Doubts about China’s breakneck plans to expand high-speed rail across the country have been underscored by a bullet train wreck that killed at least 36 people.
Railways Minister Sheng Guangzu has already apologized to the victims of Saturday’s crash, and their families. A train rammed into the back of another one that stalled after being hit by lightning in China’s deadliest rail accident since 2008. Six carriages derailed and four fell about 65 to 100 feet (20 to 30 meters) from a viaduct.
The Railway Ministry and government officials haven’t explained why the second train was not warned there was a stalled train in its path.
The accident is the latest blow to China’s bullet train ambitions. Designed to show off the country’s rising wealth and technological prowess, the national prestige attached to the high-speed rail project is on a par with China’s space program.
Beijing plans to expand the high-speed rail network _ already the world’s biggest _ to link far-flung regions and is also trying to sell its trains to Latin America and the Middle East.
Last month, it launched to great fanfare the Beijing to Shanghai high-speed line, whose trains can travel at a top speed of 186 miles (300 kilometers) per hour. The speed was cut from the originally planned 217 mph (350 kph) after questions were raised about safety.
In less than four weeks of operation, power outages and other malfunctions have plagued the showcase 820-mile (1,318-kilometer) line. The Railways Ministry previously apologized for the problems and said that summer thunderstorms and winds were the cause in some cases.
Official plans call for China’s bullet train network to expand to 8,000 miles (13,000 kilometers) of track this year and 10,000 miles (16,000 kilometers) by 2020.
China’s trains are based on Japanese, French and German technology, but the manufacturers are trying to sell to Latin America and the Middle East. That has prompted complaints that Beijing is violating the spirit of licenses with foreign providers by reselling technology that was meant to be used only in China.
Saturday’s accident involved the first-generation bullet trains, which were launched in 2007 and have a top speed of 155 miles (250 kilometers) per hour _ slower than the new Beijing to Shanghai trains.
The Ministry of Railways said in a statement on its website Monday that the accident had killed 36 people and injured 192 direct payday lenders.
The crash happened when a bullet train traveling south from the Zhejiang provincial capital of Hangzhou lost power in a lightning strike, stalled and was hit from behind by a second train in Wenzhou city.
Three top officials at the Shanghai Railway Bureau were sacked after the accident, and state-controlled media have raised questions, especially as rail travel moves hundreds of millions of people a year.
In an editorial entitled ‘Train crash lesson for railway progress,’ the Global Times said the accident should be “a bloody lesson for the entire railway industry in China.”
The newspaper said the collision casts doubt on China’s high-speed railway expansion plans because the country “lacks experience” as it seeks to join the top ranks of railway engineering.
It said China’s high-speed railway has become “the newest target of public criticism,” adding the accident should lead to “safer, not slower, railway transportation.”
China’s transportation authority ordered local departments at an emergency meeting Sunday to launch thorough safety overhauls to “resolutely curb” severe traffic accidents, the official Xinhua News Agency reported. The order follows a number of recent accidents, including a fire on a long-distance bus on Friday that killed 41 people.
The China Daily said in an editorial that the rapid development of China’s high-speed network has eased travel for passengers, but safety worries could keep them off high-speed trains.
This is because “the higher the speed of the trains, the more sophisticated the technology will be and the greater the risk if there is a failure of any link in the safety chain,” it said.
The paper called for better training of railway employees and efforts to make sure the railways are not vulnerable to extreme weather conditions.
State broadcaster CCTV reported Monday that a 2-year-old girl pulled from one of the derailed carriages 21 hours after the crash had undergone a three-hour operation. It said she had suffered lung, kidney and leg injuries and is now in intensive care. Her parents died in the crash.
In April 2008,a regular-speed train traveling from Beijing to the eastern coastal city of Qingdao derailed and crashed into another train, killing 72 people and injuring 416.
London’s departing police chief revealed Tuesday that 10 of the 45 press officers in his department used to work for News International, but he denied there are any improper links between the force and Rupert Murdoch’s media empire.
Paul Stephenson was giving evidence to a committee of lawmakers investigating wrongdoing at the now-shuttered tabloid News of the World, and allegations of bribery and collusion between Murdoch employees and the police.
“I understand that there are 10 members of the (Department of Public Affairs) staff who have worked in News International in the past, in some cases journalists, in some cases undertaking work experience with the organization,” he said.
News International is the British newspaper division of Murdoch’s global News Corp.
