Finance Blog number 1

Drug maker AstraZeneca PLC said it will cut another 7,300 jobs as it warned Thursday of a tough year ahead, due to government spending cuts on healthcare and stiff competition, even as it reported a 24 percent increase in 2011 profits.

The Anglo-Swedish company said its full-year profit was $10 billion, up from $8.1 billion a year earlier. The profit advance was helped heavily by a $1.5 billion gain from the sale of its dental subsidiary, Astra Tech.

The company said revenue this year will be hit by government interventions on prices, generic competition and the loss of exclusivity for Seroquel IR, a drug for the treatment of depression, and hypertension drug Atacand in global markets.

Job cuts and restructuring are expected to save $1.6 billion a year by 2014, the company said. AstraZeneca said it would shortly begin consultations with affected employees.

AstraZeneca shares were down 4.2 percent at 2,960 pence just before noon in London.

Generic competition cut revenue by $2 billion in 2011 while price interventions cost another $1 billion, AstraZeneca said.

Despite its concerns over the year ahead, AstraZeneca raised its full-year dividend by 10 percent to $2.80 a share10 percent, and announced a $4.5 billion share buyback program.

The company reported double-digit sales gains for cholesterol drug Crestor, Symbicort for asthma and Seroquel XR freecreditscore.

U.S. revenues were up 5 percent despite the negative impact of health care reform, while revenue in the rest of the world was down 3 percent, including a 15 percent slide in Europe.

AstraZeneca said it was reshaping its research and development activity to focus on neuroscience, employing 40 to 50 scientists in a new Innovative Medicines unit based in Boston in the United States and Cambridge in England.

The company will close its facility in Montreal and lay off some staff in Soedertaelje in Sweden.

“We’ve made an active choice to stay in neuroscience though we will work very differently to share cost, risk and reward with partners,” said Martin Mackay, the company’s president of research and development.

Linda McCulloch, a national officer for Britain’s Unite union, said the cuts were a blow to the research and development base.

“If the company can afford a 10 percent hike in its dividends, then it can afford to retain these roles,” McCulloch said.

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Greece and its private investors are close to a deal that will significantly reduce the country’s debt and pave the way for it to receive a much-needed euro130 billion bailout.

Negotiators for the investors announced the tentative agreement Saturday and said it could become final next week.

Under the agreement, the investors would take a hit of more than 60 percent on the euro206 billion of Greek debt they own.

Here’s how it would work: private investors would receive new bonds whose face value is half of the existing bonds. The new bonds would have a longer maturity and pay an average interest rate of slightly less than 4 percent (compared with an estimated 5 percent on the existing bonds).

Without the deal, which would reduce Greece’s debt load by at least euro120 billion, the private investors’ bonds would likely become worthless. Many of these investors also hold debt from other eurozone countries, which could also lose value in the event of a Greek default.

The agreement taking shape is a key step before Greece can get a second, euro130 billion bailout from its European Union partners and the International Monetary Fund, although there are other issues involved before Greece can get that aid. This would be Greece’s second bailout. The EU and the IMF signed off on a euro110 billion aid package for Greece in May 2010, most of which has already been disbursed.

Greece faces a euro14.5 billion bond repayment on March 20, which it cannot afford without additional help.

Private investors hold roughly two-thirds of Greece’s debt, which has reached an unsustainable level _ nearly 200 percent of the country’s economic output. By restructuring the debt held by private investors, Greece and its EU partners are hoping to bring that ratio closer to 120 percent by the end of this decade.

In return for the first bailout, Greece’s public creditors _ the International Monetary Fund, the European Union and the European Central Bank _ have unprecedented powers over Greek spending. However, austerity alone will not fix Greece’s problem. The country must also find ways boost its economic output, which at the moment is shrinking.

If no debt-exchange deal is reached with private creditors and Greece is forced to default, it would very likely spook Europe’s _ and possibly the world’s _ financial markets. It could even lead Greece to withdraw from the euro.

The banks, insurance companies and other private holders of Greek bonds are being represented by Charles Dallara, managing director of the Washington-based Institute of International Finance, and Jean Lemierre, senior adviser to the chairman of the French bank BNP Paribas.

The main creditor negotiators will leave Greece on Sunday and will remain in close consultation with Greek and other authorities.

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U.K. factory output prices unexpectedly fell in December for the first time in 18 months as the cost of petroleum products such as gasoline plunged.

