Market gains flatten Monday
NEW YORK, Dec. 7 (UPI) -- U.S. markets opened the week mixed after gains fell flat Monday following Federal Reserve Chairman Ben Bernanke's speech in Washington.
Commenting on the past two years, Bernanke said, "We have come a long way from the darkest period of the crisis, but we have some distance yet to go." He said employment and tight lending would keep the recovery at a slow pace.
Earlier, the U.S. Treasury estimates the $700 billion Troubled Asset Relief Program, set up to help banks during the financial crisis a year ago, would cost $200 billion less than expected.
By close, the Dow Jones industrial average gained 1.21 points, 0.01 percent, to 10,390.11. The Standard & Poor's 500 dropped 0.25 percent, 2.73, to 1,103.25. The Nasdaq composite index lost 0.22 percent, 4.74 points, to 2,189.61.
On the New York Stock Exchange, 1,656 stocks advanced and 1,364 declined on a volume of 6.3 billion shared traded.
The benchmark 10-year U.S. Treasury bill rose 13/32 to yield 3.43 percent.
The euro fell to $1.4827 from Friday's $1.4846. Against the yen, the dollar fell to 89.415 yen from Friday's 89.53 yen.
In Japan, the Nikkei 225 index gained 1.45 percent, 145.01, to 10,167.60.
In Britain, the FTSE 100 index lost 0.22 percent, 11.70, to 5,310.66.
Bernanke describes recovery as young
WASHINGTON, Dec. 7 (UPI) -- U.S. Federal Reserve Chairman Ben Bernanke said Monday the economic recovery was still on young legs and had a long way to go.
Speaking at the Economic Club of Washington D.C., Bernanke said recent economic data "offer the hope and expectation of continued recovery in the new year," However, a weak labor market and tight credit continued as "significant headwinds," he said.
"We have come a long way from the darkest period of the crisis, but we have some distance yet to go," he said.
In prepared remarks, Bernanke asked rhetorically if inflation would become an issue with bank-to-bank interest rates remaining at historic lows. "The answer is no," he said, indicating the central bank was "committed to keeping inflation low and will be able to do so."
Among the signs of improvement, businesses inventories have dropped, which encourages production, he said. But that wasn't enough. "A sustainable recovery requires renewed growth in final sales," he said.
GM, Chrysler: New leaders on two tracks
DETROIT, Dec. 7 (UPI) -- New leaders at General Motors Co. and Chrysler Group face very different challenges, U.S. auto industry analysts said.
Both GM and Chrysler went through bankruptcy proceedings this summer and emerged with lighter debt loads and less capacity as operations were slimmed down.
Chrysler Chief Executive Officer Sergio Marchionne summarized one of Chrysler's most immediate issues last month. "In this market, if you don't have a competitive mid-sized sedan, you're a nobody. That's where we are." In its favor, "Marchionne may be the best leader in the industry right now," industry analyst John Wolkonowicz at IHS Global Insight said.
At GM, a leadership shakeup that saw the resignation of Fritz Henderson as chief executive officer was intended to accelerate changes. In addition, "the bankruptcy has taken $5,000 to $6,000 out of the cost of each vehicle," said David Cole, chairman of the Center for Automotive Research.
For GM, "this is a very fast track to run on," he said.
Wolkonowicz said he would "take GM's situation in a heartbeat," compared with Chrysler.
"GM has a cold. Chrysler has pneumonia," he said.
Banks in Britain pan 'supertax' idea
LONDON, Dec. 7 (UPI) -- Bankers in Britain warned that a special tax on bank bonus checks would scare both businesses and individuals away to other countries.
"We need to think about the message this will send outside the UK about Britain being a place to do business in," said Angela Knight, chief executive officer of the British Bankers Association.
Knight pointed out the financial business sector already supplied Britain with 1 million jobs and $20.5 billion per year in corporate taxes. In addition, bankers pay $29.5 billion in personal tax each year, she said.
Treasury plans to start a "supertax" levied on bank bonus pay surfaced during the weekend, The Times of London reported Monday.
Chancellor of the Exchequer Alistair Darling is justifying the tax on the same logic an insurance company would make raising rates after a large claim is paid out.
Darling is preparing to argue that if bankers can expect bailouts from taxpayers, then taxpayers should expect a larger share of bank revenue, the newspaper said.