Stephenson denied wrongdoing, or knowing the News of the World was engaged in phone hacking _ but acknowledged that in retrospect he was embarrassed the force had hired Neil Wallis, a former executive of the paper, as a PR consultant,
After being asked about his relationship with Wallis, who was arrested last week, Stephenson said he had “no reason to connect Wallis with phone hacking” when he was hired for the part-time job in 2009.
He said now that the scale of phone hacking at the paper has emerged, it’s “embarrassing” that Wallis worked for the police.
Stephenson announced his resignation Sunday, saying allegations about his contacts with Murdoch’s News International were a distraction from his job.
He was followed out the door by assistant commissioner John Yates, who gave evidence before a hotly anticipated appearance by Rupert Murdoch, his son James and the media mogul’s former U.K. newspaper chief, Rebekah Brooks.
Yates said that with the benefit of hindsight he would have re-opened an inquiry into electronic eavesdropping of voicemail messages.
Yates said if he “knew now” how the phone hacking scandal would enfold, he would have done something different.
He has denied wrongdoing in the scandal.
Rupert Murdoch’s car was mobbed by photographers as he arrived for a grilling from U.K. lawmakers about the phone hacking scandal that has swept from his media empire through the London police and even to the prime minister’s office.
The elder Murdoch’s Range Rover was surrounded as he arrived at the Houses of Parliament three hours early, and it quickly drove off. The vehicle returned to Parliament about half an hour before the hearing was due to start.
Politicians will be seeking more details about the scale of criminality at the News of the World, while the Murdochs will try to avoid incriminating themselves or doing more harm to their business without misleading Parliament, which is a crime.
Lawmakers are also holding a separate hearing to question London police about reports that officers took bribes from journalists to provide inside information for tabloid scoops and to ask why the force decided to shut down an earlier phone hacking probe after charging only two people.
Detectives reopened the case earlier this year and are looking at a potential 3,700 victims.
London’s Metropolitan Police force said Tuesday it had asked watchdog to investigate its head of public affairs over the scandal _ the fifth senior police official being investigated. The Independent Police Complaints Commission will look at Dick Fedorcio’s role in hiring a former News of the World executive as an adviser to the police.
Fedorcio also was questioned by lawmakers Tuesday, along with Stephenson and Yates.
It was the appearance by the Murdochs and Brooks that was drawing huge public interest.
Members of the public and journalists lined up hours ahead of time in hope of a spot in the small committee room, which holds about 40 people. More will be able to watch in an overspill room, and Britain’s TV news channels are anticipating high ratings for the appearance.
Prime Minister David Cameron cut short a visit to Africa and is expected to return to Britain for an emergency session Wednesday of Parliament on the scandal.
A former News of the World reporter, Sean Hoare, who helped blow the whistle on the scandal, was found dead Monday in his home quick pay day loan. Police said the death was “unexplained” but is not being treated as suspicious. A post-mortem was being conducted Tuesday. Hoare was in his late forties.
Brooks’ spokesman, David Wilson, said police had been handed a bag containing a laptop and papers that belong to her husband, former racehorse trainer Charlie Brooks. Wilson said the bag did not contain anything related to the phone hacking scandal and he expected police to return it soon.
The bag was found dumped in an underground parking lot near the couple’s home on Monday, but it was unclear how exactly it got there. Wilson said Tuesday that a friend of Charlie Brooks had meant to drop the bag off, but he would say only he left it in the “wrong place.”
Murdoch shut down the News of the World tabloid that Brooks once edited after it was accused of hacking into the voice mail of celebrities, politicians, other journalists and even murder victims. Still, the closure has done little to end a string of revelations about the murky ties between British politics and the country’s tabloid media.
The scandal has prompted the resignation and subsequent arrest of Brooks and the resignation of Wall Street Journal publisher Les Hinton, sunk Murdoch’s dream of taking full control of lucrative satellite broadcaster British Sky Broadcasting and raised questions about his ability to keep control of his global media empire.
Rupert Murdoch is eager to stop the crisis from spreading to the United States, where many of his most lucrative assets _ including the Fox TV network, 20th Century Fox film studio, The Wall Street Journal and the New York Post _ are based.
In New York, News Corp. appointed commercial lawyer Anthony Grabiner to run its Management and Standards Committee, which will deal with the scandal. But News Corp. board member Thomas Perkins told The Associated Press that the 80-year-old Murdoch has the full support of the company’s board of directors, and it was not considering elevating Chief Operating Officer Chase Carey to replace Murdoch as CEO of News Corp.
