Markets hold onto modest gains
NEW YORK, Sept. 2 (UPI) -- U.S. markets held onto tentative gains Thursday with reports that first-time jobless claims were relatively flat and work hours increased in the second quarter.
The Labor Department said there were 6,000 fewer initial jobless benefits claims last week.
In a separate report, the department said non-farm productivity slowed 1.8 percent on an annual rate in the second quarter but work hours rose 3.5 percent in the second quarter. It was the largest quarter-to-quarter jump in hours since the first quarter of 2006, the department said.
By close, the Dow Jones industrial average added 50.63 points, 0.49 percent, to 10,320.10. The Standard & Poor's 500 index added 0.91 percent, 9.81, to 1,090.10. The Nasdaq composite index added 1.06 percent, 23.17, to 2,200.01.
On the New York Stock Exchange, 2,102 stocks advanced and 880 declined on a volume of 5.3 billion shares traded.
The benchmark 10-year Treasury note fell 13/32 to yield 2.62 percent.
The euro rose to $1.2826 from Wednesday's $1.2803. Against the yen, the dollar fell to 84.314 yen from Wednesday's 84.40 yen.
In Tokyo, the Nikkei 225 index added 1.52 percent, 135.82, to 9,06284.
In London, the FTSE 100 index added 0.09 percent, 4.63, to 5,371.04.
Tax cut debate has pundits busy
WASHINGTON, Sept. 2 (UPI) -- Allowing the Bush tax cuts to expire for high-income U.S. families would cut into finances of a high-spending group, a New York economic strategist said.
David Zervos, managing director and head of Global Fixed Income Strategy at Jefferies & Co., said allowing the tax cuts to expire for wealthy individuals would put a drag on the economy, as the wealthiest 3 percent of households are responsible for about a quarter of the nation's consumer spending, CBS News reported Thursday.
That puts Zervos at odds with former Federal Reserve Chairman Alan Greenspan, who said recently he favors tax cuts, but not when government debt is running high.
"I'm very much in favor of tax cuts, but not with borrowed money," Greenspan said on "Meet the Press."
Frequently quoted economist Mark Zandi at Moody's said, "I think if the tax cuts expire for everybody, then we'll be back in recession, no doubt."
The debate in Washington is far from as radical a move as that. President Barack Obama's proposal includes extending the tax cut for couples making less than $250,000 a year and individuals earning less than $200,000 a year.
At the same time, he would allow the tax rate to rise for the highest two income brackets, as provided by the Bush-era tax-cut law.
Zandi said, "I would extend the tax cuts for everyone, at least in 2011. I wouldn't raise the taxes next year when the recovery is so fragile."
Schumer warns Fed of credit issuer dodge
WASHINGTON, Sept. 2 (UPI) -- U.S. credit card companies may be dodging a consumer protection law by sending solicitations for professional-class cards, Sen. Charles Schumer, D-N.Y., said.
The Credit Card Accountability, Responsibility and Disclosure Act has different laws that cover professional or business credit accounts and consumer accounts, MarketWatch reported Thursday.
Schumer, in a letter to the Federal Reserve, said he feared a 256 percent surge in solicitations for professional credit cards in the first quarter "is motivated by credit-card issuers seeking to bypass the tough and smart consumer reforms recently enacted."
Anuj Shahani at research firm Synovate said card companies shifted their focus from consumer credit accounts to professional accounts "as the CARD Act had no impact" on the professional accounts.
In the second quarter, the trend shifted again, with solicitations for consumer credit cards up 104 percent compared with the second quarter of 2009, while solicitations for professional cards declined, Synovate said.
SEC looks into high-speed trade orders
NEW YORK, Sept. 2 (UPI) -- U.S. regulators are looking at huge batches of stock trading orders that do not result in actual trades, sources told The Wall Street Journal.
The practice, known as "quote stuffing," involves placing orders for stocks and canceling the order within seconds, which gives the impression that a stock is in high demand, The Journal reported Thursday.
Capital Management said traders initiated orders to buy or sell 89.7 billion shares on the Nasdaq exchange on Feb. 18. At the end of the day, however, only 1.2 billion shares traded hands -- about 1 percent of the orders placed.
The SEC would not comment on the investigation, which sources told the newspaper was connected to an ongoing probe of the events of May 6, when the Dow Jones industrial average suddenly lost 700 points, only to recover most of that within the next 15 minutes.
The SEC is also examining what role "sub-penny pricing" had to play in the day's event, which is known as the "flash crash."
Sub-penny pricing involves using high-speed computers to troll the market for small price variations that trigger buy and sell orders.
"There are dozens, sometimes hundreds of these occurring every day," said Eric Hunsader, a co-founder of stock market research firm Nanex, referring to an Aug. 17 event in which 16,187 buy orders for Abbot Laboratories stock were placed in 2 seconds of time with only 14 of those orders resulting in trades.
