Investors fled stocks and made a rush toward the safety of U.S. Treasuries Thursday, sending 10-year yield to a record low close, as worries about Greece’s future in the eurozone continued to escalate.
The Dow Jones industrial average () dropped 156 points, or 1.2%, and the S&P 500 () lost 20 points, or 1.5%. The day’s retreat marked the fifth day of declines for the Dow and S&P 500.
The Nasdaq () closed in the red for a fourth consecutive session, shedding 60 points, or 2.2%.
All three indexes ended at the lowest levels since January.
Concerns about Greece’s place in the 17-nation eurozone continued to build, pushing investors toward U.S. government debt, which is perceived as a safe haven investment. The yield on the 10-year Treasury was 1.706% Thursday, the lowest closing level on record.
Greece downgraded deeper into junk
European leaders voiced support Wednesday for keeping Greece in the body, but said the debt-ridden country must stick with unpopular austerity measures if it wants to continue receiving help.
Greek voters rebelled against those measures in the May 6 elections, denying the ruling coalition — which had agreed to the bailout terms — the votes needed to form a new government. Greek voters will go to the polls again on June 17.
Though the ability to form a governing coalition remains uncertain, the main fear is that an anti-austerity ruling party could cause the bailout deal to unravel, leading to a Greek default and an exit from the euro.
Citing the "heightened risk that Greece may not be able to sustain its membership of Economic and Monetary Union," Fitch Ratings downgraded Greece’s credit rating by one notch to CCC.
Adding to those concerns, the European Central Bank has suspended its lending to some Greek banks that need to sufficiently boost their capital.
Meanwhile, a growing number of depositors are withdrawing their money amid worries that their savings could be converted to a devalued currency if Greece drops the euro.
The rapid withdrawals add pressure on the Greek banking system, which is the "primary trigger for some from of the eurozone break-up," said Jonathan Loynes, chief European economist at Capital Economics.
Investors remain worried about what a Greek exit from the eurozone would mean for global financial systems.
"Not surprisingly, concerns are growing that bank runs could soon become a regular feature in other troubled countries in the region deemed at risk of following Greece’s lead," said Loynes.
Adding to Europe’s troubles, Spain got yet another slap in the face Thursday, when Moody’s Investors Service downgraded sixteen Spanish banks including giants Banco Santander and BBVA, saying the Spanish government’s "ability to provide support to the banks has reduced." Earlier the ratings agency downgraded four of the country’s regional governments.
Stocks finished in the red Wednesday, as positive economic data in the U.S. failed to counter increasing pessimism over Greece’s fiscal woes.
Companies: Facebook ()priced its initial public offering at $38 a share after the closing bell Thursday. Shares of Facebook will begin trading Friday on the Nasdaq.
The offering raised $16 billion, making it the most valuable tech IPO in history.
Facebook’s IPO price: $38 per share
Retail giants Wal-Mart (, Fortune 500) and Sears Holdings (, Fortune 500) were among the biggest gainers Thursday. Wal-Mart, the nation’s largest retailer, posted stronger-than-expected quarterly earnings and sales.
Rival Sears also reported a profit, even as sales declined, thanks to a boost from selling real estate assets. The retailer also announced it was looking at a partial spin-off of its Canadian operations.
Shares of JPMorgan Chase (, Fortune 500) fell Thursday, a day after the director of the FBI confirmed his agency had launched an initial investigation into a $2 billion trading loss suffered by the bank.
Economy: Initial jobless claims were unchanged in the week ended May 12 from the revised figure of 370,000. The number came in weaker than expected.
Foreclosures fell for the third straight month in April, reaching the lowest level since 2007, according to tracking service RealtyTrac.
A Philadelphia Fed report showed that regional manufacturing unexpectedly plunged in May for the first time in eight months. The Philly Fed index fell to -5.8 from 8.5 in April. Economists were expecting the index to increase to 8.8. Any reading below zero indicates weakness.
The index of leading indicators, which gauges the economy’s performance over the next three to six months, was also discouraging. The index fell 0.1% in April, disappointing economists who expected it to rise 0.2%.
