U.S. markets stumble at start
NEW YORK, Feb. 27 (UPI) -- U.S. markets stumbled then regained ground Wednesday on news that durable goods orders fell 5.3 percent in the United States in January.
The federally-backed Fannie Mae mortgage lender announced fourth quarter losses of $3.55 billion for 2007, a sign that credit losses are widespread.
The Dow Jones industrial average was up 36.96 points in late-morning trading, a rise of 0.29 percent to 12,721.88. The Standard & Poor's 500 index gained 0.23 percent to 1,384.47, up 3.18 points.
The Nasdaq composite index rose 10.12 points, or 0.43 percent to 2,355.11.
The 10-year U.S. Treasury note gained 11/32, yielding 3.861 percent.
The dollar was lost ground with the euro traded at $1.5039, compared with $1.4966 Tuesday. The dollar traded at 106.37 yen, from 107.28 yen late Tuesday.
In Tokyo, the Nikkei average gained 206.58 points Wednesday to 14,031.30, up 1.4 percent.
Fed reduces expectations, Bernanke says
WASHINGTON, Feb. 27 (UPI) -- U.S. Federal Reserve Chairman Ben S. Bernanke Wednesday said the central bank "will act in a timely manner to support growth."
In his semi-annual Monetary Policy Report to the House Committee on Financial Services, Bernanke said the Fed had downgraded several economic projections for the coming months and that "downside risks remain."
Bernanke said inflation of energy prices had exceeded the Fed's expectations and that "the economic situation has become distinctly less favorable since the time of our July report."
In spite of inflation, consumer spending and non-financial sectors of the economy remain strong, he said.
But, "the jump in the price of imported energy" contributed to an erosion of "real income and wages," he said.
The Fed now projects U.S. unemployment to reach 5.2 percent to 5.3 percent in the fourth quarter of 2008, up from July's estimates of 4.75 percent. Projections for the growth in the gross domestic product have been downgraded from 2.5 percent to 2.75 percent to "between 1.3 and 2.0 percent in 2008," he said.
Durable goods orders fall in January
WASHINGTON, Feb. 27 (UPI) -- Durable good orders declined sharply in the United States in January after two months of advances, the U.S. Commerce Department reported Wednesday.
Orders declined 5.3 percent in January, exceeding the market forecast, which had estimated a 3.5 percent decline.
Orders in many industries fell. Fabricated metal product orders declined 4.1 percent; machinery orders declined 1.5 percent. Computers and electronic orders in January were off 2.7 percent.
Of the major industries, only electrical equipment gained, up 1.4 percent, while overall declines were pushed by a 30.5 percent drop off in non-military aircraft orders.
Following a Feb. 12 announcement by the Philadelphia Federal Reserve that manufacturing was in a decline, the January durable goods figures will give investors further reason to believe that the U.S. economy is in recession.
Microsoft fined $1.35 billion
BRUSSELS, Feb. 27 (UPI) -- The European Commission fined Microsoft Corp $1.35 billion Wednesday for antitrust violations that took advantage of its dominance in the software industry.
The fine is the largest ever issued by the commission.
The commission claimed that Microsoft charged "unreasonable prices for access to interface documentation for work group servers," The Wall Street Journal reported.
In overcharging competitors for documentation that would allow them to create software compatible with its own, Microsoft was taking advantage of its strength, the commission ruled.
The fine creates a total of $2.5 billion in fines the commission has ordered Microsoft to pay. The commission fined Microsoft $739 million in 2004 for alleged monopolistic behavior. The commission added $417 million in 2006, when Microsoft failed to comply with the commission's ruling, the report said.
"I hope that today's decision closes a dark chapter in Microsoft's record of noncompliance," European Competition Commissioner Neelie Kroes said.
