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April 27, 2012 at 11:30 AM   |   0 comments

Stocks up tentatively

NEW YORK, April 27 (UPI) -- Stocks rose tentatively in New York Friday after the Commerce Department said the U.S. gross domestic product rose 2.2 percent in the first quarter.

Although data made available over the next two months could cause the figure to be revised, the 2.2 percent gain was smaller than the fourth quarter's expansion of 3 percent.

In midmorning trading on Wall Street, the Dow Jones industrial average added 17.30 points or 0.13 percent to 13,221.92. The tech-dominated Nasdaq composite index gained 3.27 points or 0.11 percent to 3,051.15. The Standard and Poor's 500 index gained 0.54 points or 0.04 percent to 1,400.52.

The 10-year treasury note fell 3/32 to yield 1.95 percent.

The euro rose to $1.3248 from Thursday's $1.3224. Against the yen, the dollar fell to 80.46 yen from Thursday's 80.99 yen.

In Tokyo, the Nikkei 225 lost 0.43 percent, 40.94, to 9,520.89.


WASHINGTON, April 27 (UPI) -- The U.S. gross domestic product rose by about 2.2 percent on an annual basis in the first three months of 2012, the Commerce Department said Friday.

The figure is considered and advanced estimate, with numbers that will firm up in the next two months as more data become available.

The advanced figure is a solid notch lower than the 3 percent of the preceding quarter.

Commerce said positive contributions for the GDP came from consumer spending, exports, private inventory investment and residential fixed investment.

They were "partly offset" by federal government spending, non-residential fixed investment and state and local government spending. In addition, imports, which subtract from the GDP, increased in the first quarter.

"These are encouraging signs that the private sector is continuing to heal from the worst recession since the Great Depression," said Alan Krueger, chairman of the White House Council of Economic Advisers.

Krueger noted it was the 11th consecutive quarter of U.S. economic expansion and said gains would have been higher without a sharp decline in government spending.

"If only the private sector components of GDP are considered, GDP grew by 3.5 percent," Krueger said in a statement.

The breakdown of the GDP includes a 2.9 percent rise in consumer spending, compared with a 2.1 percent increase in the fourth quarter.

Output of durable goods rose by 15.3 percent but the growth for the goods had been faster in the fourth quarter, up16.1 percent.

Output of non-durable goods -- items that are not expected to last three years -- rose 2.1 percent following fourth-quarter growth of 0.8 percent.

Federal government spending fell 5.6 percent in the first quarter, a sizable drop but a slower decline than the fourth quarter's 6.9 percent decrease in federal spending.

Spending on defense fell 8.1 percent following a 12.1 percent decline in the fourth quarter.


Report: Lehman execs had huge pay deals

NEW YORK, April 27 (UPI) -- The largest bankruptcy in U.S. history was preceded by handing out what could be unprecedentedly high paychecks, court documents show.

The collapse of Lehman Brothers in 2008, which became a symbol of the financial failings of the era, was preceded by paychecks totaling $700 million to just 50 of the firm's top executives, the Los Angeles Times reported Friday.

The sums paid out at Lehman Brothers were staggering, said Brian Foley, an executive compensation expert in White Plains, N.Y.

"This wasn't a matter of five or six people being paid a lot," Foley said.

"Many people are going to be stunned at how well some people were being paid."

It is not clear yet how much of the pay was in stock options that were cashed in before the firm collapsed or how much was converted to ready cash before the fall of the Wall Street giant.

But on paper, by any measure, the sums are sky-high.

In 2007, former Managing Director Robert Millard's pay on paper was $51.3 million. Former money manager Marvin Schwartz was to receive $31.1 million and trader Jonathan Hoffman $30.9 million, the Times said.

Millard's pay was even higher than former Lehman Brothers Chief Executive Officer Richard Fuld, who was promised $40 million.


U.S. firms doing much hiring -- overseas

NEW YORK, April 27 (UPI) -- U.S. corporations, reluctant to add workers in the United States, are doing the bulk of their hiring overseas, statistics show.

A study of 35 U.S. multinational firms showed that 75 percent of their hiring in the past 24 months has been in other countries.

Between 2009 and 2011, 60 percent of revenue growth for multinational firms based in the United States was overseas, The Wall Street Journal reported.

U.S. firms have set their sights on countries including China, India and Brazil as the next frontier for consumerism.

"If you want to capture market share in China, you're going to have to hire lots of locals. You just can't export that stuff," said Duke University Professor Arie Lewin, considered an expert in outsourcing.

Many U.S. multinational firms have added a paltry number of jobs in the United States since the recession ended in 2009 -- far less than smaller businesses.

But there should be no insult assumed, said Martin Baily, a former economic adviser to President Bill Clinton.

The jobs overseas "are not necessarily at the expense of U.S. workers." Baily said.

He said it is "almost inevitable" that the biggest firms need to hire workers overseas.

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