World markets: European stocks slid on Thursday. Britain’s FTSE 100 () and the DAX () in Germany slipped 1.2% and France’s CAC 40 () fell 1.1%.
Most Asian markets ended higher following a report that showed the Japanese economy grew 1% in the first quarter, which was much better than forecasts. Tokyo’s Nikkei () gained 0.9% on the news, while the Shanghai Composite () rose 1.4%. Hong Kong’s Hang Seng () slipped 0.3%.
Currencies and commodities: The dollar fell against the Japanese yen, but edged higher against the euro and British pound.
Oil for June delivery edged down 25 cents to settle at $92.56 a barrel.
Gold futures for June delivery rose $38.30 to settle at $1,5574.90 an ounce.
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Facebook’s IPO is causing a frenzy among investors eager to get a piece of the social networking website.
Whether it’s a good idea to jump in when FB debuts Friday on the Nasdaq is another story.
"Investors shouldn’t invest in any one stock unless they can afford to lose it all," said Jay Ritter, professor of finance at the University of Florida. "With a growth company like Facebook, there is a lot of upside potential, but there is also substantial downside risk if the company fails to meet expectations."
Buying shares during the initial public offering process is particularly challenging for small investors. Shares of an IPO are primarily distributed to the institutional investors, mutual funds and hedge funds which are the biggest clients of the major Wall Street banks that are underwriting the offering.
While Facebook is making an effort to make some of its hotly sought after shares accessible to all, they’ll still be hard to come by.
The demand is so strong that Facebook raised the target price range for its stock to between $34 and $38 per share, from the $28 to $35 range it set earlier this month. And early Wednesday, Facebook said it will sell 25% more of its shares.
Sterne Agee analyst Arvind Bhatia says there’s a buying opportunity for investors if they’re able to snag Facebook shares within the IPO offering range. But to those who have to wait until Facebook shares begin trading on the open market on Friday, Bhatia urges caution.
Facebook IPO is no safe haven
Given all the hype, experts anticipate that the company will have a strong debut.
For example, when Groupon () went public last November, the stock opened at $28, 40% above its IPO price, and surged as much as 56% on its first day of trading when it hit an all-time high of $31.14.
If investors had purchased shares of Groupon during their first day of trading, they’ve likely had a tough time booking decent returns. The stock has been trading below its IPO price for months, and is currently 40% below its IPO price.
Similarly, Zynga () shares surged as much as 15% during their market debut in December, but ended up closing that day 5% below the IPO price. Shares are now trading more than 14% below the IPO price.
"I would say it’s better for individual investors to generally avoid playing the IPO game until a few quarters after the company goes public so that its stock is a bit more established," said Bhatia. "Or they need to be able to stomach a lot of volatility."
Seniors clamoring to invest in Facebook IPO
If you’re daring enough to try buying Facebook shares on opening day, there are a few ways to protect yourself.
For example, by using a so-called limit order, you can set a ceiling for the purchase price that you’ll be comfortable paying, said Tom Schrader, managing director at Stifel Nicolaus.
If the stock stays above your limit, or if other limit orders snatch up all the shares available at the limit price, the trade won’t be executed. You can also specify whether you want to consider buying the stock with the limit order just at the open or throughout the trading day.
On the flip side, if you nab some shares and want to sell them at a certain price, you can use a limit order that sets a floor on the sales price that you’re willing to accept, helping you prevent selling your shares for less than you want.
The hard part is determining what’s a fair price for a share of Facebook. Morningstar’s analyst Rick Summer pegs fair value for the stock at $32.
"The enthusiasm for Facebook is not misplaced, but the market may be underestimating near-term challenges for the company," he said.
How small investors can get in on Facebook IPO
In particular, Summer noted that while Facebook will be able to translate its immense user base - over 900 million a month — into massive growth over the long run, "the ability to further monetize current users represents a significant hurdle which must be overcome."
Concerns are particularly high about the company’s ability to monetize the growing number of users that are accessing Facebook on mobile devices.
