Monthly Archives: March 2010

Wednesday Stocks Fall Amid Concerns About European Debt

Dow now at 10,836, down 52 points.

NEW YORK (AP) — Stocks fell from their 2010 highs Wednesday on renewed concerns about European debt problems and weakness in the housing market.
The Dow Jones industrial average fell about 45 points in afternoon trading. Broader stock indexes also slid.
Treasury prices tumbled after a government debt auction drew only modest demand for a second straight day. That stirred concern that the government will have to pay more to attract buyers for its debt. Washington has been issuing record amounts of debt to help revive the economy.
The drop in stocks comes after Fitch Ratings lowered Portugal’s credit rating. The rating agency said the country’s recovery will be slower than other countries that use the euro. Fitch contends that could hurt Portugal’s ability to repay its debt.
Debt problems in Europe have been one of the few drags on stocks in recent months. Rising debt in Greece, Portugal and other nations that use the euro have investors worried the countries will struggle to rebound economically and upend a global recovery.
The dollar rose sharply against the euro and other major currencies. The dollar is at its highest level against the euro since May. The stronger dollar makes commodities more expensive to foreign buyers. That cuts into demand.
Stocks have been carving steady gains for more than a month as economic reports signal slow improvement in the economy. That has kept cautious traders from placing big bets on a rebound. Some analysts were already expecting a retreat now that major stock indexes are at their highest level in about 18 months.
Subodh Kumar, global investment strategist at Subodh Kumar & Assoc. in Toronto, said investors have been too quick to look past risks still facing the economy such as debt problems in Portugal.
“There are quantitative issues that the markets have been ignoring,” he said. “I believe that markets are somewhat extended.”
In early afternoon trading, the Dow fell 44.44, or 0.4 percent, to 10,844.39, a day after closing at its highest level since September 2008.
The Standard & Poor’s 500 index dropped 5.28, or 0.5 percent, to 1,168.89, while the Nasdaq composite index fell 14.34, or 0.6 percent, to 2,400.90.
Bond prices dropped after an auction of $42 billion in five-year Treasury notes drew weak demand. The yield on the five-year note, which moves opposite price, rose to 2.59 percent from 2.43 percent.
The yield on the benchmark 10-year note rose to 3.84 percent from 3.69 percent late Tuesday.
An auction Tuesday of $44 billion in two-year notes also saw a tepid response from investors.
A Commerce Department report on new home sales showed the market is continuing to contract. Sales unexpectedly fell to the lowest level on record in February as bad winter weather kept buyers out of the market.
New home sales fell 2.2 percent last month to a seasonally adjusted annual sales pace of 308,000. Economists polled by Thomson Reuters had forecast sales would rise to 320,000.
The report comes a day after the National Association of Realtors said a drop in sales of existing homes wasn’t as bad as forecast last month.
A recovery in housing has been uneven. Reports that beat even modest expectations have regularly been met with buying on Wall Street, such as Tuesday’s big gains. The Dow jumped nearly 103 points, or 1 percent. It has advanced in 10 of the past 11 days.
Investors brushed off a report on orders to factories for big-ticket manufactured goods that showed continued growth. Unlike the housing market, the manufacturing industry has shown steady improvement in recent months.
Durable goods orders — items expected to last at least three years — rose 0.5 percent last month, slightly below expectations for 0.7 percent growth. However, it was the third straight month orders rose, and excluding the volatile transportation sector, orders increased by more than expected.
Orders climbed 0.9 percent in February excluding aircraft and other transportation orders. Economists had forecast an increase of 0.6 percent.
In corporate news, General Mills Inc. said its fiscal third-quarter profit jumped 15 percent and topped forecasts. The maker of Cheerios and Yoplait yogurt also raised its earnings outlook for 2010, though it still falls short of analysts’ expectations. General Mills shares fell $1.07 to $72.50.
Homebuilder Lennar Corp. said its fiscal first-quarter loss narrowed. However, the company said it is on track to return to profitability this year, which sent its shares higher. It climbed 98 cents, or 5.7 percent, to $18.04.
MF Global Holdings Ltd. shares surged after it named former New Jersey Governor and Goldman Sachs executive Jon Corzine as its CEO. It jumped 77 cents, or 10.5 percent, to $8.09.
Three stocks fell for every two that rose on the New York Stock Exchange, where volume came to 488 million shares, compared with 471.6 million shares traded at the same point Tuesday.
Gold fell.
Crude oil fell $1.15 to $80.76 per barrel on the New York Mercantile Exchange.
The Russell 2000 index of smaller companies fell 2.73, or 0.4 percent, to 687.57.
Overseas, European indexes bounced off lows initially seen after the Portugal debt downgrade. Britain’s FTSE 100 rose 0.1 percent, Germany’s DAX index rose 0.4 percent, and France’s CAC-40 fell 0.1 percent. Japan’s Nikkei stock average rose 0.4 percent.

