S&P 500 reaches all-time high after US debt deal

NEW YORK — The stock market hit an all-time high Thursday as investors put the government shutdown and debt ceiling crisis behind them and focused on corporate earnings.

The Standard & Poor's 500 index rose 11.61 points, or 0.7 percent, to close at 1,733.15 — a record close.

The market rose throughout the day as investors got back to focusing on corporate earnings and economic data. American Express and Verizon rose the most in the Dow Jones industrial average after reporting earnings that beat expectations from financial analysts.

The Dow ended the day down two points, or 0.01 percent, to 15,371.65. The index of 30 big U.S. companies was held back by declines in IBM, Goldman Sachs and UnitedHealth.

IBM's third-quarter revenue fell and missed Wall Street's forecast by more than $1 billion. The stock closed down $11.90, or 6 percent, to $174.80. Earlier, it had touched its lowest level of the past year — $172.57

Goldman Sachs also weighed down the index. The investment bank's revenue fell sharply as trading in bonds and other securities slowed. Goldman fell $3.93, or 2.4 percent, to $158.32.

The focus on earnings is a change of pace for Wall Street, which had been absorbed in Washington's political drama over the last month.

Now that the U.S. has avoided the possibility of default, at least for a few months, earnings news is expected to dominate trading for the next couple weeks. So far, only 79 companies in the S&P 500 have reported third-quarter results, according to S&P Capital IQ. Analysts expect earnings at those companies to increase 3.3 percent over the same period a year ago.

"I don't think we can completely close the door on the debt ceiling chapter just yet, but we can get back to the stuff that really matters," said Jonathan Corpina, who manages trading on the floor of the New York Stock Exchange for Meridian Equity Partners.

Other indexes also posted big gains. The Nasdaq composite closed up 23.71 points, or 0.6 percent, to 3,863.15.

The Russell 2000 index, which is made up of primarily smaller, riskier companies, also hit an all-time high. It closed up 9.85 points, or 0.9 percent, to 1,102.27 and has risen nearly 30 percent this year.

Market analysts think the 16-day partial shutdown of the government caused billions of dollars of damage to the economy. Government employees were furloughed, contracts were delayed, and tourism declined at national parks.

Analysts at Wells Fargo said the shutdown likely lowered economic growth by 0.5 percentage point.

There remain broader concerns that Democrats and Republicans won't be able to draw up a longer-term budget. The deal approved late Wednesday only permits the Treasury Department to borrow through Feb. 7 and fund the government through Jan. 15.

"The agreement represents another temporary fix that pushes fiscal uncertainty into the early months of next year," Wells Fargo analysts said.

Despite the worries, signs of normalcy returned to financial markets Thursday.

The one-month Treasury bill was back to trading at a yield of 0.01 percent, about where it was a month ago, and down sharply from 0.35 percent on Tuesday.

Usually a staid, conservative security, the one-month T-bill was subjected to a wave of selling at the beginning of the month. Investors feared the T-bill would be the first piece of government debt to be affected by a U.S. default if the debt ceiling was breached and the federal government could no longer pay its obligations.

The yield on the more closely-watched 10-year Treasury note fell to 2.60 percent from 2.67 percent Wednesday.

Among other stock moves:

— Verizon rose $1.65, or 4 percent, to $48.90. The telecommunications company earned an adjusted 77 cents per share for the recent quarter, beating expectations of financial analysts.

— UnitedHealth Group dropped $3.82, or 5 percent, to $71.37. The health insurance giant narrowed its 2013 profit forecast, instead of raising it, giving some analysts pause.

00.33 | 0 komentar | Read More

Google's 3Q earnings rise 36 percent, stock surges

SAN FRANCISCO — Google's third-quarter results may have proven that a deepening decline in the Internet search leader's average ad prices matters less than how frequently people are clicking on the commercial pitches.

The numbers released Thursday impressed investors who had been fretting about a downturn in Google's ad prices that began two years ago. Those concerns evaporated, at least temporarily, with a third-quarter performance that exceeded the analyst projections steering Wall Street.

Google's ad prices are still sagging as marketers pay less for commercial pitches on mobile devices, but the number of revenue-generating clicks on those ads is rising at a much faster clip.