The cost of goods at factory gates declined 0.2 percent from November, the Office for National Statistics said today in London. Annual price growth slowed to 4.8 percent, the least in a year. On the month, economists had forecast a 0.1 percent gain in December, according to the median of 17 estimates in a Bloomberg News survey.

Declines in prices for commodities such as oil may ease inflation pressure in the economy as producers and manufacturers pass lower costs onto consumers. The Bank of England, which maintained its bond-purchase target at 275 billion pounds ($422 billion) yesterday, has forecast that consumer-price growth will ease

America’s retailers enjoyed a record 2011 and their first $400 billion sales months ever. But the final month of the year was a dud.

Sales eked out a 0.1 percent increase in December, lifting sales to a seasonally adjusted $400.6 billion.

It was the second straight month that sales have topped $400 billion. The government revised November sales to show a 0.4 percent gain, twice the original estimate.

For all of 2011, sales totaled a record $4.7 trillion. That was a gain of nearly 8 percent over 2010 _ the largest percentage increase since 1999.

Steady sales gains have fueled a 20 percent surge from the low during the Great Recession. Monthly sales are even 6 percent above their pre-recession high. The figures confirm evidence that the economy was strengthening as 2011 ended.

Still, December’s increase was the weakest in seven months. Excluding volatile auto purchases, overall sales actually fell 0.2 percent. It was the first such drop since May 2010.

Part of the reason was lower gasoline prices. Those prices reduced sales at gasoline stations by 1.6 percent. Excluding gas stations, overall retail sales would have risen 0.3 percent in December.

Another factor was heavy discounting during the holiday shopping season. Many retailers said they had to offer cut prices in December to attract shoppers.

Separately, more people applied for unemployment benefits last week, the government said. Applications rose 24,000 to a seasonally adjusted 399,000. But the gain was largely due to companies letting go of workers after the holiday season.

Economists downplayed the increase. It followed three months of declines that had reduced the number of unemployment applications to their lowest level in more than three years.

And businesses increased their stockpiles in November to meet rising consumer demand. That gain likely boosted economic growth in the final months of 2011. Companies are rebuilding stockpiles after cutting them last summer amid fears of another recession. It means many anticipate higher consumer spending.

The government’s report on retail sales showed that holiday discounts weakened department store sales. They fell 0.2 percent in December. A broader category that includes department stores like Macy’s and big chains such as Wal-Mart showed an even larger drop last month: 0.8 percent.

Compared with the same time last year, retail sales have risen 6.4 percent.

An earlier survey of 25 major retail chains by the International Council of Shopping Centers found that revenue in December at stores open at least a year rose 3.5 percent over the same month a year ago.

That survey’s figures aren’t adjusted for seasonal changes; the government’s sales figures are. The government report is also a broader gauge. It covers purchases at all retailers, not just at major national chains. It also includes auto dealerships, restaurants and bars, grocery stores and gasoline stations.

Though December’s retail sales were disappointing, analysts said they still expect consumers to help the economy strengthen further, especially because businesses have stepped up hiring payday loan no faxing. More jobs mean more people with money to spend.

“Although consumer spending is not particularly robust, households do continue to spend and provide moderate support for the overall economy,” said Steven Wood, chief economist at Insight Economics.

The strength last month was led by a 1.5 percent jump in auto sales. Furniture store sales rose 1 percent. Hardware stores reported a 1.6 percent increase. But sales at electronics and appliance stores sank nearly 4 percent.

Restaurants and bars fared slightly better over the holidays. Their sales rose 0.7 percent.

The government’s retail sales report is its first look each month at consumer spending, which accounts for roughly 70 percent of economic activity. A healthy report typically signals a stronger economy.

Compared with the same time last year, retail sales have risen 6.4 percent.

This week, the Federal Reserve issued a report saying the final six weeks of 2011 were among the economy’s best last year. The report pointed to higher holiday and auto sales, along with increased travel.

The job market has brightened, too. Employers added 200,000 jobs in December. And the unemployment rate fell to 8.5 percent, the lowest in nearly three years.

Many analysts predict that economic growth rose to an annual rate of roughly 3 percent in the final three months of 2011. That would be an improvement from the summer, when the annual rate was just 1.8 percent. And it’s much better than the 0.9 percent growth rate in the first six months of 2011.

For the holiday season, many retailers drew customers by staying open on Thanksgiving Day or offering sharp discounts. Discounting helped generate record sales at the start of the shopping season and in the days before Christmas.

