Friday, June 26, 2009

States lock in highway stimulus funds

Every state has committed at least half its highway stimulus funds so none will lose any of its allocation, the Obama administration said Thursday.

States had until June 29 to obligate the funds or risk losing half the leftover money. Only a month ago, some 14 states had yet to satisfy that goal. Hawaii was the last to meet the mark, hitting it on June 19.

Maine has secured 100% of its funds and 15 states have more than 80% of their money committed.

"By delivering on these projects ahead of schedule and under-budget, we have been able to do even more than we expected," said Vice President Joe Biden.

The Federal Highway Administration has approved a total of $15.8 billion for more than 4,800 projects, as of June 25. States, however, have spent less than $190 million, as of June 19, according to federal data.

To commit the funds, states had to gain approval for their projects from the Federal Highway Administration, an agency of the Department of Transportation. The money doesn't actually have to be spent, which can take months as projects go through the contracting and construction process.

Some states -- Florida, Georgia, Hawaii, Arizona, Virginia and New Mexico -- have yet to claim any funds. Illinois has spent the most, claiming more than $47.6 million of the $664 million allocated so far.
0:00 /3:00States' budget bummers

Republicans in Congress said they were concerned by the slow pace of spending.

"This is pitiful that we can't get people working, we can't get the stimulus money out," said Rep. John Mica, (R-Fla.), the top Republican on the House Committee on Transportation and Infrastructure. "People want jobs and they want them now."

The administration did not report how many jobs have been created or saved thanks to the infrastructure funding. The issue has become a source of controversy, with Republicans on Capitol Hill questioning the the recovery act's effectiveness in stemming the unemployment tidal wave.

States are sharing $26.6 billion for highway infrastructure projects, though only $18.6 billion is subject to the June deadline. The road allocations are among the earliest of the $280 billion in funds going to states and municipalities as part of the $787 billion recovery act.

Including transit and airport construction, the federal Department of Transportation is making $48.1 billion available, of which $19 billion has already been committed to more than 5,300 projects, according to the administration. Currently, more than 1,900 projects are underway.

A total of $369 million has been spent, Mica said. Only $11 million has flowed to the 10 states with the highest unemployment rates, he said.

Tuesday, June 9, 2009

Stocks try to rise

Stocks edged higher Tuesday afternoon on news that 10 of the banks that received government loans will be allowed to give the money back, adding to bets that the worst of the financial crisis is over.

The Dow Jones industrial average (INDU) was barely changed 3 hours into the session. The S&P 500 (SPX) index added 3 points, or 0.3%.

The Nasdaq composite (COMP) added 16 points, or 0.9%, with technology shares rising after chipmaker Texas Instruments (TXN, Fortune 500) boosted its quarterly sales and earnings outlook late Monday.

Stocks have been on the rise since early March, with the Dow having risen more than 32%, the S&P 39% and the Nasdaq 46%, as of Monday's close.

The gains have been sparked by a series of not-as-bad-as-expected economic reports.

After such a run, it's not surprising to see markets drifting a bit, said Steven Goldman, market strategist at Weeden & Co. Overall, the trend should remain up, he said.

"The market has had a nice run of around 40%, and so a pullback is to be expected," he said. "But overall, I think stocks will continue to find buyers on pullbacks and the trend will remain up."

He said that historically, stocks tend to gain six months ahead of the end of a recession and for the first three months after a recession is over. Using data that goes back to 1901, he found that the S&P was always higher in the three months after a recession ended.

Banks: The U.S. government said Tuesday morning that 10 banks that received TARP loans last fall can repay a total of $68 billion to the government.

The news shows that the fear of an implosion has subsided and that the risk factor in financial markets has diminished, Goldman said.

Morgan Stanley (MS, Fortune 500), American Express (AXP, Fortune 500), JPMorgan Chase (JPM, Fortune 500), Goldman Sachs (GS, Fortune 500), Bank of New York Mellon (BK, Fortune 500), BB&T (BBT, Fortune 500), Capital One (COF, Fortune 500), Northern Trust (NTRS, Fortune 500), State Street (STT, Fortune 500) and US Bancorp (USB, Fortune 500) have confirmed that they are allowed to repay loans.

But banks that were stress-tested earlier this year should undergo another round of tests, a U.S. watchdog group said Tuesday.

The Congressional Oversight Panel said that recent signs that the recession could be worsening show the tests did not go far enough. In particular, the group pointed to the May employment report, which showed a slower pace of job losses but also that the unemployment rate rose to a 26-year high of 9.4%.

Chrysler: The Supreme Court delayed the sale of Chrysler's assets to Italian automaker Fiat, in a late-Monday move that threw a wrench into the automaker's plans for a quick exit from bankruptcy.

Under terms of the agreement, Fiat can ditch the deal if it is not finished by June 15. However, the company said Tuesday that it won't walk away from Chrysler.

Economy: Wholesale inventories fell 1.4% in April, the Census Bureau reported, after falling 1.8% in the previous month. Economists surveyed by expected a decline of 1.1%, on average.
0:00 /5:11Getting tough on Treasury

Bonds: Treasury prices inched higher, lowering the yield on the benchmark 10-year note yield to 3.85% from 3.82% late Monday. Treasury bond prices and yields move in opposite directions.

The Treasury is set to auction $65 billion this week, including 3-year and 10-year notes. It will also reopen 30-year bonds.

The recent rise in the 2-year note has raised concerns that the Federal Reserve will need to lift interest rates again before the end of the year, something stock investors don't like.

And the spike in the 10-year has caused worries that it may stunt a burgeoning recovery, as the longer-term bond yields are tied to mortgage rates. Higher mortgage rates could dissuade home buyers at a time when the housing market is just starting to stabilize in some areas.

Other markets: In global trading, Asian markets ended lower and European markets were mixed in late trading.

In currency trading, the dollar fell versus the euro and the yen.

U.S. light crude oil for July delivery rose $1.05 to $68.14 a barrel on the New York Mercantile Exchange.

COMEX gold for August delivery rose $5.50 to $958 an ounce.

Copyright 2007 All Right Reserved. shine-on design by Nurudin Jauhari. and Published on Free Templates