Best financial sourse

June 30, 2010

Treasurys advance on GDP report

Filed under: online — Tags: , , — Snowman @ 5:18 pm

Treasury prices rose Friday after the government said economic growth was weaker than previously estimated and a major overhaul of financial regulations cleared a legislative hurdle.

What prices are doing: The benchmark 10-year note was up 10/32 to 103-11/32 and its yield fell to 3.11% from 3.12% on Thursday. Bond prices and yields move in opposite directions.

The 30-year bond rose 26/32 to 105-15/32 with a yield of 4.06%. The 2-year note gained 2/32 to 99-31/32 and its yield was 0.66%.

What’s moving the market: Economic growth for the first three months of the year was revised lower, to an annual rate of 2.7% from the previous reading of 3%. Economists surveyed by expected growth to remain unchanged at 3%.

Separately, an index of consumer sentiment rose in June to the highest level since January 2008 no teletrack payday loan. The Reuters/University of Michigan’s Surveys of Consumers rose to 76 from 73.6 in May. Economists expected the index to remain steady at 75.5.

Meanwhile, lawmakers in the House and Senate finalized negotiations on a bill that would overhaul the financial system. The agreement, which came after marathon talks that ended early Friday, paves the way for a final vote in July.

Treasurys were on track for a weekly gain as investors remain nervous about the economy. The Federal Reserve issued a more cautious outlook earlier this week, raising concerns about housing and the outlook for growth.

In addition, the U.S. sold $108 billion worth of Treasurys this week, including 2-, 5- and 7-year notes.  


June 26, 2010

Grocer brings the spice of South Asian life to St. Louis

Filed under: legal — Tags: , , — Snowman @ 9:36 pm

For more than two decades, Ashwin Patel has been bringing Indian and Pakistani grains and spices — as well as the latest Bollywood movies — to St. Louis through Seema Enterprises, his grocery business.

Patel can often be found behind the cash register at the store, at 10635 Page Avenue. He knows most of his customers by name, some of whom come from as far away as Columbia, Mo., and Carbondale, Ill., to stock up on groceries every month.

Inside his stores, customers can find a couple of dozen types of rice — parboiled, kerala, ponni, Basmati and so on. It’s also one of the only places St. Louisans can find gongura and methi leaves, lychee and green mango juices, Indian-style frozen hot pockets, henna, toothpaste made with neem herbs, and shelves full of teas from the region.

Patel immigrated to the United States from India in 1978. In 1985, he and his wife, Raksha, took over Seema Enterprises after the store’s former owner passed away.
The Page store, which first opened in 1977, was one of the first Indian groceries in the Midwest, according to Patel.

In 1991, he expanded to a second location to Manchester Road, wanting to be closer to the nearby Hindu temple and the growing South Asian population moving into west St. Louis County.

In the last two years, he’s nearly doubled the size of both stores so he has more space to display the ever-expanding variety of South Asian frozen and dried goods that are increasingly available.

Over the years, Patel has also helped fill a void in the community by sponsoring movie screenings and musical performances by some of Bollywood’s biggest musical stars including the likes of Asha Bhosle, Sonu Nigam and Jagjit Singh, to name a few.

How has your business changed in the last 25 years?

It’s a big change. In that time, there were not that many things available, just rice, flour, dals (lentils). We didn’t have frozen food and ready-to-eat meals then, which are becoming much more popular with this new generation. … At that time, there were only one or two kinds of rice: long-grain or jasmine. Basmati was hard to get back then (and it was so expensive and hence, less popular.) Now we sell almost 25 different kinds of rice. Tamil people eat a different kind of rice. Telugu people use a different rice. …

With the popularity of Indian cooking, are more of your customers non-South Asians? Or is your core business still South Asians?

We have non-South Asian people — they are at least 15 percent of our customers. They mostly come here looking for spices and rice.

A lot of the non-South Asians are becoming vegetarian. So they come to Indian grocery stores to see what they can cook. … And these days, more people are becoming samosa-lovers.

You sponsor a lot of movie screenings of Bollywood movies in area theaters. When did you start that and why?

