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miercuri, 19 mai 2010
Iran rejects UN sanctions resolution draft
TEHRAN, Iran – Iran on Wednesday dismissed as "illegitimate" a draft U.N. Security Council resolution seeking to impose harsher sanctions against Tehran for its refusal to halt uranium enrichment.
Mojtaba Hashemi Samareh, a top adviser to Iranian President Mahmoud Ahmadinejad, said the draft proposed by the U.S. was a reactionary response to a deal in which Iran agreed to ship much of its low-enriched uranium to Turkey.
The surprise deal, brokered by Turkey and Brazil Monday, didn't ease concerns in the West that Iran's nuclear program has military dimensions primarily because Tehran has said it will continue to enrich uranium to higher levels.
Uranium enriched to a low level is used for nuclear fuel, but if processed to much higher levels it can be fashioned into a weapon.
"The draft resolution being discussed at Security Council has no legitimacy at all," the official IRNA news agency quoted Samareh as saying Wednesday after a Cabinet meeting.
The deal would deprive Iran — at least temporarily — of some of the stocks of enriched uranium that it would need to process further to create a weapon, if that were its intention. Iran insists its nuclear program is peaceful.
But — because seven months have elapsed since the agreement was originally floated and Iran continues to enrich — it would still have enough material to make such a weapon even if Tehran shipped out the original amount stipulated by the U.N.
The material would be returned to Iran in the form of fuel rods, which cannot be processed further. Iran needs the fuel rods to power an aging medical research reactor in Tehran that produces isotopes for cancer treatment.
But to the U.S. and its allies the deal is to little now too late.
The United States and its Western allies won crucial support from Russia and China for new sanctions against Iran Tuesday but face tough opposition from non-permanent U.N. Security Council members Turkey, Brazil and Lebanon.
Vice President Ali Akbar Salehi, who is also the head of Atomic Energy Organization of Iran, said world powers would discredit themselves if they passed new sanctions.
"By issuing resolution, they would further discredit themselves in the public opinion," he said on state TV. "Discussions of imposing sanctions has faded away and this is a last effort by the Western countries."
Mojtaba Hashemi Samareh, a top adviser to Iranian President Mahmoud Ahmadinejad, said the draft proposed by the U.S. was a reactionary response to a deal in which Iran agreed to ship much of its low-enriched uranium to Turkey.
The surprise deal, brokered by Turkey and Brazil Monday, didn't ease concerns in the West that Iran's nuclear program has military dimensions primarily because Tehran has said it will continue to enrich uranium to higher levels.
Uranium enriched to a low level is used for nuclear fuel, but if processed to much higher levels it can be fashioned into a weapon.
"The draft resolution being discussed at Security Council has no legitimacy at all," the official IRNA news agency quoted Samareh as saying Wednesday after a Cabinet meeting.
The deal would deprive Iran — at least temporarily — of some of the stocks of enriched uranium that it would need to process further to create a weapon, if that were its intention. Iran insists its nuclear program is peaceful.
But — because seven months have elapsed since the agreement was originally floated and Iran continues to enrich — it would still have enough material to make such a weapon even if Tehran shipped out the original amount stipulated by the U.N.
The material would be returned to Iran in the form of fuel rods, which cannot be processed further. Iran needs the fuel rods to power an aging medical research reactor in Tehran that produces isotopes for cancer treatment.
But to the U.S. and its allies the deal is to little now too late.
The United States and its Western allies won crucial support from Russia and China for new sanctions against Iran Tuesday but face tough opposition from non-permanent U.N. Security Council members Turkey, Brazil and Lebanon.
Vice President Ali Akbar Salehi, who is also the head of Atomic Energy Organization of Iran, said world powers would discredit themselves if they passed new sanctions.
"By issuing resolution, they would further discredit themselves in the public opinion," he said on state TV. "Discussions of imposing sanctions has faded away and this is a last effort by the Western countries."
Muslim anger prompts Pakistan to block Facebook
LAHORE, Pakistan – Pakistan's government ordered Internet service providers to block Facebook on Wednesday amid anger over a page that encourages users to post images of Islam's Prophet Muhammad.
The page on the social networking site has generated criticism in Pakistan and elsewhere because Islam prohibits any images of the prophet. The government took action after a group of Islamic lawyers won a court order Wednesday requiring officials to block Facebook until May 31.
By Wednesday evening, access to the site was sporadic, apparently because Internet providers were implementing the order.
The Facebook page at the center of the dispute — "Everybody Draw Mohammed Day!" — encourages users to post images of the prophet on May 20 to protest threats made by a radical Muslim group against the creators of "South Park" for depicting Muhammad in a bear suit during an episode earlier this year.
In the southern city of Karachi, about 2,000 female students rallied demanding that Facebook be banned for tolerating the page. Several dozen male students held a rally nearby, with some holding signs urging Islamic holy war against those who blaspheme the prophet.
"We are not trying to slander the average Muslim," said the information section of the Facebook page, which was still accessible Wednesday morning. "We simply want to show the extremists that threaten to harm people because of their Mohammad depictions that we're not afraid of them. That they can't take away our right to freedom of speech by trying to scare us into silence."
