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U.S. stocks markets closed lower Monday, reversing the biggest two-day gain for the S&P 500 Index so far this year, Bloomberg News reports. The S&P fell 0.1 percent to 1,385.30, after rising 3.6 percent in two days, while the Dow Jones Industrial Average fell less than 0.1 percent to 13,073.01. Trading was 14 percent below the three-month average as nervous investors waited for Friday’s monthly employment report and news from this week’s meeting of the Federal Reserve’s Open Market Committee.
Corn Prices as High as an Elephant’s Eye
The worst drought in more than a half-century has sent corn prices skyrocketing to a record high, CNN reports. Almost 90% of the United States' corn crops are in drought ravaged areas, according to the U.S. Department of Agriculture, and nearly 40% are situated in the hardest hit spots. Corn prices have soared more than 50 percent during the past six weeks as the crops continue to shrivel in relentless dry heat throughout the Midwest. They jumped another 3 percent Monday to a record high of $8.17 per bushel on the Chicago Board of Trade. Soybean prices are also escalating. In recent weeks they have climbed more than 20 percent and on Monday, they rose to their highest level since last week, $16.17 per bushel.
Chrysler Drives to Second Quarter Profits
What a difference a year makes for Chrysler, which recorded a $436 million net profit in the second quarter, Financial Times reports. Last year in the same time period, the company recorded a $370 million loss. The company, majority owned by Italy’s Fiat, confirmed that it expected to earn full-year net income of $1.5 billion. Last year’s earnings were $183 million due to loan repayments and refinancing, FT said. Sales growth was driven by U.S. retail sales, which revved up 32 percent, and the company’s market share in the U.S. grew to 11.2 percent from 10.6 percent in 2011. The U.S. comprises three-quarters of the company’s sales.
The U.S. Postal Service to Default?
The U.S. Postal Service’s solvency is in doubt as the agency said Monday that two legally required payments for future postal retirees’ health benefits will be left unpaid, the Associated Press reports. With cash already “perilously low,” $5.5 billion is due Wednesday, and another $5.6 billion is due in September. Postal officials are also studying whether other obligations, such as a $1.5 billion payment due to the Labor Department for workers compensation, may have to be delayed. Post offices are expected to stay open, mail trucks will operate, employees will be paid, and current retirees will get health benefits. Postmaster General Patrick Donahoe has described a "crisis of confidence" amid the mounting red ink that could lead even once-loyal customers to abandon use of the mail, the AP reports. First-class mail volume, which has fallen 25 percent since 2006, is projected to drop another 30 percent by 2016.
For-Profit Colleges: High Drop-Out Rate and Tuition
For-profit colleges received $32 billion in taxpayer money last year, though 54 percent of their students drop out before earning a degree, according to a study released Monday by the Senate Committee on Health, Education, Labor and Pensions and reported by CNNMoney.
At the same time, tuition at for-profit colleges is significantly higher than that charged by public schools, according to the study. An associate’s degree can cost four times more, while a bachelor’s is 20 percent higher. The schools also devote more money to marketing than education. Many for-profit students are military veterans attending on the GI Bill, which covers up to $17,000 a year for private tuition.
IMF Steps up Monitoring of Member Nations
The International Monetary Fund will improve its surveillance of its members’ economies to better monitor the effects of one nation’s policies on other countries, Bloomberg News reports. In a pilot report released on Monday, the IMF noted that the failure to resolve the European debt crisis has caused “heightened stresses that are spilling over to other countries.”
The IMF has been criticized for missing the warning signs of the 2008 global financial crisis and, more recently, for the way it assesses exchange rates. The IMF, which lends money to governments, has pledged, among other things, to include capital flows data in reviews of member nations’ external stability. The new monitoring standards will go into effect in six months.