The equation resulted in a 36 percent increase in Google's earnings for the three months ending in September.

Google's stock surged 8 percent to $959 in extended trading after the report came out. That leaves it poised to reach an all-time high in Friday's regular trading session.

The robust rally represents an abrupt about-face. As the overall stock market rose, Google's shares had slipped slightly during the past three months. The reason: Google's previous quarterly report in mid-July revealed the deterioration in the company's ad prices was getting worse.

Google's average ad price has now declined from the prior year in each of the last eight quarters, primarily because advertisers aren't yet paying as much for mobile ads because the screens on smartphones and tablet computers are smaller than those on laptop and desktop computers.

As more people rely on mobile devices to connect to Google's search engine and other services, it's driving down the company's average ad price, or "cost per click."

In Google's latest quarter, that measure fell 8 percent from last year. That was worse than the 6 percent drop in the previous quarter.

But the number of so-called "paid clicks" on Google's ads helped offset the lower prices in the third quarter. The clicking volume increased 26 percent from last year, an indication that Google's data analysis is doing a good job matching ads with the interests of its services' users.

Google Inc. earned nearly $3 billion, or $8.75 per share, during the three months ending in September. That compared to income of $2.2 billion, or $6.53 per share, at the same time last year.

If not for its expenses for employee stock compensation, Google said it would have earned $10.74 per share. That figure topped the average estimate of $10.36 per share among analysts polled by FactSet.

Revenue for the third quarter rose 12 percent from last year to $14.9 billion. After subtracting commissions paid to Google's ad partners, Google's revenue stood at $11.9 billion — about $227 million above analysts' predictions.

Motorola Mobility, a mobile device maker that Google acquired for $12.4 billion last year, remains a financial drag. The division lost $248 million in the quarter, and still hasn't made any money under Google's ownership.

In a mild surprise, Google CEO Larry Page disclosed Thursday that he doesn't plan to regularly participate in the company's quarterly earnings calls with analysts in the future.

Page, 40, missed an earnings call last year because of an ailment on his vocal chords that made it difficult for him to talk. Although his voice remains raspy, Page didn't mention that as a reason for skipping the calls. He said he wants to devote more time to running the company and helping Google's engineers build great products.

Google's stock gained $70.21 to $959 in extended trading. The stock has never surpassed $928 in regular market trading since Google went public at $85 per share nine years ago.

00.33 | 0 komentar | Read More

Boston hospitals get $12M NIH grant

Two local hospitals are using a federal grant to form the Boston Biomedical Innovation Center, the latest effort by nonprofit hospitals to play a role in transforming medical research into commercially viable products.

The seven-year, $12 million grant — one of three nationwide from the National Institutes of Health — will ensure that scientific advances at Brigham and Women's Hospital and Massachusetts General Hospital will "rapidly lead to new drugs, medical devices and diagnostic tools that can help improve — and even save — the lives of patients everywhere," said Dr. Anne Klibanski, chief academic officer at Partners HealthCare.

"The purpose is to help bridge the chasm in realizing the benefits of many discoveries," said Dr. Joseph Loscalzo, chairman of the department of medicine at Brigham and Women's and a Harvard Medical School professor.

As government funding grows more difficult to secure, hospitals are turning to industry to establish joint projects, said Michael Pistone of the Center for Technology Commercialization at Cincinnati Children's Hospital, which spends $1 million annually to advance research to the point of commercial viability.

Boston Children's Hospital has joined with a California diagnostics equipment maker to form a company to develop tests for pediatric diseases. And, Mass. General is teaming with AstraZeneca to find the best matches between patients and treatments.

"It's obvious you need to have partnerships in order to make medical progress," said Edward Abrahams, president of the Personalized Medicine Coalition, an education and advocacy group. "We need to break down the barriers."

00.33 | 0 komentar | Read More

The Ticker

Boston Scientific to pay $30M to feds

The Justice Department said Boston Scientific Corp. and its Guidant subsidiaries will pay $30 million to settle allegations that Guidant knowingly sold defective heart devices that health care facilities implanted in Medicare patients from 2002 to 2005.

Boston Scientific is headquartered in Natick and acquired Guidant in 2006.