We started doing that in 1994 … I love Indian movies. When I was growing up in India, I used to watch the first day, first showing of new movies. When we came here, we were out of touch with Indian movies for 15 to 20 years. … Then distributors started to bring the movies to the big cities in 1993-94. So we tried it. … Bollywood has become so popular …

Movie rentals used to be a big part of your business, too, right? Do you still do that?

At one point, movie rentals were 25 percent of the business. But we discontinued that about seven months ago.

Nobody rents anymore. The Internet is bringing more mischief with the piracy thing. … We were paying more money to the distributors and less people were renting them or going to the theaters. Nowadays, many people have Indian satellite channels. About 75 percent of South Asian households have a satellite TV. And they can watch 24 hours of shows and news in their own native languages. …

We also used to sell audio CDs, too. But nobody buys it anymore. They just download it.

Are you worried about the future of your business as the first generation of South Asian immigrants ages and there are more second and third generation South Asians?

The kids who are born here, they are not going to be coming here as much. … I think it might survive but in a different way.

With them, items like Indian hot pockets and naan pizza are really popular. It won’t be the same, but we’ll be OK for at least 10 to 15 years. … But it’s going to be changing.

The kids who were born here, they still have roots. But the newer generation, we don’t know. My son likes Indian food. But the next generation?


June 25, 2010

Denver council approves new city zoning code, 13-0

Filed under: online — Tags: , , — Snowman @ 1:09 pm

The Denver City Council late Monday unanimously adopted the city's first new zoning code in more than 50 years.

The council bill that will place the new zoning code into law, passed 13-0, next goes to Denver Mayor John Hickenlooper for action. If Hickenlooper signs the bill, as expected, it will be published by the city clerk and take effect.

During a public hearing several hours long before the p.m. vote, several speakers as well as council members expressed mixed feelings about the new code, saying it's not perfect and will need tweaking over time.

Inconsistencies in code policies and practices will be addressed, said David Roberts, the city's chief services officer.

"It will always be changing," District 4 Councilwoman Peggy Lehman said of the new code.

But speakers and council members also said the new form- and context-based code is a needed improvement over the outdated, 54-year-old existing code, and will sustain Denver's future growth.

"Calling the new code form-based doesn't do it justice," Denver developer Mickey Zeppelin of Zeppelin Development Co., said at the hearing. "It's really a value-based code, reflecting the values of the community."

Council President Jeanne Robb, District 10, called the new code an affirmation of Denver neighborhoods and, while it may not necessarily be simpler than the existing code, it is more organized and an example of the public process, which is "what makes our city great."

Councilwoman Jeanne Faatz, District 2, said she still has problems with how downzoning is handled in the new code, and the loss of property value it could cause, but allowed many of her concerns that the updated code would hinder development were resolved over the last six months.

Other worries expressed about the revamped code at the council hearing ranged from concerns about upzoning, how the South Platte River will be protected and accessory dwelling units to making sure property owners get the sunlight and building heights they want.

City planning department staffers ― including planning chief Peter Park as well as planners Tina Axelrad and Tyler Gibbs ― answered questions from council members and private-sector speakers. Park said his department will present a report to the council, evaluating the new code's performance, after its first six months of use.

Monday's meeting was held at City Council Chambers at the Denver City & County Building, 1437 Bannock St.

The council, city planning and development department, and a public/private group called the Zoning Code Task Force have spearheaded the creation the new zoning code for more than five years. Updating the code is part of city growth plans, including the Comprehensive Plan of 2002 and Blueprint Denver in 2002.

The main idea behind the new code is to better manage Denver's future growth, through form- and context-based zoning. Creators of the new code also have worked to make it more user friendly than the old one, and hope it will help stimulate economic recovery by encouraging development.

Over the years, the current code has become a patchwork of incongruous zoning regulations and it's outdated, according to real estate experts and the city.

Authors of the new code initially hoped council members would vote on the new code by the end of 2009, and then in February of this year, and then in April.

Votes have been delayed to provide more time for public comment about the code and changes to it based on some of that comment.


