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UPI NewsTrack Business

Dec. 17, 2012 at 1:58 PM   |   Comments

Stocks start higher Monday

NEW YORK, Dec. 17 (UPI) -- U.S. stock indexes opened higher Monday morning as House Speaker John Boehner, R-Ohio, has reportedly proposed raising taxes on millionaires.

The offer was made privately on Friday. Although the White House rejected the majority of Boehner's proposal, Democrats said the offer was a potential opening for further budget talks and an eventual compromise, The Wall Street Journal reported.

Gains were held in check by a U.S. Federal Reserve of New York report that pegged New York State manufacturing as sliding further in December, although the pace of decline was described as modest.

In early afternoon trading, the Dow Jones industrial average added 63.11 points, 0.48 percent, to 13,201.47. The Standard and Poor's 500 gained 11.35 points, 0.8 percent, to 1,424.93. The tech-heavy Nasdaq composite added 23.63 points, or 0.8 percent, to 2,994.96.

In Tokyo, the Nikkei 225 index added 91.32 points, 0.94 percent, to 9,828.88.

In London, the FTSE 100 index lost 0.16 percent, 9.61 points, to 5,912.15.

The benchmark 10-year U.S. Treasury note fell 13/32 to yield 1.751 percent.

The dollar rose to 83.80 yen, up from Friday's 83.66 yen. The euro rose to $1.316 from Friday's $1.3075.


Economists see 2013 economic, job growth

ARLINGTON, Va., Dec. 17 (UPI) -- The U.S. economy and job market will likely improve modestly next year, a panel of economists, strategists, academics and policymakers said in a survey Monday.

The economy's growth throughout the year will likely reach an annualized, inflation-adjusted 3 percent by 2013's fourth quarter, the National Association for Business Economics survey of 48 professional forecasters indicated.

But the annual average growth is forecast to be 2.1 percent, slightly less than 2012's projected annual average 2.2 percent, the December NABE Outlook survey indicated.

Non-farm job growth will likely increase to an average 165,000 jobs a month next year, the survey said. This year's average growth has been 151,000 jobs a month. Last month 146,000 jobs were added, the U.S. Labor Department said Dec. 7.

The annual unemployment rate will likely be an average 7.7 percent, down from this year's forecast annual average 8.1 percent, which is down from 2011's annual average 9 percent, the survey said.

The nation's unemployment rate was 7.7 percent last month, down from October's 7.9 percent, the Labor Department said.

Wages and benefits are also expected to grow slightly next year, up 2.6 percent from this year's forecast 2.4 percent growth, the survey found.

Average hourly earnings this year are up about 1.7 percent from a year earlier, the Labor Department said.

In addition, labor productivity is expected to increase, the survey said, with non-farm business output per hour growing 1.5 percent, up from this year's projected 1.2 percent. Growth in 2011 was 0.7 percent.

"The panelists expect modest growth in the economy in 2013 as a whole, which accelerates steadily as the year progresses," survey Chairwoman Nayantara Hensel, a National Defense University industry and business professor, said in a statement.

"The panelists also suggest some reduction in the U.S. 2013 federal budget deficit relative to the 2012 federal budget deficit," she said.

The survey makes no mention of the looming $500 billion to $600 billion in automatic tax hikes and across-the-board spending cuts due to take effect in two weeks and a day if Congress and the White House fail to break an impasse on the impending "fiscal cliff."

The non-partisan Congressional Budget Office has estimated doing over the cliff would cut growth about 3 percentage points next year and push unemployment back up.


Sprint, Clearwire, agree to $2.2B deal

OVERLAND PARK, Kan., Dec. 17 (UPI) -- Sprint Nextel, the third largest U.S. telecommunications service said Monday it had agreed to buy the portion of Clearwire that it did not yet own.

The New York Times reported that Sprint had raised its bid from $2.90 per share that was revealed Thursday to $2.97 per share, pushing the total value of the deal to $2.2 billion, a premium of 128 percent over Clearwire's price before news of a possible acquisition became public.

Sprint currently owns 51.7 percent of Clearwire. On Thursday, a public filing revealed that Sprint had made an offer valued at $2.1 billion.

With the purchase, Sprint can close some of the considerable gap between itself and AT&T and Verizon Wireless, the two largest carriers in the country. But the deal was made possible by an injection of cash from SoftBank of Japan, which agreed to buy a majority of Sprint for $20.1 billion in October.

Having a parent company with deep pockets has enabled Sprint to make the latest move, the Times said.

"Today's transaction marks yet another significant step in Sprint's improved competitive position and ability to offer customers better products, more choices and better service," said Sprint Chief Executive Officer Dan Hesse in a statement.

Among the immediate advantages in the deal, Clearwire owns a portion of the spectrum similar to the one used in Japan by SoftBank, which means Sprint would have quick access to recently released smart phones, the Times said.


New York manufacturing slows further

NEW YORK, Dec. 17 (UPI) -- Manufacturing activity contracted in New York in December for the fifth consecutive month, the Federal Reserve Bank of New York said Monday.

The Empire State Manufacturing Survey, taken the first half of each month, indicated manufacturing activity shrank at a slightly faster pace than November, but within the range between minus five and minus 10, where it has been throughout the five-month contraction.

The general business conditions index for December fell to 8.1.

The index suggested "only moderate lingering effects from superstorm Sandy," the Fed said. While the index remained negative, business conditions have "changed little since the storm," which made landfall in late October.

The effects of the storm on manufacturing was noticed as "manufacturers in downstate New York generally showed more widespread declines than those from upstate establishments -- suggesting that superstorm Sandy has had some lingering negative impact," the Fed said.

In addition, the Fed said a specific question on the impact of the storm on revenue revealed "virtually no net effect," for October, November and December among upstate manufacturing firms, but a negative impact of roughly 7 percent in October and 5 percent in November for downstate firms. For December, respondents indicated they anticipated "a neutral net effect," on revenue from Hurricane Sandy.

Across the state, the new orders index "dipped below zero but only sightly," while the shipments index remained in positive territory.

Meanwhile, the indexes measuring number of employees and average hours worked in a week both fell in December.

© 2012 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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