The Justice Department said that while Guidant took corrective action to fix the defects, the company continued selling its remaining stock of defective versions of the implantable defibrillators used in patients at risk of cardiac arrest due to an irregular heartbeat.

Google shares reach all-time high

Google's shares soared to new heights yesterday after the company reported sales and profit that topped Wall Street expectations.

The stock jumped nearly 8 percent in after-hours trading, near $955.50 a share — well above the stock's all-time high of $928 set in July.

Sales from both Google-owned sites and its network of partner sites both jumped by almost a quarter over the year. Search makes up 92 percent of Google's business.

Sovereign Bank becomes Santander

The third largest bank in Massachusetts changed its name yesterday.

Sovereign Bank will be known as Santander, one of the nation's 25 largest retail banks. It operates mostly in the Northeast and Mid-Atlantic. It has 700 branches in the United States.

The bank is part of the Spanish banking firm the Santander Group, which operates in countries across the globe including in Europe, South and North America.

THE OUTLOOK

Today

• Conference Board releases leading indicators for September.
• General Electric Co. reports quarterly financial results before the market opens.
• Morgan Stanley reports quarterly financial results before the market opens.

THE SHUFFLE

• ProEx, a physical therapist-owned private practice specializing in orthopedics, spine and sports medicine, has announced Elizabeth "Liz" Kilzi has been named an exercise technician, operating from its Boston location in the Financial District.
• Rodman & Rodman, P.C., an independent accounting and tax firm with a specialty practice in clean technology and renewable energy, has named Janine L. O'Connor as an accountant. She will provide accounting, tax and financial statement preparation services to Rodman & Rodman's business clients and individuals throughout New England.

00.33 | 0 komentar | Read More

Facebook to profit, but teens pay cost

Facebook has just made it a bit easier for members of Generation TMI to mess up their lives.

Mark Zuckerberg & Co. 
announced Tuesday that teens are now allowed to post public updates and photos to their Facebook profiles. This is due to two undeniable truths: It's better for business, and Facebook doesn't give a hoot about your kids, their future or their 
safety.

Teens are major consumers, with their disposable income and susceptibility to marketing and fads. Advertisers want greater access to them, and Facebook was reeling from recent research showing the current generation is starting to view the service as unhip. But make no mistake: 94 percent of teens on social media have a Facebook account, according to the Pew Research Center. And an estimated 5.6 million children under 13 have lied about their date of birth to get around the site's age requirement and sign up.

Though cyberbullying is a huge issue, Facebook's newly relaxed privacy rules are more likely to impact things like college acceptance and employment. University admissions offices now admit to checking social media profiles of prospective students. Like it or not, employers have a huge interest in the social media footprint of 
employees, too.

The American Academy of 
Pediatrics now warns that parents should talk to their kids about social media just as they should talk to their kids about drugs. That's not as hyperbolic as it sounds. The part of our brains that anticipates the consequences of our behavior isn't fully developed for women until age 25 and men until age 30. The notion of teens going down a rabbit hole of bad social media should be treated with the same vigilance as drug addiction.

We need to teach kids in elementary school that when they post something on the Internet, they are adding to a body of research that will become their memoir. Every status update, tweet and comment by a friend is a sentence in your yet-to-be-written biography. Evidence suggests this is literally true. Decades from now, biographers won't be sifting through attic boxes for handwritten letters and interviewing elders, they'll have programs that automatically crawl through social media archives and Internet 
archives.

Social media is akin to the greatest generation gap since rock 'n' roll. The only difference is, it's got actual potential for harm, and Facebook just amplified the risk.

00.33 | 0 komentar | Read More

City floats contracts for new ferry service

Contracts are expected by year's end for two new ferries slated to start running next year between South Boston, East Boston and Charlestown.

The city is pursuing the service as an alternate commuter route from Eastie and points north to South Boston's Seaport District, said Richard McGuinness, the Boston Redevelopment Authority's deputy director for waterfront planning.

The route will run between a Fan Pier dock completed in June in the Seaport District, a Lewis Mall terminal in East Boston that Massport will restore and Pier 3 in the Charlestown Navy Yard. A private operator will provide service on BRA-owned ferries funded by a $1.28 million federal grant and $320,000 in city money.