A series of cartoons of the prophet published in a Danish newspaper in 2005 sparked violent protests by Muslims around the world, including Pakistan, and death threats against the cartoonists.
In an attempt to respond to public anger over the Facebook controversy, the Pakistani government ordered Internet service providers in the country to block the page Tuesday, said Khurram Ali, a spokesman for the Pakistan Telecommunications Authority.
But the Islamic Lawyers' Forum asked the Lahore High Court on Wednesday to order the government to fully block Facebook because it allowed the page to be posted in the first place, said the deputy attorney general of Punjab province, Naveed Inayat Malik.
The court complied with the request and ordered the government to block the site until the end of May, Malik said.
Lawyers outside the courtroom hailed the ruling, chanting "Down with Facebook."
Later in the day, the telecommunications authority ordered all Internet service providers to block Facebook, it said in a statement.
It remains to be seen how successful the move will be at keeping people in Pakistan from accessing the site. Some countries, such as China, permanently ban Facebook. But citizens often have little trouble working their way around the ban using proxy servers and other means.
Pakistan's minister of religious affairs, Hamid Saeed Kazmi, said the ban was only a temporary solution and suggested the government organize a conference of Muslim countries to figure out ways to prevent the publication of images of the prophet.
The page on the social networking site has generated criticism in Pakistan and elsewhere because Islam prohibits any images of the prophet. The government took action after a group of Islamic lawyers won a court order Wednesday requiring officials to block Facebook until May 31.
By Wednesday evening, access to the site was sporadic, apparently because Internet providers were implementing the order.
The Facebook page at the center of the dispute — "Everybody Draw Mohammed Day!" — encourages users to post images of the prophet on May 20 to protest threats made by a radical Muslim group against the creators of "South Park" for depicting Muhammad in a bear suit during an episode earlier this year.
In the southern city of Karachi, about 2,000 female students rallied demanding that Facebook be banned for tolerating the page. Several dozen male students held a rally nearby, with some holding signs urging Islamic holy war against those who blaspheme the prophet.
"We are not trying to slander the average Muslim," said the information section of the Facebook page, which was still accessible Wednesday morning. "We simply want to show the extremists that threaten to harm people because of their Mohammad depictions that we're not afraid of them. That they can't take away our right to freedom of speech by trying to scare us into silence."
A series of cartoons of the prophet published in a Danish newspaper in 2005 sparked violent protests by Muslims around the world, including Pakistan, and death threats against the cartoonists.
In an attempt to respond to public anger over the Facebook controversy, the Pakistani government ordered Internet service providers in the country to block the page Tuesday, said Khurram Ali, a spokesman for the Pakistan Telecommunications Authority.
But the Islamic Lawyers' Forum asked the Lahore High Court on Wednesday to order the government to fully block Facebook because it allowed the page to be posted in the first place, said the deputy attorney general of Punjab province, Naveed Inayat Malik.
The court complied with the request and ordered the government to block the site until the end of May, Malik said.
Lawyers outside the courtroom hailed the ruling, chanting "Down with Facebook."
Later in the day, the telecommunications authority ordered all Internet service providers to block Facebook, it said in a statement.
It remains to be seen how successful the move will be at keeping people in Pakistan from accessing the site. Some countries, such as China, permanently ban Facebook. But citizens often have little trouble working their way around the ban using proxy servers and other means.
Pakistan's minister of religious affairs, Hamid Saeed Kazmi, said the ban was only a temporary solution and suggested the government organize a conference of Muslim countries to figure out ways to prevent the publication of images of the prophet.
Bangkok burns after Thai protest leaders arrested
BANGKOK – Downtown Bangkok became a flaming battleground Wednesday as an army assault forced anti-government protest leaders to surrender, enraging followers who shot grenades and set fire to landmark buildings, cloaking the skyline in black smoke.
Using live ammunition, troops dispersed thousands of Red Shirt protesters who had been camped in the capital's premier shopping and residential district for weeks. Five protesters and an Italian news photographer were killed in the ensuing gunbattles and about 60 wounded.
After Red Shirt leaders gave themselves up to police, rioters set fires at the Stock Exchange, several banks, the headquarters of the Metropolitan Electricity Authority, Central World — one of Asia's biggest shopping malls — and a cinema that burned to ground. There were reports of looting.
Firefighters retreated after protesters shot guns at them, and thick smoke drifted across the sky of this city of 10 million people.
Sporadic clashes between troops and protesters continued in the night at the site of former protest camp.
The chaos in Bangkok in the wake of the two-month protest will deepen the severe impact dealt to the economy and tourism industry of Thailand, a key U.S. ally and long considered one of the more stable countries in Southeast Asia. The Red Shirts, mostly rural poor, had demanded the ouster of Prime Minister Abhisit Vejjajiva's government, the dissolution of Parliament and new elections.
A 10-hour curfew came into force in Bangkok and 18 other provinces at 8 p.m., and the government said army operations would continue through the night in the Thai capital.
It is the first time that Bangkok has been put under curfew since 1992, when the army killed dozens of pro-democracy demonstrators seeking the ouster of a military-backed government.
