Business torrents

U.S. stocks are closing the day mixed, a mundane ending to an electrifying week.

The Dow Jones industrial average and the Nasdaq composite index both ended the day down. The Dow fell 20 points to 13,233. The Nasdaq fell one point to 3,055. The broader Standard & Poor’s 500 rose almost two points to 1,404.

Investors were weighing competing reports about the health of the U.S. economy. A key measure of consumer sentiment came in lower than expected, and high gas prices continued to weight down hopes about the recovery. But prices for other goods, including food, showed signs of stabilizing.

Bank of America climbed on news that its delinquent loans declined. Buffalo Wild Wings fell on concerns about high costs of chicken wings.

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European car sales dropped the most in more than a year, led by Renault SA (RNO) and PSA Peugeot Citroen (UG) as consumers shied away from purchases amid a weak economy.

This year’s budget deficit will swell by an additional $92 billion from estimates made in January after Congress later extended a payroll tax cut without reducing spending elsewhere, the nonpartisan Congressional Budget Office said on Tuesday.

The CBO, in an update to its budget estimates, said it now expects a $1.171 trillion deficit for the 2012 fiscal year, based on current law. Previously, it forecast a $1.079 trillion deficit for the fiscal year, which ends September 30.

The increase is in line with the $100 billion price tag for the tax cut, and leaves both Democrats and Republicans with a deeper near-term fiscal hole as they consider how to deal with the expiration at the end of December of tax cuts begun under former President George W. Bush.

“The fundamental story about the federal budget has not changed: Although the deficit is starting to shrink, it remains very large by historical standards,” the CBO said in the report.

“How much and how quickly it declines will depend in part on how well the economy performs over the next few years faxless payday advance. Probably more critical, though, will be the fiscal policy choices made by lawmakers as they face the substantial changes to tax and spending policies that are slated to take effect within the next year under current law.”

The baseline projections - which assume that the tax cuts enacted by Bush will expire on December 31 - show a reduction of $186 billion in the cumulative deficits for the subsequent 10 years compared with the January estimate.

This is largely attributed to revised revenue estimates of the 2010 healthcare law signed by President Barack Obama.

Under the CBO’s alternative fiscal scenario, which assumes that the Bush-era tax cuts and some other policies are left in place, the 10-year cumulative budget deficits would shrink by $250 billion from the January estimate, to a cumulative $7.845 trillion.

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Asian stock markets were mostly lower Monday after China’s trade figures underlined a slowdown in the world’s No. 2 economy.

Hong Kong’s Hang Seng fell 0.4 percent to 21,001.87 and South Korea’s Kospi lost 0.7 percent to 2,004.24. Australia’s S&P/ASX 200 fell 0.3 percent to 4,199.80. Benchmarks in Shanghai, Taipei and Manila were also lower but Japan’s Nikkei 225 index rose 0.3 percent to 9,960.79.

On Saturday, China reported its biggest monthly trade deficit in at least a decade in February as imports rebounded after a Lunar New Year holiday slowdown in January, but the combined figures for both months showed growth in imports and exports decelerating markedly.

January-February export growth slowed to 6.9 percent over the same two-month period last year, barely half of December’s 13.4 percent rate. Imports for the two months rose 7.7 percent, down from December’s 11.8 percent.

The numbers suggest China’s manufacturers are being hit by weaker overseas demand amid Europe’s debt crisis. Weaker growth in Chinese imports, meanwhile, could have a ripple effect throughout Asia.

Investment sentiment was also tempered by news that Greece’s debt reduction deal with private creditors could cause losses for banks after the International Swaps and Derivatives Association, the private organization that rules on such cases, ruled that a “restructuring credit event” occurred.

That means Greece’s debt relief will trigger payouts of so-called credit default swaps, a type of insurance on bonds. But the ISDA said overall payouts will be significantly below the $3.2 billion in net outstanding credit default swap contracts linked to Greece. The exact level of payouts will be determined on March 19.

