Nation roundup for May 29
Colorado marijuana regulations signed into law
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DENVER (AP) — A set of laws to govern how recreational marijuana should be grown, sold and taxed was signed into law Tuesday in Colorado, where Democratic Gov. John Hickenlooper called the measures the state’s best attempt to navigate the uncharted territory of legalized recreational pot.
The laws cover how the drug should be raised and packaged, with purchasing limits for out-of-state visitors and a new marijuana driving limit as an analogy to blood alcohol levels. Hickenlooper didn’t support marijuana legalization last year, but he praised the regulatory package as a good first crack at safely overseeing the drug.
“Recreational marijuana is really a completely new entity,” Hickenlooper said, calling the pot rules “commonsense” oversight, such as required potency labeling and a requirement that marijuana is to be sold in child-proof opaque packing with labels clearly stating the drug may not be safe.
Colorado voters approved recreational marijuana as a constitutional amendment last year. The state allows adults over 21 to possess up to an ounce of the drug. Adults can grow up to six plants, or buy pot in retail stores, which are slated to open in January.
The governor said Tuesday he believes the federal government will soon respond to the fact that Colorado and Washington state are in violation of federal drug law. But Hickenlooper didn’t have a specific idea of when.
“We think that it will be relatively soon. We are optimistic that they are going to be a little more specific in their approach on this issue,” Hickenlooper said. Pressed for details, the governor jokingly referred to unrelated scandals surrounding the U.S. Department of Justice.
“They’ve been kind of busy,” Hickenlooper said.
Colorado’s new marijuana laws include buying limits for out-of-state visitors. Visitors over 21 would be limited to one-fourth of an ounce in a single retail transaction, though they could legally possess the full ounce.
Colorado laws attempt to curb public use of marijuana by banning its sale in places that sell food and drink that aren’t infused with the drug, an attempt to prevent Amsterdam-style pot cafes. Food laced with the drug also would have to be to-go orders.
Colorado’s laws also include a first-in-the-nation requirement that marijuana magazines such as High Times be kept behind the counter in stores that allow people under 21. That provision has prompted promises by attorneys representing at least two publications to challenge the restriction, which would treat pot magazines similar to pornography.
Besides the magazine restriction, Colorado’s laws differ in several more ways from proposed marijuana regulations pending in Washington state. Colorado makes no attempt to ban concentrated marijuana, or hashish, unlike Washington. Colorado also has different possession limits on edible marijuana. Colorado also is planning a brief grandfather period during which only current medical marijuana business owners could sell recreational pot.
Both states are poised to require all pot-related businesses to have security systems, 24-hour video surveillance and insurance. One of the Colorado laws signed Tuesday gives state pot businesses a chance to claim business deductions on their taxes, something currently prohibited because the industry is illegal under federal law.
Colorado’s laws also propose a series of new taxes on the drug. If voters agree this fall, recreational pot would face a 15 percent excise tax, with the proceeds marked for school construction. There would also be a new recreational pot sales tax of 10 percent, in addition to regular statewide and local sales taxes. The special sales tax would be spent on marijuana regulation and new educational efforts to keep the drug away from children.
“Public safety and the safety of our children were at the forefront of our minds,” said Sen. Randy Baumgardner, R-Hot Sulphur Springs, the sponsor of some of the pot bills.
Lawmakers and a few dozen marijuana legalization activists on hand to see the pot bills signed into law agreed that marijuana laws will see many changes in coming years if the federal government doesn’t intervene.
“We are going to be talking about marijuana in the state of Colorado for some time,” predicted Rep. Mark Waller, R-Colorado Springs, a sponsor of the stoned-driving law.
Mason Tvert, spokesman for the national legalization advocacy group the Marijuana Policy Project, predicted a lot of states will watch to see how recreational pot regulation works in Colorado and Washington.
“We can regulate the sale of alcohol in a responsible manner, and there’s no reason we can’t regulate the sale of something arguably less harmful — marijuana,” Tvert said.
Derailment, blast near Baltimore rattles homes
ROSEDALE, Md. (AP) — A CSX freight train crashed into a trash truck and derailed Tuesday in a Baltimore suburb and the explosion that followed rattled homes at least a half-mile away, sending a plume of smoke into the air that could be seen for miles, officials and witnesses said.
The train went off the tracks at about 2 p.m. in Rosedale, a Baltimore eastern suburb. Hazmat teams were on the scene, but Baltimore County Fire Chief John J. Hohman said at a news conference that no toxic inhalants were burning and officials did not order an evacuation. The truck driver was taken to the hospital in serious condition and two CSX workers aboard weren’t hurt, fire officials said.
Dale Walston said he lives about a half-mile away from the blast site and that he thought he could smell chemicals.
“It shook my house pretty violently and knocked things off the shelves,” he said in an email to The Associated Press.
