Builders boost housing spending
Builders boost housing spending
WASHINGTON (AP) — U.S. builders spent more to construct homes in August, further evidence of a housing rebound. Still, the increase couldn’t offset cuts in public projects and commercial real estate.
Overall construction spending dipped 0.7 percent in August from July, the Commerce Department reported Monday. It was the second straight monthly decline.
The decline lowered construction spending to a seasonally adjusted annual rate of $834.4 billion. That’s nearly 12 percent above a 12-year low hit in February 2011 and roughly half of what’s considered healthy.
Spending on residential projects rose 0.9 percent in August. That pushed residential spending to a seasonally adjusted annual rate of $273.5 billion, nearly 18 percent above the level from a year ago.
Spending on single-family homes increased in August for the fifth straight month, while apartment construction spending rose for the 10th month in a row.
Paul Dales, senior U.S. economist for Capital Economics, said the increase in residential spending “provides more evidence that the housing recovery is gathering pace.”
Scouts to report about pedophiles
PORTLAND, Ore. (AP) — The Boy Scouts of America plan to begin doing what critics argue they should have done decades ago — bring suspected abusers named in the organization’s so-called perversion files to the attention of police departments and sheriff’s offices across the country.
The Scouts have, until now, argued they did all they could to prevent sex abuse within their ranks by spending a century tracking pedophiles and using those records to keep known sex offenders out of their organization. But a court-ordered release of the perversion files from 1965 to 1985, expected sometime in October, has prompted Scouts spokesman Deron Smith to say the organization will go back into the files and report any offenders who may have fallen through the cracks.
Smith said Mike Johnson, the group’s youth protection director and a former police detective, will lead the review.
That could prompt a new round of criminal prosecutions for offenders who have so far escaped justice, said Clatsop County, Ore., District Attorney Josh Marquis.
But investigations may require more than what most Scout files provide, including victims willing to cooperate.
Fraud grows in science research
WASHINGTON (AP) — A new study finds that fraud in scientific research is growing at a troubling rate, even though it remains rare overall.
A review of retractions in medical and biological peer-reviewed journals finds the percentage of studies that had to be withdrawn because of scientific misconduct has jumped several-fold since the mid-1970s.
The study says fraud or suspected fraud is by far the biggest reason for retractions, outweighing errors and plagiarism.
Fraud is detected only a handful of times for every 100,000 studies published. Study author Arturo Casadevall says a few scientific scofflaws cause big problems that can hurt people. He says one reason may be pressure to hit it big in science. The study was published Monday in the Proceedings of the National Academy of Sciences.
Manufacturing
boosts Wall Street
U.S. stocks mostly rose on Monday as growth in manufacturing provided more evidence that the economy may be picking up, or at least not getting any worse.
The gains came after news that U.S. manufacturing grew in September for the first time in four months.
The Institute for Supply Management, a trade group of purchasing managers, also said its gauge of manufacturing employment rose following a decline in August. That’s a hopeful sign that the government’s monthly employment report, due out Friday, could come in better than analysts have been expecting.
Also Monday, the government said U.S. builders spent more on home construction in August, the latest positive sign for the housing market.
Investors are looking for signs that there will be more workers with money to spend, said Jerry Webman, chief economist for OppenheimerFunds Inc. That can create a “virtuous cycle” that generates its own fuel for a recovery.
“If you’re going to manufacture more you’re going to employ more people, and if you employ more people you’re going to pay them money, and they’re going to buy some stuff,” helping the economy, Webman said.
It was still a choppy day on Wall Street. The manufacturing report came out half an hour after trading began, and sent stocks sharply higher. The Dow Jones industrial average rose as much as 161 points and the Standard & Poor’s 500 index rose as much as 1.1 percent.
But market indexes gave up most of their gains in the afternoon. The decline started after Federal Reserve Chairman Ben Bernanke said the Fed needs to keep interest rates low because the economy isn’t growing fast enough to reduce high unemployment. Bernanke made the remarks in a speech to the Economic Club of Indiana.
It wasn’t clear whether investors were reacting directly to Bernanke’s remarks or just taking profits from a morning in which stocks showed their strongest gains in two weeks. Monday was only the third day since Sept. 17 that the S&P 500 has risen.
The S&P closed 0.3 percent higher, rising 3.82 points to 1,444.49. The Dow rose 77.98 points to close at 13,515.11. The Nasdaq composite fell 2.70 points to close at 3,113.53.
Goldman Sachs jumped $3.18, or 2.8 percent, to $116.86 after Barron’s wrote that investors are too pessimistic on the investment bank’s prospects.
Other financial stocks rose, too. Bank of America rose 13 cents, or 1.5 percent, to $8.96, and JPMorgan Chase rose 49 cents, or 1.2 percent, to $40.97.
Monday was the first day of trading of the fourth quarter, and the early gains were a welcome change from the way the last quarter ended. U.S. indices fell on Friday for the fifth day out of six.
Quincy Krosby, market strategist at Prudential Financial, said investors believe that the news about the economy has stopped getting worse. Besides the U.S. manufacturing news on Monday, she noted that recent data from China suggests that manufacturing has improved there as well.
“The numbers were still weak, but they were not as bad as before,” Krosby said. “So that was a positive backdrop for the market.”
Wendy’s Co. fell 28 cents, or 6.1 percent, to $4.25 after a Janney Capital Markets analyst lowered his rating on the stock, saying he is seeing signs that the hamburger chain’s revenue won’t be as strong as expected.
Markets around Europe rose. Results last Friday of an audit of 14 Spanish banks showed the lenders need $77.6 billion in capital. That was roughly what was expected, and well within the amount Madrid can get from fellow European countries.
A slight improvement in a survey of manufacturing in the 17 countries that use the euro also helped.
However, credit rating agency Moody’s might downgrade Spain’s debt to junk status this week. That’s likely to limit enthusiasm in Europe until the Moody’s decision is known.
Germany’s DAX stock index rose 1.5 percent, France’s CAC-40 was up 2.4 percent, and Britain’s FTSE 100 rose 1.4 percent. Spain’s Ibex was up 1 percent.
The euro slightly to $1.2886 from $1.2855 late Friday.
The yield on the 10-year Treasury note was unchanged from late Friday at 1.63 percent.