The U.S. Economy Expanded At 2.5 Annual Rate

A report Thursday showed that the U.S. economy expanded at a solid 2.5 annual rate in the July-September quarter. That helped ease concerns that another recession might be nearing. Yet the news may have also raised unrealistic expectations about the economy. This week, investors will shift their focus from Europe to U.S. economic data, which might temper their exuberance. So, investors could end up disappointed. Last week, investors were cheered by the deal European leaders reached Thursday. European banks agreed to take a 50 percent loss on their holdings of Greek government bonds. They will also set aside more money to cushion against future losses. Economists caution that European officials must still fill in the details of their plan and implement it. Even then, it might not work. When world leaders meet in France on Thursday and Friday, investors will want to see signs that China and other nations are prepared to help bolster Europe’s bailout fund. For all that, some stock analysts remain bullish. The U.S. economy appears more resilient than it did in August, when worries had grown that the United States would fall back into recession. Consumers’ sentiment tumbled that month after Congress fought over raising the nation’s borrowing limit and Standard & Poor’s downgraded long-term U.S. debt. Yet the economy managed to expand in the July-September quarter at the healthiest pace in a year. Despite their gloomy outlook, consumers spent more. Companies increased their investment in software and equipment. On Wednesday, the central bank will update its economic forecasts, which Bernanke will discuss at his news conference. The Fed is expected to revise down its estimates for hiring and growth from its last forecast in June. Investors will scrutinize how Bernanke explains any such revisions. The Fed’s meeting will be followed by the most closely watched economic indicator the government releases: the monthly jobs report. The economy is growing, but not enough to generate many jobs for the 14 million people unemployed. Employers added 103,000 net jobs in September. That wasn’t enough to lower the unemployment rate, which has been stuck 9.1 percent for three months. Analysts expect roughly 100,000 jobs to be added in October. Anything less could raise concerns that the economy may slow. Stocks might stumble. A gain of 100,000 jobs is scarcely enough to keep up with population growth. More than double that total would be needed consistently to reduce unemployment significantly. This week will bring other economic reports, too. The Institute for Supply Management, a trade group of purchasing executives, will issue its surveys of purchasing managers for manufacturing and service-sector companies. Those will provide early reads of whether growth will accelerate in the final three months of the year or drop back.

Bright Automotive Car Company Plan To Build Hybrid Trucks With AM General

Indiana car company Bright Automotive announced its plan to build plug-in hybrid work trucks at AM General. This plan could to bring 300 jobs to St. Joseph County by early 2013. But it’s not a done deal. Bright Automotive wants a local work force to build the hybrid work truck that plugs in and uses electricity for the first 40 miles, then changes over to a gasoline engine after that. There is a demand for it, citing a 900,000 cars for a vehicle market for service companies, repairmen, delivery drivers and others. However, Bright has to overcome a big hurdle before production can begin. The company applied for a loan for hundreds of millions of dollars from the Department of Energy months ago, and that application has neither been approved nor denied. There is a great confidence in this business plan and certainly expect the Department of Energy will recognize that and ultimately push this through. In 2009, Electric Motors Corporation announced it would bring at least 1,600 jobs to Elkhart County to build a hybrid pick-up truck. Now the building along State Road 19 in Wakarusa where all that hype happened sits empty. Neither AM General nor leaders with the county’s Project Future program are saying much about the partnership.

New 401(k) Retirement Plan Regulation For Small Businesses

A new regulation issued by the Department of Labor this week will allow small businesses to more expert advice for 401(k) retirement plans. This regulation will improve access for retirement plan companies to offer workers individual account advice and other retirement services. Currently businesses, employers can offer expert advice, but it has to be contracted with an independent investment adviser, rather than the retirement planning company, like Fidelity or Vanguard, to avoid any potential conflicts of interest. This change simplifies an already complex process for small business owners sponsoring retirement plans. As sponsors of a retirement plan, small business owners automatically become plan fiduciaries, meaning they can only act in the best interest of their employees, or participants. The Associated Press reported that 401(k) plans covering 17 million participants will start to offer investment advice under this regulation change. The Labor Department also estimates 3.5 million of these participants will seek business advice from these investment advisers. In addition, the department estimates 17 million IRA beneficiaries will also seek advice. The regulation will go into effect Dec. 27, according to the DOL.