The thick plume of black smoke drifted across the Baltimore city line and covered the eastern part of the city. The face of one warehouse near the train tracks blew off. CSX spokesman Gary Sease said in an email that sodium chlorate is on one of the trains, which the Department of Transportation classifies as a hazardous material.
However, Hohman said the chemical is not in one of the cars that was still burning into the evening. Earlier, fire officials had said building actually collapsed, but Hohman modified that later to say two warehouses were heavily damaged by the explosion and other buildings were damaged, but none collapsed. Overhead photos showed the front of one warehouse blown out.
An Amtrak spokeswoman said its Northeast Corridor service is not being affected.
More than one video posted to Facebook shows the fire, then minutes later, an explosion rattles the area. Hohman said firefighters had considered letting the the blazes burn out but later decided to hose them down. They had advised anyone within 20 blocks who can see the smoke to leave but said later people could stay.
Overhead photos showed at least a dozen train cars off the tracks including at least one tanker car. Sease said four of the cars believed derailed carried terephthalic acid, which is used in the production of plastics, among other things. He said it is not listed as a hazardous material.
One of the cars still burning was carrying terephthalic acid, and another was carrying fluoroacetic acid, Hohman said.
A worker at a nearby Dunkin’ Donuts, Tawan Rai, reached by The Associated Press by phone, said he saw a fire and flames by the railroad tracks at first, then felt a thundering blast that sent smoke pouring into the sky.
“The whole building shook and there was just dust everywhere,” said Rai, adding no windows broke but he was surprised by the intensity of the blast.
John Kane, treasurer of Atlantic Tire on nearby Pulaski Highway, said the explosion blew out two large showcase windows and light fixtures in his shop. The highway, also called Route 40, is shut down to the Baltimore city line as well as some side streets in area.
The National Transportation Safety Board said it was sending a team to investigate.
The derailment is the third serious one this month. In Bridgeport, Conn., on May 17, more than 70 people were injured when a commuter train derailed. The eastbound train from New York City went off the tracks during evening rush hour, came to a stop and was struck about 20 seconds later by a westbound train.
In Rockview, Mo., on Saturday, a cargo train crash injured seven people and destroyed a highway overpass that could take a year to repair.
Some businesses closed immediately, fearful of the unidentified contents of a heavy plume of black smoke roiling into the atmosphere. At seafood supplier S. DiPaula & Sons Seafood Inc., a good-natured voice left a message on the answering machine afterward that the business was closing early for the day.
“Hello, this is S. DiPaula & Sons Seafood. Today is Tuesday and it’s around 2:30 in the afternoon. We have decided to close due to a large explosion relatively close to our building and a heavy black plume of smoke that we can’t tell what’s in it.”
In each of the past five years, CSX has reported more than 100 deaths in accidents and incidents involving the railroad.
The Federal Railroad Administration says CSX reported 104 deaths in 2012, down from 122 in 2011 and 117 in 2010. The railroad reported 102 deaths in 2009 and 122 in 2008.
The number of derailments on CSX’s network in the eastern United States has been declining steadily since 2008 when it reported 229 derailments. Last year, CSX reported 143 derailments. CSX, based in Jacksonville, Fla., operates over 21,000 miles of track in 23 eastern states and two Canadian provinces.
CSX shares traded higher Tuesday before the derailment was reported. The shares closed down 20 cents at $25.30.
Stocks jump after confidence, house prices surge
NEW YORK (AP) — A rally that brought the stock market to record highs this year came back to life after consumer confidence reached a five-year high and U.S. home prices rose the most in seven years. As stock prices rose investors sold bonds, sending interest rates higher.
The Dow Jones industrial average rose 106 points to close at another record Tuesday, bouncing back from a loss the week before. The Standard & Poor’s 500 index also gained. The S&P is on track for its seventh straight monthly increase, the longest winning streak since 2009.
“They say the stock market tends to lead the economy. Now we’re starting to see the improvement on the economic front, so there’s some justification for this rally,” said Ryan Detrick, a senior technical strategist at Schaeffer’s investment research.
The yield on the 10-year Treasury note jumped to 2.17 percent, its highest level since April 2012, as investors moved money out of safe assets and into riskier ones like stocks. That’s a big move from Friday’s level of 2.01 percent. Markets were closed Monday for Memorial Day.
The stock market is coming off a rare loss last week, when both the Dow and the S&P 500 index had their first losing weeks in a month. Investors worried that the Federal Reserve might slow its extraordinary economic stimulus measures, which have also supported the stock market’s advance.
The gains were broad. Eight of the 10 industry groups in the S&P 500 index rose, led by financial stocks. The only groups that fell were utilities and telecommunication companies, which investors tend to buy when they’re seeking stable, safe stocks that pay high dividends. All but six of the 30 stocks in the Dow rose.
