Markets close with gains Monday
NEW YORK, Oct. 15 (UPI) -- New York stock markets moved higher Monday after the Commerce Department said retail sales rose 1.1 percent in September over August.
The sales bump matched the 1.2 percent increase a month earlier and beat economists' expectations, which called for a 0.8 percent gain in September.
A mid-month report on New York State manufacturing indicated business activity fell in the state for the third consecutive month, but at a slower decline than September. The New York Federal Reserve's diffuse index of business activity rose four points to minus 6.2.
After posting losses in four of five sessions last week, the Dow Jones industrial average gained 95.38 points, 0.72 percent to 13,442.23. The Nasdaq composite index, added 20.07 points, 0.66 percent, to 3,064.18. The Standard and Poor's 500 index added 11.54 points or 0.81 percent to 1,440.13.
On the New York Stock Exchange, 2,030 stocks advanced and 1,007 declined on a volume of 3.4 billion shares traded.
The benchmark 10-year treasury note was yielding 1.662 percent.
The euro fell to $1.2952 from Friday's $1.2953. Against the yen, the dollar rose to 78.72 yen from 78.44 yen.
In Japan, the Nikkei 225 index added 0.51 percent, 43.81 points, to 8,577.93.
In London, the FTSE 100 index gained 0.21 percent, 12.29, to 5,805.61.
Rajoy's hesitation could hurt Spain
MADRID, Oct. 15 (UPI) -- Economists say Spain's hesitation to ask for international assistance could make matters worse when the government gets around to asking for help.
"If you wait too long, you will be forced into a program that will have much tougher conditions -- so better to ask for it now," said former economic minister Jose Manuel Campa, who is now an IESE Business School professor at the University of Navarra in Madrid.
The New York Times reported Monday that Spanish Prime Minister Mariano Rajoy has several reasons for hesitating to seek an international loan, including a request from Germany, where taxpayers are weary of bailing out other countries.
The European Central Bank pledged in September to buy short-term government bonds on the secondary market from countries that have asked for assistance from the European Stability Mechanism, a $648 billion fund set up to buy bonds directly from governments.
That ECB pledge alone pushed the Spanish government's borrowing costs below 6 percent, which has bought Rajoy some time. But that only means Spain is potentially coming closer each day to a crisis, at which point the terms of an international loan would be even harsher than what they would be today, analysts said.
The government, so far, has managed to avoid cutting pensions in Spain. But that budget item accounts for $129 billion out of Madrid's $452 billion annual spending package and with that large a percentage of the budget it would be very difficult to make any more budget cuts without cutting into the pension program, an analyst said.
"The government will have to take additional measures to reach the 6.3 percent of gross domestic product target. They will need to freeze pensions or even reduce them," said economist Federico Steinberg at the Real Instituto Elcano research group.
Meanwhile, the economy is hard pressed to move forward without help. From a year earlier, car sales were down 38 percent in September, the first month a sales tax increased from 18 percent to 21 percent, adding about $850 to the price of a new car, the president of an automobile retail association said.
"We are worried about the market because sales are so dependent on the economy," said Juan Antonio Sanchez Torres, the president of Ganvam.
"The recent value added tax increase raised the cost of a car by $841 on average. That has an important psychological impact that can stop consumption," he said.
AFL-CIO boycotts American Crystal Sugar
WASHINGTON, Oct. 15 (UPI) -- The AFL-CIO Monday called for a boycott of all American Crystal Sugar products to protest its lockout of more than 1,300 workers for 14 months.
AFL-CIO President Richard Trumka, in a release posted on the union's website, deplored American Crystal's refusal to meet the workers' contract demands while making record profits and paying hefty salaries to upper management.
"Corporate greed isn't sweet no matter how many spoons of sugar you take with it," Trumka said.
Trumka also decried the company's demand that workers healthcare coverage be cut and seniority rights be eliminated.
The lockout affects American Crystal Sugar facilities in North Dakota, Minnesota and Iowa.
Trumka said the lockout is taking an economic toll on communities across the Midwest, noting sugar beet farmers are getting lower prices for their beets and are being forced to plow under their crops. He also said small businesses are losing revenue because workers and their families can't spend like they did before the lockout.
U.S. consumer debt drops
WASHINGTON, Oct. 15 (UPI) -- Debt loads among U.S. consumers have receded to levels unseen since before the recession, data from private and public sources say.
U.S. Federal Reserve records indicate less than 16 percent of the average household's income after taxes is being used to pay debt and rent. That's the smallest combined debt and rent load since 1984, the Los Angeles Times reported Monday.
Moody's Analytics data shows consumer debt, including fixed and revolving debt, is lower than it has been since 2006.
Fixed loans include car and mortgage loans, while revolving debt refers to credit cards and other lines of credit.
The only category of consumer debt that is increasing is student loans, which are much higher than before the recession, as tuition costs have continued to climb and people without jobs are returning to school to increase their chances of finding one.
Overall, debt is lower because consumers are cautious, because monetary policy has pushed interest rates to historic lows and because foreclosures have reduced mortgage debt and lowered credit scores for many consumers.
"It's sort of a new reality that you have. We're going to try to live within our means because living beyond it didn't work out," said Jack Ablin, chief investment officer at Harris Private Bank in Chicago.
Moody's said the average credit card balance dropped to $4,940 April through June, 24 percent lower than the second half of 2008, when credit card debt was an average of $6,500 per household.
In 2008, there were 600 million credit card accounts in the United States. That has dropped to 470 million, Moody's said.
