Kitsap Business and Economy

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Archive for June, 2009

Doesn’t Look Promising For SEED

Tuesday, June 30th, 2009

Bloggers,

I attended a morning study session of the Port of Bremerton, and amid much discussion there appeared to be general agreement that there’s not enough money to completely pull off the Sustainable Energy and Economic Development initiative.

New port director Cary Bozeman will come back in 30 days with recommendations that could bring an end to plans for a business incubator building at the port.

More coming.

Rachel Pritchett


Time To Write About Fireworks Sales

Monday, June 29th, 2009

Bloggers,

I’ve been out all morning interview people at fireworks stands. Yes, the recession’s hurting some, but people still need to celebrate. Contact me and tell me where you shop and why, and how much you’re going to spend this year.

Rachel Pritchett, 475-3783, rpritchett@kitsapsun.com


How’s Everyone Feeling About Michael Jackson?

Monday, June 29th, 2009

Post your thoughts below. I had time this weekend to reflect on his music, and the huge impact it had on all of us. I always wondered, however, why Jackson didn’t move on musically. He seemed frozen in the disco beat for decades after it died. 

Rachel Pritchett


Monday Dow Closes Up 90 Points

Monday, June 29th, 2009

to 8,529 …

Rising oil, commodity prices pull stocks higher

NEW YORK (AP) — A jump in oil sent investors rushing to put money into the stock market in the final days of the second quarter.

Energy, industrial and materials stocks pulled the market higher in light trading Monday as investors raced to keep up with the gains in oil.

Crude rose $2.33 to settle at $71.49 a barrel on the New York Mercantile Exchange after China said it would boost oil reserves and Nigerian militants partly shut down an offshore oil platform.

With the quarter’s end coming up on Tuesday some money managers were buying stocks bolster their returns. The Standard & Poor’s 500 index is up 16.2 percent since the start of the April-June quarter.

Robert Pavlik, chief market strategist at Banyan Partners LLC in New York, said some of the day’s gains reflected “window-dressing” of portfolios and that the gains in energy helped lift the overall market.

With some of the gains attributable to end-of-the-quarter technical maneuvering by portfolio managers, analysts cautioned against seeing the upswing as a sign of conviction among investors that it was time to move into the market ahead of an economic bounce. Stocks seesawed in the early going but jumped after oil gained.

After running the market up more than 30 percent since March on a litany of “less bad” economic data, investors have become more cautious about the pace of the economy’s recovery in recent weeks and are looking for more concrete signs of growth.

The Dow Jones industrial average rose 90.99, or 1.1 percent, to 8,529.38. The S&P 500 index rose 8.33, or 0.9 percent, to 927.23, while the Nasdaq composite index rose 5.84, or 0.3 percent, to 1,844.06. Stocks ended last week mixed.

There was little economic news Monday but the week, which is abbreviated by the Independence Day holiday on Friday, brings key data that will give investors a better sense of where the economy is headed.

Doreen Mogavero, president of Mogavero, Lee & Co., said the market likely will trade in a tight range as investors await a clearer signal on the economy.

“We want to see if things really are getting better,” Mogavero said.

Of particular importance is the government’s monthly employment report, due Thursday. Though considered a lagging indicator of the country’s economic health, the unemployment rate is still one of the most closely watched gauges of the economy. The labor market is intricately tied to many facets of the economy, including consumer spending.

Investors also will get readings on consumer confidence and manufacturing this week.

The Dow is up 30.3 percent from a 12-year low on March 9, though it has fallen 3.1 percent from a five-month high on June 12. The blue chips are now down only 2.8 percent in 2009.

Harry Rady, chief executive of Rady Asset Management, is concerned that although the market’s rally has lost steam in the past three weeks traders are still too optimistic about how quickly the economy can recover.

“I see a bit of complacency creeping into the market,” he said. “The market has run up and that has the inverse effect of what it should.”

Rady is uneasy watching a gauge of fear in the stock market continue its retreat, and contends that investors are overlooking trouble spots in the economy like heavy debt loads and weakness in the dollar. The Chicago Board Options Exchange Volatility Index, or VIX, is a measure of stock market volatility that has been easing since early March. The VIX is down 36 percent in 2009 and stands below 26. The historical average is 18-20. It hit a record 89.5 in October at the height of the financial crisis.

Beyond the stock market, traders followed the sentencing of Bernard Madoff, who was given the maximum 150 years in prison for his multibillion-dollar fraud scheme. A U.S. District judge handed down the sentence in New York.