"Tonight is going to be another worrisome night," government spokesman Panitan Wattanayagorn said.
The government also imposed a partial media blackout on local TV stations, saying all of them will have to air government-prepared bulletins.
"They might be able to show their regular news programs. But we are concerned about their live broadcasts from the scenes," Panitan said. "There will be more (government) programs ... to be shown simultaneously by all stations," he said.
Protesters had already turned their rage on the local media, which they have accused of pro-government coverage. They attacked the offices of state-run Channel 3, setting fire to cars outside and puncturing water pipes that flooded the building.
"At Channel 3 need urgent help from police, soldiers!!!" tweeted news anchor Patcharasri Benjamasa. "News cars were smashed and they are about to invade the building."
Hours later its building was on fire. Its executives were evacuated by helicopter and police rescued other staff. The English-language Bangkok Post newspaper evacuated its staff after threats from the Red Shirts. A large office building down the street from the Post was set afire.
Thailand's stock exchange would be closed for the rest of the week after rioters set the building's ground floor on fire, its president, Patareeya Benjapolchai, told The Associated Press.
The exchange, where about $600 million of shares change hands each day, may reopen on Monday, she said. The central bank, meanwhile, said all financial institutions in Bangkok including commercial banks would be shut Thursday and Friday.
Unrest also spread to the rural northeast and north of the country, where Red Shirts, who claim Abhisit's government is elitist and oblivious to their plight, retain strong support.
Local media reported protesters set fire to government offices in the city of Udon Thani and vandalized a city hall in Khon Kaen. Udon Thani's governor asked the military to intervene. TV images showed troops retreating after being attacked by mobs in Ubon Ratchathani. There were also reports of fires and other unrest in the northern city of Chiang Mai, Thailand's third largest.
Cabinet minister Satit Vongnongteay described the chaos as anticipated "aftershocks."
"There are violence-prone protesters who remain angry," Satit told a news conference.
At least 74 people have been killed and nearly 1,800 injured since the Red Shirts descended on Bangkok in mid-March to press their demands. In response, Abhisit offered to hold elections in November, a year earlier than required. Despite initial hopes that could end the standoff, Red Shirt leaders issued new demands and the protesters stayed put.
Many are supporters of populist former Prime Minister Thaksin Shinawatra, who was ousted in a 2006 military coup. Thaksin lives in exile after being sentenced in absentia to two years prison for corruption. The government accuses him of having bankrolled the protests.
As hopes for a negotiated settlement to the two-month standoff faded, and as business losses mounted, the army cranked up pressure last Thursday, trying to blockade the protesters who had camped in the 1-square-mile (3-square-kilometer) Rajprasong district. That military pressure sparked violent clashes. Some 45 of the reported fatalities in the unrest have occurred since then.
The final crackdown began soon after dawn Wednesday, as hundreds of troops armed with M-16s converged on Rajprasong, where high-end malls and hotels have been shuttered for weeks.
Armored vehicles crashed through barricades of piled tires and bamboo stakes, then soldiers gradually moved toward the protesters' hub, opening fire and drawing return fire from militant Red Shirts, Associated Press journalists saw.
Bullets flew overhead and several grenades exploded near the soldiers, forcing them to pull back and take cover briefly before pushing forward. A Canadian freelance reporter was injured by grenade shrapnel. Two other journalists were wounded earlier, one Dutch man and an American documentary filmmaker. An Italian photographer was killed.
With no hope of resisting the military's advance, seven top Red Shirt leaders turned themselves in on Wednesday afternoon, saying they cannot see their supporters — women and children among them — being killed anymore.
"Brothers and sisters, I'm sorry I cannot see you off the way I welcomed you all when you arrived here. But please be assured that our hearts will always be with you," Nattawut Saikua, a key leader, said as he was being arrested.
"Please return home," he said.
By mid-afternoon, the army announced it had gained control of the protest zone and the operations had ended — nine hours after troops launched the pre-dawn assault — although sporadic clashes with rioters continued into the night.
Using live ammunition, troops dispersed thousands of Red Shirt protesters who had been camped in the capital's premier shopping and residential district for weeks. Five protesters and an Italian news photographer were killed in the ensuing gunbattles and about 60 wounded.
After Red Shirt leaders gave themselves up to police, rioters set fires at the Stock Exchange, several banks, the headquarters of the Metropolitan Electricity Authority, Central World — one of Asia's biggest shopping malls — and a cinema that burned to ground. There were reports of looting.
Firefighters retreated after protesters shot guns at them, and thick smoke drifted across the sky of this city of 10 million people.
Sporadic clashes between troops and protesters continued in the night at the site of former protest camp.
The chaos in Bangkok in the wake of the two-month protest will deepen the severe impact dealt to the economy and tourism industry of Thailand, a key U.S. ally and long considered one of the more stable countries in Southeast Asia. The Red Shirts, mostly rural poor, had demanded the ouster of Prime Minister Abhisit Vejjajiva's government, the dissolution of Parliament and new elections.
A 10-hour curfew came into force in Bangkok and 18 other provinces at 8 p.m., and the government said army operations would continue through the night in the Thai capital.