June 21, 2010

High hopes for Crown Square in Old North St. Louis as official opening nears

Filed under: legal — Tags: , , — Snowman @ 7:45 am

The regular lunch crowd waiting to enter Crown Candy Kitchen at North 14th Street and St. Louis Avenue may soon find another reason to visit the block.

A ribbon-cutting ceremony is set for July 29 to launch the fully renovated Crown Square, a residential and commercial development in the 2600 and 2700 blocks of North 14th.

The development, offering 80 residential units and 35,000 square feet of commercial and retail uses, spans 27 buildings and 2? acres of green space.

The developers, two nonprofit community groups, are optimistic the $35 million project will bring more traffic to that once-booming north St. Louis neighborhood and help lead a renaissance for the area.

"This is the biggest project that we’ve ever been involved with," said Sean Thomas, executive director of the Old North St. Louis Restoration Group, which teamed up with the Regional Housing and Community Development Alliance.

"It is very close to being ready," Thomas said. "Work to reopen the street is the last component to be finished."

In fact, those two blocks of North 14th will be reopened to vehicular traffic for the first time in 33 years. The buildings there had fronted on a failed pedestrian mall since 1977, when urban planners believed that was the best way to attract business to the neighborhood.

However, prospective shoppers and clients of businesses along what was called the 14th Street Mall didn’t like parking behind the buildings and having to walk around to the front doors.

So most businesses along the pedestrian mall eventually closed.

In 2005, the Regional Housing and Community Development Alliance and Old North St. Louis Restoration Group decided to partner to redevelop the mall, which had become an eyesore.

The buildings were acquired over almost two years, from late 2005 through summer of 2007, for about $2 million, developers said.

Funding for the project came from a variety of sources. The development alliance provided a $2 million predevelopment loan. Another $12 million came from state and federal tax credits, and the rest through individual and institutional contributions.

Thomas said he was especially encouraged about the development’s prospects because nearly 70 of 80 housing units in the redevelopment area already have been leased to tenants.

"The challenge now is in leasing out the commercial spaces," he said. "But we have been getting a lot of interest. We want to get them out here to see it and look at the possibilities."

At least one restaurant and some retail businesses are in discussions with real estate agents for the developers, Thomas said.

Two new businesses already have moved into Crown Square, even as the work continues outside on the street. Norah Ryan has opened her law office there, and Therapy, a women’s clothing store, is preparing for its grand opening soon.

Ryan said she was happy about deciding to move her office from Clayton to Crown Square.

"There’s a wonderful sense of community, and a lot of things are going on here," she said.

Ryan, who was familiar with the neighborhood, said the full impact of the redevelopment struck her while taking a friend on a driving tour of the city last fall. "I thought, ‘Wow! That’s pretty neat.’"

And she said her new office was just the right size for her law practice, at about 900 square feet of renovated space.

Thomas acknowledged that a fear of crime has kept some businesses and clients away from the neighborhood for years. But he noted that crime rates in the area had gone down in recent years, and that many of the area’s residents were actively involved in Neighborhood Watch and other programs to keep the area safe.

Thomas said he could foresee a day when the development would rival the neighborhood’s heyday of the 1920s through the early 1950s. In addition to small businesses, that stretch of North 14th once had the first J.C. Penney store in the St. Louis area, he said, adding that the area also had Woolworths and J.J. Newberry’s five-and-dime stores.

"You could argue that this was the main street of a small town, and it could become that way again," he said.

E.M. Harris Construction Co., based in St. Louis, began work on the residential part of Crown Square late in 2007. Restoration of the commercial buildings began in 2008. The project was named in honor of Crown Candy Kitchen, which has anchored the neighborhood for years.

The buildings in Crown Square date from as old as 1860 to the 1920s. Developers restored each building to the era in which it was built, Thomas said.

"This project reflects what cities actually look like — they evolve and change over time," he said.


June 16, 2010

Funding approved for new Sacramento County courthouse

Filed under: management — Tags: , , — Snowman @ 12:45 pm

Funding for a new Sacramento County Courthouse was approved Monday, paving the way for a much-larger — and much-needed — building for criminal trials.

