Senate averts shutdown and Fed maintains stimulus. Learn more about these and other top news stories of the day.
Senate Moves to Avert Government Shutdown Drama
A bipartisan spending bill that would avert a government shutdown that would take effect March 27 progressed in the Senate Wednesday. The measure is expected to return to the House for a vote on Thursday, after which it would be sent to President Barack Obama for his signature. Congress is scheduled to start a two-week recess on Friday. The measure would fund the gaily operating budgets of every Cabinet agency through the end of September, provide another $87 billion to fund overseas military operations in Afghanistan and Iraq and maintain a pay freeze for federal workers, The Associated Press reports. The bill had been stalled by a flurry of proposed amendments aimed at protecting money for a variety of lawmakers’ pet programs. Senate Majority Leader Harry Reid and Republican Senate leader Mitch McConnell reached a deal that paved the way for consideration of just a handful of these proposals.
Fed Sees Moderate Growth, Maintains Stimulus
The Federal Reserve yesterday acknowledged the U.S. economy had resumed growing at a moderate rate, but affirmed it will maintain its economic stimulus program, The New York Times reports. The Fed restated its intention to keep short-term interest rates near zero at least until unemployment rates fall below 6.5 percent. Unemployment currently stands at 7.7 percent and is not expected to reach the Fed’s target before 2015. The central bank said it would also continue to buy $85 million in Treasuries and mortgage-backed securities each month.
Cyprus Turns to Russia, Keeps Banks Closed
The Cyprus government scrambled Wednesday to avert a financial meltdown after rejecting the terms of a euro zone bailout, turning to Russia for help and ordering banks to remain closed until next Tuesday. Cyprus is seeking a further 5 billion euros in addition to a five-year extension and lower interest on an existing 2.5 billion euro loan from Moscow. Russia has a vested interest in Cyprus as many of its citizens and businesses keep billions of euros, Reuters reports. These actions follow a controversial vote on Tuesday to reject a proposed tax on bank deposits in exchange for a 10-billion euro bailout from the EU.
Hacker Website Shut Down
A rogue website on which hackers published credit reports for Michelle Obama and high-ranking government officials was shut down by Russian Internet officials. The publishing of personal financial records “made it necessary to interfere,” the director for Webanems.ru said in a statement. The website had published the credit reports of 29 politicians and celebrities, including the attorney general and the directors for the CIA and FBI. The reports include such personal information as date of birth, Social Security numbers, and monthly credit card account balances. The perpetrators of the website issued a statement this week saying that the site was intended for “entertainment and laughs.” It signed off with the message, “from Russia with love.”
Suntech Heads Into Bankruptcy
Chinese lenders have filed a bankruptcy petition against Suntech Power Holdings Co., once the world’s largest solar panel maker, Bloomberg News reported yesterday. The Chinese company last week defaulted on $541 million in bonds and has not reported a profit since the first quarter of 2011.
When the company went public in 2005 it made its founder, Shi Zhengrong, one of the world’s first solar billionaires and, fueled by loans, the company expanded aggressively from 2007 to 2011 to achieve world dominance. Trading on U.S. exchanges was halted yesterday after the company’s American depositary receipts fell 28 percent before the start of regular trading. The drop following a 46 percent decline in shares over the week ending Tuesday.
Bellwether FedEx Lowers Outlook
FedEx – seen as a bellwether for the global economy - lowered its outlook yesterday after reporting a steep drop in earnings, CNNMoney reports.
The company reported a 31 percent decline in net income in the period ending February 28 for the third consecutive quarter. Contributing to the decline were a drop in shipments to and from Asia, and a customer shift to slower, cheaper shipping methods contributed to the losses.
FedEx forecasts earnings per share could fall to $1.90 a share this quarter. The company plans to cut air capacity to Asia and will spend $450 million to $550 million on a voluntary buyout program.