It is the first time that Bangkok has been put under curfew since 1992, when the army killed dozens of pro-democracy demonstrators seeking the ouster of a military-backed government.
"Tonight is going to be another worrisome night," government spokesman Panitan Wattanayagorn said.
The government also imposed a partial media blackout on local TV stations, saying all of them will have to air government-prepared bulletins.
"They might be able to show their regular news programs. But we are concerned about their live broadcasts from the scenes," Panitan said. "There will be more (government) programs ... to be shown simultaneously by all stations," he said.
Protesters had already turned their rage on the local media, which they have accused of pro-government coverage. They attacked the offices of state-run Channel 3, setting fire to cars outside and puncturing water pipes that flooded the building.
"At Channel 3 need urgent help from police, soldiers!!!" tweeted news anchor Patcharasri Benjamasa. "News cars were smashed and they are about to invade the building."
Hours later its building was on fire. Its executives were evacuated by helicopter and police rescued other staff. The English-language Bangkok Post newspaper evacuated its staff after threats from the Red Shirts. A large office building down the street from the Post was set afire.
Thailand's stock exchange would be closed for the rest of the week after rioters set the building's ground floor on fire, its president, Patareeya Benjapolchai, told The Associated Press.
The exchange, where about $600 million of shares change hands each day, may reopen on Monday, she said. The central bank, meanwhile, said all financial institutions in Bangkok including commercial banks would be shut Thursday and Friday.
Unrest also spread to the rural northeast and north of the country, where Red Shirts, who claim Abhisit's government is elitist and oblivious to their plight, retain strong support.
Local media reported protesters set fire to government offices in the city of Udon Thani and vandalized a city hall in Khon Kaen. Udon Thani's governor asked the military to intervene. TV images showed troops retreating after being attacked by mobs in Ubon Ratchathani. There were also reports of fires and other unrest in the northern city of Chiang Mai, Thailand's third largest.
Cabinet minister Satit Vongnongteay described the chaos as anticipated "aftershocks."
"There are violence-prone protesters who remain angry," Satit told a news conference.
At least 74 people have been killed and nearly 1,800 injured since the Red Shirts descended on Bangkok in mid-March to press their demands. In response, Abhisit offered to hold elections in November, a year earlier than required. Despite initial hopes that could end the standoff, Red Shirt leaders issued new demands and the protesters stayed put.
Many are supporters of populist former Prime Minister Thaksin Shinawatra, who was ousted in a 2006 military coup. Thaksin lives in exile after being sentenced in absentia to two years prison for corruption. The government accuses him of having bankrolled the protests.
As hopes for a negotiated settlement to the two-month standoff faded, and as business losses mounted, the army cranked up pressure last Thursday, trying to blockade the protesters who had camped in the 1-square-mile (3-square-kilometer) Rajprasong district. That military pressure sparked violent clashes. Some 45 of the reported fatalities in the unrest have occurred since then.
The final crackdown began soon after dawn Wednesday, as hundreds of troops armed with M-16s converged on Rajprasong, where high-end malls and hotels have been shuttered for weeks.
Armored vehicles crashed through barricades of piled tires and bamboo stakes, then soldiers gradually moved toward the protesters' hub, opening fire and drawing return fire from militant Red Shirts, Associated Press journalists saw.
Bullets flew overhead and several grenades exploded near the soldiers, forcing them to pull back and take cover briefly before pushing forward. A Canadian freelance reporter was injured by grenade shrapnel. Two other journalists were wounded earlier, one Dutch man and an American documentary filmmaker. An Italian photographer was killed.
With no hope of resisting the military's advance, seven top Red Shirt leaders turned themselves in on Wednesday afternoon, saying they cannot see their supporters — women and children among them — being killed anymore.
"Brothers and sisters, I'm sorry I cannot see you off the way I welcomed you all when you arrived here. But please be assured that our hearts will always be with you," Nattawut Saikua, a key leader, said as he was being arrested.
"Please return home," he said.
By mid-afternoon, the army announced it had gained control of the protest zone and the operations had ended — nine hours after troops launched the pre-dawn assault — although sporadic clashes with rioters continued into the night.
US proposes rules shakeup after mystery stocks plunge
WASHINGTON (AFP) – US authorities proposed Tuesday a rules revamp to prevent a repeat of a mysterious stock market free-fall experienced on May 6 that saw the key Dow index drop a record 1,000 points.
Under the proposed rules, exchanges would pause trading in certain individual stocks if the price moves 10 percent or more in a five-minute period, the US Securities and Exchange Commission said in a statement.
The rules were filed Tuesday by the national securities exchanges and the Financial Industry Regulatory Authority, according to the SEC, which was seeking comment on the proposals.
"The markets are proposing these rules in consultation with FINRA and staff of the SEC to provide for uniform market-wide standards for individual securities in the S&P 500 Index that experience a rapid price movement," the statement said.
The rules reflected a "consensus" achieved among the exchanges and FINRA after SEC Chairman Mary Schapiro convened talks last week, it said.
On May 6, the market dropped significantly and after about 30 stocks making up the broad S&P 500 Index fell at least 10 percent in a five-minute period.
