Finance Blog number 1

A British lawmaker says James Murdoch could be asked to clarify his testimony to a parliamentary committee investigating phone hacking after two former employees challenged his claim he had not seen evidence suggesting eavesdropping went beyond a jailed rogue reporter.

Murdoch’s former legal adviser and an ex-editor say they told Murdoch years ago about an email that suggested the rot at the News of the World was more widespread than previously claimed.

News International said James Murdoch stood by his statement payday advance low fees.

Conservative legislator James Whittingdale, who heads the committee, said Friday that Murdoch could be asked to address the contradiction in writing _ but he would not be recalled before the committee.

James and Rupert Murdoch gave evidence on Tuesday.

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OTTAWA

Widespread gains in commodity prices lifted energy and materials companies as part of a broad stock market rally. Stocks built on morning gains after the Federal Reserve released minutes that showed that officials at the central bank agreed that the economy is improving.

Oil gained nearly 4 percent to settle above $100 a barrel Wednesday. That sent energy companies like Chevron and Exxon Mobil Corp up nearly 2 percent.

The Dow Jones industrial average added 81 points, or 0.6 percent, to 12,560. The S&P 500 rose 12, or 0.9 percent, to 1,341. The Nasdaq composite gained 32, or 1.1 percent, to 2,815.

Four stocks rose for every one that fell on the New York Stock Exchange. Consolidated volume came to 3.5 billion shares.

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Companies paid more for raw materials and factory goods in April, mostly because energy prices jumped for the seventh straight month.

The Labor Department says the Producer Price Index, which measures price changes before they reach the consumer, rose 0.8 percent last month. That’s slightly above the 0.7 percent gain in March. Excluding the volatile food and energy categories, the core index increased 0.3 percent, the same as the previous month.

In the past 12 months, the index has increased 6.8 percent, the biggest gain in nearly three years. Outside of food and energy, prices rose 2.1 percent, up from a 1.9 percent gain in March. The price of civilian aircraft rose by the most in nearly seven years, pushing up the core index.

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Purchases of new houses in the U.S. rose in March from a record low as the weakest industry in the economy strained to recover.

New-home sales, tabulated when contracts are signed, climbed 11.1 percent to a 300,000 annual pace, faster than forecast, figures from the Commerce Department showed today in Washington. The median estimate in a Bloomberg News survey called for a rise to 280,000. Housing prices fell from a year ago.

The market for new homes faces competition from a glut of foreclosed properties that may keep prices depressed this year, discouraging new construction. Unemployment above 8 percent and housing’s struggles help explain why the Federal Reserve may announce at the end of this week’s policy meeting that it plans to complete the purchase of $600 billion of Treasuries by June.

“It’s a nice rebound from February but the bottom line is housing is continuing to trend sideways,” said Omair Sharif, an economist at RBS Securities Inc. in Stamford, Connecticut, who correctly forecast March sales. “Builders have been doing their bit in paring inventory but the problem is they’re facing competition from distressed properties, high unemployment and prices that are still falling.”

Estimates in the Bloomberg survey of 68 economists ranged from 247,000 to 300,000. Sales in February were revised to a 270,000 annual rate from a 250,000 previously reported.

Stocks held earlier losses after the report and Treasuries were little changed. The Standard & Poor’s 500 Index fell 0.4 percent to 1,332.53 at 10:55 a.m. in New York. The yield on the benchmark 10-year note dropped to 3.38 percent from 3.39 percent.

Median Price

The median sales price decreased 4.9 percent from the same month last year, to $213,800, today’s report showed.

Purchases rose in three of four U.S. regions last month, led by a 67 percent surge in Northeast after a 54 percent slump a month earlier. Sales in the South were little changed at a 162,000 pace after February’s 163,000.

The supply of homes at the current sales rate fell to 7.3 month’s worth in March from 8.2 months. There were 183,000 new houses on the market at the end of March, the fewest since August 1967, indicating builders are reducing construction.

Previously-owned home purchases climbed 3.7 percent to a 5.1 million annual rate in March as a mounting supply of properties in or near foreclosure lured investors, a National Association of Realtors report showed April 20. All-cash deals accounted for 35 percent of the transactions, the most on record, while distressed properties including foreclosures and short sales made up 40 percent of all deals, the group said.