“Officials in Europe are set to finalise Greece’s second bailout today but market sentiment is unlikely to be boosted as various concerns creep into the market,” analysts at Credit Agricole CIB in Hong Kong said in a report.

A multibillion euro bailout, which Greece needs to avoid imminent bankruptcy, was contingent upon the successful completion of the debt restructuring deal.

On Friday, Wall Street closed modestly higher after the government’s monthly report on employment bolstered hopes that the economic recovery is on track.

The Dow on finished up 0.1 percent at 12,922.02. The Standard & Poor’s 500 gained 0.4 percent to 1,370.87. The Nasdaq composite average gained 0.6 percent to 2,988.34.

Benchmark oil for April delivery was down 60 cents to $106.80 in electronic trading on the New York Mercantile Exchange. The contract rose 82 cents to settle at $107.40 per barrel in New York on Thursday.

In currencies, the euro fell to $1.3095 from $1.3116 late Friday in New York. The dollar fell to 82.14 yen from 82.52 yen.

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Treasury Secretary Timothy Geithner said on Thursday that he saw no risk to the dollar from China’s efforts to encourage other emerging market economies to use the yuan more in international trade.

“What you’re seeing China do is gradually dismantle what were a comprehensive set of very, very tight controls on the ability of countries to use their (the Chinese) currency,” Geithner told an event at the Dallas Regional Chamber.

“Over time that will mean - and this is a good thing for the United States - more use of that currency and it will mean the currency will have to reflect market forces … So, I see no risk to the dollar in those reforms,” he said.

China is planning to extend renminbi-denominated loans to its fellow BRICS countries - a grouping that includes China, Russia, South Africa, Brazil and India - in an attempt to boost trade between the leading emerging market nations and promote the use of the yuan, according to the Financial Times.

Geithner said he was skeptical the yuan, or renminbi, would soon become a world currency.

“I don’t think so. I don’t know, maybe in some long time after we’re all gone, it would be possible,” Geithner said after he toured a railcar facility here cash advance companies.

However, China’s transition from an economy fueled by exports to one driven more by domestic demand is partly why the value of China’s currency “is moving up against the dollar,” he added.

In Dallas to meet with regional business leaders and promote the Obama administration’s economic policies, Geithner also said the United States’ government could afford to extend tax breaks for middle-class Americans beyond the end of the year.

Individual tax cuts enacted under the Bush administration expire December 31 and the Obama administration wants to allow tax breaks for the wealthiest Americans expire.

On Thursday, Geithner repeated that the tax burden on the top 2 percent of Americans had to go up again “as part of a balanced plan to bring down our fiscal deficits down to a sustainable level.”

“There is no real alternative to doing that,” the U.S. Treasury secretary added. “Those should be allowed to expire, but the middle-class tax cuts we think we can afford to extend.”

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More people applied for U.S. unemployment benefits last week. But the overall level stayed low enough to suggest the job market is strengthening.

The Labor Department says weekly applications increased by 8,000 to a seasonally adjusted 362,000, the highest level since January.

The four-week average, which smooths week-to-week fluctuations, edged up to 355,000, its first increase in eight weeks. Still, that’s only slightly above the previous week’s figure of 354,750, the lowest in nearly four years.

Applications have fallen 14 percent since October. When applications fall below 375,000, that generally signals hiring is strong enough to reduce the unemployment rate. The steady decline has coincided with three months of big hiring gains.

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Societe Generale SA (GLE), France

Worries over slowing economic growth in China and concern that a Greek bond exchange deal may not be going according to plan are pushing U.S. stocks lower Monday morning.

The Dow Jones industrial average fell 82 points to 12,893 in the first hour of trading, a loss of 0.6 percent.

Investors are particularly worried of the effect of a slowdown in China’s economy on global growth. In recent years, China’s growth helped shore up the global economy in the wake of a banking crisis, a deep U.S. recession and debt problems in Europe.