"We see mobile monetization as a significant long-term growth opportunity for Facebook, but with some initial challenges," said Sterne Agee’s Bhatia, whose price target for Facebook’s stock over the next 12 months is $45. "For example, it is not yet clear if most of the mobile advertising growth will be incremental or will cannibalize online advertising."
Advertising accounted for 85% of Facebook’s total 2011 revenue, but to-date, most of Facebook’s ads have been display ads: banners, images and other graphics, ignoring mobile devices.
Another worry among analysts is Facebook CEO Mark Zuckerberg’s tight grip on the company. After the IPO, the young billionaire will control about 57% of the voting power.
Morningstar’s Summer notes that Facebook’s recent purchase of Instagram for $1 billion reportedly happened with little involvement from the company’s board of directors.
"If Mr. Zuckerberg loses discipline in allocating the company’s capital, there can be no guarantee that any such mechanism would prevent the company from destroying shareholder value," he said.
Following an IPO-induced pop, Summer said the focus on these looming challenges may lead to stock price declines and "ultimately create a very interesting buying opportunity for the shares at a later date."
Online practice tests for medical board exams. A system to trade recyclable materials. “The Hulu of foreign TV.”
Those are a few of the startups that received $50,000 Arch Grants Monday, winners of the first round of a new program designed to boost entrepreneurship in St. Louis. In all, 15 companies were awarded $750,000 in grants, which come with professional services and office space downtown.
The startups come from a mix of industries and backgrounds. Several are affiliated with other startup incubators in St. Louis. Four are moving here from elsewhere, including one from Costa Rica.
They were picked from more than 400 applicants from around the world, and most of the winners made it to Monday’s ceremony, where they gathered on a big staircase for the award presentation.
One of the people on that staircase was Dan Garcia. He’s a senior at Washington University, studying chemical engineering. He’s also director of science at Saturnis LLC, which is trying to commercialize a process for turning turn biomass into fuel for trucks and other vehicles.
Winning the grant is a big help, Garcia said, and will anchor his company in St. Louis – near plant research giants like Monsanto – for the forseeable future.
That’s the idea, said Jerry Schlichter, an attorney who co-founded the Arch Grants, to give companies with potential the chance to grow here in St. Louis, instead of going elsewhere for funding.
“We want to change the game here in St. Louis for entrepreneurs,” he said.
The event was held on the 10th floor of a downtown office building, with, fittingly, a picture-window view of the Arch. It was packed with bankers and biotech executives and other business leaders from around St. Louis. Gov. Jay Nixon was there, to talk about the importance of small business in growing Missouri’s economy.
Many of those business leaders – and Nixon’s Department of Economic Development – had kicked in money to fund the program. Arch Grants so far has raised just under $3 million in pledges, and plans more rounds of annual awards.
That money goes a long way, said Schlichter. It also sends a message that St. Louis is serious about startups.
“We’re building a community around entrepreneurship here,” he said. “The message we want to send is that St. Louis is the place, the place, to be for entrepreneurs.”
And to help pound that message home, they enlisted one of St. Louis’ best known entrepreneurs, Square co-founder Jim McKelvey, to address the crowd. McKelvey, who’s an advisor to the Arch Grants and helped judge the entrants, noted that starting a company from scratch can be “a lonely process.” But, he said, the people in that room want to help, and he hoped that message would resonate.
“We understand what it’s like in St. Louis, and we’re committed. Come to St. Louis, and you’ll be among friends,” McKelvey told the winners.
“Now get back to work.”
————–
Winners
Companion Pharma Inc. (veterinary medicine)
Food Essentials (Food labeling data analysis)
Graematter, Inc. (regulatory database)
IDC Projects (mobile, location-based social gaming)
Iveria TV (foreign-language TV streaming)
Labor Voices (crowd-sourced supply chain intelligence)
Material Mix (Exchange platform for trade in recyclables)
Med Preps (tests and flash cards for medical board exams)
Observable Networks (Network security and management)
Obsorb (small business work platform for web, smartphone and tablet)
Pharos Scientific (medical imaging)
Saturnis LLC (creating fuel from biomass)
simMachines (search engine technology)
Techli (blog for digital startup community in Midwest)
Unique Metal Solutions (pipe systems for food/beverage processing)
Stocks plunged Friday after the government reported that hiring slowed sharply last month. The report confirmed investors’ fears that the U.S. economic recovery is faltering.