U.S. automakers have said that November and December were their two best sales months in 2011. Their U.S. sales rose 10 percent to 12.8 million in 2011, a 23 percent jump from the recession year of 2009.

Chrysler Group reported sales surged 26 percent for all of 2011. General Motors Co. saw sales rise 13 percent for the year. Ford Motor Co. reported an 11 percent gain for 2011.

Because the government’s retail sales report is seasonally adjusted, the current month can be compared with the previous month. But the figures aren’t adjusted for inflation.

A separate government report each month measures consumer spending. It’s an even more inclusive gauge. It covers all spending at retailers _ for both durable goods like cars that are expected to last for years and nondurable goods such as food.

This report also covers spending on services. Services include items such as doctor’s visits, airline tickets, apartment rentals and utility bills. The service category makes up two-thirds of consumer spending and isn’t covered in the retail surveys.

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North Korea said solving food and power shortages are urgent goals in 2012, and called on its people to defend Kim Jong Un, who inherited control of a country struggling to feed itself after 60 years of totalitarian rule.

Covidien plc will spin off its Hazelwood-based drug business, turning it into an independent company that may restore the historic corporate name of Mallinckrodt.

Covidien, based in Dublin, makes medical devices and medical supplies in addition to drugs. The proposed spinoff also will have its legal headquarters in Ireland, largely for tax reasons, company executives said in a conference call.

But the spinoff’s U.S. operation will be based in Hazelwood, and its new CEO will work from here. Spokesman Steve Littlejohn said the company has not made a final decision on its name, “but chances are good that it will be Mallinckrodt.”

Covidien’s pharmaceutical business has $2 billion in sales, with two-thirds of that coming in the U.S. market. It turned an operating profit of $318 million this fiscal year.

The drug business is a large provider of acetaminophen, the ingredient in Tylenol, and the largest U.S. supplier of opioids; both are pain medicines. Other lines include contrast products used with medical imagery and nuclear medicine products.

The pharmaceutical operation currently employs about 2,500 people in metro St. Louis. A company spokesman said the move should have no immediate impact on jobs here. Some jobs might be added as the firm sets up its own administrative operation.

Analysts had speculated that Covidien might get rid of the drug operation. Although profitable, it is less lucrative than the rest of Covidien and demands a higher investment in research and development. The drug operation earns a 16 cent operating profit for every dollar of sales, compared with 28 cents for the rest of the company.

The drug operation has a “lumpy” revenue history, notes analyst Aaron Vaughn of Edward Jones in Des Peres. The division is largely a generic drugmaker, and that sector suffered through a price war in past years, he noted.

“We thought they would be getting the business right-sized so that they could spin it off and let it grow on its own,” he said.

Covidien Chief Executive Jose Almeida said the pharmaceutical drug division’s performance had improved in recent years.

“We’re confident the business can now stand on its own,” he said in a conference call Thursday morning.

He said the company had been thinking about shedding the business for several years, citing “major differences” between drugs and Covidien’s other medical products. The operations have different business models, sales channels, customers and capital requirements, and demand different talents, he said.

Separating the operations would allow both to focus on their own strategies, Almeida said. Shareholders also might get more value over the long term, he said.

The drug business “definitely needs some investment,” said analyst Jeff Jonas of Gabelli & Co. in an interview with Bloomberg News. “They need to find new products, invest in the pipeline. That’s a multiyear process.”

Research and development consumes 7 percent of revenue in the drug division, compared with 4 percent in the rest of Covidien.

The spinoff would be in the form of a stock distribution, tax-free to U.S. shareholders, the company said. That tax-free aspect made the option of a spinoff superior to the alternative of selling the unit, company officials said.

The spinoff could take 18 months to complete and would need approval of regulators.

Bloomberg News, citing unidentified sources, reported last summer that Covidien had tried to sell the unit, but talks broke down.

Almeida said he has picked a CEO for the new company, although he didn’t name the person. The person is a ’strong leader” with “broad pharmaceutical experience,” Almeida said, and will join the spinoff from another company.

The drug operation is now headed by Matt Harbaugh, the drug division’s chief financial officer serving as interim president. Based in Hazelwood, he has led the unit since the previous president left last year.

Besides its Hazelwood headquarters, the drug unit has a research operation in Webster Groves, a nuclear medicine facility in Maryland Heights and a plant just north of downtown St. Louis.