It's needed for conventioneers and workers alike, Boston Harbor Association president Vivien Li said.

"When the Vertex building starts opening at the end of this year — and companies start populating other buildings — all of a sudden you're going to have thousands of new employees working at Fan Pier," she said.

The ferries, which will be subsidized by waterfront developers, are expected to cost $3 one-way.

"(Mayor Thomas M. Menino) wants to continue the excitement of what's happening in South Boston — the new development — to East Boston," McGuinness said. Eastie has 1,500 units of waterfront housing fully permitted, and the mayor hopes employees relocating to the Seaport District will see them as a great opportunity, he said.

Demand already is there and only will increase, said East Boston Chamber of Commerce President Diane Modica. "We have a lot of new professionals right now who I know would take that ferry," she said.

00.33 | 0 komentar | Read More

Federal workers return, but 16-day furlough leaves scars

About 15,000 federal workers in Massachusetts were back on the job yesterday and the state's national parks reopened after the 16-day partial government shutdown came to an end — at least for now.

"Hopefully, we won't be doing this again in January," said John Buckley, regional vice president of Boston-based Local 2264 of the American Federation of Government Employees.

The state's federal employees were notified electronically and by phone to return to their posts and many were relieved to be back on the job. Around the state, national parks began reopening as staff returned.

Sean Hennessey, spokesman for Boston National Historic Park, whose destinations include the Bunker Hill Monument and the USS Constitution, both in Charlestown, and the Great Hall at Faneuil Hall, said they turned away 55,000 people in the first 10 days of the shutdown alone, while 85 of 100 employees were furloughed.

"There were ancillary effects as well," Hennessey said of the lost business. "It was very hard on our gateway communities: car rentals, hotels, trolley tours, retirees who made long-range plans ... Those visits were all impacted because they'd show up and find we were closed."

Furloughed workers will be compensated for the time they were away from their offices, but two weeks without a job or a paycheck left real scars.

"It's devastating, especially for the people who are working check to check," Buckley said. "No one's prepared for this type of thing. By no means was it a vacation. It was uneasy all the time. It was really disturbing."

00.33 | 0 komentar | Read More

Shutdown fix makes companies defensive

The short-term fix that ended the government shutdown will have significant effects on the state and national economy as companies may put off hiring and spending for new projects while uncertainty over a permanent budget solution lingers, experts said.

One of the most direct impacts will be on the defense industry, including Waltham-based Raytheon.

Just awarded a $385 million Navy contract to develop an air and missile defense radar system, Raytheon could push back the additional hiring necessary to fill the contract because of uncertainty in the government and the potential for another shutdown in a few months, said defense analyst Loren Thompson, COO of the Lexington Institute in Virginia.

"It's quite possible that a hundred or more engineers who might have been hired on this program will be hired later or not hired at all," Thompson said. "They have to behave more cautiously."

Raytheon did not respond to requests for comment.

Virginia-based General Dynamics, which has an engineering and manufacturing facility in Taunton that employs about 100 people, also could be cautious with its investments and hiring over the next few months, Thompson said. A General Dynamics spokesman declined to comment on the company's plans.

Elliot Winer, chief economist for the Northeast Economic Analysis Group and former chief economist for the state, said businesses in general will likely be hesitant to make investments or new hires.

President Obama yesterday addressed the economic impacts of the shutdown.

"These last few weeks have inflicted completely unnecessary damage on our economy. We don't know yet the full scope of the damage, but every analyst out there believes it slowed our growth," Obama said.

Standard & Poor's Ratings Services said the shutdown cost the economy $24 billion, and research firm IHS Global Insight reduced its fourth-quarter forecast for U.S. economic growth to 1.6 percent from 2.2 percent. Spending at chain retail stores fell 0.7 percent last week, mortgage applications dropped 5 percent, and auto sales slumped about 2 percent.

Chris Geehern, executive vice-president of Associated Industries of Massachusetts, said the potential for another budget fight "will dampen the creation of new jobs and opportunities."

"Employers remain concerned that a lack of a solution to the underlying issues may well bring us back to the brink again," Geehern said.

00.33 | 0 komentar | Read More

Downtown evolves as a neighborhood

No longer do the sidewalks roll up after 6 p.m. in the Financial District.