News Corp.’s widely traded Class A shares fell 68 cents to $14.97 Monday _ down 17 percent since the scandal reignited on July 4.
Britain’s Independent Police Complaints Commission also is looking into the phone hacking and police bribery claims, including one that Yates inappropriately helped get a job for the daughter of Wallis. Wallis has been arrested on suspicion of conspiring to intercept communications.
London police also confirmed that they once employed a second former News of the World employee besides Wallis. Alex Marunchak had been employed as a Ukrainian language interpreter with access to highly sensitive police information between 1980 and 2000, the Metropolitan Police said.
The police force said it recognized “that this may cause concern and that some professions may be incompatible with the role of an interpreter,” adding that the matter will be looked into.
Meanwhile, Internet hackers took aim at Murdoch late Monday, defacing the sites of his other U.K. tabloid, The Sun, and shutting down website of The Times of London. Visitors to The Sun website were redirected to a page featuring a story saying Murdoch’s dead body had been found in his garden.
Internet hacking collective Lulz Security took responsibility for that hacking attack via Twitter, calling it a successful part of “Murdoch Meltdown Monday.”
Lulz Security, which has previously claimed hacks on major entertainment companies, FBI partner organizations and the CIA, hinted that more was yet to come, saying “This is only the beginning.”
It later took credit for shutting down News International’s corporate website. Another hacking collective known as Anonymous claimed the cyberattack on The Times’ website.
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Danica Kirka and Bob Barr contributed to this report.
Meera Selva can be reached at http://twitter.com/Meera_Selva.
Jill Lawless can be reached at http://twitter.com/JillLawless
WATERLOO, ONT.
Shares in British Sky Broadcasting PLC are falling for the sixth straight session Tuesday, a day after News Corp.’s bid for the satellite broadcaster was referred to the competition regulator.
With the review likely to take many months, there’s little incentive for short-term investors, such as hedge funds, to keep hold of the stock. BSkyB shares were 2.1 percent lower early Tuesday at 700 pence ($11.07). The decline means that the stock is underperforming in the FTSE 100 index of leading British shares. Shares around the world have been hit Tuesday by mounting fears over the financial health of Spain and Italy.
BSkyB shares have taken a battering over the past week, falling from 850 pence, as a phone-hacking at the Sunday tabloid News of the World escalated.
The paper, which closed Sunday after 168 years, was owned by News Corp.’s British subsidiary News International. News Corp. shares have also taken a pounding, as investors doubt whether it will get the 61 percent of BSkyB it doesn’t already own.
On Monday, News Corp. withdrew its promise to spin off Sky News, which had been a condition for buying the remaining shares in BSkyB, triggering a referral to the Competition Commission from Culture Secretary Jeremy Hunt.
Britain’s Competition Commission now must hold a full-scale inquiry into whether the takeover would break anti-monopoly laws. These inquiries usually take six months and Murdoch must be hoping that the current febrile atmosphere surrounding the bid cools down.
“News Corp. now has a decent time for the crescendo of allegations to peak and be dealt with and relevant actions to be taken, assuming these are containable,” Investec Securities analyst Steve Liechti said.
However, with police apparently still in the early stages of a criminal investigation of the News of the World, Liechti said there is a danger that News Corp. could be forced to reduce its stake in BSkyB if Britain’s communication regulator decides it is not “fit and proper” to control a broadcasting license.
On Tuesday, former Prime Minister Gordon Brown joined the criticism of News International, repeatedly accusing the company of employing criminals to obtain confidential information about his bank account, taxes and other issues.
“If I, with all the protection and all the defenses and all the security that a chancellor of the exchequer or a prime minister, am so vulnerable to unscrupulous tactics, to unlawful tactics, methods that have been used in the way we have found, what about the ordinary citizen?” Brown said in an interview with the BBC.
As the jobless rate inches up and the economic recovery sputters, investors looking for a few good stocks may want to follow the money _ or rather the TV, the beloved Fender guitar, the baubles from grandma, the wedding ring.
Profits at pawn shop operator Ezcorp Inc. have jumped by an average 46 percent annually for five years. The stock has doubled from a year ago, to about $38. And the Wall Street pros who analyze the company think it will go higher yet. All seven of them are telling investors to buy the Austin, Texas, company.
