American currency today. The S&P 500 stalled after climbing to a two-year high.

“The economic data points that we’re getting are good on balance, but not madly positive,” said James Paulsen, chief investment strategist at Minneapolis-based Wells Capital Management, which oversees $342 billion. That could explain the muted response of investors. There’s downward pressure on commodities. That should weigh on today’s light action.”

U.S. stock markets are closed tomorrow in observance of the Christmas holiday. Volume on exchanges amounted to less than 4.6 billion shares, the lowest total for a full day this year.

Homebuilders Fall

Lennar Corp. and KB Home dropped at least 4.1 percent in U.S. stock trading after a government report showed that fewer new homes than forecast were sold in November payday lenders. Bank of America Corp. slumped 2.4 percent after a judge gave MBIA Inc. permission to use statistical sampling, rather than going through every loan, in a fraud lawsuit. Micron Technology Inc. lost 4.1 percent as the largest U.S. maker of computer-memory chips reported fiscal first-quarter sales that missed analysts’ estimates.

The S&P 500 completed its recovery this week from the 46 percent plunge that followed Lehman Brothers Holdings Inc.’s bankruptcy in September 2008 as government data showed that the world’s largest economy grew at a faster pace in the third quarter than previously estimated. The stock index rallied 6.6 percent in December through yesterday after posting a combined gain of 13 percent in September and October, the biggest increase during those months since 1998.

Confidence among newsletter writers that U.S. stocks will rally has risen to the highest level since the middle of October 2007, the week after the S&P 500 and the Dow climbed to records. The proportion of bullish publications tracked by Investors Intelligence jumped to 58.8 percent on Dec. 21 from 56.8 percent a week earlier, the firm said yesterday. Sentiment has improved since October 2008, when the financial crisis drove the figure to a 20-year low of 22.2 percent.

“Optimism on stocks got very high yet people are afraid to short the market,” said Mark Bronzo, who helps manage $21 billion at Irvington, New York-based Security Global Investors. “The economy is growing at a moderate pace, but most data points are moving on the right direction. The U.S. will likely surprise positively.”

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Steps by the Federal Reserve to pump more money into the U.S. economy through government bond purchases could stoke inflation, even though growth will remain moderate through 2011, a survey showed on Monday.

The National Association for Business Economics (NABE) said its 51-member forecasting panel continued to rank inflation as a bigger worry than deflation. The survey was conducted between October 21 and November 4.

The Fed’s November 3 decision to buy an additional $600 billion worth of government bonds to stimulate the economy and prevent prices for spiraling lower has been criticized both at home and abroad.

About a third of NABE panelists view the Fed’s second asset purchasing program as somewhat lessening the risks of deflation, while another 33 percent saw the step as risking inflation.

Still, they forecast the Fed’s preferred measure of consumer inflation — the personal consumption expenditures price index excluding food and energy — to rise to 1.5 percent by the end of 2011 from a projected 1.0 percent this year.

That is below the Fed’s considered comfort zone between 1.7 percent and 2.0 percent. Inflation remains subdued as the economy slowly recovers from the worst recession since the 1930s. Core consumer prices rose 0.6 percent in October from a year ago, the smallest increase since records started in 1957.

NABE panelists tweaked the gross domestic product (GDP) growth forecast for 2010 and kept the estimate for 2011 unchanged at an annual rate of 2.6 percent.

The economy is now seen expanding at a 2.7 percent rate instead of 2.6 percent this year, still below the 3.5 percent many analysts say is needed to start lowering unemployment.

“Projections for real GDP growth remain sub-par through the first quarter of 2011, but accelerate gradually through the forecast period,” said NABE President Richard Wobbekind, associate dean of the Leeds School of Business at the University of Colorado.

“For next year as a whole, GDP growth is expected to be moderate. Factors restraining growth going forward include ongoing balance-sheet restructuring by consumers and businesses, and a diminished contribution to GDP growth from inventory restocking and government stimulus.”

The panelists predicted a gradual improvement in the labor market, with monthly payroll gains forecast to average less than 150,000 until the latter half of 2011. The unemployment rate was seen above 9.5 percent through the first quarter of 2011, dipping to 9.2 percent by year-end.

A tepid housing market recovery was forecast, with prices rising somewhat in 2011.

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Ireland was in talks over a financial rescue as European Union leaders battled to shield Portugal from the resurgent debt crisis and doubts surfaced over Greece’s economic health.

“We are in a survival crisis,” EU President Herman Van Rompuy said at the European Policy Centre in Brussels today. “If we don’t survive with the euro zone we will not survive with the European Union.”