Some of the most eye-catching price moves were in the bond market.
Bond yields are rising in anticipation that the Fed may ease back on its $85 billion monthly bond purchases. Tim Courtney, chief investment officer at Exencial Wealth Advisors, is among those who see a bleak outlook for the bond market. While inflation is currently low, it will likely start to rise within one or two years if the economy continues to improve, Courtney said.
Higher inflation prompts investors to demand higher yields, pushing down bond prices and inflicting losses on bond investors.
“The only way that bonds can make money from here is if we go a prolonged period of time with very, very low inflation and rates just don’t move up a whole lot at all,” said Courtney. “Under any other scenario they lose.”
Treasury yields are used as benchmarks to set interest rates for consumer loans and mortgages. While they have increased sharply this month, they are still relatively close to the record low of 1.39 percent reached last July.
The Standard & Poor’s/Case-Shiller survey, which was released before stock trading opened, found that U.S. home prices rose 10.9 percent in March, the most since April 2006. A growing number of buyers are bidding on a tight supply of homes. Beazer Homes jumped 44 cents, or 2.1 percent, to $21.79.
Stocks extended their gains in the morning after the Conference Board reported at 10 a.m. that its measure of consumer confidence rose in May to its highest level since February 2008.
The Dow was up as much as 218 in the early going, then gave up some of its gain in the afternoon.
Some analysts said investors were likely booking gains as the end of the month approached on Friday. The Dow is up 3.8 percent so far in May. The S&P 500 is 3.9 percent higher.
“It’s the end of the month,” said Quincy Krosby, a market strategist at Prudential Financial. “If you’ve been long and you’d done very well you want to lock in those gains.”
The Dow closed 106.29 points, or 0.7 percent, higher at 15,409.39. The index has risen for 20 straight Tuesdays. The longest streak of consecutive gains for any day of the week was sent in 1968, when there were 24 gains on Wednesdays, according to Schaeffer’s Investment Research.
The S&P 500 index rose 10.46 points, or 0.6 percent, to 1,660.06. The Nasdaq composite index climbed 29.74 points, or 0.9 percent, to 3,488.89.
The Dow has advanced 17.6 percent this year and the S&P 500 index is 16.4 percent higher as investors have piled into stocks.
Unlike the first three months of the year, when the biggest gains were in large companies in steady industries that pay big dividends, investors have been bidding up the stocks of companies that will gain more if the economy continues to strengthen. That shift out of lower-risk stocks, like utilities, and into more “cyclical” stocks, like banks and industrial companies, means investors are becoming more aggressive in seeking returns and more comfortable taking on risk.
Another bullish signal for the market is the strong growth in small-company stocks. Those stocks have a greater potential for appreciation but also tend to carry greater risk than large, diversified companies. The preference for small stocks was on display again Tuesday as the Russell 2000 index of small-company stocks rose 1.3 percent, more than other market indexes, to 997.35 points, a gain of 13.08 points. Its year-to-date increase of 17.4 percent is 1 percentage point greater than that of the S&P 500.
Among other stocks making big moves:
—Tiffany rose $3.01, or 3.9 percent, to $79.22 after the high-end jewelry seller said its first quarter net income rose 3 percent as sales improved across all regions. The results beat the forecasts of Wall Street analysts.
—Tesla Motors jumped $13.25, or 13.7 percent, to $110.33. Last week the electric car maker raised almost $1 billion from a bond and stock offering and paid off a government loan nine years early. The company is also set to announce this week that it’s expanding a network of car-charging stations.
—Railway operator CSX fell 20 cents, or 0.8 percent, to $25.30 after one of its freight trains derailed in a Baltimore suburb.
—Electricity company FirstEnergy dropped 6.5 percent, or $2.76, to $39.86 after Credit Suisse stripped the company of its “outperform” rating, saying that a glut of energy would push down prices the company is able to charge.
In commodities trading, the price of oil rose 86 cents, or 0.9 percent, to $95.01. Gold fell $7.70, or 0.6 percent, to $1,378.90 an ounce. The dollar rose against the euro and the Japanese yen.
Healthy quintuplets born in Salt Lake hospital
SALT LAKE CITY (AP) — A team about 40 medical personnel led by eight doctors helped ensure a Utah couple’s newborn quintuplets were born healthy.
Guillermina and Fernando Garcia welcomed their five babies — three girls and two boys — over the weekend at the University of Utah hospital in Salt Lake City. The mother carried the babies until 31 ½ weeks — about three weeks longer than most quintuplet mothers.
Dr. Elizabeth O’Brien says that helped their lungs develop. All five were born by cesarean section and weigh between 2-3 pounds each.
Only a handful of quintuplet sets are born each year in the United States. The Centers for Disease Control and Prevention counted 37 babies who were born as part of a set of five or more in 2010.
