Nation roundup for March 27
Wash., Colo. bars testing pot laws
TACOMA, Wash. (AP) — John Connelly leaned forward on his barstool, set his lips against a clear glass pipe and inhaled a white cloud of marijuana vapor.
A handful of people milled around him. Three young women stood behind the bar, ready to assist with the preparation of the bongs, as the strains of a blues band playing downstairs sounded faintly off the exposed brick walls.
“It feels so comfortable in here,” said Connelly, 33. “It’s just a great social aspect.”
Welcome to the Stonegate — puns welcome. It’s one of a tiny number of bars, cafes and private clubs catering to the stoner class in Washington and Colorado since voters last fall made them the first states to legalize marijuana for adults over 21.
Both states bar the public use of marijuana — which typically would include bars and restaurants — and most bars are steering clear of allowing pot use at least until officials come up with rules for the new weed industry.
But a few have been testing the boundaries of what’s allowed in hopes of drumming up business and making a statement.
“I’ve been running a bar a few years now, and people would always go outside around the corner, into the shadows, to smoke up,” said Jeff Call, the Stonegate’s owner. “People shouldn’t have to hide. There’s no rules yet, but I’m trying to do this thoughtfully and responsibly.”
Manufacturing boosts economy
WASHINGTON (AP) — Gains in housing and manufacturing propelled the U.S. economy over the winter, according to reports released Tuesday, and analysts say they point to the resilience of consumers and businesses as government spending cuts kick in.
U.S. home prices rose 8.1 percent in January, the fastest annual rate since the peak of the housing boom in the summer of 2006. And demand for longer-lasting factory goods jumped 5.7 percent in February, the biggest increase in five months.
February new-home sales and March consumer confidence looked a little shakier. But the overall picture of an improving economy drove stocks higher on Tuesday.
The Standard & Poor’s 500 gained 12 points to close at 1,563 — a point away from its record high reached in October 2007. The Dow Jones industrial average rose 111 points, its biggest gain in three weeks.
“There is nothing in this data that says the economy is falling back,” said Joel Naroff, chief economist at Naroff Economic Advisors.
A recovery in housing has helped lift the economy this year and is finally restoring some of the wealth lost during the Great Recession.
USDA expanding poverty program
COLUMBIA, S.C. (AP) — A federal program intended to reduce poverty and improve life in rural areas through better access to federal funding is expanding to six states, officials said Tuesday.
Secretary of Agriculture Tom Vilsack traveled to South Carolina to announce the expansion of the so-called StrikeForce initiative, which already operates in 10 states. The program will now also be available in the Carolinas, the Dakotas, Alabama and Virginia.
The goal of StrikeForce is to help farmers, food producers and other businesses get access to money for projects such as new wells, greenhouses, community gardens, kitchen space, and summer meals for low-income school children. The money is often hard to access due to complicated grant applications, requirements for matching funds, and limited staffing.
The USDA uses U.S. Census data to find areas with poverty rates higher than 20 percent. The agency then works with local officials and community-based organizations to publicize the program and reach out to potential applicants.
S&P nears record as stocks surge
NEW YORK (AP) — More good news on the economy Tuesday drove the Standard & Poor’s 500 index to within two points of its record closing high.
The S&P rose 12.08 points, or 0.8 percent, to 1,563.77. Its record close of 1,565.16 was on Oct. 9, 2007, before the Great Recession and ensuing financial crisis battered markets.
Rising home prices and orders for manufactured goods drove all other major indexes higher as well. The Dow Jones industrial average rose 111.90 points, or 0.8 percent, to another record high — 14,559.65.
“Unless something major comes along to derail this rally, it just seems like the market is going to keep climbing higher,” said Marty LeClerc, the managing partner of Barrack Yard Advisors, an investment firm in Bryn Mawr, Pa.
Factory orders surged in February, helped by stronger demand for commercial aircraft.
Overall orders for durable goods, a catchall term for products ranging from refrigerators to jumbo jets, jumped 5.7 percent from the previous month, the Commerce Department said Tuesday. It was the biggest increase in five months.
All 10 industry groups in the S&P 500 rose, led by health care and energy companies. But smaller companies, which have been beating the market all year, didn’t do as well Tuesday. The Nasdaq composite rose 17.18 points, or 0.5 percent, to 3,252.48, and the Russell 2000 rose 3.97 points, or 0.4 percent, to 949.82.
Big-company stocks and small-company stocks often part ways, said Jack Ablin, chief investment officer at BMO Private Bank in Chicago. Recently, Europe has been the reason. Big corporations generally do more business in Europe, and their stocks had wavered over the past week as traders watched negotiations to rescue Cyprus.
After a deal was announced Sunday, there was still uncertainty on Wall Street Monday. But by Tuesday, investors seemed back to focusing on the U.S. economy, and stocks of big companies rose the most.
By contrast, smaller companies are less exposed to the rest of the world. “That’s part of the reason small-caps have outpaced the market this year,” Ablin said. The Russell 2000 is up 11.8 percent this year, compared with 9.7 percent for the S&P 500.
European markets rose modestly as investors gained confidence in the new bailout plan arranged for Cyprus and its banking system. Cyprus decided to keep its banks closed for another two days in an attempt to ward off panicked withdrawals.
Netflix surged 5 percent, leading the S&P 500, after an analyst at Pacific Crest Securities said the stock will likely climb as the company continues to add subscribers. Netflix’s database of its members’ viewing habits should give it an edge in creating shows and draw more people to sign up for its video-streaming service, the analyst said. Netflix rose $9.82 to $190.61.
Housing prices rose in January at the fastest pace since the summer of 2006, before the housing bubble popped. The Standard & Poor’s/Case-Shiller index of prices in 20 cities was up 8.1 percent over January 2012. That compared with a 6.8 percent year-over-year increase in the index in December. Prices rose in all 20 cities, led by 23.2 percent in Phoenix and 17.5 percent in San Francisco.
The economic reports out Tuesday added to evidence that the economy is slowly improving, and that’s what many investors want right now, LeClerc said. Slow growth and continued low inflation mean it could be a long time before the Federal Reserve starts unraveling its bond-buying program and raising interest rates.
In the market for U.S. government bonds, the yield on the 10-year Treasury note slipped to 1.91 percent from 1.92 percent late Monday.
Among other stocks making big moves Tuesday:
— Drive-in restaurant chain Sonic jumped 10 percent after reporting that its quarterly earnings more than doubled. Revenue was flat, but Sonic said it expects improvement. Its stock rose $1.14 to $12.87.
— Supervalu rose after announcing plans to lay off more than 1,000 people, roughly 3 percent of its workforce. The supermarket operator said its recent sale of five grocery chains means it needs fewer workers. Supervalu’s stock gained 7 cents, or 1.4 percent, to $5.12.
— Children’s Place Retail Stores sank 3 percent after the company reported weaker quarterly earnings. The retailer also said bad weather would crimp revenue. The company’s stock lost $1.48 to $44.51.
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