Madoff pleaded guilty in March to securities fraud and other charges. Prosecutors had been seeking the 150-year jail sentence, while his lawyers had sought 12 years in prison.

About three stocks rose for every two that fell on the New York Stock Exchange, where volume came to a light 1.1 billion shares compared with 2.3 billion traded Friday. Volume was heavy Friday because of the annual reconstitution of the Russell 3000 index. That forced investors to buy and sell hundreds of stocks.

Bond prices rose, pushing yields lower. The yield on the benchmark 10-year Treasury note fell to 3.48 percent from 3.53 percent late Friday.

The dollar was mixed against other major currencies. Gold prices fell.

The gains in commodities lifted energy, industrial and materials stocks. Exxon Mobil Corp. rose $1.53, or 2.2 percent, to $70.58, defense contractor General Dynamics Corp. rose $1.54, or 2.8 percent, to $57 and Eastman Chemical Co. rose $1.38, or 3.7 percent, to $38.79.

In other trading, the Russell 2000 index of smaller companies fell 2.61, or 0.5 percent, to 510.61.

Overseas, Britain’s FTSE 100 rose 1.3 percent, Germany’s DAX index advanced 2.3 percent, and France’s CAC-40 rose 2 percent. Japan’s Nikkei stock average fell 1 percent.


Harrison Poulsbo Facility Receives Final Approval

Monday, June 29th, 2009

Harrison Memorial Hospital has received final approval for a cancer facility proposed for the corner of Highway 3 and Lincoln Road from the Poulsbo planning director.

Plans call for two buildings with services for oncology, primary care, urgent care and diagnostic imaging to be built in the not-too-distant future.

Rachel Pritchett


Former Electrograph People Please Contact Me

Monday, June 29th, 2009

A couple of you asked for my e-mail address.  Here’s the contact information:

Rachel Pritchett

(360) 475-3783

rpritchett@kitsapsun.com


Friday Stocks Mixed On Savings News

Friday, June 26th, 2009

NEW YORK (AP) — Investors are nervous because consumers are saving more than they’re spending.

Stocks were mixed Friday after the Commerce Department reported that personal spending, incomes and savings all rose in May. What troubled investors was that the savings rate soared to 6.9 percent, a 15-year high, while spending rose by a more modest 0.3 percent.

The trend suggests consumers are being extremely careful with their money. That’s good for the individual, but not great for the overall economy in the short-term.

Phil Orlando, chief equity market strategist at Federated Investors, said he expects the savings rate to eventually hit 10 percent before it eases. The savings rate had been 5.6 percent in April, and annual savings rates were below 1 percent from 2005 through 2007.

“If people ramp up savings that aggressively, that is going to result in less GDP recovery than ordinarily would be the case,” Orlando said.

Gross domestic product dropped at an annual rate of 5.5 percent in the first quarter, the government reported earlier this week. As the second half of 2009 draws to a close, investors are growing more anxious about whether the economy can bounce back later this year.

That uncertainty, bolstered by a mix of promising and worrisome data, has led to a choppy week in the stock market. After four straight days of losses, the Dow Jones industrial average rebounded by 2.1 percent on Thursday. But traders appeared eager to take some profits from that jump ahead of the weekend, analysts said.

In early afternoon trading, the Dow Jones industrial average fell 39.53, or 0.5 percent, to 8,432.87. The Standard & Poor’s 500 index fell 2.42, or 0.3 percent, to 917.84. The Nasdaq composite index rose 3.93, or 0.2 percent, to 1,833.47.

The University of Michigan reported a rise in consumer sentiment in June, better than the flat reading expected by analysts. But even that data could not trigger a rally.

The technology-dominated Nasdaq did better than the other major indexes thanks in large part to Palm Inc. The smartphone maker posted a narrower loss for its fiscal fourth quarter than analysts expected. Shares rose $2.25, or 16 percent, to $16.27.

Government bond prices gained modestly. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.52 percent from 3.54 percent late Thursday.

The Russell 2000 index of smaller companies was flat at 509.14.

Advancing stocks narrowly outnumbered declining stocks, where volume came to 417 million on the New York Stock Exchange, down from 516 million at the same time on Thursday.

Crude oil fell $1.18 to $69.05 a barrel on the New York Mercantile Exchange.

The dollar fell against other major currencies. Gold prices rose.

Overseas, Japan’s Nikkei stock average rose 0.8 percent. Britain’s FTSE 100 fell 0.3 percent, Germany’s DAX index fell 0.5 percent, and France’s CAC-40 fell 1.1 percent.