That plant sits on what was the Mallinckrodt family farm. G. Mallinckrodt & Co. was founded there in 1867 and grew up as a chemical and drug firm. It refined uranium for the Manhattan Project, which created the atomic bomb during World War II.

Avon Products acquired Mallinckrodt in 1982. Avon sold the company to International Minerals and Chemical Corp. in 1986, which later changed its own name to Mallinckrodt.

In 2000, Tyco bought the company. After Tyco went bankrupt amid scandals, its health care operations were spun off as Covidien in 2007.

Without the drug business, Covidien would have $9.6 billion in sales. Covidien’s remaining business makes trays, hypodermic needles, retractors, pumps for patient feeding and pain management, and other medical devices.

Covidien stock rose $1.39 to $43.55 on Thursday.

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House Republicans intend to propose a gradual increase in Medicare premiums for wealthy seniors to help cover the cost of renewing Social Security payroll tax cuts and benefits for the long-term unemployed, officials said Wednesday.

The precise details remain to be worked out as the leadership consults with rank-and-file Republicans about the legislation, which has grown significantly in recent days and is expected on the House floor next week.

GOP officials described the plan on condition of anonymity because no final decision has been made.

In addition to the extension of payroll tax cuts and jobless benefits that are at the heart of President Barack Obama’s jobs program, House Republicans plan to include a provision to avert a 27 percent cut in payments to doctors who treat Medicare patients. All three face a Dec. 31 deadline for action.

In addition, GOP leaders eager to attract votes for the measure are likely to include conservative-backed provisions to speed the construction of a controversial oil pipeline from Canada to Texas and block a proposed Environmental Protection Agency rule restricting toxic emissions from industrial boilers.

Across the Capitol, Democrats set the stage for a second politically charged vote in the Senate later in the week on their proposed surtax on million-dollar earners to help pay for the renewal of the tax cuts and unemployment benefits.

Senate Republicans blocked an earlier bill along the same lines, and the Democrats’ decision to call for a second showdown comes as they seek to brand GOP lawmakers as protectors of the rich at the expense of the middle class.

The move is “nothing more than another bill that’s been designed to fail, so Democrats can have another week of fun and games on the Senate floor while tens of millions of working Americans go another week wondering whether they’re going to see a smaller paycheck at the end of the year,” said Senate Republican leader Mitch McConnell of Kentucky.

Republicans oppose higher taxes, and GOP aides in the House pointed out that the proposed higher Medicare premiums for the wealthy would fall on some of the same individuals whom Democrats want to tax.

Senate Republicans included higher premiums in their own alternative measure last week. It would have required seniors earning more than $750,000 to pay more for Medicare Part B, which covers doctor visits and other costs apart from the expense of hospitalization.

According to Medicare’s website, monthly Part B premiums will be $99.90 in 2012 for beneficiaries with individual income of $85,000 or less. The cost rises gradually, reaching $319.70 for anyone whose income exceeds $214,000.

The dispute over taxes is one of several that must be settled before legislation can reach Obama’s desk, and Democrats sought to put the onus on Republicans.

Republicans have said in recent days that to cover the cost of doctor fees under Medicare, they intend to cut funds from the year-old health care bill that is the president’s signature domestic achievement.

Sen. Max Baucus, D-Mont., who is chairman of the Senate Finance Committee, dismissed that approach during the day as “not a good idea. That’s going to cause more problems than it solves,” he said, and urged Republicans to concentrate on drafting legislation that can clear both houses.

Speaker John Boehner, R-Ohio, and other GOP leaders must contend not only with Senate Democrats, but also with disgruntled lawmakers inside their own party who are reluctant to extend a payroll tax cut that they claim has failed to produce any jobs. The proposal to take a piece out of the president’s health care bill is likely to be an attractive addition to these Republicans, as is the renewal of current reimbursement rates for doctors who treat Medicare patients.

Officials said the emerging House bill is also likely to extend several features of Medicare that would otherwise revert to lower payments for some hospitals as well as for ambulances in rural areas, some mental health services and therapy services from non-hospital providers.

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British police are investigating whether computers belonging to former government minister Peter Hain were hacked by the tabloid News of the World while he was the official responsible for Northern Ireland, Hain’s office said Wednesday.

It said in a statement that Hain had met with police officers “regarding an investigation into the alleged hacking of his official and personal computers during his time as Secretary of State for Northern Ireland.”

Hain was Northern Ireland secretary between 2005 and 2007 and would have had access to classified intelligence information.