Existing-Home Sales

New-home sales are considered a more timely barometer than purchases of previously owned homes, which are calculated when a contract closes. Resales account for about 95 percent of the housing market so far this year.

Housing demand gyrated in 2010, reflecting a boost from a homebuyer tax incentive of as much as $8,000 that gave way to a plunge in sales by mid-2010 after the credit ended.

While sales have steadied, they have yet to strengthen, keeping builders pessimistic. The National Association of Home Builders’ confidence index fell to 16 this month from 17 in March. A reading under 50 means a majority of builders view conditions as poor.

KB Home (KBH)

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Japan’s economy will overcome some temporary setbacks and may recover once reconstruction from last month’s earthquake and tsunami damage begins, Finance Minister Yoshihiko Noda said.

“Japan’s economy will likely slump in the near-term, but it may start to recover once reconstruction activities start kicking in,” Noda said in Washington overnight, after a meeting of finance ministers and central bankers from Group of 20 nations. “We need to keep in mind three uncertainties — the nuclear problems, power supply shortages and global supply chain disruptions.”

The March 11 magnitude-9 earthquake and tsunami left more than 28,000 dead or missing, knocked out plants, and triggered a nuclear crisis. The government last month estimated damages from the disaster may swell to as much as 25 trillion yen ($300 billion).

While the recovery is “broadening and becoming more self- sustained,” unrest in the Middle East and North Africa, as well as Japan’s earthquake, raise “uncertainty” in the outlook, G- 20 finance ministers and central bankers said in a statement. The G-20 will provide “any needed cooperation” with Japan, it said.

Priority on Relief

Noda said the priority for the government is to undertake relief measures, such as building temporary homes for evacuees displaced by the disaster and clearing debris, and to submit an extra budget to parliament in April to finance that work. Following that, the government should immediately start compiling a second extra budget for reconstruction that could require more financing, he said.

“It’s necessary to address whether we are going to seek a path to restore fiscal health in the medium-term at the same time,” Noda said, indicating the government may flesh out a consolidation plan around the middle of the year when it reviews its fiscal goals.

Japanese Prime Minister Naoto Kan plans to unveil this month what he says may be the first of multiple supplementary budgets. Chief Cabinet Secretary Yukio Edano told reporters on April 7 that the first budget may be 4 trillion yen.

Chernobyl Level

The quake and ensuing tsunami crippled the Fukushima Dai- Ichi nuclear plant operated by Tokyo Electric Power Co., causing radiation leaks and power shortages in eastern Japan. Government officials this week raised the severity level of the accident to the same level as the 1986 Chernobyl disaster.

Bank of Japan Governor Masaaki Shirakawa, who held a joint press conference with Noda in Washington, said he told the G-20 members that Japan’s financial system and the financial markets remain “resilient” after the disaster.

“We will continue strong support of the economy and financial markets,” Shirakawa said.

After the disaster in northeastern Japan, the central bank doubled to 10 trillion yen a fund to provide cash to markets by buying assets such as corporate debt and exchange-traded funds. It also unveiled a 1 trillion yen, one-year loan program for banks, aimed at getting funds to companies hit by the quake and tsunami.

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Stomach churning fairground rides are nothing compared to the nausea caused by receiving a brown Canada Revenue Agency envelope in the mail. Even the colour of those CRA missives seems somehow accusatory. Almost 3 million returns are reviewed annually with millions of the dreaded brown envelopes sent out with a request (demand) for additional information from taxpayers.

The best way to avoid panic-filled evenings scrambling for receipts and other documents is to know some of the agency

Long before the sun rises and long before consumers are thinking about meals or deals, emails starting flooding inboxes.

Get 20 yoga classes for 20 bucks. Manicures and massages. Discounts for everything you can imagine, from car detailing to teeth whitening to zip-line adventures.

The question is whether this type of marketing is sustainable, with merchants offering deep discounts, usually at more than 50 per cent off. Websites keep cropping up. There are now estimated to be 35 in the Toronto area; several more are in the works.

Consumers have to act quickly; the deals usually stick around for only a day or so. Some sites pay cash or credits for referrals through social media like Facebook or Twitter, thus pushing the group buying frenzy.

Big bucks are at stake. Groupon spurned a $6 billion offer from Google last year, aiming instead at an IPO.

Amazon.com Inc. invested $175 million in LivingSocial, a Groupon competitor.