More on Arnold’s


A few more details I didn’t didn’t have room for in my story on the Arnold’s Home Furnishing rebuild:

Arnold’s relies on many, many furniture suppliers to fill its showroom, probably hundreds if you include accessory manufacturers.

Over the years, the Kitsap Way store oftentimes has had a significant amount of its space devoted to a single manufacturer, like Broyhill or LazyBoy.

I don’t think that’s going to be the case now, at least not to that degree. The old Arnold’s signs with Broyhill on them will come down. That leaves the Arnolds perhaps a little more free to fill its showroom with greater variety.

The exception, of course, would be a certain portion of the showroom devoted to the popular Stressless recliners, which have done very well for Arnold’s. General Manager Ralph Erickson said the Arnold’s new Stressless display will be the first of its kind in the United States.

Rachel Pritchett

Port of Bremerton Commissions Mulls Returning $2.58 Million Grant


Port of Bremerton commissioners will meet tonight at 6 p.m. at the Norm Dicks Government Center to mull turning back a $2.58 million federal grant.

The port received the grant back in the days of the proposed Sustainable Energy and Economic Development program. The SEED proposal faded away, and port chief Cary Bozeman and others tried to find a use for the grant the port still had. Stipulations that came with the grant stated it had to be used for something green.

But each proposal that came up was met with fierce objection from the public. Since the grant required a one-to-one match of port funds, they said the port was in no position to spend more of the taxpayers’ money now, in this recession.

So I wouldn’t be surprised if they turn back the grant tonight.

Commissioner Bill Mahan, the chief grant-getter for the port, has warned in the past that this will make the port look bad in the eyes of grant givers. I expect he’ll say the same tonight.

See you there.

Rachel Pritchett, 475-3783

Health Care Companies Pull Tuesday Stocks Higher

Dow at 10,831 this morning, up 45 points.

NEW YORK (AP) — Drug and hospital companies led stocks higher Monday after lawmakers ended months of uncertainty and approved the health care overhaul bill.
The Dow Jones industrial average rose about 44 points. Broader indexes also climbed.
Investors had expected the health care bill would pass the House, but the approval late Sunday removed some of the anxiety about health care that has dogged stocks of hospitals and drug makers. A bill with changes made by the House now goes back to the Senate for approval. Debate could begin Tuesday.
The changes from the 10-year, $938 billion bill will have far-reaching effects on health companies. With the bill in hand, investors could place bets on winners and losers. Hospital stocks rose on expectations they would see more business and increased revenue. Some insurers fell because of greater restrictions imposed by the changes.
Hospital operator Tenet Healthcare Corp. rose 9 percent, while UnitedHealth Group Inc. fell 3.2 percent.
Stocks opened lower following more doubts about Greece’s ability to repay its debt. Concern about the country’s fiscal crunch pushed investors into the safety of the dollar in morning trading. Stocks extended their gains after demand for the dollar eased.
Traders focused on health stocks because the bill passed by the House will extend benefits to 32 million uninsured Americans. That means increased business for hospitals and drug makers. Many of the key points of the bill will not go into effect for several years.
“You’ve got some uncertainty here lifted,” said Jack Ablin, chief investment officer at Harris Private Bank in Chicago. Ablin noted, however, that other industries will face higher costs to pay for wider coverage. “What it really comes down to is that as a result of this bill health care is a beneficiary at the expense of every other sector.”
Stocks have been rising steadily in recent weeks as investors grow more confident in a rebound following a string of improved economic reports. At the same time, much of the advance has come on light trading volume. That signals that not all the gains are tied to increasing expectations about the economy. Some analysts say that stocks are rising in a vacuum rather than because investors strongly believe that the market is poised to go higher.
According to preliminary calculations, the Dow rose 43.91, or 0.4 percent, to 10,785.89. The Standard & Poor’s 500 index rose 5.91, or 0.5 percent, to 1,165.81, while the Nasdaq composite index rose 20.99, or 0.9 percent, to 2,395.40.

Frontier Bank Gets Same Directive American Marine Got Toward the End

EVERETT — (Marketwire) Frontier Financial Corporation (NASDAQ: FTBK), the financial holding company for Frontier Bank, announced that Frontier Bank has received from the Federal Deposit Insurance Corporation (FDIC), a Supervisory Prompt Corrective Action Directive (Directive) dated March 16, 2010, due to the Bank’s critically undercapitalized status. The Directive requires that within 30 days of the effective date of the Directive, or by April 15, 2010, the Bank must either recapitalize by the sale of shares or obligations so that the Bank will be adequately recapitalized, or accept an offer to be acquired by another institution.
The Directive also reiterates a number of restrictions already imposed on the Bank by the regulators, prohibiting the Bank from accepting or renewing brokered deposits, increasing assets, paying dividends, increasing compensation or paying bonuses to directors or officers, opening, relocating or selling new offices, and requiring the Bank to comply with certain restrictions on interest rates and transactions with affiliates. The Bank was already subject to these restrictions prior to the issuance of the Directive, and key elements of the Bank’s strategic plan have included the reduction in its asset base and brokered deposits.