Public clashes among EU officials over how to defuse Europe’s debt bomb marked a new stage in the crisis triggered by Greece’s near-default in May that forced the EU to set up a 750 billion-euro ($1 trillion) rescue fund to keep the euro intact. A European Central Bank official threatened to end economy- boosting measures.

Irish bonds fell, reversing a two-day rally, on concern European finance ministers would fail to strike a deal at a meeting in Brussels that started at 5 p.m. The euro slid 0.7 percent to $1.3495, down 5 percent since Nov. 4.

“We are discussing with both the ECB and the IMF and of course the Irish,” EU Economic and Monetary Affairs Commissioner Olli Rehn said on his way into the meeting. “The real problems are in the banking sector,” not with the government, “but these are connected.”

Ireland is negotiating with the EU and International Monetary Fund about aid to shore up the state’s finances, furnish capital for the country’s banks and spare it from tapping the bond market for an extended period, the European official said on condition of anonymity. Spokesmen for the Irish central bank and Finance Ministry declined to comment.

Irish Yields Rise

The aid package may total about 80 billion euros, according to Barclays Capital. Prime Minister Brian Cowen told Parliament in Dublin tonight that Ireland hasn’t lodged an aid request and the goal is “a credible, efficient and above all workable solution that will provide assurance to the markets.”

The yield on Ireland’s 10-year bond rose 28 basis points to 8.44 percent. The extra yield over German bunds rose to 561 basis points from 540 basis points yesterday. The spread, a measure of the risk of investing in Ireland, peaked at 646 basis points on Nov. 11.

“Once the bond spreads started to spike, whatever avenue looked at, it was very difficult to see how we were going to avoid a bailout,” NCB Stockbrokers Chief Economist Brian Devine said. “We probably could have handled a budgetary fiscal crisis on its own, but not a fiscal and banking crisis.”

Stark’s Threat

ECB Executive Board member Juergen Stark upped the stakes today, saying in Frankfurt that the ECB will continue to scale back stimulus “notwithstanding the most recent tensions in some segments of the European sovereign debt market.”

Stark’s views are “unhelpful to say the least,” said Jacques Cailloux, chief European economist at Royal Bank of Scotland Plc in London. “It’s a bold call to make when you have three countries in your region effectively cut off from the markets.”

A split on the ECB council has added to market tensions, with President Jean-Claude Trichet’s program of buying bonds of deficit-hit states lacking the support of Axel Weber, head of Germany’s central bank payday lenders. Another ECB council member, Spain’s Miguel Angel Fernandez Ordonez, yesterday blamed Ireland for equivocating over EU aid.

As Ireland’s fate took center stage, concern mounted that Portugal would be next in the crossfire and that Spain, the euro region’s fourth-largest economy, might come under speculative pressure. Cyprus, which adopted the euro in 2008, had its long- term sovereign credit rating lowered to A from A+ by Standard & Poor’s Ratings Services today.

‘Risk of Contagion’

“There is a risk of contagion,” Portuguese Finance Minister Fernando Teixeira dos Santos said in an interview yesterday. “But there’s a big difference between saying there is a risk of contagion and saying help is imminent or that we are going to ask for help.”

The latest leg in the debt crisis began Oct. 29 when EU leaders agreed to consider German Chancellor Angela Merkel’s demand for the setup of a permanent crisis-resolution mechanism that forces bondholders to share the cost of future bailouts.

That pledge triggered 13 straight days of losses in the Irish bond market and dragged down Portuguese, Greek and Spanish securities. To stem the damage, Merkel on Nov. 12 signed up to a five-country declaration that exempts bonds now on the market from a restructuring that could be imposed under a permanent system to be created by 2013.

Papandreou’s Criticism

Merkel wants to penalize bondholders for betting against fiscally unsound governments after the EU’s temporary rescue fund runs out in 2013. In Paris yesterday, Greek Prime Minister George Papandreou blamed the her proposal for creating a “self- fulfilling prophecy” that hurt peripheral countries.

The Greek criticism drew a German rebuke today. “When I heard the comments by the Greek prime minister I thought, with all due respect, that Greece has enjoyed a lot of European and German solidarity,” German Finance Minister Wolfgang Schaeuble said before the Brussels meeting. “But solidarity is not a one- way street. That shouldn’t be forgotten in Greece.”

The German demands reflected a revolt by taxpayers in richer EU countries against underwriting fiscally unsound governments at a time of 10.1 percent euro-area unemployment. Finland’s Jyrki Katainen said today that Ireland be forced to put up collateral for any aid.

Austrian Finance Minister Josef Proell said he was considering withholding the country’s share of the next part of Greece’s 110-billion euro rescue, saying the Athens government missed a revenue-raising target.