Is the economy still just in a soft patch? A hard patch? Will the market rise or drop? Even experts are just guessing. In investing, it’s often better to focus on what you can safely predict, even if that safety is found in companies that thrive on hard times. One good bet: The jobless aren’t likely to find work anytime soon. And companies profiting from their bad fortune will continue to do so.
Among them:
_ Stock in payday lender Advance America Cash Advance Centers (AEA) has doubled from a year ago, to just under $8. Rival Cash America International Inc. (CSH) is up 64 percent, to $58. Such firms typically provide high interest loans _ due on payday _ to people who can’t borrow from traditional lenders.
_ Profits at Encore Capital Group, a debt collector that targets people with unpaid credit cards bills and other debts, rose nearly 50 percent last year. Encore has faced class action suits in several states, including California, over its collection practices. The Minnesota attorney general filed a suit in March. No matter. The stock (ECPG) is up 59 percent from a year ago, to more than $30.
_ Stock in Rent-A-Center (RCII), which leases televisions, couches, computers and more, is up 57 percent from a year ago to nearly $32. Nine of the 11 analysts covering the company say it will rise further and that investors should buy it.
The idea of investing in companies catering to the hard-up might not be palatable to some people. But it is profitable.
Mark Montagna, an analyst at Avondale Partners in Nashville, has developed what he calls “value retail” index of 11 companies _ dollar stores, off-price shops and clothing and footwear chains favored by shoppers looking for deals. The index is up 149 percent since February 2009, which marked the lowest month-end closing value for the S&P 500 during the recession.
Desperation stocks continue to be lifted by a drumbeat of bad news. Consumer spending, adjusted for inflation, has fallen for two months in a row _ the first back-to-back fall since November 2009. On Friday, the government reported the unemployment rate rose to 9.2 percent in June, sending stocks in tailspin. On top of that, one in seven Americans now live below the poverty line, a 17-year high.
“It’s been a good year,” says John Coffey Jr., a Sterne Agee analyst, referring to the companies he follows, not the economy. Coffey created a stir late last month when he issued a report arguing shares of Ezcorp (EZPW), which also makes payday loans, were worth a third more than their price and urged investors to buy. The stock rose 7 percent in just a few hours.
The next day a widely followed survey showed consumer confidence at a seven month low.
“Here we are celebrating the second year of recovery and confidence is at levels consistent with a recession,” says David Rosenberg, an economist at money manager Gluskin Sheff. “The folks in the survey are probably not the same folks shopping at Tiffany’s.” (That company’s stock is also up nearly 50 percent since March, to about $82.)
But they probably are shopping at Dollar General Corp. Stock in the discount retailer recently hit $34.13, up 50 percent from its IPO in late 2009. And it may be worth about a third more, at least according Avondale’s Montagna.
“People are broke. They’re all chasing value. It’s a seismic shift in mindset,” he says.
Some experts think these down-and-out stocks are just as likely to fall now instead of rise. It’s not that they think the recovery will turn brisk and people will get jobs and shop elsewhere. It’s that things could get worse _ making customers too poor to borrow or buy even from these outfits. Rent-A-Center, the furniture store, is already suffering. Some of its core low-income shoppers have seen money they would have spent leasing a couch or cocktail table eaten up by rising food and fuel bills.
But not to despair. According to Nick Mitchell, an analyst at Northcoast Research, wealthier customers, say those making $45,000, are feeling so strapped lately that they’re starting to rent furniture, too.
Montagna, the Dollar General bull, says he’s seeing people earning $70,000 or more at that chain, too. Even he shops there now.
“If I’m driving past one, I stop in,” he says, adding triumphantly, “I just bought toothpaste _ Crest _ two tubes for $4.”
Britain’s phone hacking scandal reached a new intensity Wednesday as the scope of tabloid intrusion into private voicemails became more clear: Murder victims. Terror victims. Film stars. Sports figures. Politicians. The royal family’s entourage.
Almost no one, it seems, was safe from the reporters and investigators toiling for a tabloid determined to beat its rivals, whatever it takes.
The focal point was the News of the World tabloid, which faced a growing advertising boycott from major firms over the alleged phone hacking, and the top executives of its parent companies: Rebekah Brooks, chief executive of News International, and her boss, media potentate Rupert Murdoch.
Murdoch on Wednesday released a statement indicating that Brooks would continue to lead his British newspaper operation despite calls for her resignation.
