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Stocks End Lower After Bernanke Comments
Thursday February 14, 5:46 pm ET
By Madlen Read, AP Business Writer
Stocks Fall As Bernanke Predicts 'Sluggish' Economic Growth Before Late-Year Strengthening


NEW YORK (AP) -- Wall Street retreated Thursday after Federal Reserve Chairman Ben Bernanke predicted a "sluggish" economy until later in the year and more mortgage-related losses at banks. The Dow Jones industrial average fell 175 points.



Though the Fed chairman's comments suggested the central bank is still open to further interest rate reductions, the tone was, as expected, somber. Bernanke said the housing and credit crises have weighed on the economy and curbed hiring. If the job market deteriorates, consumer spending, which is crucial for economic growth, will keep dwindling.

The Labor Department said Thursday the number of workers filing unemployment claims fell 9,000 to 348,000 last week. But after the January jobs report that showed the first net jobs loss in more than four years, Wall Street remains worried that businesses are becoming cautious about hiring and that unemployment will compound the debt problems that have been slamming the markets and the greater economy.

After three strong days on Wall Street, investors found scant encouragement in Bernanke's testimony and cashed in their gains.

"He was more bearish on the economy than he was before," said Arthur Hogan, chief market analyst at Jefferies & Co. After this week's better-than-expected report on January retail sales, investors found Bernanke's assessment of the economy particularly disheartening.

"To have the Fed come in and talk about how things could be getting worse, not better, kind of takes the wind out of their sails," Hogan said.

The Dow fell 175.26, or 1.40 percent, to 12,376.98, after gaining 370 points, total, in the previous three sessions.

Broader stock indicators also declined. The Standard & Poor's 500 index fell 18.35, or 1.34 percent, to 1,348.86, and the Nasdaq composite index fell 41.39, or 1.74 percent, to 2,332.54.

Government bond prices dropped, pushing up the yield on the benchmark 10-year Treasury note, which moves opposite its price, to 3.82 percent from 3.73 percent late Wednesday.

Bond investors were focusing on Thursday's upbeat jobless claims data, as well as Bernanke's indication that the Fed may be nearing the end of its rate-cutting campaign if it expects the economy to regain momentum later in the year, said Joe Balestrino, a portfolio manager at Federated Investors Inc.

The central bank has been lowering key interest rates since September, and it usually takes six to nine months before rate moves affect the economy.

Banks fell on Bernanke's testimony, and on a huge loss at the Switzerland-based bank UBS AG. UBS reported a fourth-quarter net loss of $11.28 billion due to investments in U.S. subprime mortgages. The bank, which posted its first full-year loss in a decade, said it expected more debt problems in 2008. Its U.S.-traded shares fell $3.05, or 8.3 percent, to $33.94.

Wall Street's decline also reflected its underlying concerns about bond insurers, which are in danger of losing their superior ratings because of bad mortgage debt.

Late Wednesday, MBIA Inc. raised $1.1 billion from the sale of a nearly 40 percent stake in the company. Shares of the bond insurer rose 98 cents, or 8.4 percent, to $12.62.

MBIA told Congress Thursday it has enough cash to survive the distress in the industry, and that it needs neither a bailout nor tighter federal regulation. But lawmakers say action is necessary. New York regulators are working with banks and bond insurers on a plan to raise insurers' cash levels.

Moody's Investors Service downgraded another bond insurer, Financial Guaranty Insurance Co., to a financial strength rating of "A3" instead of "AAA." The ratings agency said it believes the larger bond insurers MBIA and Ambac are "better positioned from a capitalization and business franchise perspective," but that it is still reviewing its ratings on the two companies.

The dollar was mixed against other major currencies.

The weak dollar is, somewhat counterintuitively, helping to prop up the economy right now because U.S. goods are cheap for foreign buyers. The government reported Thursday that the nation's trade deficit, which had ballooned to record levels for five straight years, finally narrowed in 2007. In December, the deficit dropped 6.9 percent to $58.8 billion, thanks largely to strong increases in U.S. exports.

High oil prices, however, are keeping the deficit from narrowing further. On Thursday, light, sweet crude oil rose $2.19 to $95.46 per barrel on the New York Mercantile Exchange.

Gold prices fell.