Americans Squirreling Away Savings

Friday, June 26th, 2009

WASHINGTON (AP) — Households pushed their savings rate to the highest level in more than 15 years in May as a big boost in incomes from the government’s stimulus program was devoted more to bolstering nest eggs than increased spending.

The higher savings rate is healthy in the long term, economists said. But without vigorous consumer spending, the government may have to do more to revive the economy, possibly through further tax breaks and spending.

The Commerce Department said Friday that consumer spending rose 0.3 percent in May, in line with expectations. But incomes jumped 1.4 percent, the biggest gain in a year and easily outpacing the 0.3 percent increase that economists expected.

The savings rate, which was hovering near zero in early 2008, surged to 6.9 percent, the highest level since December 1993.

The income increase reflected temporary factors relating to the $787 billion economic stimulus program that President Barack Obama pushed through Congress in February to fight the recession. That program included one-time payments to people receiving Social Security and other government pension benefits.

“Personal tax cuts and government income support have brought consumers back from the dead, but the recuperation period promises to be a long one,” said Sal Guatieri, an economist at BMO Capital Markets.

The big jump in the savings rate also made some Wall Street investors nervous. The Dow Jones industrial average lost about 50 points in afternoon trading. Broader indices were mixed.

The stimulus package also featured reductions in payroll tax withholding designed to get people to start spending more money and boost the economy. Those factors helped increase after-tax incomes 1.6 percent in May. However, without the special factors, after-tax incomes would have risen just 0.2 percent.

The savings rate, which is a percentage of disposable income, rose to 6.9 percent from 5.6 percent in April. Last month’s savings rate was far above recent annual rates, which dipped below 1 percent from 2005 through 2007 as a booming economy and soaring home prices pushed Americans to spend most of what they earned.

Those factors have been reversed amid the longest recession since World War II. Triggered by a housing bust, the downturn has depressed home prices by the largest amounts since the Great Depression.

Still, private economists viewed the 0.3 percent rise in spending in May as encouraging after no change in April and a 0.3 percent drop in March. April had originally been reported as a drop of 0.1 percent. It was the best monthly performance since spending rose by 0.4 percent in February.

Consumer spending is closely watched because it accounts for about 70 percent of total economic activity. Economists are hoping that improved spending will help support a rebound in economic activity.

Nigel Gault, chief U.S. economist at IHS Global Insight, forecast that consumers would remain cautious going forward but that even dampened increases in spending should be enough to jump-start economic growth.

“We do expect spending to creep slowly higher in the second half of the year as the labor market deterioration becomes less severe,” he said in a research note.

The government reported Wednesday that the overall economy, as measured by the gross domestic product, shrank at an annual rate of 5.5 percent in the January-March quarter, slightly less severe than the 5.7 percent decline estimated a month ago.

However, the 5.5 percent drop in the first quarter followed a 6.3 percent decline in the last three months of last year, the worst six-month performance for the GDP in more than a half-century.

Economists believe that the 0.3 percent rise in spending in May will help bolster the economy in the second quarter and will translate into a smaller drop in GDP of around 2 percent during this period. Economists believe that GDP will begin growing again in the second half of this year, signaling an end to the recession that began in December 2007.

However, the rebound is expected to be subdued. That’s because unemployment, already at a 25-year high of 9.4 percent, is expected to continue rising, pushing worried households to save even more against the threat of further layoffs.

Reduced spending has been tough on the nation’s retailers, who have been forced to lay off workers and shut stores. Drugstore operator Rite Aid Corp. said Wednesday that it narrowed its fiscal first-quarter loss by closing stores and trimming other operating costs as it works to eliminate $6 billion in debt.

Still, the weak economy has kept a lid on prices. An inflation gauge tied to consumer spending edged up 0.1 percent in May compared with April.


Coming: Franciscan Health System’s Inroads Into South Kitsap

Friday, June 26th, 2009

Bloggers,

Look soon for my story about how Gig Harbor’s new St. Anthony Hospital is convincing some South Kitsap residents to head south for hospitalization.

Rachel Pritchett, 475-3783


Attention St. Anthony Hospital Users

Thursday, June 25th, 2009

I am preparing a story about Franciscan Health System’s inroads into South Kitsap today. With its opening three months ago, South Kitsap residents, for the first time, have a hospital close by. If you’ve had occasion to use St. Anthony’s services, please give me a call today. I’d like to interview you about the new option available.

Rachel Pritchett, reporter, (360) 475-3783