Markets mixed on flat data
NEW YORK, Dec. 17 (UPI) -- Markets on Wall Street opened mixed Friday morning after a week of flat and discouraging economic data.
The Conference Board said Friday U.S. leading indicators rose 1.1 percent in November. On Thursday, the Commerce Department said housing starts rose in November compared to October, but housing permits issued, indicating future construction starts, fell 4 percent.
In late morning trading, the Dow Jones industrial average lost 12.17 points or 0.11 percent to 11,486.10. The Standard & Poor's 500 index gained 1,75 or 0.14 percent to 1,244.62. The Nasdaq composite index gained 11.83 o 0.45 percent to 2,649.14.
The benchmark 10-year treasury note rose 9/32 to yield 3.36 percent.
The euro fell to $1.3158 from Thursday's $1.3228. Against the yen, the dollar rose to 84.055 from Thursday's 84.02 yen.
In Japan, the Nikkei 225 index was also flat, off 0.07 percent, 7.46, to 10,303.83.
Moody's cuts Ireland's credit rating
DUBLIN, Ireland, Dec. 17 (UPI) -- Moody's Investor Services on Friday cut Ireland's credit rating sharply and warned future downgrades were possible if its economy did not improve.
For now, Moody's dropped Ireland's rating from Aa2 to Baa1, a five-notch downgrade. But Moody's also put the new rating under a negative outlook status, which means the agency has doubts Ireland will be able to prevent its rating from slipping further, The New York Times reported.
In a statement, Moody's said, "The Irish government's financial strength could decline further if economic growth were to be weaker than currently projected or the cost of stabilizing the banking system turn out to be higher than currently forecast."
European leaders at a summit in Brussels praised Ireland for recent moves to correct its budget problems, but investors reacted, as well, sending interest rates on 10-year Irish bonds up 21 basis points to 8.3 percent
Leading indicators mildly upbeat
NEW YORK, Dec. 17 (UPI) -- The U.S. index of leading economic indicators rose 1.1 percent in November, the Conference Board said Friday.
The rise, more than double the 0.4 percent increase a month ago, was exactly on par with the consensus forecast
The headline index rose to 112.4. The index was up at an annual rate of 4.4 percent with a six-month change of 2.2 percent. A month ago, the rate of annual increase was 3.3 percent.
Of the 10 index components, only building permits issued showed a contraction in the month. The Commerce Department said Thursday that permits issued dropped 4 percent in November.
By comparison, however, the annual growth rate in the index is slower than the 8.1 percent annual rate of the previous six months.
The Conference Board said all four components of the Coincident Index -- industrial production, income minus transfer payments, employment and manufacturing and wholesale sales -- rose in November. The Coincident Index measures current business conditions.
"The U.S. economy is showing some sparks of life in late 2010. Overall, the indicators point to a mild pickup after a slow winter. Looking further out, possible clouds on the medium term horizon include weaknesses in housing and employment," said Conference Board Economist Ken Goldstein.
Fed proposes cap on debit card fees
WASHINGTON, Dec. 17 (UPI) -- The U.S. Federal Reserve has opened to public comment proposed caps on debit card transaction fees retailers pay to card issuers.
The Fed has spelled out options it is considering that would apply to banks with more than $10 billion in assets.
One option would set the fee initially at 7 cents per transaction with a cap set at 12 cents. The second would set a "stand alone cap" of 12 cents per debit card swipe.
As a third option, the Fed said it would consider setting a fee that is based on processing costs to banks including "costs associated with fraud prevention."
The Washington Post reported Friday the average "swipe fee" for debit cards is currently 44 cents and retailers applauded the possibility of paying less.
Hank Armour, chief executive of National Association of Convenience Stores said there was "an abundant amount of evidence cost savings will be passed through," to consumers, although the Fed is not considering a mandate to have the savings show up on price stickers.
American Bankers Association Chief Executive Officer Edward Yingling said, "The proposal seems little more than direct government interference in the card payments system on behalf of large retailers and at the expense of everyday consumers."
Sen. Richard Dubin, D-Ill., said he was concerned about how banks would try to make up the difference. Debit card swipe fees currently generate about $16 billion a year for banks.
"I worry that the banks and credit card companies, faced with change and reform, will do the same thing they've always done: Create a new product, create a new fee, find a new loophole," Dubin said.