The breathtaking scandal, which has already touched the offices of Prime Minister David Cameron and the London Police, widened as News International provided police with evidence that the tabloid had made illegal payments to police officers in its quest for information. Possible victims cited those payments to police as the reasons why an earlier police inquiry did not begin to turn up the extent of the hacking.
The list of potential victims grew as well. New revelations emerged Wednesday that the phones of relatives of people killed in the July 7, 2005 terrorist attacks on London’s transit system, as well those tied to slain schoolgirls, may also have been targeted.
The true extent of the hacking is not yet clear _ and may not be known for months as inquiries unfold.
Graham Foulkes, whose son died in the terrorist attacks, was told by police that he was on a list of potential hacking victims.
“I just felt stunned and horrified,” Foulkes told The Associated Press on Wednesday. “I find it hard to believe someone could be so wicked and so evil, and that someone could work for an organization that even today is trying to defend what they see as normal practices.”
Foulkes, who was to mourn his son Thursday on the sixth anniversary of the attack, said a completely independent investigation was needed because new information showed that the police were compromised by accepting “bribes” from the tabloid.
“The police are now implicated,” he said. “The prime minister must have an independent inquiry and all concerned should be prosecuted.”
Foulkes also demanded the resignation of Brooks, the former News of the World editor who is now chief executive of News International, the U.K. newspaper division of Murdoch’s News Corp. media empire. News Corp. owns a swath of newspapers, including News of the World, the Sun, and the Wall Street Journal.
“She’s gotta go,” Foulkes said. “She cannot say, oops, sorry, we’ve been caught out. Of course she’s responsible for the ethos and practices of her department. Her position is untenable.”
Yet Brooks, one of the most powerful women in British journalism, maintains she did not know about the phone hacking and has declared she will continue to direct the company.
Foulkes also challenged Murdoch _ a global media titan with vast newspaper, television, movie and book publishing interests in the United States, Britain, Australia and elsewhere _ to meet with him to discuss the gross intrusion into his privacy.
“I doubt he’s brave enough to face me,” said Foulkes.
In Parliament, lawmakers held an emergency debate to call for the prosecution of those responsible for hacking into the phone of Milly Dowler, a 13-year-old murder victim, and others.
The Dowler case touched a raw national nerve because the paper is accused of hampering the police investigation by deleting some of Milly’s phone messages, and giving them and her parents false hope that she was still alive after she was abducted in 2002 personal business card.
Cameron called for inquiries into the News of the World’s behavior as well as into the failure of the police’s original phone hacking inquiry, which did not uncover the allegations now emerging.
“We are no longer talking here about politicians and celebrities, we are talking about murder victims, potentially terrorist victims, having their phones hacked into,” Cameron said. “It is absolutely disgusting, what has taken place, and I think everyone in this House and indeed this country will be revolted by what they have heard.”
Ordinary Britons were equally horrified.
“It’s disgusting,” said Danny Wright, 25, of Liverpool. “It’s heartless and inconsiderate that they’d do it to victims and family of murder victims.”
He said it was wrong to hack into celebrities’ phones but far worse to do it to victims’ families “because of what they’ve been through.”
According to opposition Labour Party lawmaker Tom Watson, an April 2002 story in the News of the World made a specific reference to messages that had been left on Milly’s voicemail.
Bob Satchwell, executive director of the Society of Editors, said the Dowler case was crucial.
“That’s why the case has gotten so big,” he said. “If celebrities or politicians have their phones intercepted, that’s one thing. But the idea that they were doing this while a little girl was missing and a police inquiry was going on makes it a really gross intrusion.”
Satchwell said the hacking has become politically sensitive not only because Cameron’s communications chief Andy Coulson was forced to resign earlier this year because of his previous stewardship of the tabloid, but also because lawmakers opposed to Murdoch’s growing media power in Britain want to slow down his takeover of other properties.
He said the hacking of Dowler’s phone was revealed just as government regulators are preparing to decide whether Murdoch can take full control of British Sky Broadcasting.
“You have to ask yourself why that happened right now,” Satchwell said, cautioning that the public has yet to see clear evidence of illegal phone hacking except for two News of the World employees _ reporter Clive Goodman and investigator Glenn Mulcaire _ who have already served time in jail.
When police arrested Mulcaire, they seized 11,000 pages of notes, including the phone numbers of many suspected hacking victims. But police, still investigating, have in most cases not yet made clear who was actually hacked.
News of the World executives have admitted wrongdoing and offered cash settlements to a number of its victims.