Declining issues outnumbered advancers by nearly 4 to 1 on the New York Stock Exchange. Consolidated volume came to 3.49 billion shares, down from 3.64 billion shares Wednesday.

The Russell 2000 index of smaller companies fell 16.61, or 2.30 percent, to 705.32.

Overseas, Japan's Nikkei stock average jumped 4.27 percent -- its biggest advance in nearly six years -- following strong economic growth figures and sizable gains on Wall Street on Wednesday. Britain's FTSE 100 fell 0.01 percent, Germany's DAX index fell 0.16 percent, and France's CAC-40 rose 0.07 percent.

Nikkei 225 13,422.02 -204.43 -1.50%

Government extends Taslima's visa


ALSO SEE
TASLIMA CONTROVERSY

Taslima's visa will be extended: Sources
Taslima's visa extended: Sources
Taslima should be allowed to stay in India: BJP
Taslima hopes for timely visa renewal


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Taslima Nasreen case: A challenge for Indian secularism?



Press Trust of India
Thursday, February 14, 2008 (New Delhi)
Ending uncertainty over controversial Bangladeshi author Taslima Nasreen's stay in India, government on Thursday night decided to extend her visa, which expires on February 17.

Though there's a word of caution, that she remain ''sensitive'' to India's traditions and not ''hurt'' its secular ethos.

The six-month visa of the author expires on Sunday. There was speculation whether she will get another extension to stay here in the wake of demands by radical Muslim groups that she be thrown out of the country for allegedly hurting their religious sentiments through her writings.

''The government of India has decided to extend the visa'' of Taslima, External Affairs Ministry spokesman Navtej Sarna said but did not specify the duration of her fresh visa.

Taslima said, ''I'm very grateful to the Indian government.''

But Taslima is weary of the cautionary guidelines, ''The curbs on freedom of my movement and expression would remain,'' she said.

Taslima said she would like to return to Kolkata and expressed the hope that the restrictions on her movement and expression would go in course of time.

Taslima, 45, was bundled out of Kolkata in November last year following widespread violent protests by a little-known Islamic group and has been living in an undisclosed place in Delhi for security reasons.

The author has been living in exile abroad since leaving Bangladesh in a cloak of secrecy in 1994 after fundamentalists in her home country issued a religious edict to kill her for writing the novel Lajja which was alleged to be blasphemous.

Noting that India has had a tradition throughout history of offering hospitality to those who seek it, Sarna said it has also ''afforded protection to those who have come as our guests''.

Sapna Das, Sandeep Bhushan FM considers relief package for farmers
Thursday, February 14, 2008 (New Delhi)
The government is worried about mounting debt among the country's farmers and their ability to pay. So this budget could see a huge write-off of farm loans.

Finance Ministry sources have told NDTV that the debt relief package could range between a massive 60,000 to 100,000cr rupees. These estimates are based on farm loans disbursed up to December end. And it is unlikely that there will be any cap on the size of the loan. If only marginal and small farmers are considered, the loan waiver would cost about 60,000 crore.

Such a massive loan waiver will be coming in the backdrop of a sharp dip in the growth forecast for agriculture and this could seriously jeopardise the nine per cent growth story of India.

Finance Minister P Chidambaram has said that the government's top priority is agriculture.

Although the details of the debt relief package are still being worked out, Finance Ministry officials have said that the Centre and states might share the cost of the package.

In addition, there could also be a farmer cess, which could be levied on direct as well as indirect taxes, just the way the Finance Minister raised the education cess by one per cent in the last budget.

While no one knows it better than the Finance Minister, the largest farm relief package is surely on its way and taxpayers will just have to wait and watch as to how the government funds it.

FM considering cess proposal

The government's proposal to waive off farmer loans to the tune of 65,000 crore rupees could cost the middle-class dear. NDTV has learnt that the Agriculture Ministry wants a one per cent cess on all direct and indirect taxes in the forthcoming budget.

There is a three-year fund mobilisation plan to write off farmer debts. NDTV has also learnt that Chidambaram has told the agriculture minister that he needs funds to finance the pay commission recommendations

^N225 Nikkei 225 - 13,359.71 7:54PM ET -266.74 (1.96%)
^NZ50 NZSE 50 - 3,498.30 7:54PM ET - 52.11 (1.47%)
^STI Straits Times - 3,013.25 12:10PM ET - 32.34 (1.06%)
^KS11 Seoul Composite 1,674.09 8:14PM ET - 23.36 (1.38%)
^TWII Taiwan Weighted 7,782.62 8:14PM ET - 82.66 (1.06%}

asian market under selling pressure.