The Hub will see twice the number of new housing units during this cycle than it did last cycle. And it is well-positioned to absorb the housing spurt, as there is a shift toward more urban living.

Accompanying the new housing are more amenity retail options and a different vibe in office tenancy in Downtown Crossing and the Financial District — an area we now just call downtown.

Greg Vasil, CEO of the Greater Boston Real Estate Board, said the lines for the two districts were artificially drawn — one a retail area and the other an office area — but now it is all one.

"The Downtown Crossing area was always the place to shop, and as a natural progression over time, the area is going from a retail district to a mixed-use district," Vasil said. "Downtown Crossing is on its way to becoming another 'living district,' where you have the amenity retail, such as the Walgreens superstore, Roche Brothers grocery store, as well as more fitness centers, retail and restaurants."

David Begelfer, CEO of NAIOP-Massachusetts, a commercial real estate association, said Boston has evolved, both commercially and residentially.

"It is no longer the sense if you are looking for residential you look only to the Back Bay or the South End, you are looking at options that go across the city," Begelfer said. "Same thing goes for office, it is no longer just the Financial District; it is Back Bay, the Seaport, Allston, Brighton and Fenway that are showing very strong life for office development, not a usual situation."

Over the past 13 years, the topography of Greater Boston's commercial tenant landscape has shifted significantly.

To keep talent, companies are moving into the city. Many of these non-financial companies want to be in an urban location with some street vibe to it, said Peter Farnum, senior managing director and principal at Cassidy Turley.

"PayPal, with its move into the fifth and sixth floors of One International Place, and Technip, with its relocation from East Cambridge to One Financial Center, are just two of the recent technology and innovation firms to move into the downtown market," Farnum said.

A significant step forward in changing the face of downtown is Millennium Partners' $630 million complex of new offices, stores and 450 luxury residences on the former Filene's site at the corner of Washington and Summer streets.

Advertising giant Arnold Worldwide and its sister agency, Havas Media, will occupy about 125,000 square feet in the project.

Several other housing developments already are underway in the downtown, including the recently opened 256-unit condo building at Millennium Place and a 381-unit apartment tower by Kensington Investment on Washington Street.

With its AAA bond rating, Boston is on its way to becoming a world class city.

Jennifer Athas is a licensed real estate broker. Follow her on Twitter @Jenathas.

00.33 | 0 komentar | Read More

HSBC unit ordered to pay $2.46B, plans to appeal

NEW YORK — A division of Europe's HSBC bank has been ordered to pay about $2.46 billion in a class action lawsuit claiming that it violated federal securities laws.

The lawsuit named consumer mortgage lender Household International Inc., which is now HSBC Finance Corp., and former executives William Aldinger, David Schoenholz and Gary Gilmer. It claimed that the company fraudulently misled investors about its predatory lending practices, the quality of its home loans and its financial accounting from March 23, 2001 through Oct. 11, 2002. HSBC acquired Household International in 2003. The acquisition made HSBC the biggest subprime lender in the U.S. at the time, but resulted in billions of losses to HSBC leading up to the financial crisis of 2008.

Lawyers for the plaintiffs said that the judgment, which includes $1.48 billion in damages and nearly $1 billion in prejudgment interest, was the biggest ever following a securities fraud class action trial. HSBC Holdings PLC, Europe's biggest bank by market value, said in a statement on Friday that it will appeal, noting that it was "the next step in an 11-year-old case and we believe we have a strong argument."

The judgment "shows that the fraud committed by Household International and the individual defendant officers will not go unpunished, and we look forward to having the judgment affirmed on appeal," James Glickenhaus of Glickenhaus & Co., one of the three lead plaintiffs appointed by the court in 2002 to represent the class, said in a statement.

A jury in Chicago found in favor of the plaintiffs in May 2009. In the final judgment entered in the U.S. District Court Northern District of Illinois Eastern Division on Thursday, Household International, Aldinger, and Schoenholz are held jointly and severally liable for the judgment. Gilmer is held severally liable for 10 percent of the judgment.

HSBC's U.S. shares shed 32 cents to $54.84 in morning trading. They are up less than 2 percent for the year.

00.33 | 0 komentar | Read More