The scandal has its roots in the tabloid’s efforts to scoop its competitors with news about the royal family. Representatives of the royals complained to police in late 2005 with suspicions that some of their voicemails had been hacked into.
Tabloid executives claimed at the time the two were rogue employees but that assertion has been undermined by a series of arrests at the newspaper earlier this year and by the company’s willingness to settle with other victims.
The tabloid’s parent company, News International, has insisted it is working closely with police and has a zero-tolerance policy for any wrongdoing or sketchy tactics.
Several companies hastily pulled ads Wednesday from the News of the World amid the public uproar.
Virgin Holidays canceled several ads due to run in the Sunday newspaper this week. Car makers Ford UK and Vauxhall and Halifax bank also said they have suspended advertising.
Mumsnet _ a popular online community for mothers _ removed ads from Murdoch broadcaster Sky after its members complained about the tabloid hacking.
Falling gas prices brought truck buyers back to General Motors showrooms last month. Still, pump prices remained high enough that shoppers snapped up smaller cars as well.
GM sales rose 10 percent in June from a year ago. The Detroit car company said it sold 215,000 cars and trucks last month, up from 194,828 a year ago. The result indicates the auto industry’s slow recovery from the recession is back on track after a brief slump in May.
GM said that cheaper gas lured more pickup truck buyers with Chevrolet Silverado sales rising 5 percent and GMC Sierra sales up 8 percent compared with a year earlier. Any jump in pickup sales helps GM and other Detroit automakers, which sell more than five times as many pickups as foreign-based brands.
Still, GM’s sales were led by smaller, more fuel-efficient models like the new Chevrolet Cruze compact. Gas prices averaged $3.68 per gallon in June. That’s cheaper than the average for May, but hardly cheap. Sales of the Cruze more than doubled the sales of the car it replaced, the lackluster Chevrolet Cobalt.
GM’s small-car and crossover sales also got a boost from earthquake-related shortages of Japanese models that persisted through June.
GM is the first major car company to report U.S. sales on Wednesday. Earlier, Volkswagen of America Inc. said its U.S. sales rose 35 percent in June on strong demand for its Jetta midsize sedan and other models. Industry analysts expect overall U.S. sales to rise 13.5 percent from last June.
Even with sales rebounding in June, GM backed off a bit from its sales forecast for the year payday loans online. Don Johnson, vice president of U.S. sales, said he now expects the total sales to be at the low end of the company’s previous prediction of 13 million to 13.5 million vehicles.
Johnson blamed the change on stubbornly high unemployment, which contributed to the decline in May. Total U.S. sales fell 3.7 percent in May after a string of double-digit monthly increases.
Johnson sees the slow recovery continuing through the rest of the year. He said that even with unemployment around 9 percent, 91 percent of the country is still working, and many are driving older cars.
“There are still people out there looking for a vehicle and in many cases need to replace their vehicles,” Johnson said.
The average car on the road now is 10.6 years old, according to the Polk research firm.
Automakers expect to sell around 1.1 million cars and trucks in June. That’s up 5 percent from May, when parts shortages caused by the March earthquake in Japan, $4-per-gallon gas and a lack of deals caused a slump.
But the pace of sales has slowed from the beginning of this year. Like GM, some analysts are starting to question the strength of the recovery. J.D. Power and Associates lowered its full-year sales forecast from 13 million vehicles to 12.9 million, saying the sluggish economy could take a bite out of sales even if car shortages ease by this fall.
Investors largely put aside their concerns about the Greek financial crisis Monday and focused instead on value. Stocks rose broadly after the market shook off its longest weekly losing streak in nearly a decade.
The downturn brought the S&P 500 close to its average level over the prior 200 days. So long as the index doesn’t sink far below that level, many technical traders see it as a sign to start buying stocks again. The S&P is now 6 percent below the 2011 high it reached on April 29.
“In the short term, stocks have been oversold, and you’re going to get some sort of bounce, whether justified or not, just for technical reasons,” said Paul Simon, chief investment officer for Tactical Allocation Group, which has $1.5 billion in assets under advisement.
The S&P 500 index rose 6.86 points, 0.5 percent, to close at 1,278.36. The Dow Jones industrial average added 76.02 points, or 0.6 percent, to 12,080.38. The Nasdaq composite gained 13.18, or 0.5 percent, to 2,629.66.