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• ^N225 JGB futures edge up as Nikkei slumps
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• ^N225 GLOBAL MARKETS-Economy surpises boost stocks, hit dollar
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• ^HSI GLOBAL MARKETS-Asian stocks rally; economy blues ease
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• ^KS11 GLOBAL MARKETS-Buffett boon peters out as fear preys on stocks
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`Damn lie` that Left parties were consulted: Dasgupta

Kolkata, Feb 14: Demanding immediate withdrawal of the hike in petrol and diesel prices, CPI leader Gurudas Dasgupta on Thursday said it was a "damn lie" that the left parties were consulted on the matter.

"It is a damn lie to suggest that Left parties were consulted before the unprecedented fuel price hike. Even if we had been consulted we would not have given consent as already the prices of essential commodities are high," Dasgupta, a senior trade union leader and MP, told reporters here.

"We will oppose it both inside and outside the parliament. We want immediate withdrawal of the hike," he said.

He said it would also increase the cost of agricultural products and lead to further all-round inflation.

"Petroleum ministry is overstating the dimension of the burden of international prices on domestic oil companies. It is much less than what Mr Murli Deora (Petroleum Minister) has said," the CPI leader said.

He said the government should have lowered tax on petroleum products and the shortfall in revenue should have been taken care of by increasing the tax on the rich and super-rich.

BJP calls nationwide stir against petrol price hike

New Delhi, Feb 14: BJP today attacked the government for increasing the prices of petrol and diesel and announced a nationwide agitation against the hike, which it said will heap burden on the common man.

Seeking to fault the Congress on its "aam aadmi" plank, BJP president Rajnath Singh said the hike will push up the prices of essential commodities, affecting all sections of the society, particularly the middle class and farmers.

"The common man will have to bear the brunt of the petrol price hike. The Congress-led UPA government has failed to control price rise," Singh told PTI here.

He said the party will launch a countrywide agitation against the hike from tomorrow.

Singh slammed the Government's "flawed" economic policy and blamed it for the distress in agrarian sector, food security crisis and volatility in stock market.

"The Congress-led Government's inability to check price rise means its economic policies are faulty or there is corruption or it has no control over the system," he said.

He also ridiculed the Left parties for opposing the petrol price hike, saying "they only bark, don't bite".

Separately, party spokesperson Prakash Javadekar accused the UPA government of profiteering from the oil sector by hiking petrol prices, which he said is sure to further trigger inflationary trends.

Noting that this was the eighth petroleum price hike effected by the Congress-led UPA, Javadekar said it would also adversely impact the economy.

"Instead of opting for a price hike, the government should have considered the Expenditure Finance Commission recommendation on revenue neutralisation," Javadekar said.

"The tax burden in the prices of petroleum products is well above 50 per cent. This is the highest tax regime in the world. The government seeks to profiteer with every increase in petroleum prices at the cost of inflationary impact," he said.

Javadekar said the revenue earnings from the petroleum sector were to the tune of Rs 70,000 crore in 2004 and last year, the government earned more than Rs 1,40,000 crore.

"This profiteering by the government from the oil sector is criminal injustice heaped upon the common man. This increase once again exposes the UPA's anti-people policies," he said.

Javadekar noted that during the NDA regime, in May, 2004, the price of petrol in Delhi was Rs 30.25 per litre, which has under the UPA rule escalated by over 50 per cent to Rs 45.52 per litre.

He said the diesel price in May, 2004 was Rs 20.49 per litre and it was also up by 50 per cent to Rs 31.48 per litre.

Bureau Report

CBSE announces exam schedules for 12th, 10th Std

Zeenews Bureau

New Delhi, Feb 14: The Central Board of Secondary Examinations (CBSE) on Thursday announced its schedule for conducting examinations for 12th and 10th standards respectively.

As per this years schedule exams for the tenth standards will be held between March 1st and 27th. The 12th grade exams will be conducted between March 1st and April 2nd.

Meanwhile, the board has also decided to grant additional one-hour time for dyslexic students during the examination.