The losses in the market were widespread. The Dow Jones industrial average lost 168 points and the Nasdaq composite had its worst day since Nov. 9. Both the Nasdaq and the Standard & Poor’s 500 index closed out their worst weeks of the year. The Dow had its second-worst.
The dollar and U.S. Treasury prices rose as investors dumped risky assets and moved money into lower-risk investments. Energy stocks were among the hardest hit after the price of oil fell below $100 a barrel for the first time since February. Only one of the 10 industry groups in the S&P 500 rose, utilities, which investors tend to buy when they’re nervous about the economy.
“The jobs numbers were a disappointment,” said Phil Orlando, chief equity strategist at Federated Investors.
It was the third straight daily loss for the Dow, but it’s too early to know if it’s the start of a correction in the market. Even after its 1.4 percent decline this week, the Dow is still up 6.7 percent this year.
Investors are on edge about Europe once again as France and Greece both hold elections over the weekend. In France the socialist candidate Francois Hollande has a chance to unseat the incumbent Nicolas Sarkozy, who has been at the forefront of fashioning Europe’s efforts to prevent its share currency from collapsing.
Crude oil plunged $4 to $98.49 a barrel on worries that demand would drop because of a weakening world economy. It was the first time oil has dropped below $100 since February 13.
The late slump in the week was a stark contrast to Monday, when the Dow closed at its highest level more than four years, propelled by a report that showed a pickup in manufacturing. All that become a distant memory after a slew of poor economic reports were released in the rest of the week.
On Thursday major retailers including Costco and Macy’s reported that April sales inched up less that 1 percent, the worst performance since 2009. Thursday also brought news that U.S. service companies expanded their business more slowly in April.
The Dow closed down 168.32 points, or 1.3 percent, at 13,038. All 30 companies that make up the index fell, led by Bank of America and Cisco.
The S&P 500 slipped 22.47 points, or 1.6 percent, to 1,369, while the Nasdaq index fell 67.96 points, or 2.2 percent, to 2,956.
For the week, the S&P lost 2.4 percent, the Nasdaq 3.7 percent.
The yield on the benchmark 10-year Treasury note dropped sharply to 1.88 percent from 1.92 percent late Thursday as demand increased for safe investments payday loan lenders. The yield hasn’t settled that low since early February.
The culprit for the distress in financial markets was a report from the Labor Department Friday showing that U.S. job growth slumped in April for a second straight month. The 115,000 jobs added were fewer than the 154,000 jobs created in March.
Job creation is the fuel for the nation’s economic growth. When more people have jobs, they have more money to spend.
Orlando noted that the first few months of the year were marked by a number of abnormal conditions including an uncharacteristically warm January and February. That led to a spurt in hiring which usually occurs in spring.
Retail sales and hiring were also affected by an earlier Easter, which fell on April 8 this year, 16 days earlier than last year. That pushed some retail sales ahead to March, leaving April’s numbers weaker than they might have been. Retailers also blamed a late Mother’s Day for pushing some sales out of April and into May. Unusually warm weather in February and March also pulled forward some sales that would have normally occurred in April.
“The surge in hiring and spending that usually occurs in March through April, occurred earlier in the year this year,” said Orlando. “We have to wait for economic numbers from May and June to get a better idea of the underlying strength of this economy.”
After the price of oil fell, energy company stocks turned lower in response. Southwestern Energy Co. fell 7 percent and Marathon Oil Corp. fell 3 percent.
In other trading:
_ Warnaco Group Inc. dropped over 6 percent after the clothing maker lowered its 2012 forecast and said that its first-quarter net income fell, hurt by the weak European economy.