On Monday, China’s premier Wen Jiabao lowered China’s target growth rate to 7.5 percent from 8 percent, where it has stood for years.

The news hurt stocks of large U.S. materials companies that derive significant earnings from China like heavy equipment maker Caterpillar Inc., which was off over 1 percent, and aluminum maker Alcoa Inc., off 2 percent.

In a sign that not all’s well in the U.S. economy either, the Commerce Department said factory orders fell 1 percent in January. Businesses sharply reduced orders for machinery and other core capital goods in January after a tax credit expired, pushing U.S. factory orders down by the largest amount in 15 months.

In recent months markets have been lifted by signs of improvement in U.S. economic reports. U.S. stock indexes have been trading at their highest levels since before the collapse of investment bank Lehman Brothers in 2008.

However, traders are watching closely for any signs that the U.S. economy might be losing steam.

Further weighing on the market were worries that there aren’t enough private investors participating in Greece’s bond swap, which could worsen the European debt crisis. Results are due late Thursday.

Greece and its bondholders have agreed on a debt swap that would reduce the face value of their holdings by 53.5 percent. Bondholders including banks, insurance companies, and investment funds are being offered new bonds that are worth less, have a longer time to be paid off and bear less interest. The debt reduction is one condition of Greece getting a second bailout package from other European countries and the International Monetary Fund.

Banks and energy stocks also fell. Wells Fargo fell 1.6 percent, and Morgan Stanley was off 2.8 percent. Alpha Natural Resources was down 3.5 percent.

In other trading, the S&P 500 index fell 8 points to 1,361. The Nasdaq composite index fell 17 points to 2,958.

Among other stocks making big moves:

_ American International Group was up 3.5 percent as it prepares to reduce the amount it owes the U.S. government for its federal bailout during the financial crisis. It will sell part of its stake in insurer AIA Group to raise about $6 billion.

_ Computer Sciences Corp. was up over 2 percent after it signed a letter with the U.K. Department of Health to deliver healthcare solutions and services in England.

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Children who may have taken breast cancer treatment medication mistakenly distributed by a New Jersey pharmacy instead of prescribed fluoride pills likely won’t suffer any health problems, a pharmaceutical expert said Saturday.

CVS Caremark officials say only a few children ingested pills for breast cancer treatment that they mistakenly received, and company investigators are still working to determine how and why the errors occurred at the pharmacy in Chatham. The pharmacy has acknowledged improperly dispensing Tamoxifen instead of chewable fluoride tablets to children in as many as 50 families between Dec. 1 and Feb. 20.

“Fortunately, it’s very unlikely that this specific drug would cause any serious or adverse effects when used for only a short periods of time,” said Daniel Hussar, a professor with the Philadelphia College of Pharmacy at the University of the Sciences.

CVS said it had spoken with or left messages for every family whose child was dispensed a 0.5 mg fluoride prescription from its Chatham location within the past 60 days. The company issued a statement Friday that said it was “deeply sorry for the mistake that occurred,” although it did not explain how the mistake happened.

Mike DeAngelis, CVS Caremark’s director of public relations, has said that “most of the families we have spoken to did not indicate that their children received any incorrect pills.” No injuries related to the mix-up have been reported.

Officials say the two pills are similar looking but have distinctively different tastes. Fluoride helps prevent tooth decay and is usually prescribed by dentists for children, while Tamoxifen is used to treat breast cancer and blocks the female hormone estrogen.

Hussar noted that while the fluoride pills may have some flavoring because they are meant to be chewed, Tamoxifen is a pill that’s intended to be swallowed, so no effort is made to make it taste good. That means a child who mistakenly took a Tamoxifen pill would likely “want to spit it out or tell his parents it tastes bad,” said Hussar, who has written and spoken extensively in the areas of new drugs, drug interactions, patient compliance, and issues facing the profession of pharmacy. He’s also served as a member of the Board of Trustees for the American Pharmacists Association and is a Past President of the Drug Information Association and the Pennsylvania Pharmacists Association.