Police are investigating phone hacking by the Rupert Murdoch-owned newspaper have set up a parallel probe into whether computers also were targeted.

Murdoch’s News International said it was “co-operating fully with the police” on all investigations.

Earlier Wednesday, Alastair Campbell, Tony Blair’s former spin doctor, told a media ethics inquiry set up in the wake of the hacking scandal that a minority of journalists had turned the country’s press “putrid” and tarnished the whole industry. Campbell said journalists such as those who hacked phones for the News of the World tabloid had “besmirched the name” of almost every other reporter in the country.

“A very, very small number of people have completely changed the newspaper industry,” said Campbell, who is credited with running a sophisticated _ and manipulative _ media operation when he worked for the then-prime minister at 10 Downing Street between 1997 and 2003.

“We have a press that has just become frankly putrid in many of its elements,” Campbell said, criticizing the “inhumane treatment” meted out to celebrities and ordinary people alike by newspapers in relentless pursuit of exclusives.

Campbell was giving evidence to Judge Brian Leveson’s inquiry, which was established to examine media ethics and practices and recommend changes to Britain’s system of media self-regulation.

Prime Minister David Cameron set up the inquiry in response to the scandal that began with the exposure of illegal eavesdropping by the News of the World.

Murdoch shut down the tabloid in July after evidence emerged that it had accessed the mobile phone voice mails of celebrities, politicians and even crime victims in its search for scoops.

Campbell said police had told him details about his working life were included in the notes of private investigator Glenn Mulcaire, who worked for the News of the World and was jailed in 2007 for phone hacking.

In a written witness statement, Campbell said he suspected the phone of Blair’s wife, Cherie, had been hacked _ although he acknowledged he had no proof.

He said stories about her “often involved details of where Cherie was going, the kind of thing routinely discussed on phones when planning visits, private as well as public.”

He said phone hacking could explain how the Daily Mirror learned that Cherie Blair was pregnant in 1999.

“As I recall it, at the time only a tiny number of people in Downing Street knew that she was pregnant,” Campbell said. “I have heard all sorts of stories as to how the information got out, but none of them strike me as credible.”

Campbell told the inquiry he had accused Cherie Blair’s adviser Carole Caplin of tipping off the press about Cherie Blair’s whereabouts. Caplin has since been told by police her phone may have been hacked.

Campbell said he had apologized to Caplin for blaming her.

More than a dozen current and former News of the World journalists and editors have been arrested, and two top London police officers and several senior Murdoch executives have resigned over the still-unfolding hacking scandal.

Police said they had made a new arrest, a 31-year-old woman detained in northern England on Wednesday. Her name was not disclosed, although media including Sky News _ which is 39 percent owned by Murdoch’s News Corp. _ identified her as a former News of the World reporter.

The only people charged with crimes so far are Mulcaire and former News of the World reporter Clive Goodman, who were jailed in 2007 for hacking into the voicemails of royal aides.

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The Robin Hoods in this northern Greek town sport rubber gloves, fuses and orange stickers.

Nearly two years of pay cuts, job cuts and tax hikes have pummeled living standards in debt-crippled Greece and the country is facing record unemployment and a fourth year of recession in 2012. On a personal level, that means many in Veria can’t pay for basic necessities such as electricity and end up getting cut off from the grid.

That’s where the “Citizens of Veria” activists step in.

The group illegally reconnects needy households back to the electric grid in a direct challenge to the country’s dominant power provider, the Public Power Corporation.

“By cutting off power, (PPC) punishes young children, elderly people and generally those who can’t cope without it,” said activist Nikos Aslanoglou. “We decided that we had to reconnect them. We’re not hiding, everybody knows who we are.”

He says the group has so far reconnected dozens of households, particularly in the villages and small towns outlying Veria.

Greece sank into a financial crisis in 2009 after it emerged that authorities had been falsifying financial data for years. The fallout from that blocked the country’s access to bond markets. Greece only escaped bankruptcy with a euro110 billion ($147 billion) international rescue loan in May 2010, and when that was not enough, a second, euro130 billion ($174 billion) rescue deal that awaits final approval.

In return, the government has promised to slash bloated budget deficits through harsh austerity measures.

As jobs become rarer and worse-paid, many in this northern farming region are falling through a weakening social safety net. In the village of Agia Marina, 9 miles (15 kilometers) from Veria, activists recently reconnected the house of a disabled, 34-year-old single mother, who lives with four of her five children.