Health care companies like Aetna Inc. and Humana Inc. rose 1 percent, the largest gain among the 10 industry groups that make up the S&P 500 index. Financial companies like Morgan Stanley, which lost 1.9 percent, were the only group to lose ground.
The S&P 500 notched its third straight day of gains, the longest stretch of increases in the stock market for nearly a month. The index eked out a tiny gain last week, breaking a six-week losing streak driven by concerns that U.S. economic growth would falter in the second half of the year and that Greece’s debt crisis would spread. It was the S&P’s longest slide since 2002.
Signs that the European financial crisis may be contained helped ease investors’ concerns. European Union officials in Luxemburg said Monday that the EU would take steps to prevent Greece’s debt problems from affecting other struggling countries like Ireland and Portugal.
European leaders failed over the weekend to agree on releasing more financial aid to Greece, saying the country must first agree to more budget cuts. Greece’s recent efforts to slash spending have led to street protests and political turmoil in Athens. The Greek government faces a confidence vote on Tuesday.
Prime Minister George Papandreou’s newly-reshuffled government is expected to prevail in the vote, and officials say they expect Greece to get its next installment of emergency loans in July. If Greece were to default, it could trigger losses for the banks that hold Greek bonds and more turmoil in financial markets.
Some analysts say investors are ready to move beyond the Greek crisis and focus on corporate earnings and the U.S. economy.
“There’s a little fatigue about hearing about the same problems, and there’s no shock factor anymore,” said Oliver Pursche, president of Gary Goldberg Financial Services. Traders are now starting to look ahead to the Federal Reserve’s two-day policy meeting, which begins Tuesday, and the next round of corporate earnings reports that begin in July, he said.
Analysts expect that operating earnings per share for companies in the S&P 500 index rose 14 percent in the second quarter. They also expect the Fed to keep interest rates at nearly zero, a record low.
Among U.S. companies, PNC Financial Services Group Inc. fell 2 percent after saying it would buy the U.S. retail operations of Royal Bank of Canada for $3.45 billion. The deal will make PNC the fifth biggest U.S. bank with 2,870 branches.
Whole Foods Market Inc. gained 2.2 percent after a BMO Capital Markets analyst upgraded the stock following a recent sell-off. And Wal-Mart stores Inc. rose 0.4 percent after the Supreme Court blocked a sex discrimination lawsuit brought against the retailer by a large group of female employees.
Two stocks rose for every one that fell on the New York Stock Exchange. Consolidated volume came to 3.1 billion shares.
After two years without seeing an increase in their Social Security checks, more than 59 million retirees and other beneficiaries can expect a bump up in benefits next year.
The Social Security trustees’ annual report released last month estimates that the cost-of-living adjustment in next year’s checks will be 0.7 percent. The increase, which will be announced in October, could be higher, depending on where prices head in the coming months.
Still, experts say, retirees could see all or some of that raise eaten up by higher Medicare premiums.
News of the potential rise in benefits didn’t generate much excitement last week among seniors at the Allen Center, a Baltimore senior center, although some retirees say they would be grateful for any boost.
“If it was $5 more, I would be happy,” Frances McCready, 69, a retired cashier, said about her monthly benefit Same day payday loans. “I would dance a jig.”
The past two years have been “very bad,” said McCready, who receives $616 a month from Social Security and about $400 working for the Department of Aging.
She said she lives with her son and his wife, who help her pay her bills.
“If it wasn’t for them, no way in the world could I make it,” she said.
The Social Security trustees projected the cost-of-living adjustment using inflation assumptions from December. Since then, the price of gas has spiked and then pulled back. If fuel prices tick up again, beneficiaries could see as much as a 2 percent increase.
The actual cost-of-living increase will be based on the inflation rate in July, August and September, and how it compares with the rate during the third quarter of 2008
South Carolina Gov. Nikki Haley and other Republican governors are calling on the National Labor Relations Board to dismiss its complaint against Boeing.
Haley and 15 other GOP governors wrote to the board’s general counsel, Lafe Solomon, on Thursday saying the probe hamstrings governors who are trying to create jobs.
The letter was released Friday as the U.S. House Committee on Oversight and Government Reform held a hearing in North Charleston on the complaint.
The labor board alleges Boeing built an assembly line for its new 787 aircraft in South Carolina to avoid unionized workers in Washington state. Boeing has challenged the complaint, saying no union workers lost jobs.
Haley and Solomon are scheduled to testify during the hearing.
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