Turmoil returns with Wall Street relapse
NEW YORK, Aug. 18 (UPI) -- U.S. markets plummeted Thursday, indicating the roller coaster ride set off in part by the government's credit rating downgrade is not over.
The Labor Department said the Consumer Price Index rose a seasonally adjusted 0.5 percent in July while the core rate rose 0.2 percent. By itself, the figure is benign, but a steady pulse of weak data for two months makes the report neutral at best.
The Federal Reserve of Philadelphia said manufacturing activity in the region "dipped significantly" in August. The report follows a similar downturn in manufacturing activity in New York.
The dour data snapped stock markets into an up and down frenzy after credit rating agency Standard & Poor's downgraded U.S. credit from AAA to AA+ on Aug. 5. The following week was the most volatile in the history of the Dow Jones industrial average, which swung 400 points or more on four consecutive trading days.
Markets settled down Friday last week and Monday through Wednesday of this week. Stocks became unhinged Thursday, however, following downturns in Asia and Europe. Thursday morning, the Labor Department said first-time jobless claims rose by 9,000 in the latest weekly report, a sign unemployment worries are not over.
Some Asian stocks struggled. The Sensex index in India lost 2.2 percent, while the Shanghai composite index in China lost 1.61. The Nikkei 225 in Tokyo lost 113.50 points, 1.25 percent, to 8,943.76.
In Europe, losses escalated. The DAX 30 in Germany fell 5.82 percent. Stocks were down 5.48 percent on the French CAC 40 and off 6.15 percent on the FTSE MIB in Italy.
The Swedish OMX index dropped 6.18 percent.
On Wall Street, markets closed with the DJIA giving up 419.63 points, or 3.68 percent, to 10,990.58, wiping out the four-day comeback. The Standard & Poor's 500 index lost 53.23 points, 4.46 percent, to 1,140.56. The Nasdaq index lost 131.05 points, 5.22 percent, to 2,380.43.
Safe havens responded predictably. Investors turning to gold pushed the metal to $1,827 per troy ounce, up $33.20. The benchmark 10-year treasury note rose 29/32 to yield 2.068 percent.
The euro fell to $1.4328 compared to Wednesday's $1.4426. Against the yen, the dollar slid to 76.56 yen from Wednesday's 76.59 yen.
Son of TARP raises eyebrows
WASHINGTON, Aug. 18 (UPI) -- The U.S. Treasury Department is doling out funds to small banks in a program critics say is a way to extricate banks from the unpopular TARP program.
The $30 billion program known as the Small Business Lending Fund is available to banks that have paid off the Troubled Asset Relief Program funds, The Boston Globe reported Thursday.
Nearly two-thirds of the $1 billion handed out so far has gone to TARP recipients, with banks typically using the funds to pay off their TARP loans, which are more expensive.
For example, four banks in Massachusetts this week were given $18 million. In the mix, Mercantile Capital Corp. is set to receive $7 million and half will go to pay off the bank's TARP obligation, the Globe reported.
The SBLF, which is being touted as a way to boost lending to small businesses that expect to expand and hire more workers, will cost banks 1 percent a year in dividends, about one-fifth of what TARP costs.
"In that regard, SBLF is particularly helpful in permitting Mercantile to assist its customers and the local economy to grow," said Mercantile Chief Executive Officer Charles Monaghan.
Republicans in Congress are denouncing the program, which some have dubbed "TARP Jr.," the newspaper said.
Neil Barofsky, the former special inspector general who oversaw the TARP program, said the new program "has always been more about giving Treasury the opportunity to rebrand an unpopular TARP program than actually stimulating small business lending."
Sen. Olympia Snowe, R-Maine, has introduced a bill to disqualify TARP recipients from participation in the SBLF program, a move some say would effectively end SBLF.
TARP was put together by the George W. Bush administration and signed into law in October 2008 as a way to stem a financial crisis in the nation's largest banks.
Managers value keeping cool over smarts
CHICAGO, Aug. 18 (UPI) -- Handling stress on the job and managing relationships is becoming valued by U.S. managers even more than intelligence, researchers say.
CareerBuilder said a survey of 2,662 hiring managers found 71 percent indicated emotional fortitude -- the ability to control emotions and manage relationships -- was more important than a worker's IQ.
CareerBuilder postulated that in tough economic times, employers are more apt to look beyond the skills needed to do the job and the value of intangible assets is heightened.
"The competitive job market allows employers to look more closely at the intangible qualities that pay dividends down the road -- like skilled communicators and perceptive team players," Rosemary Haefner, vice president of human resources at CareerBuilder, said in a statement.
Emotional strength, however, can be observed in workers who "admit and learn from their mistakes," or "keep emotions in check and have thoughtful discussions on tough issues," CareerBuilder said.
Workers with "emotional intelligence" also "listen as much or more than they talk" and handle criticism maturely.
They also show "grace under pressure," CareerBuilder said.
The survey was conducted May 19 to June 8 and carried a margin of error of 1.9 percentage points.
Businesses target healthcare cost
NEW YORK, Aug. 18 (UPI) -- A non-profit business association said a June survey indicated U.S. businesses will take more action to curtail healthcare costs in 2012.
The National Business Group on Health, which represents 329 large businesses, said healthcare costs are expected to rise 7.2 percent in 2012, more than twice the rate of inflation. Healthcare costs rose 7.4 percent this year.
The rising cost "sharply outpaces the economy's anemic growth and business conditions," the group said in a statement.
A survey of employers found 53 percent of respondents indicated they planned to increase employee contributions to healthcare benefits next year.
Thirty-nine percent indicated they would increase in-network deductibles and 23 percent indicated they would raise out-of-network deductibles, while 22 percent indicated they would raise out-of-pocket maximums next year.
On the preventative side of the equation, 57 percent of respondents indicated employees and spouses or domestic partners would have access to weight management programs. About a third of the employees would also have a weight management program available to their children.