In panic selling, the Dow suffered a record drop of almost 1,000 points before recouping over half those losses.
The drop eclipsed the crashes seen when markets reopened after September 11, 2001 and in the wake of the 2007 Lehman Brothers collapse.
Under the proposed rules, exchanges would pause trading in certain individual stocks if the price moves 10 percent or more in a five-minute period, the US Securities and Exchange Commission said in a statement.
The rules were filed Tuesday by the national securities exchanges and the Financial Industry Regulatory Authority, according to the SEC, which was seeking comment on the proposals.
"The markets are proposing these rules in consultation with FINRA and staff of the SEC to provide for uniform market-wide standards for individual securities in the S&P 500 Index that experience a rapid price movement," the statement said.
The rules reflected a "consensus" achieved among the exchanges and FINRA after SEC Chairman Mary Schapiro convened talks last week, it said.
On May 6, the market dropped significantly and after about 30 stocks making up the broad S&P 500 Index fell at least 10 percent in a five-minute period.
In panic selling, the Dow suffered a record drop of almost 1,000 points before recouping over half those losses.
The drop eclipsed the crashes seen when markets reopened after September 11, 2001 and in the wake of the 2007 Lehman Brothers collapse.
Target's 1Q net income climbs almost 29 pct
NEW YORK – Target Corp. reported a 29 percent increase in first-quarter net income, fueled by an improvement in its credit-card business and higher sales of more profitable items such as clothing.
Chairman and CEO Gregg Steinhafel said the results came in a "stronger-than-expected economic environment."
The discounter, based in Minneapolis, reported net income of $671 million, or 90 cents per share, for the period ended May 1. That compares with $522 million, or 69 cents per share, in the year-ago period. Analysts surveyed by Thomson Reuters had expected 86 cents a share.
Target said its total revenue rose 5 percent to $15.59 billion, a a shade ahead of Wall Street expectations. Target's revenue at stores open at least a year rose 2.8 percent for the first quarter. The measure is a key indicator of a retailer's health because it excludes the effect of expansion.
In a statement, Steinhafel noted that the retail segment beat expectations as sales of discretionary items with high profit margins such as clothing were particularly strong. Target's gross profit margin increased to 31.3 percent in the first quarter, up from 30.8 percent in the year-ago period.
Steinhafel also noted that profitability in its credit card segment also was well above expectations.
Target's sales results were in sharp contrast with Wal-Mart, which reported on Tuesday that its key measure of revenue fell for the fourth consecutive quarter.
Wal-Mart struggled with a 1.1 percent drop in revenue at stores opened at least a year, dragged down by its U.S. namesake business. That was below the 0.6 percent decline that analysts had expected. Wal-Mart also said that its customer counts declined for the second straight quarter.
Even as the world's largest retailer reported a 10 percent increase in net income that beat analysts' expectations for the first quarter, it offered a muted outlook and offered a pessimistic view of the economy. Its main customers, it said, were having even more trouble stretching their dollars to the next payday.
Target, which carved a niche as a cheap chic discounter, took a hit when the economy went into free fall because about 40 percent of its sales come from essentials like groceries and wellness as opposed to 60 percent at Wal-Mart.
But Wal-Mart, which had benefited from a steady flow of new customers trading down from upscale stores, acknowledged Tuesday that it's possible it is losing some of the new customers it acquired during the Great Recession.
Meanwhile, its main customers are cutting back the number of trips as they either stopped shopping or are going to other alternatives like dollar stores. Many analysts believe that Target is taking some customers away from Wal-Mart.
To turn around sales, Target has emphasized its low prices in advertising and expanded its food offerings. The company also rolled out a new store format starting in April. It features spruced-up home furnishings, larger grocery sections, and better video-game displays.
Like Wal-Mart, Target also has plans to open smaller stores in urban markets. Target, which has stores only in the United States, said in January that it plans to open stores in Canada, Mexico and Latin America, but not for at least three to five years.
Chairman and CEO Gregg Steinhafel said the results came in a "stronger-than-expected economic environment."
The discounter, based in Minneapolis, reported net income of $671 million, or 90 cents per share, for the period ended May 1. That compares with $522 million, or 69 cents per share, in the year-ago period. Analysts surveyed by Thomson Reuters had expected 86 cents a share.
Target said its total revenue rose 5 percent to $15.59 billion, a a shade ahead of Wall Street expectations. Target's revenue at stores open at least a year rose 2.8 percent for the first quarter. The measure is a key indicator of a retailer's health because it excludes the effect of expansion.
In a statement, Steinhafel noted that the retail segment beat expectations as sales of discretionary items with high profit margins such as clothing were particularly strong. Target's gross profit margin increased to 31.3 percent in the first quarter, up from 30.8 percent in the year-ago period.
Steinhafel also noted that profitability in its credit card segment also was well above expectations.
Target's sales results were in sharp contrast with Wal-Mart, which reported on Tuesday that its key measure of revenue fell for the fourth consecutive quarter.