That disclosure triggered losses in Greek bonds, pushing the extra yield over 10-year German bonds up by 12 basis points to 898 basis points.

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At the Web 2.0 Expo in New York City this week, executives from big sites like Facebook, Twitter and Pandora all spoke about industry trends. But the showcase of 27 startup tech companies stole the show.

One clear trend emerged among the new companies: A handful of startups focused on apps tied to highly localized information, be it about specific neighborhoods or even physical objects.

Here’s a look at five of the most promising startups.

Roadify: Brooklyn, N.Y.-based Roadify is a social transportation company. Users text "road" to 95495, and they can get real-time information from other users about a full parking lot or a delayed subway. For example, a member can ask if a bus is running late; another user can respond that she just saw the bus six blocks away.

Roadify relies on social karma and discounts as an incentive for users to offer tips. When users post a message about an open parking spot or a bus location, they’ll get points to use toward local freebies and deals. Roadify also gives easy access to official data sources like Google Transit. The service is available only in Brooklyn for now, but the company hopes to expand soon. Text-messaging rates apply, but the service itself is free.

NabeWise: NabeWise is a startup that aims to give users the ability to explore any neighborhood on such a local level that it feels as if they’ve already lived there — even if they’ve only explored it online. The goal is to help members find neighborhoods that are perfect for them.

To do that, NabeWise lists real-time neighborhood rankings across 65 key attributes "that people really talk about" — like trendiness, safety and even "hipster levels."

Users can also use the NabeFinder, a tech-driven tool that uses data and algorithms to display heat maps of the best nabes for their specific combo of preferences. It’s currently in New York, San Francisco, Boston, Seattle and Chicago but promises to expand "in the coming months."

Intersect: Intersect adds a social, storytelling aspect to neighborhoods. Users can upload photos and stories about anything in their lives, linking the posts to a specific date and location. Stories can be shared with the whole site or with specific groups.

Users can search by place or time to see if their stories "intersect" with anyone else’s. People can post as many stories as they want on their timelines, and Intersect says it hopes the project will help foster community connections. The site’s in beta testing now, but the company accepts email requests to become a tester.

Itizen: Like Intersect, this startup also revolves around stories. But Itizen focuses on the "life stories" of physical items like keepsakes and gifts — perhaps how it was made, or why it’s special. If people receive items with an Itizen "TrackIt Tag" (a two-dimensional QR barcode), they can scan it with their mobile app to read the object’s story — and add another tale to the webpage.

SoBi: The Social Bicycle System says it’s the first public bike share system that attaches tracking and security systems to the bicycle itself, thanks to GPS and a secure lock. Anyone can join SoBi by downloading the smartphone app, which lets users to locate nearby bikes and unlock them with a PIN.

Users can also create profiles to share their experiences with other SoBi members and check if friends are nearby, as well as track calories burned and greenhouse gases saved by biking rather than driving. A beta test is coming to New York City in the fall. 

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The president’s signature foreclosure rescue plan is losing its punch, according to a federal report released Friday.

Only 36,695 troubled homeowners received long-term mortgage modifications in July under the Obama administration’s Home Affordable Modification Program, known as HAMP. This brings the total to 434,717 borrowers who have successfully made it out of the trial phase.

A month ago, 51,205 delinquent borrowers were given long-term assistance.

The number of people falling out of the program, however, is on the rise. Some 12,912 homeowners had their permanent modifications canceled in July, 272 of whom paid off their loans.

Obama officials acknowledge that the foreclosure rescue program will not help every troubled homeowner and that it may be a while before the housing market stabilizes. They are shifting their focus to initiatives that are targeted to those who have been hit by the recession and declining home prices.

"While there has been some stabilization in the housing market, it remains clear that we have more work ahead," said Raphael Bostic, assistant housing secretary. "We know that we must continue to provide support to underwater borrowers, unemployed homeowners, and to the nation’s hardest hit neighborhoods."

Foreclosure prevention programs have taken on renewed importance with the housing market on shaky ground again. A spike in foreclosures, combined with weak housing sales, could send home prices plummeting again.

In July, foreclosures were up 3.6% from the month before but down 9.7% from the year earlier period, according to RealtyTrac.

Defaults on the rise

The latest report comes two weeks after the government had to revise its June redefault figures sharply higher, after analysts called the initial numbers misleading.

The revision showed that nearly 20% of homeowners were at least two months delinquent nine months after receiving a permanent modification. The initial figure showed that 7.7% had fallen behind.

The government did not provide redefault statistics for July in the current report. Officials said the data would be released quarterly.

Analysts at Barclay’s Capital said last month said 60% of homeowners may ultimately redefault instant personal loans guaranteed.

Status of trial mods

Some 96,025 people in trial modifications were canceled in July, bringing the total to 616,839 since the program began in the spring of 2009.

