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Tuesday, September 7, 2010


Steel companies in Asia gain as markets end mixed
Asian share markets closed mixed Tuesday, with steel companies advancing because of an expectation that steel prices will increase in China. Japan's Nikkei 225 slid 0.8%, Australia's S&P/ASX 200 inched down 0.1% and South Korea's Kospi Composite slipped 0.3%. China's Shanghai Composite added 0.1%, Hong Kong's Hang Seng Index gained 0.2% and New Zealand's NZX 50 climbed 1%. In afternoon trading, India's Sensex was up 0.3%and Singapore's Straits Times Index lost 0.4%. The Wall Street Journal (07 Sep.)

U.S. stock dividends are exceeding bond yields the most in 15 years
With U.S. corporate profit increasing at the fastest rate in two decades, more stocks are paying dividends higher than bond yields than at any time in the past 15 years. Shares in Johnson & Johnson, the world's biggest health-product company, pay a 3.66% dividend, compared with a 2.66% interest rate on the company's 10-year debt sold last month. Companies increased payout by 6.8% in the second quarter, according to data compiled by Bloomberg. Bloomberg (07 Sep.)

U.S. tech sector is healthy but not creating many jobs
Hope is fading that a relatively strong high-tech sector in the U.S. will play a big part in bringing down unemployment. Profit at technology companies is surging, but the firms are reluctant to add employees. Hiring in software publishing and data processing has posted a decline. The New York Times (free registration) (06 Sep.)

Obama wants $50 billion spent on roads, railroads and airports
U.S. President Barack Obama said during a Labor Day rally that he will ask Congress to approve a $50 billion program to rebuild the transportation system, create jobs and reduce unemployment. The plan calls for constructing or improving 150,000 miles of roads, 4,000 miles of rail lines and 150 miles of airport runway during a six-year period. The proposal is one of a series of job-creation initiatives the White House plans to announce as the November midterm election approaches. USA TODAY (07 Sep.)

Analysis: Underwater mortgages are the real problem in housing
It doesn't make sense for the U.S. to spend money to prop up the housing market by giving buyers incentives, but that doesn't mean sitting back and letting prices crash would "magically" bring the housing market back to life, as some have suggested, according to The Economist. At the core of the problem are homeowners with underwater mortgages who can't afford to sell at prices buyers are willing to pay. "Driving those prices lower won't change that fact," the magazine notes. The Economist/Free Exchange blog (06 Sep.)

Europe's stress tests understated some banks' debt risk, analysis shows
Europe's major banks were required as part of the recently conducted stress tests to disclose their government-debt holdings. However, a Wall Street Journal analysis found that the tests understated some banks' holdings of potentially risky sovereign debt. The Wall Street Journal (07 Sep.)

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