_ Aon Corp. fell almost 6 percent after the insurance broker reported first-quarter net income fell 3 percent due to higher costs and unfavorable currency exchange rates.
_ LinkedIn Corp. rose 7 percent after announcing late Thursday that its first-quarter profit more than doubled, topping expectations. The social networking company also announced an acquisition.
_ Tilly’s Inc. climbed 8 percent in the clothing retailer’s debut on the New York Stock Exchange. Tilly’s sells surf-inspired and casual West Coast-styled clothing and accessories.
_ Einstein Noah Restaurant Group Inc. soared 19 percent after the owner of bagel chain Noah’s Bagels said it is considering strategic alternatives, including a possible sale of the company
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British Prime Minister David Cameron says he discussed News Corp.’s bid to take full control of a British broadcaster with James Murdoch, but denies promising to support the deal in return for favorable coverage from the media giant’s newspapers.
A judge-led inquiry into media ethics in Britain has raised questions about the government’s links to News Corp., particularly as it deliberated on whether the firm should be authorized to take full control of British Sky Broadcasting, in which it holds a 39 percent stake.
Cameron told BBC television Sunday that had chatted about the takeover bid with James Murdoch at a Christmas party, but insisted he had not brokered any tit-for-tat deal with him or his media mogul father Rupert Murdoch.
Americans are buying record numbers of hybrid and electric cars as gas prices climb and new models arrive in showrooms, giving the vehicles their greatest share yet of the U.S. auto market.
Consumers bought a record 52,000 gas-electric hybrids and all-electric cars in March, up from 34,000 during the same month last year.
The two categories combined made up 3.64 percent of total U.S. sales, their highest monthly market share ever, according to Ward’s AutoInfoBank. The previous high was 3.56 percent in July 2009, during the Cash for Clunkers program.
And while their share of the market remains small, it’s a big leap from the start of the year, when hybrids and electrics made up 2.38 percent of new car sales.
Buyers were drawn by new models like the Toyota Prius C subcompact, the Prius V wagon and Camry hybrid. Gas prices near or above $4 per gallon added to the cars’ attraction.
Stronger sales of the Chevrolet Volt and the Nissan Leaf were a positive sign for electric car makers. The two have struggled to gain acceptance from buyers worried about how far they can drive on a battery charge.
Another concern: Volt maker General Motors Co. had to change the car’s charging system because its batteries caught fire after government crash tests.
GM sold just 7,671 Volts last year, below its goal of 10,000. But in March, it set a new monthly record of 2,289 for the Volt, an electric car with a small backup gas engine personal loan for poor credit. Sales of the all-electric Leaf nearly doubled to 579.
Gas prices helped sales. The nationwide average for a gallon of gas jumped 19 cents in March, from $3.73 to $3.92, and it crossed the $4 mark in California even earlier. The $4 mark was a significant psychological milestone, said Paul Lacy, who forecasts sales trends for consulting firm IHS Automotive.
Lacy expects hybrids and electrics to make up about 4 percent of U.S. sales this year, although sales could drop if gas prices fall or if buyers get more accustomed to higher prices.
Lacy predicts hybrids and electrics will double their market share to 8.5 percent by 2017, in part because there will be more options on the market. Last month, 35 hybrids and electrics were on sale, double the number from 2008.
The proliferation of models will also bring down costs. Hybrids cost around $2,000 to $4,000 more than their gas counterparts, which can make them less attractive. Edmunds.com estimates it takes 11 years’ worth of gas savings to recoup the $4,595 premium on the Honda Civic hybrid, or 5.2 years to make back the $3,400 premium on the Toyota Camry hybrid.
Toyota Motor Co.’s Prius hybrid cars were the runaway best-sellers last month. They made up 57 percent of all hybrids and electrics sold.
Nearly five months after some $1.6 billion in customer money went missing at bankrupt brokerage MF Global, the question remains: Will anyone be held responsible?