Stock Exchange, NYSE Euronext To Release Incorrect Stocks Information

A technical problem caused NYSE Euronext Stock Exchange to release over 1,000 of incorrect stocks information and securities on Thursday. The error resulted in some online sites showing closing prices for some securities that were actually based on trades that had occurred in electronic trading after markets had closed. The problem started at 7:27 p.m. Thursday when NYSE’s Arca platform sent incorrectly coded share price information. An email sent to traders Friday said the problem involved prices from aftermarket trades Thursday that were incorrectly coded as if they had happened during regular trading that day. The email says the mix-up affected the closing price in some shares that trade on the New York Stock Exchange as well as its Arca platform. The mix-up confused some investors. The share price for Precision Castparts Corp. showed a decline of as much as 9.6 percent Friday, but that was based on an incorrect comparison to the after-hours price. In reality, its shares were down less than 3 percent from Thursday’s close. The error affected some stocks, exchange-traded funds and mutual funds that started with the letters A though T. Symbols starting with U through Z were not affected. More than 1,000 ticker symbols were effected at Stock Exchange, NYSE. The mix-up is still being investigated. Click To See More Stock Trading Info

Options Markets, GDX Call Options Hit A Record At 1.2 Million

Options Markets, the number of outstanding GDX call options hit a record at 1.2 million last Friday, and open interest in GDX calls was about 1.1 million at Wednesday’s close, notes a report by Dow Jones Newswires. The GDX put-call ratio hit a two-year low last Friday, and was 0.61-to-1 at Wednesday’s close. The measure is down significantly from its 2011 high in April. The shifting sentiment could mean that bullish call options now make up a significantly higher proportion of GDX positions. Six months ago, puts were in favor. Call options allow the holder to buy 100 ETF shares for a set price, while put options allow the holder to sell shares. Some observers are taking the activity in options markets as signs that gold mining stocks are finding renewed interest after badly lagging bullion prices this year. Click To See More Options Info

Trading Market Activity Set Gold Higher

Trading market activity of bullish options in the Market Vectors Gold Miners ETF (GDX) has doubled over the past 10 weeks to near all-time highs. That’s likely to be a boon for gold miners. Today, Barrick Gold (ABX), GDX’s biggest name, reported third-quarter earnings rose 45% to a record level. Also, GDX’s second-largest holding, Goldcorp (GG), on yesterday its adjusted earnings rose 88%. The physical-backed SPDR Gold Trust (GLD) has gained 21%-plus in 2011. Meanwhile, GDX has lost more than 5% on the year and the small-cap focused Market Vectors Junior Miners ETF (GDXJ) has slumped by nearly 22%. Gold prices averaged $1,706 a troy ounce in the third quarter, up from $1,509 in the second quarter and $1,227 in the third quarter of 2010, according to HSBC Securities. Click To See More Gold Info

U.S. Dollar Under Pressure Against Yen At Forex Market

U.S. dollar remained under downward pressure against the yen in Asia Friday, as traders watched for any signs that Japanese financial authorities might attempt to weaken the yen through Forex market intervention. The biggest focus remains intervention; without such action, the pair won’t bounce back. Renewed optimism over Europe after Thursday’s plan to stem the region’s sovereign debt crisis and a global stock market rally have helped improved market appetite for taking on risk. But that has not helped weaken the yen, typically considered a safe-haven asset in times of market turmoil, against the dollar, as the trade is an independent of such risk-on/risk-off sentiment, possible intervention is instead the dominant factor. At 0450 GMT, the dollar was at Y75.87, after hitting a fresh record low of Y75.66 overnight, according to EBS via CQG. As the Asian trading day wore on, however, the chances of action by the Japanese government appeared to be fading, at least for now. Even if the dollar hit a fresh record low overnight for the third consecutive day, recent tight movements and the stock market rally have apparently made (the finance ministry) hesitant to decide on intervention. Recent movements are excessive or disorderly, which are conditions needed to justify currency intervention under an agreement by the Group of Seven industrialized countries. Finance minister Jun Azumi kept up his warnings over the strong yen Friday, though he left it unclear how close Tokyo is to intervening in the markets. There is a concern about speculative movements in the foreign exchange markets. Upcoming events such as the G-20 summit in Cannes on Nov. 3-4 may make Japan reluctant to act. Meanwhile, the market is also focusing on U.S. Federal Reserve’s policy-setting meeting next week as an event that could trigger a selloff of the dollar amid growing speculation about further credit easing in the U.S. There isn’t expectation that Fed to take additional steps soon after U.S. economic growth accelerated in the third quarter to 2.5%, the strongest performance in a year, there’s no reason for the dollar to gain.