Wal-Mart struggled with a 1.1 percent drop in revenue at stores opened at least a year, dragged down by its U.S. namesake business. That was below the 0.6 percent decline that analysts had expected. Wal-Mart also said that its customer counts declined for the second straight quarter.
Even as the world's largest retailer reported a 10 percent increase in net income that beat analysts' expectations for the first quarter, it offered a muted outlook and offered a pessimistic view of the economy. Its main customers, it said, were having even more trouble stretching their dollars to the next payday.
Target, which carved a niche as a cheap chic discounter, took a hit when the economy went into free fall because about 40 percent of its sales come from essentials like groceries and wellness as opposed to 60 percent at Wal-Mart.
But Wal-Mart, which had benefited from a steady flow of new customers trading down from upscale stores, acknowledged Tuesday that it's possible it is losing some of the new customers it acquired during the Great Recession.
Meanwhile, its main customers are cutting back the number of trips as they either stopped shopping or are going to other alternatives like dollar stores. Many analysts believe that Target is taking some customers away from Wal-Mart.
To turn around sales, Target has emphasized its low prices in advertising and expanded its food offerings. The company also rolled out a new store format starting in April. It features spruced-up home furnishings, larger grocery sections, and better video-game displays.
Like Wal-Mart, Target also has plans to open smaller stores in urban markets. Target, which has stores only in the United States, said in January that it plans to open stores in Canada, Mexico and Latin America, but not for at least three to five years.
Loan demand to buy homes sinks to 13-year low
NEW YORK (Reuters) – Demand for loans to buy U.S. homes shriveled to a 13-year low last week, following the expiration of federal tax credits, while near-record low mortgage rates stoked refinancing, the Mortgage Bankers Association said on Wednesday.
Mortgage purchase applications sank 27.1 percent to the lowest level since May 1997 in the absence of the popular government support, the group said. U.S. housing groped for footing after more than a year of homebuyer tax credits worth up to $8,000 expired on April 30.
Requests for home purchase loans have fallen almost 20 percent over the past month despite low borrowing costs.
"It's disturbing," said John Canally, economist at LPL Financial in Boston.
"It seems that every other data point for housing is pretty good -- high affordability, low interest rates, relatively low inventory, home prices are up -- so I'm leaning toward the hangover from the tax credit but I'm going to need to see a couple of more weeks of data."
Overall loan requests were down 1.5 percent, on a seasonally adjusted basis, in the week ended May 14, cushioned by a 14.5 percent jump in mortgage refinancing applications as home loan rates neared historic lows.
Average 30-year mortgage rates fell 0.13 percentage point last week to 4.83 percent, the lowest since last November, the MBA said. The record low was 4.61 percent in March 2009, based on the group's survey, which has been conducted since 1990.
Refinancing applications jumped to a nine-week high and accounted for about 68 percent of all applications last week.
But buyers took a low profile after rushing en masse to take advantage of the tax incentive.
"The data continue to suggest that the tax credit pulled sales into April at the expense of the remainder of the spring buying season," Michael Fratantoni, the industry group's vice president of research and economics, said in a statement.
The MBA separately reported that total U.S. home loans that are late paying or in foreclosure eased in the first quarter but remained near record highs, largely because the country's unemployment rate remains elevated.
One out of seven U.S. households with a mortgage ended the first quarter late on payments or in the foreclosure process.
With the tax credits gone, home shoppers will take more time to find the right property, said Marc Demetriou, branch manager/mortgage consultant at Residential Home Funding Corp in Bloomingdale, New Jersey.
"Unemployment is definitely still an issue and inventory is still an issue, but it's definitely a buyer's market," he said. However, "people that were serious about buying worked very hard and spent a lot of time and effort to find the right house to get in for April 30," when the tax credit expired,
U.S. borrowers have gotten a hand from Europe, on worry that roughly $1 trillion in emergency funding might not be enough to stabilize euro zone debt markets. Investors have fled for the safest securities, slicing the U.S. Treasury yields that are used as a peg for mortgage rates.
Low borrowing costs and stabilizing home prices are being offset by the near double-digit U.S. unemployment rate and a looming supply of foreclosed properties yet to hit the market. The worst of the housing crisis is over but recovery will be long and slow, most economists agree.
Mortgage purchase applications sank 27.1 percent to the lowest level since May 1997 in the absence of the popular government support, the group said. U.S. housing groped for footing after more than a year of homebuyer tax credits worth up to $8,000 expired on April 30.
Requests for home purchase loans have fallen almost 20 percent over the past month despite low borrowing costs.
"It's disturbing," said John Canally, economist at LPL Financial in Boston.
"It seems that every other data point for housing is pretty good -- high affordability, low interest rates, relatively low inventory, home prices are up -- so I'm leaning toward the hangover from the tax credit but I'm going to need to see a couple of more weeks of data."
Overall loan requests were down 1.5 percent, on a seasonally adjusted basis, in the week ended May 14, cushioned by a 14.5 percent jump in mortgage refinancing applications as home loan rates neared historic lows.
Average 30-year mortgage rates fell 0.13 percentage point last week to 4.83 percent, the lowest since last November, the MBA said. The record low was 4.61 percent in March 2009, based on the group's survey, which has been conducted since 1990.