A congressional subcommittee will take up the issue on Wednesday in the latest hearing on Capitol Hill to focus on the firm’s collapse. Watching anxiously will be the 38,000 former MF Global customers who are still missing money and are waiting for someone to be held accountable.
"We’ve been arguing for a long time that at a minimum, this was larceny," said John Roe, a partner at BTR Trading Group who has advocated on behalf of MF Global customers. "This was a company appropriating money that wasn’t its own."
While the case had been quiet in recent months, that changed last week when the subcommittee released a memo detailing a critical $200 million transfer out of an account holding customer funds.
The memo has reignited questions about who at MF Global knew that customer money had been appropriated and how that information could influence a possible criminal case.
It cites an email from MF Global assistant treasurer Edith O’Brien saying the transfer, to resolve an overdraft of an account at JPMorgan (, Fortune 500), came "Per JC’s [Jon Corzine’s] direct instructions."
The memo does not say, however, that Corzine ordered that the transfer use customer funds, in violation of industry rules.
Futures brokers like MF Global can hold their own cash in customer accounts along with that of their clients, and money belonging to the firm may be transferred out freely.
Testifying under oath before Congress last year, Corzine denied ordering the use of client money, saying he received assurances "both orally and in writing" that the transfer had been lawful.
Corzine’s spokesman also said last week that the former New Jersey governor had not specified from which account the transfer was to be made
No one from MF Global has been formally accused of wrongdoing, though the FBI and federal regulators are investigating.
In a criminal case, prosecutors must prove there was a deliberate intent to appropriate customer funds, or failing that, that there was "willful blindness" by Corzine or others to the fact that such funds were at risk, said Michael E. Clark, an attorney with the law firm Duane Morris and a former federal prosecutor.
"The practical problem is that, if there were instructions given to move the money from customer accounts, can they establish a direct link or is this going to be more circumstantial?" Clark said. The testimony of lower-level employees, he added, could be crucial to building a case.
Finding charges that stick: Shortly after the transfer to JPMorgan, the banking giant requested that O’Brien sign a letter certifying that the transaction complied with industry rules on the protection of customer funds. O’Brien was "reluctant" to sign this letter, according to the memo from the subcommittee, and it was never returned.
In addition, Terry Duffy, the head of exchange operator CME Group (), has accused MF Global of falsifying accounting statements in the week prior to its bankruptcy to conceal its use of customer funds.
O’Brien has been summoned to appear at Wednesday’s hearing along with several other former MF Global staffers, though she is expected to refuse to testify, invoking her Fifth Amendment right against self-incrimination.
Leaving aside the issue of the missing money, there are other ways prosecutors might pin charges on MF Global executives.
MF Global was felled after its disclosure of billions of dollars worth of bets on risky European debt sparked a panic among investors. Trading partners called for increased margin payments and clients began taking their business elsewhere, leaving the firm scrambling for cash to make good on its obligations.
Less than two weeks before MF Global went bankrupt, however, executives assured staff from ratings agency Standard & Poor’s that the firm was in good health. A week before the bankruptcy filing, CFO Henri Steenkamp told S&P that the firm was in "its strongest position ever as [a] public entity."
"Let’s ignore the missing $1.6 billion for a second and let’s talk about securities fraud, because you have the CFO running around telling ratings agencies that the company had never been in a stronger position, and that clearly wasn’t the case," said Roe, the customer advocate.
Again, a fraud charge would require proof that misstatements by MF Global executives about the health of the firm were intentional. Lawyers for Steenkamp and Corzine did not respond to requests for comment.
There’s also the Sarbanes-Oxley Act of 2002, which requires corporate officers like those at MF Global to certify that the internal risk controls at their firms are adequate. Ironically, Corzine helped write this law while serving in the Senate.
Sarbanes-Oxley violations can carry prison terms of up to 20 years. While the law has seldom been used in this context over the years, Clark said it could be part of a broader case against MF Global executives.
"I would hate to be in their shoes," he said.
TORONTO
Newspapers need to prioritize digital advertising sales if they expect to thrive, according to a Pew Research Center study released Monday.