Homeowners usually are kicked out of the trial program because they do not make the required payments, meet the qualifications or submit the needed paperwork. Going forward, loan servicers will gather the necessary documents and review homeowners’ eligibility before entering them in trial modifications.

Once their trials are canceled, about 45.4% of homeowners receive alternate modifications, often one from their loan servicer. Some 9.8% had foreclosure proceedings started against them and 1.8% lost their home in foreclosure.

Only 255,934 troubled borrowers remain in the trial phase, some 24,577 of whom entered the program in July. Nearly 118,000 have been in trials for at least six months, though loan servicers should address these homeowners in the next month, administration officials said.

Another new program

Launched with great fanfare, the president’s foreclosure prevention plan calls for servicers to reduce eligible troubled homeowners’ monthly payments to no more than 31% of their pre-tax income. However, it has come under persistent fire for being slow to launch and for not helping enough people.

Meanwhile, the government is set to roll out yet another fix for the housing market. Borrowers can start applying for the FHA Short Refinance option starting Sept. 7.

The program allows those who owe more than their homes are worth to refinance into a Federal Housing Administration-backed loan provided they are current on their mortgages and their lender agrees to write off at least 10% of their principal balance. The initiative is open to those who do not currently have an FHA loan and who have a credit score of 500 or more.

In recent months, the administration has stressed the wide range of housing programs it has underway, including initiatives to keep interest rates low and to provide tax credits to first-time homebuyers.  

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Ann Moore, the chief executive of Time Inc. — the world’s largest magazine publisher — is stepping down from the company to be replaced by Jack Griffin, a group president of Meredith Corp., according to published reports.

The New York Times, Wall Street Journal and New York Post all reported the CEO shakeup Wednesday evening, citing unnamed executives at the companies.

A Time Warner (TWX, Fortune 500) subsidiary, Time Inc. publishes about 115 magazines worldwide including Time and Sports Illustrated and accounts for almost a quarter of total advertising revenues of U.S. consumer magazines. Measured by circulation, it’s the world’s largest magazine company, followed by Meredith, which is based in Des Moines, Iowa.

A Time Warner spokesman could not be immediately reached for comment. CNNMoney is a joint venture of CNN and Time Inc.

A 32-year veteran of Time Inc., Moore was appointed CEO in 2002. She has presided during a time when magazines suffered an unprecedented decline in advertising revenue due to competition from online media and the recession.

In recent years, Time Inc. has made major staff cuts and shed some of its magazine titles.

Griffin ran Meredith’s magazine brands — including Better Homes and Gardens, Parents and Family Circle — as well as its Internet and digital properties.

Meredith announced his departure from the company on Monday, saying he had left "to pursue another opportunity."

Griffin would inherit Moore’s role just as Time Inc. reported a 50% surge in its quarterly operating profit Wednesday.

That surge was primarily due to substantial cost-cutting measures, including a restructuring of the company’s pension expenses.

Time Inc.’s quarterly revenue remained virtually unchanged. Advertising sales were up 4%, but other revenue failed to grow primarily due to flat subscription growth and an ongoing impact from the sale of Southern Living at Home last fall, the company said.

Nearly all of Moore’s career has played out at Time Inc., where she worked her way up the corporate ladder. She started as an analyst shortly after earning her Harvard M.B.A. in 1978 and later became publisher and then president of People. 

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Servigistics bought Conduit Internet Technologies Inc. for an undisclosed sum.

Atlanta-based Servigistics provides software to help companies manage their parts inventory.

Conduit, headquartered in State College, Pa., provides product content management technology for OEM and dealer-based service organizations.

"Conduit's content management solutions will give potential and existing Servigistics clients extended capabilities to drive revenue through the service chain by granting more visibility and access to critical content necessary to support their distribution channels," said Eric Hinkle, CEO of Servigistics, in a statement paydayloans.

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Bruton Smith, chief executive of Speedway Motorsports Inc., saw a drop in his compensation last year to $1.7 million.

Smith received $1.9 million in 2008.

According to a company filing with the Securities and Exchange Commission, Smith was paid a salary of $600,000 and received nonequity incentives of $1.1 million last year.

He received a salary of $600,000 and nonequity incentives of $1.3 million in 2008.

Speedway Motorsports (NYSE:TRK) is a Concord-based promoter of motorsports entertainment. The company owns and operates Charlotte Motor Speedway, Atlanta Motor Speedway, Bristol Motor Speedway in Tennessee, Infineon Raceway in California, Kentucky Speedway, Las Vegas Motor Speedway, New Hampshire Motor Speedway and Texas Motor Speedway near Fort Worth.

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