The state Public Works Board approved $439.1 million for the courthouse, a lower cost for the project that allows to expand the number of courtrooms from 35 to 44 and more space for holding cells. In addition, the state will shift administrative space to the existing Schaber Courthouse, rather than the original plan for administrative offices to be part of the new building. The Schaber building will also undergo a minor renovation under the plan.

“The new courthouse is long overdue and badly needed … ,” presiding Judge Steve White said in a news release Monday. “The current downtown courthouse is 45 years old. It is inadequate to handle the 25,000 people who enter it every week. The jury room, well beyond overcrowded, spills into the hallways of the courthouse; crime victims are forced to wait in the halls with defendants’ families; and jurors with witnesses online payday advance.”

Criminal trials will be held in the new courthouse, while the Schaber Courthouse will handle civil trials.

The new 405,000-square-foot courthouse includes 44 courtrooms and allows the county to consolidate from seven locations to three, eliminating four leases. Nine new judges will be added to meet the increasing legal demand.

The almost half billion-dollar courthouse is funded by Senate Bill 1407, which provided $5 billion in funding for “critically needed new and renovated court facilities” that use court-user fees rather than the state general fund.

Local architecture firm Nacht & Lewis and global firm HOK have been hired to design the criminal courthouse. The Administrative Office of the Courts expects to choose a site and complete deal for the property in 2011, and begin construction in 2013. The new courthouse should open in 2015.


June 14, 2010

Big builders are seeing leaner times

Filed under: online — Tags: , , — Snowman @ 9:45 pm

Based locally and working internationally, McCarthy Building Cos. and Alberici Corp. got through the recession’s first year on their deep backlogs of commercial construction contracts.

But now St. Louis’ Big Two of general contracting expect leaner times ahead as they cope with the worst economic downturn in decades.

Commercial construction is a lagging economic indicator, meaning that recessions hurt general contractors later than most companies during tough economic times. Thus general contractors are among the last to recover when the economy improves.

"Once owners start to build something, it’s very rare that they stop a project," said Greg Kozicz, Alberici’s chief executive.

As a result, Alberici had a "very significant backlog" of work for 2006, 2007 and early 2008 even as the economy cooled, and company revenue grew steadily, reaching $1.3 billion in 2008. Completion of some projects and a smaller backlog of new jobs will mean a slight revenue drop this year, Kozicz said.

"And we think ‘11 will be softer than ‘10," he said.

Alberici currently has about a year’s worth of jobs in the works, down from 18 months in more normal times.

"When the economy was roaring along at its peak, we were closer to two years," Kozicz said.

Whether commercial construction is in rebound mode is unclear, he added. The U.S. market is unique because of public stimulus spending, said Kozicz, adding that for the first time in Alberici’s 90-year history, government work makes up a "disproportionate" share of the company’s business.

"On the surface, the numbers look like recovery," he said. "But look at the mix of work and you get a question mark. The government just can’t spend money indefinitely."

By far the region’s largest construction company is McCarthy, which had more than $3.1 billion in revenue last year. Even though that amount was down $380 million from 2008, the company had its highest gross margin ever in 2009, said Derek Glanvill, McCarthy’s president and chief operating officer.

"We still had a lot of good work in the pipeline," he said best payday advance. "The bad years are yet to come. If we could stay flat over the rest of 2010, ‘11 and ‘12, that might be a good thing. That would be favorable not only for McCarthy but for the entire industry."

With projects in more than a dozen "core markets" spread across 40 states, McCarthy’s U.S. business has benefited from a recession-produced 30 percent plunge in the cost of construction, Glanvill said.

"The second thing is that the pent-up demand is starting to come slowly, with more aggressive owners starting to build," he said.

Absent "creative financing," hotel and office construction remains slow although public university construction is "steady" despite the budget stresses felt by many states, Glanville said.

"There are some bright spots but they’re few and far between and not in our traditional market of major cities," he said.