The question is whether these sites are a fad, and will eventually go the way of MySpace and Napster.

Marlon Pather, owner of The Butchers at Yonge and Eglinton, doesn

U.S. stocks rallied for a third day on Monday, as fears about Japan’s damaged nuclear plants eased and investors cheered a huge merger in the telecommunications industry.

The Dow Jones industrial average (INDU) jumped 178 points, or 1.5%, to 12,037. It’s the first time the Dow has closed above the 12,000-point mark since the day of the Japanese earthquake on March 11.

The S&P 500 (SPX) index added 19.2 points, or 1.5%, to 1,298; and the tech-heavy Nasdaq (COMP) gained 48 points, or 1.8%, 2,692.

Stocks spiked at the open Monday, and remained steadily higher throughout the session.

Investors rallied on positive news regarding Japan’s nuclear crisis, as well as AT&T’s $39 billion deal to acquire T-Mobile USA. Shares of AT&T (T, Fortune 500) and Verizon Communications (VZ, Fortune 500) closed up more than 1%, although both companies pared back some of their earlier gains.

"Mergers are always a shot of adrenaline for investors, because it shows that corporate insiders still see value, despite this two-year bull market," said Fred Dickson, chief market strategist at D.A. Davidson & Co.

Shares of AT&T’s smaller competitor Sprint Nextel (S, Fortune 500), which had been reported to be in talks with Deutsche Telekom, fell 14%, making it the worst performer on the S&P 500.

Aside from corporate news, investors continue to react to developments in Japan and Libya.

Over the weekend, Japanese engineers made progress in cooling nuclear reactors that had overheated, following the devastating earthquake and tsunami that struck the country March 11.

Meanwhile, turmoil in North Africa heated up. The United States and its allies launched an airstrike on Libyan military targets Monday, in an effort to subdue forces of Libyan leader Moammar Gadhafi no fax cash loans.

Oil prices jumped more than $1 a barrel in electronic trading, following the attack. (CNN.com coverage of Libya)

"The fear of a Middle East contagion and a horrible nuclear calamity in Japan has abated, and the good news is that the economy and market fundamentals have returned to the forefront," said Paul Zemsky, head of asset allocation with ING Investment Management.

U.S. stocks ended higher Friday, but the ongoing turmoil in Japan led indexes to end lower for the week.

Economy: The National Association of Realtors said existing home sales fell to an annual rate of 4.88 million in February, which was much lower than the 5.05 million most economists forecasted.

Companies: Citigroup (C, Fortune 500) shares fell 1.6% after the bank announced a 1-for-10 reverse stock split and said it plans to reinstate its quarterly dividend.

Tiffany & Co. (TIF) shares rose 5% after the luxury retailer reported a stronger-than-expected profit.

World markets: European stocks closed broadly higher. The DAX in Germany gained 2.3%, France’s CAC 40 rose 2.5%, and Britain’s FTSE 100 added 1.2%.

Asian markets ended higher. The Shanghai Composite ticked up less than 0.1%, while the Hang Seng in Hong Kong added 1.7%. Japanese markets were closed for a national holiday.

Currencies and commodities: The dollar gained against the euro and the Japanese yen, but was flat versus the British pound.

Gold futures for April delivery rose $10.30, or 0.7%, to $1,426.40 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury fell, pushing the yield up to 3.35% from 3.26% late Friday.  

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The French prime minister says France would support military action against Moammar Gadhafi’s Libya within a matter of hours if the U.N. Security Council approves it.

Francois Fillon says “time is of the essence” and “the threat of Col. Gadhafi shows how urgent it is that the international community mobilizes itself.”

Fillon’s comments on France-2 Television Thursday came just hours before a scheduled Security Council vote on a resolution that would impose a no-fly zone over Libya.

The resolution would also authorize “all necessary measures” to protect civilians from attacks by Gadhafi’s forces.

France and Britain have been among the biggest proponents of a no-fly zone over Libya and French Foreign Minister Alain Juppe was arriving in New York for the debate.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.

UNITED NATIONS (AP) _ The U.N. Security Council scheduled a vote Thursday on a resolution that would impose a no-fly zone over Libya and authorize “all necessary measures” to protect civilians from attacks by Moammar Gadhafi’s forces.

France’s U.N. Ambassador Gerard Araud said he expected more than one of the council’s 15 members to abstain when the vote took place at 6 p.m. EDT (2300 GMT), but council diplomats said they did not expect the resolution to be vetoed.