As advertisers shift spending from traditional print media to the Internet, newspapers are failing to make up for the decline in print advertising revenue with gains in online ads. Pew studied 38 large and small newspapers and found that for every $7 in print ad revenue declines, the companies only generated about $1 in new digital advertising sales.
The study suggests, however, that newspapers have the power to change _if they alter their approach to advertising sales. Papers with the largest circulations and biggest sales forces do a better job increasing online ad sales. But even newspapers with a daily circulation of less than 25,000 printed copies show hefty digital gains with a properly aligned sales force, training and commissions that encourage online ad sales.
“The notion that you can only have success in digital if you’re bigger is not what we found,” said Tom Rosenstiel, director of the Pew’s Project for Excellence in Journalism. “You can have success even at small papers if you’re willing to change the culture.”
The newspapers provided Pew with financial data for its study, on the condition that they would not be identified. One newspaper, with a circulation of about 20,000 copies and over $8 million in annual print revenue, managed to boost its annual online ad revenue by 63 percent to more than $500,000 in 2010 payday advance lenders. In 2011, its digital ad revenue grew about 33 percent.
The newspaper’s publisher told Pew researchers that the company had aggressively sought to hire ad salespeople who focused on online ads _ mainly display and classified ads. Now, “almost everything we sell has a digital component,” the publisher told the center.
For all the newspapers that participated, print ad revenue fell 9 percent while digital ad revenue grew 19 percent. Since print ads still account for about 92 percent of ad revenue, the small decline in print has had a much bigger impact on than the digital gains.
The huge chunk of revenue that still comes from print ads can also skew the behavior of salespeople, many of whom work on commission.
Many newspapers are attempting to transform. Pew found that three quarters of the newspapers it studied had changed their commission structure to encourage more digital ad sales. One newspaper now pays a 20 percent commission on digital ads but just 8 percent on print ads.
Gasoline prices jumped 0.9 percent in January, pushing overall consumer prices up at their fastest clip in four months and offering a reminder of the risks energy costs could pose to the economic recovery.
Still, the 0.2 percent increase in the Consumer Price Index reported by the Labor Department on Friday is unlikely to ring alarm bells at the Federal Reserve, which is trying to decide whether the economy needs another dose of monetary stimulus.
“(The data) doesn’t prevent another round of quantitative easing to stimulate the economy,” said Brian Kim, a currency strategist at the Royal Bank of Scotland in Stamford, Connecticut.
The rise in prices was just below analysts’ expectations of a 0.3 percent increase.
The gain in gasoline prices was the first in four months. Tensions in the Middle East have been pushing oil prices higher, leading to extra costs at the pump for Americans.
After rising throughout January, the national price for regular unleaded gasoline prices rose to $3.58 a gallon in the week through Monday, according to the Energy Information Administration. It had started the year around $3.32 a gallon.
The Labor Department report showed that after stripping out food and energy, the so-called core reading rose 0.2 percent, which was in line with expectations.
However, the report also showed the rate of core price increases in the twelve months through January unexpectedly climbed to 2 online pay day loans.3 percent.
The increase in the 12-month core reading, which is seen as a barometer of inflation trends, might be read as a sign that inflation pressures are not subsiding as quickly as expected.
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Graphic on January U.S. CPI: link.reuters.com/xyr66s
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At the close of its January meeting, the Fed said it would likely keep interest rates at rock-bottom levels until at least late 2014. Fed Chairman Ben Bernanke expressed caution about recent improvements in the economy and left the door open to further Fed bond buying to boost growth.
U.S. stock investors shrugged off the inflation data. U.S. Treasury debt prices held at lower levels.
Earlier, world stocks hit a fresh 6-1/2 month high and the euro held above recent lows as hopes Greece will seal a long-awaited bailout deal next week fuelled risk appetite.
Overall consumer prices rose 2.9 percent year-on-year after increasing 3.0 percent in December. That was in line with economists’ expectations.
Moderating the monthly gain in core prices, used car and truck prices fell 1.0 percent and new vehicle prices were flat.
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