Refinancing applications jumped to a nine-week high and accounted for about 68 percent of all applications last week.
But buyers took a low profile after rushing en masse to take advantage of the tax incentive.
"The data continue to suggest that the tax credit pulled sales into April at the expense of the remainder of the spring buying season," Michael Fratantoni, the industry group's vice president of research and economics, said in a statement.
The MBA separately reported that total U.S. home loans that are late paying or in foreclosure eased in the first quarter but remained near record highs, largely because the country's unemployment rate remains elevated.
One out of seven U.S. households with a mortgage ended the first quarter late on payments or in the foreclosure process.
With the tax credits gone, home shoppers will take more time to find the right property, said Marc Demetriou, branch manager/mortgage consultant at Residential Home Funding Corp in Bloomingdale, New Jersey.
"Unemployment is definitely still an issue and inventory is still an issue, but it's definitely a buyer's market," he said. However, "people that were serious about buying worked very hard and spent a lot of time and effort to find the right house to get in for April 30," when the tax credit expired,
U.S. borrowers have gotten a hand from Europe, on worry that roughly $1 trillion in emergency funding might not be enough to stabilize euro zone debt markets. Investors have fled for the safest securities, slicing the U.S. Treasury yields that are used as a peg for mortgage rates.
Low borrowing costs and stabilizing home prices are being offset by the near double-digit U.S. unemployment rate and a looming supply of foreclosed properties yet to hit the market. The worst of the housing crisis is over but recovery will be long and slow, most economists agree.
Novartis hit with $250M punitive damage award
NEW YORK – A jury that found drug company Novartis discriminated against women by paying them less than men, promoting fewer of them and allowing a hostile workplace awarded $250 million in punitive damages on Wednesday.
The same jury concluded Monday that Novartis Pharmaceuticals Corp. had discriminated against its female employees since 2002, and it awarded $3.3 million to a dozen women whose stories were outlined during the six-week trial.
Attorneys for Novartis declined to comment. The company has said it would appeal.
The plaintiffs' attorney, David Sanford, said the findings "sent a message to Novartis and all other corporations in America that they cannot continue to get away with the discrimination and the systemic problems that have gone on for so long. That day has come and we're absolutely delighted."
Sanford had sought up to $285 million in punitive damages. He said he came up with that amount by estimating that the company should have to pay 2 percent to 3 percent of the $9.5 billion in revenues it made in 2009.
"To Novartis, discrimination is one big joke," Sanford told the jury. "There was an old boys' network at Novartis running rampant. The discrimination continues to this very day. Absolutely nothing was ever done to help women at Novartis."
Novartis attorney Richard Schnadig urged the jury not to react emotionally.
"The company is taking everything you said to heart and is going to change," he promised. "Be fair to us."
The judge warned jurors not to let bias, prejudice or sympathy play a role in awarding punitive damages.
During the trial, the plaintiffs portrayed one district manager as particularly abusive, so much so that he showed women pornographic images and invited them to sit on his lap.
During his opening statement, Schnadig said the company might have been slow to investigate the claims against the manager, who was fired two years after the lawsuit was filed in 2004.
"He wasn't that bad a manager. He was just terrible with women," Schnadig said. It was a quote that the plaintiffs repeatedly reminded the jury about.
Sanford did so again Tuesday, telling jurors that Novartis "just doesn't get it. You can't be a good manager if you're terrible with women."
The same jury concluded Monday that Novartis Pharmaceuticals Corp. had discriminated against its female employees since 2002, and it awarded $3.3 million to a dozen women whose stories were outlined during the six-week trial.
Attorneys for Novartis declined to comment. The company has said it would appeal.
The plaintiffs' attorney, David Sanford, said the findings "sent a message to Novartis and all other corporations in America that they cannot continue to get away with the discrimination and the systemic problems that have gone on for so long. That day has come and we're absolutely delighted."
Sanford had sought up to $285 million in punitive damages. He said he came up with that amount by estimating that the company should have to pay 2 percent to 3 percent of the $9.5 billion in revenues it made in 2009.
"To Novartis, discrimination is one big joke," Sanford told the jury. "There was an old boys' network at Novartis running rampant. The discrimination continues to this very day. Absolutely nothing was ever done to help women at Novartis."
Novartis attorney Richard Schnadig urged the jury not to react emotionally.
"The company is taking everything you said to heart and is going to change," he promised. "Be fair to us."
The judge warned jurors not to let bias, prejudice or sympathy play a role in awarding punitive damages.
During the trial, the plaintiffs portrayed one district manager as particularly abusive, so much so that he showed women pornographic images and invited them to sit on his lap.
During his opening statement, Schnadig said the company might have been slow to investigate the claims against the manager, who was fired two years after the lawsuit was filed in 2004.
"He wasn't that bad a manager. He was just terrible with women," Schnadig said. It was a quote that the plaintiffs repeatedly reminded the jury about.
Sanford did so again Tuesday, telling jurors that Novartis "just doesn't get it. You can't be a good manager if you're terrible with women."