The resolution needs nine “yes” votes and no veto by a permanent member to be adopted.

Russia and China, which have veto power, have expressed doubts about the United Nations and other outside powers using force against Gadhafi, and diplomats said other council nations reacted cautiously, including Germany, India, Brazil and South Africa.

Even if all six countries abstained, the resolution would still have the minimum nine “yes” votes.

The United States joined the resolution’s initial supporters _ Britain, France and Lebanon _ not only in pushing for a speedy vote but in pressing for action beyond setting up a no-fly zone in order to protect civilians from air, land and sea attacks by Gadhafi’s fighters.

The text that will be put to a vote would “establish a ban on all flights in the airspace of the Libyan Arab Jamahiriya in order to help protect civilians,” diplomats said. It also would authorize U.N. member states to take “all necessary measures” to protect civilians under threat of attack, while excluding an occupation force, the diplomats said.

French Foreign Minister Alain Juppe flew to New York Thursday to press the case for speedy Security Council approval.

A French diplomatic official in Paris said military action could follow “in a very short period of time.”

The official, speaking on condition of anonymity because he was not authorized to speak about the issue publicly, said France foresees a “coalition of the willing” that would include support from Arab states but would not involve a ground operation.

French officials have said Arab countries’ support could come, for example, by providing use of their air bases, the official said.

U.S. Secretary of State Hillary Rodham Clinton told reporters in Tunisia on Thursday that a U.N. no-fly zone over Libya would require action to protect the planes and pilots, “including bombing targets like the Libyan defense systems.”

Council members agreed to call a vote after a close-door meeting to discuss reactions to the draft sent to capitals overnight. It was hammered out during more than eight hours of sometimes heated negotiations on Wednesday.

With Gadhafi’s forces intensifying attacks and heading toward opposition-held Benghazi, Libya’s second-largest city, supporters of the resolution have been pressing for speedy council action.

U.S. Ambassador Susan Rice said late Wednesday the Obama administration is “fully focused on the urgency and the gravity” of the situation in Libya.

“We are interested in a broad range of actions that will effectively protect civilians and increase the pressure on the Gadhafi regime to halt the killing and to allow the Libyan people to express themselves in their aspirations for the future freely and peacefully,” Rice told reporters. “Those include discussion of a no-fly zone, but the U.S. view is that … a no-fly zone has inherent limitations in terms of protection of civilians at immediate risk.”

According to a council diplomat who spoke on condition of anonymity because the talks were private, Rice said the U.S. will not act without Security Council authorization, does not want to put U.S. ground troops into Libya, and insists on broad international participation, especially by Arab states.

President Barack Obama and his top national security aides had been cautious with calls for a no-fly zone, which the Pentagon described as a step tantamount to war. The U.S. fears involvement in Libya could further strain its already stretched military and entangle the country in an expensive and messy conflict in another Muslim country.

The council diplomat said Rice told the ambassadors the Obama administration believes there is a significant risk of major atrocities by Gadhafi’s forces in Benghazi and wants the council to do everything possible to prevent that and protect civilians.

Michael Mann, a spokesman for EU foreign policy chief Catherine Ashton, said Thursday that even as Gadhafi’s forces advanced, there would be no talks with his regime. He called the situation on the ground “extremely worrying.”

Asked what the EU would do if Gadhafi’s forces retook Benghazi, Mann said, “We have always said all along that we are planning for all options.”

He also said the EU was looking to the U.N. Security Council before making further decisions.

Russia’s U.N. Ambassador Vitaly Churkin, whose government had expressed misgivings about a no-fly zone, proposed that the council vote first on a resolution calling for a cease-fire in Libya.

Rice told reporters a majority of council members did not support a separate cease-fire resolution but said that a call for a cease-fire could be incorporated in the no-fly resolution.

France and Britain failed to win support for a no-fly zone during a two-day meeting of Group of Eight foreign ministers in Paris earlier Tuesday and the G-8’s final communique did not mention a flight ban, leaving any action to the Security Council.

The Security Council on Feb. 26 imposed an arms embargo on Libya and ordered all countries to freeze assets and ban travel for Gadhafi and some close associates. It also referred the regime’s deadly crackdown on protesters to the International Criminal Court, for an investigation of possible crimes against humanity.

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