As they left, they placed an orange sticker on the electricity meter that reads: “Citizens of Veria. Social solidarity. We are reconnecting the power.”

The woman’s eldest daughter, a 19-year-old student, said before the activists came her siblings _ aged from 6 to 18 _ had to study by candlelight or with oil lamps in an unheated house.

“Our only income is a euro400-euro500 ($535-$668) welfare payment every two months,” said the student, Vasso. “PPC disconnected us because we owed them money, and we were left in the dark for about a month, but then some gentlemen came and reconnected us. Now we have heating again.”

She didn’t want her full name used because she was afraid authorities would track down her family.

What the activists are doing is illegal and can be punished by more than ten years’ imprisonment depending on the size of the outstanding bills, although in most cases sentences do not exceed five years no fax payday loan.

“Greek law treats the theft of electricity like any other common theft,” University of Thessaloniki law professor Lambros Margaritis said.

Undeterred, a three-strong activist team recently reconnected a house in the small town of Meliki, where a 54-year-old woman lives with her two unemployed sons in their thirties. Working deftly, it took them 15 minutes.

“We’re not stealing, the electricity consumption is recorded,” Aslanoglou said. “The poor houseowners can’t face consequences, it’s us who do the reconnecting.”

Hence the stickers.

Veria activists claim their campaign is catching on in other parts of the country _ particularly since the introduction in September of a deeply resented new property tax levied through power bills. People who can’t pay the new tax face losing their power supply.

That prospect has enraged even PPC employees, who staged a sit-in at a company office in Athens to disrupt the collection of the new emergency tax.

While the Veria municipal authority says have-nots should not be disconnected over the new tax, Mayor Haroula Ousountzoglou says the activists are going too far.

“What the group is doing may be very romantic, it is, however, dangerous,” Ousountzoglou told the AP. “PPC just goes and cuts off the electricity again, and imposes additional charges.”

In cases of repeated illegal reconnection, homeowners can also face prosecution _ or have their link severed at the nearest electricity pole, a drastic move that activists are powerless to counter.

PPC public relations officer Kimon Stergiotis warned that the company is determined to protect its interests.

“To illegally reconnect cut power links poses severe threats to the life and property of unsuspecting citizens,” he said. “In any case, PPC will use the law to its utmost severity.”

Ousountzoglou said her town has about 330 families on a welfare program that sometimes includes assistance in paying power bills.

“But our funds are constantly dwindling, and I keep making the rounds of local firms to ask for contributions,” she added.

The Veria mayor has threatened to sue PPC if people who really can’t pay the property tax are left without power.

“We told them we’re not joking,” she said. “PPC can’t behave like that to needy people.”

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Asian stock markets were mostly higher Friday following signs of progress in debt plagued Europe _ a successful bond sale in Italy and the naming of a new leader in Greece.

Hong Kong’s Hang Seng gained 0.4 percent to 19,035.94 and South Korea’s Kopsi added 1.2 percent to 1,835.34. Australia’s S&P/ASX 200 rose 0.2 percent at 4,251.70. Benchmarks in Singapore, Taiwan and New Zealand also rose.

After opening higher, Japan’s Nikkei 225 index slipped 0.1 percent to 8,492.36,

Investors were calmed after Greece _ which is struggling to pull back from the brink of bankruptcy _ named Lucas Papademos, a respected economist, as its new prime minister on Thursday.

An additional sign of stability came after Italy was able to borrow $6.8 billion at lower interest rates than analysts expected. On Wednesday, the rise in Italy’s 10-year bond yield to well over 7 percent stoked panic in financial markets that the country was heading toward a Greece-style debt crisis.

Traders are also fretting that debt troubles in Italy and Greece could blow up into a massive liquidity crisis and lead to a global financial meltdown payday advance low fees.

In New York on Thursday, the Dow Jones industrial average rose 1 percent to close at 11,893.86. It plunged 389 points Wednesday after Italy’s borrowing rates soared and talks in Greece to name a new prime minister broke down.

Positive economic data from the U.S. also boosted hopes that the world’s No. 1 economy would avoid a double dip recession.

The Labor Department reported early Thursday that the number of people applying for unemployment benefits in the U.S. fell to 390,000 last week _ the fewest since April. The data suggested layoffs are easing and that the economy grew slightly better over the summer than estimated.

The S&P 500 index gained 0.9 percent to 1,239.70. The Nasdaq rose 0.1 percent to 2,625.15.

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