Hussar also noted that while such prescription mix-ups are “rare occurrences,” they can be important learning tools to help ensure that similar problems don’t occur in the future.

The state attorney general’s office has begun a preliminary investigation into the matter. Its consumer affairs division on Friday ordered the Chatham pharmacy to explain the mistake and provide the names of all its employees along with all emails, telephone calls, complaints, and other information related to the mix-up.

The pharmacy must provide the information by Wednesday and company representatives must appear before division officials for questioning under oath on Friday, an order signed by division Director Thomas R. Calcagni said. He said in the order that the division wants to look into whether any laws were violated.

DeAngelis said the company is “actively investigating this matter to determine how the mistake occurred in order to take corrective actions to prevent this from happening again.”

CVS Caremark, based in Woonsocket, R.I., runs the second-largest chain of drugstores in the U.S., after Walgreen.

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The weak response to India’s sale of a 5 percent stake in state-run Oil and Natural Gas Corp. gives New Delhi little relief as it scrambles to balance the national budget.

ONGC shares slipped Friday, a day after the sale, and analysts said the lukewarm response will make it more difficult for the government to sell off stakes in other state run companies, a tactic New Delhi had hoped would ease India’s troublesome fiscal deficit.

“Had this issue got a healthy response, the government could have lined up three or four more issues,” said Jagannadham Thunuguntla, a strategist at SMC Global Securities. “It is high time the government gets their divestment strategy more organized.”

New Delhi aimed to raise $2.5 billion from selling a 5 percent stake in ONGC Thursday.

At the close of trading Thursday, stock exchanges were reporting that 292.2 million shares _ about two-thirds of the offer _ had been sold.

India’s two main stock exchanges and ONGC then issued a late-night press release, saying that some orders had been wrongly rejected and that final demand was actually for 420.4 million shares against the offer of 427.7 million shares.

Thunuguntla said a surge of interest in the last ten minutes of trading contributed to the confusion. India media reported that state-owned Life Insurance Corporation of India may have intervened at the last minute to salvage the sale.

Thunuguntla said the government had tried to sell ONGC shares at too high a price. The 290 rupee ($5.88) floor price was a 2.3 percent premium to the previous closing price.

Lack of clarity about what share of India’s fuel subsidies are shouldered by ONGC also clouded investor appetite, he said.

“Everyone expected there to be a discount to the market price,” he said. “The government is not in a position to give clarity about subsidy sharing. It would have deserved a bigger discount, of 7 to 8 percent of market price.”

Better priced offers have drawn investor interest. Last week, Citigroup successfully sold its stake in India’s Housing Development Finance Corp. for $2 billion, and the $135 million initial public offering of India’s Multi Commodities Exchange was 54 times oversubscribed.

New Delhi is scrambling to ease its fiscal deficit before announcing a new budget on March 16. Faced with disappointing tax collections and a burgeoning subsidy bill, the government had hoped to raise funds by selling stakes in state-run companies, which still dominate large areas of India’s economy.

India has raised about 140 billion rupees ($2.8 billion) from such asset sales this year, including Thursday’s auction, against an initial target of 400 billion rupees ($8 billion), Thunuguntla said.

Economists are wary of India’s growing fiscal deficit, which analysts expect to miss the target of 4.6 percent of gross domestic product by a percentage point or more. Some have chided New Delhi for turning to one-off measures like asset sales to plug the gap rather than undertaking more difficult, fundamental reforms to boost revenues and trim spending.

“Sustainable fiscal consolidation should not be based on non-tax revenue,” Standard Chartered economist Samiran Chakraborty wrote in a recent research note.

ONGC shares were down 2 percent, to 282 rupees, in midday trade Friday on the Bombay Stock Exchange.

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