U.S. markets up slightly
NEW YORK, June 4 (UPI) -- U.S. markets edged up Thursday after the Department of Labor said jobless claims fell and productivity rose faster than previously reported.
The department said there were 4,000 fewer initial jobless claims in the week ending May 30. In the first quarter, productivity rose 1.8 percent in the business sector with manufacturing dropping 2.7 percent, a slower rate than reported a month ago.
In late morning trading, the Dow Jones industrial average gained 25.87 points, or 0.30 percent, to 8,701.15. The Standard & Poor's 500 rose 0.51 percent, 4.78 points, to 936.54. The Nasdaq composite index added 8.74 points, 0.48 percent, to 1,834.66.
The benchmark 10-year U.S. Treasury bond fell 31/32 to yield 3.654 percent.
The euro fell to $1.4137, compared to Wednesday's $1.4155. Against the Japanese yen, the dollar rose to 96.36 yen, compared to Wednesday's 95.98 yen.
In Tokyo, the Nikkei average lost 72.71 points to 9,668.96 , off 0.75 percent.
Canadian building permits dip in April
OTTAWA, June 4 (UPI) -- The value of building permits taken out by Canadian contractors in April was down 5.4 percent from March to $4.3 billion, Statistics Canada said Thursday.
The value of residential permits nationally rose 4.1 percent to $2.3 billion, but the non-residential permits plunged 14.4 percent to $2 billion, the agency said.
Broken down further, in the non-residential side, the value of commercial permits fell 22.1 percent to $1.1 billion, a volatile plunge on the heels of of a 45.8 percent increase in March, StatsCan said.
"The value of industrial permits remained volatile, climbing 41.6 percent to $310 million in April, with increases posted in eight provinces," the report said.
Regionally, the value of building permits fell in four provinces in April, led by British Columbia, which posted a 36.5 percent decline to just $380 million. Ontario was second with a 15.7 percent drop to $1.5 billion, the agency said.
Interest rates could haunt world economies
WASHINGTON, June 4 (UPI) -- Rising interest rates on rising debt could haunt the United States much like the crisis that sneaked up on U.S. homeowners, a Harvard University economist said.
Interest payments on federal borrowing could reach $806 billion by 2019, up from $170 billion this year, The New York Times reported Thursday.
With borrowing escalating to get world economies back on track, a one percentage point increase in interest rates could increase U.S. obligations by $50 billion a year, the newspaper said.
"It's a gigantic issue," said Harvard professor Kenneth Rogoff. "It leaves us very vulnerable to a global rise in interest rates that might be substantially beyond our control."
"It's a little like what happened to the subprime borrowers. People are just assuming the funding will always be there," Rogoff said.
Government borrowing in other countries has also alarmed economists. Britain's debt could reach 100 percent of its gross domestic product by 2013, Standard & Poor's said.
As borrowing affects bond rates, which in turn affect rates consumers pay, "it will be more expensive for everybody," said Olivier Blanchard, chief economist of the International Monetary Fund.
"As government borrowing in the world increases, interest rates will go up. We're already starting to see it."
Buyer: No plans to make Hummer in China
BEIJING, June 4 (UPI) -- China's Sichuan Tengzhong Heavy Industrial Machinery says it has no plans to make General Motors' Hummer vehicles in China.
The private Chinese firm plans to buy the heavy-duty sport utility vehicle brand from the U.S. automaker, which is now in Chapter 11 bankruptcy.
"Rather than setting up a plant in China, Tengzhong will use the current facilities including their employees in the United States," spokesman Zhao Xiaolu told Xinhua.
Tengzhong, with headquarters in southwest China's Sichuan province, is a leading maker of road, construction and energy industry equipment, the Chinese news agency said. It came into being in 2005 after a number of mergers and currently employees about 4,800 people.
In the Hummer deal, Tengzhong plans to retain its management, operational team and 3,000 of its employees, Xinhua said. The company also will assume existing Hummer dealer agreements.
In an earlier statement, Tengzhong Chief Executive Officer Yang Yi was quoted as saying the company will "allow Hummer to innovate under the leadership and continuity of its current management team."
"This transaction, if successful, will allow us to embark on a more aggressive global expansion, ensuring a successful future with our new partners," Hummer Chief Executive Officer James Taylor said.
Zhao said Tengzhong will use internal funds and bank loans to finance the transaction.
Recent auto purchases by Chinese companies include Shanghai Automotive Industry Corp.'s acquisition in 2004 of a 48.9 percent stake in South Korea's Ssangyong Motor, and the 2005 acquisition of Britain's MG by Nanjing Automotive, Xinhua said.
This March, China's independent car maker, Geely Automobile, purchased Drivetrain Systems International, the world's second-largest auto transmission supplier.
