Nations at a London summit on Tuesday intensified calls for Libyan leader Col. Moammar Gadhafi to stand down, the Wall Street Journal reports. Leaders and diplomats at the meeting of 40 nations focused on protecting Libyan civilians from Gadhafi’s military and on distributing humanitarian aid. They also talked to rebel leaders about how to transform the North African country to a democracy.
The Syrian government resigned Tuesday, setting the stage for further concessions in a speech President Bash al-Assad is expected to give to the nation today, the New York Times reports, describing the moves as part of the president’s expanding effort to address protests against his authoritarian rule. Bashar al-Assad is expected to offer to lift laws that restrict civil and political freedoms. The news was greeted skeptically by a public accustomed to a leadership that has talked of reform for years without results.
Japanese stocks soared Wednesday on a weakened yen and news some firms will soon restart production at plants affected by the devastating earthquake and tsunami, MarketWatch said.
The sovereign credit ratings for Portugal and Greece were further downgraded yesterday by Standard & Poors, the New York Times reported. The agency cut Portugal’s rating to BBB– from BBB, with a negative outlook. BBB- is the agency’s lowest investment grade rating and is just one notch above junk. The Greek rating, which had already been cut to junk, was lowered to BB– from BB+.
U.S. stocks rose for the seventh time in nine sessions, MarketWatch said, reclaiming nearly six weeks of losses to close at their highest level since the outbreak of violence in Libya on February 18th. The gains were fueled by telecommunications and energy companies as investors anticipated key economic reports on Friday on unemployment and manufacturing. High dividend yields are attracting investors moving away from bonds.
Bonds briefly erased their decline after Standard & Poor’s downgraded Portugal and Greece and a report showed U.S. consumer confidence tumbled this month, Marketwatch reported. Yields on the benchmark securities have risen for nine days, the longest string since December 1999. The Treasury Department sold $35 billion in 5-year notes at a yield of 2.26%, the highest level since last April. Indirect bidders, a group which includes foreign central banks, bought 42.4% of the auction, above the average of 37.9%. A higher proportion of a sale going to direct and indirect bidders is considered a sign of good investor demand. When primary dealers, who are required to bid, end up with more of the new debt, they tend to turn around and sell it, weighing on prices. On Monday, the government’s sale of 2-year notes drew tepid demand from investors.
The U.S. will finish the week’s auctions by selling 7-year notes on Wednesday.
Proposed changes in lending rules, part of the Dodd-Frank overhaul, could eventually raise the cost of borrowing for most homeowners, the Wall Street Journal reports. The Act requires banks to hold 5 percent of the credit risk for loans that are bundled together and sold off as securities. Prime residential mortgages – those with down payments of at least 20 percent - would be exempt and are likely to have lower borrowing costs. Any changes won't be felt immediately because government agencies are exempt. Fannie Mae and Freddie Mac currently satisfy the risk-retention rules because the firms, which guarantee 100% of losses to investors on mortgages they securitize, are backed by the U.S. government, the Journal reports. The mortgage giants, together with federal agencies, currently back nine in 10 new loans.
American Express Co., the world’s biggest credit-card issuer by purchases, has introduced a payment system called “Serve” for smartphones and computers that competes with Visa, MasterCard and PayPal, Bloomberg.com reports. The prepaid electronic wallet can be funded by linking with a checking account, debit card or credit card, and Serve customers may send money to each other through smartphones, shop online and receive plastic cards for use at stores that accept American Express.
Holy Cheetos! The U.S. Food and Drug Administration is reconsidering warning labels for products containing artificial food colorings, the New York Times reports. On Wednesday and Thursday, the F.D.A. will ask a panel of experts to review a growing list of studies suggesting a link between artificial colorings and behavioral changes in children. An F.D.A. report states that while typical children might be unaffected by the dyes, those with behavioral disorders such as hyperactivity might have their conditions “exacerbated by exposure to a number of substances in food, including, but not limited to, synthetic color additives.”
A labeling issue prompted the Trader Joe’s grocery stores to recall about 131,000 pounds worth frozen “Pizza al Pollo Asado” produced in California between January 27th and March 27th, then shipped to stores nationwide. The product label failed to disclose the pizza contained an allergen, wheat.
The fate of a class action lawsuit against Wal-Mart is unclear following a U.S. Supreme Court hearing yesterday. The court appeared closely divided with some justices expressing concerns over administering a lawsuit involving up to 1.5 million women and settlements totaling billions of dollars, the New York Times reports. Other justices worried about the impact on other businesses if they allowed the case to move forward. The court must decide whether the women have enough in common to form a class action.