Stocks slide as mortgage delinquencies hit record
NEW YORK – Stocks resumed their slide Wednesday after investors looked past a rising euro to concerns about the U.S. economy. The Dow Jones industrial average fell about 115 points in morning trading.
The Mortgage Bankers Association reported that the number of homeowners who missed at least one payment on their mortgage rose to a record in the first quarter. That signaled that foreclosures could rise and suggested that troubles in the U.S. housing sector are far from over.
Traders also focused on Washington. The Senate is scheduled to vote Wednesday to end debate on the biggest overhaul of financial regulation since the 1930s. The Senate could vote this week. The bill would then be reconciled with a House version.
The concern for some investors is that the new rules could hurt profits at financial companies.
Stocks initially stabilized Wednesday after the euro bounced off of a four-year low. The euro hit $1.2146 before climbing to $1.2315.
U.S. stocks have been tracking the movement of the 16-nation currency for weeks. A sliding euro indicates waning confidence in Europe's ability to contain a debt crisis in Greece, which unsettles stock investors.
European stocks fell sharply at first, rattled by Germany's move to ban certain kinds of short-selling. Germany enacted the rule to try to prevent its markets from falling sharply in response to concerns about Europe's debt problems. Major European indexes also regained some ground as the euro moved higher.
European leaders agreed last week to a nearly $1 trillion bailout program to help countries that are facing mounting debt problems. The deal was initially embraced by investors. But traders quickly worried that the austerity measures tied to the rescue package would upend a rebound.
In midmorning trading, the Dow fell 116.99, or 1.1 percent, to 10,393.96. The broader Standard & Poor's 500 index fell 11.92, or 1.1 percent, to 1,108.88. The Nasdaq composite index fell 31.56, or 1.4 percent, to 2,285.70.
U.S. stocks fell Tuesday after the euro slumped. The drop came after Germany said it had banned "naked" short selling, which occurs when traders bet on a stock or investment that they don't own. The ban covers European government bonds, credit default swaps and the shares of several financial companies.
The euro immediately retreated after the ban was announced, which dragged down U.S. markets. The Dow fell nearly 115 points after being up nearly 93 points early in the day. The announcement came after the close of European markets and brought concerns that officials were having trouble blunting the debt crisis and waves of selling in European markets.
Bond prices dipped. The yield on the benchmark 10-year Treasury note edged up to 3.36 percent from 3.35 percent late Tuesday. Bond yields have been falling in recent weeks as investors flock to safe investments.
Three stocks fell for every one that rose on the New York Stock Exchange, where volume came to 239.8 million shares, compared with 210 million traded at the same point Tuesday.
The Russell 2000 index of smaller companies fell 4.47, or 0.7 percent, to 678.28.
The Mortgage Bankers Association reported that the number of homeowners who missed at least one payment on their mortgage rose to a record in the first quarter. That signaled that foreclosures could rise and suggested that troubles in the U.S. housing sector are far from over.
Traders also focused on Washington. The Senate is scheduled to vote Wednesday to end debate on the biggest overhaul of financial regulation since the 1930s. The Senate could vote this week. The bill would then be reconciled with a House version.
The concern for some investors is that the new rules could hurt profits at financial companies.
Stocks initially stabilized Wednesday after the euro bounced off of a four-year low. The euro hit $1.2146 before climbing to $1.2315.
U.S. stocks have been tracking the movement of the 16-nation currency for weeks. A sliding euro indicates waning confidence in Europe's ability to contain a debt crisis in Greece, which unsettles stock investors.
European stocks fell sharply at first, rattled by Germany's move to ban certain kinds of short-selling. Germany enacted the rule to try to prevent its markets from falling sharply in response to concerns about Europe's debt problems. Major European indexes also regained some ground as the euro moved higher.
European leaders agreed last week to a nearly $1 trillion bailout program to help countries that are facing mounting debt problems. The deal was initially embraced by investors. But traders quickly worried that the austerity measures tied to the rescue package would upend a rebound.
In midmorning trading, the Dow fell 116.99, or 1.1 percent, to 10,393.96. The broader Standard & Poor's 500 index fell 11.92, or 1.1 percent, to 1,108.88. The Nasdaq composite index fell 31.56, or 1.4 percent, to 2,285.70.
U.S. stocks fell Tuesday after the euro slumped. The drop came after Germany said it had banned "naked" short selling, which occurs when traders bet on a stock or investment that they don't own. The ban covers European government bonds, credit default swaps and the shares of several financial companies.
The euro immediately retreated after the ban was announced, which dragged down U.S. markets. The Dow fell nearly 115 points after being up nearly 93 points early in the day. The announcement came after the close of European markets and brought concerns that officials were having trouble blunting the debt crisis and waves of selling in European markets.
Bond prices dipped. The yield on the benchmark 10-year Treasury note edged up to 3.36 percent from 3.35 percent late Tuesday. Bond yields have been falling in recent weeks as investors flock to safe investments.
Three stocks fell for every one that rose on the New York Stock Exchange, where volume came to 239.8 million shares, compared with 210 million traded at the same point Tuesday.
The Russell 2000 index of smaller companies fell 4.47, or 0.7 percent, to 678.28.
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