Dow surges to all-time high
NEW YORK, March 5 (UPI) -- The Dow Jones industrial average blasted into new territory Tuesday, posting its best-ever closing and surpassing its previous intraday high.
Both previous records were set in 2007, before the financial crisis that scalded Wall Street and triggered a near global recession that displaced millions of jobs around the world.
Economic problems abound, but stocks have been on the rebound for two years, culminating in Tuesday's new high-water mark.
Jack Ablin, chief investment officer for BMO Private Bank, based in Chicago, told The Wall Street Journal the Dow's performance "really does represent an achievement that we have climbed out of this crater."
By close of trading, the Dow added 125.95 points, or 0.89 percent, to reach 14,253.77 -- eclipsing its previous closing peak of 14,164.53, recorded Oct. 9, 2007.
The blue-chip index, a select listing of 30 of the country's trend-setting corporations, had posted its second-highest close Monday, finishing at 14,127.82.
The Dow was pushed Tuesday by solid gains in Asia and Europe, following an announcement by China that it plans to maintain a growth target of 7.5 percent for 2013 with increased spending, and a report that U.S. services-oriented businesses grew in January, although at a slower pace than in December.
The Standard and Poor's 500 index added 14.59 points or 0.96 percent to 1,539.79. The Nasdaq composite gained 42.10 points or 1.32 percent to 3,224.13.
On the New York Stock Exchange, 2,252 stocks advanced, 804 declined and 101 were unchanged on a volume of 3.5 billion shares traded.
The 10-year U.S. treasury note fell 6/32 to yield 1.9 percent.
Against the dollar the euro was higher at $1.3048 from Monday's $1.3026. Against the yen, the dollar was down to 93.30 yen from 93.48 yen.
In Tokyo, the Nikkei 225 rose 0.27 percent on a gain of 31.16 points, to 11,683.45.
In London, the FTSE 100 index added 1.36 percent, 86.32 points, to 6,431.95.
Cyprus closer to bailout
BRUSSELS, March 5 (UPI) -- Cyprus has agreed to have its banks audited, a step that could clear the way for a $22.7 billion European Union bailout, officials said.
Officials from Cyprus insist that its bank's activities are above board, but Germany has insisted on an audit, as claims have been made repeatedly that Cypriot banks are involved in money laundering for organized crime groups in Russia.
The country's banks have assets valued at $156.2 billion, about seven times the size of the country's gross domestic product, EUobserver reported Tuesday.
While Eurogroup President Jeroen Djisselbloem has said that a bailout agreement is in "well advanced" stages, it has yet to be determined whether or not private creditors in Cyprus will be asked to accept losses on their holdings.
Some officials are pressing the point that private investors will have to take a loss if the banks are holding a significant amount of ill-gotten gains. Others have said putting depositors on the line could create a run on Cypriot banks.
The European Commission has also said that option, which was employed for the bailout for Greece, was "unique" to the Greek bailout.
In February, European Commission economic affairs minister Olli Rehn said, "the commission is not working on any private sector involvement option for Cyprus."
There is also some confusion on who would do the audit.
Djisselbloem said a private firm would audit the banks, but officials in Cyprus said it would be done by Moneyval, a Council of Europe agency that investigates finances related to money laundering and terrorism.
The agency has already cleared Cypriot banks of money laundering suspicions on four previous occasions, EUobserver said.
Martha Stewart defends J.C. Penney deal
NEW YORK, March 5 (UPI) -- Household goods trendsetter Martha Stewart said in New York State Supreme Court Tuesday that signing a deal with J.C. Penney was beneficial to consumers.
Stewart's company Martha Stewart Living Omnimedia already had a deal with department store Macy's when MSLO sold 16.6 percent of itself to rival J.C. Penney in December 2011, CNNMoney reported.
Macy's thought it had an exclusive deal with MSLO and filed lawsuits against J.C. Penney and MSLO.
When asked in court if having two stores in the same mall can carry her products, Stewart said, "They might have two houses."
The deal with J.C. Penney involved setting up MSLO kiosks or booths inside J.C. Penney stores. That way, it was reasoned, MSLO could circumvent any exclusivity spelled out in the deal with Macy's, because their contract allowed MSLO to open stores of its own.
J.C. Penney paid $38.5 million to buy its 16.6 percent of MSLO.
In the process, Martha Stewart lost a friend.
Macy's Chief Executive Officer Terry Lundgren said he considered Stewart a friend, but that he "was literally sick to my stomach" when he first heard of the J.C. Penney deal.
The two have not spoken since the deal was announced, CNNMoney reported.
Cadbury accused of $46 million tax dodge
NEW DELHI, March 5 (UPI) -- Tax authorities in India said Cadbury PLC, a unit of Mondelez International, invented a non-existent factory to avoid paying $46 million in taxes.
In a 103-page report, the government accuses Cadbury of creating a fraudulent paper trail, including invoices, order forms and accounting sheets, that made it appear as if it had a new factory in the northern state of Himachal Pradesh, The Wall Street Journal reported Tuesday.
The alleged scam was perpetrated to take advantage of a tax exemption for new plants put in operation by March 31, 2010, the report said.
A former Cadbury executive said an addition an existing factory was portrayed as a new plant to allow Cadbury to qualify for the tax exception, the Journal said.
The same plant is the subject of a Securities and Exchange Commission probe into possible violations of the Foreign Corrupt Practices Act, which covers bribery of foreign officials.
Cadbury said it was cooperating with both investigations.
"We are in the process of reviewing the contents of the show-cause notice from the (Indian) Excise Department and will respond to it under legal advice," company spokesman Michael Mitchell said in an email.
"We firmly believe our executives acted in good faith and based on legal advice," he said.
|Additional Business News Stories|
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