To help deal with the lean times, McCarthy is venturing into smaller cities and bidding on jobs that it would have passed on in better economic times.

"Before, if there were four projects, maybe we’d get two," Glanvill said. "Now, if there are 10 out there, maybe you swallow hard and go after eight and maybe, if you’re lucky, get one."

Len Toenjes, president of the Associated General Contractors of St. Louis, said most construction companies of all sizes are struggling to get over the recession.

A few big projects — such as the St. Louis Art Museum expansion, the Mississippi River bridge — are helping spur a slow turnaround, Toenjes said. Regardless, some area construction companies are looking for work farther from home.

"We’re going to see more of a national footprint in our construction industry," he said. "Now that we’ve learned to work out of town, I think there’s going to be more of a tendency to follow a type of work or a client regionally or across the country."


June 10, 2010

Banking reform takes shape in Congress

Filed under: business — Tags: , , — Snowman @ 6:09 pm

St. Louis bankers are aghast, consumer advocates are delighted and retailers have their fingers crossed.

That’s the situation as the U.S. Senate and House get ready to iron out the differences in their banking reform packages this month.

Meanwhile, debate goes on over whether the bills will accomplish their biggest goal — preventing a repeat of the bacchanal of brainless lending that nearly collapsed the financial system in 2008 and plunged America into recession.

In St. Louis, the howls are particularly loud from area bankers who fear they will be forced to cut the fees they charge merchants for debit card transactions, while being stuck with higher costs for complying with new consumer protection rules.

The bills contain "several very alarming things," says David Kemper, CEO at Commerce Bank, the largest bank based in St. Louis. He says the bills could cut 5 to 8 percent from pre-tax earnings. "We’re all for consumer protection, but at what cost?"

Consumer groups are hailing a rare victory over the bankers. "It’s amazing. The bill could be stronger, but given how much political muscle the industry has, this is really good," said Kathleen Day of the Center for Responsible Lending.

The House and Senate bills have their differences, but they are similar enough so that a probable outline of the final bill is emerging. Here’s a review:

A new consumer protection agency and new rules for banks — Both bills would establish a new agency with broad authority to set rules for consumer lending. The rules would cover banks, payday lenders, finance companies and the like. However, the agency couldn’t set a limit on interest rates, and it probably wouldn’t have authority over auto loans made through car dealers.

The House excluded auto dealers. The Senate didn’t, but the Senate later told its negotiators to exempt the dealers. Auto dealers arrange 79 percent of all car loans, according to the Senate Finance Committee, and dealers often add their own profit to the price. Banks and credit unions complain that they will be subject to consumer protection rules on car loans whereas the dealers won’t.

The bills also contain new rules on mortgages, requiring lenders to assure that borrowers prove they have enough income to make their payments.

Bankers complain that they will be stuck with the cost of paying for the consumer agency, and the government examiners who will troop through banks making sure the rules are obeyed. Such costs get passed on to customers, bankers say.

The consumer rules might limit innovation in credit cards, home improvement loans, mortgages and the like, banks say. That, in turn, might prompt them to stick to plain-vanilla lending rather than risk running afoul of the consumer agency, leaving less choice for borrowers.

Max Cook, president of the Missouri Bankers Association, thinks the consumer agency will become a tool of consumer advocacy groups. "Our greatest fear is that this is their platform," he said.

Giant financial institutions will have to raise more capital — Financial institutions deemed "systemically important" would be put under the thumb of the Federal Reserve under the Senate version. The Fed’s reach would go beyond commercial banks into big investment banks and other financial companies whose failure might threaten the system.

One of the most expensive failures of 2008 was the insurance conglomerate AIG, which was hardly regulated at all. Taxpayers have paid more than $170 billion so far to prevent its collapse.

Financial giants are linked to each other through a web of obligations. The failure of a single giant player can weaken others, potentially leading to more failures. Fear of that domino effect helped set off the panic of 2008, which nearly froze the credit system, and brought on a $700 billion taxpayer bailout.

To head off a repeat, the Fed could force big players to reduce risk and raise capital — a cushion of shareholders’ money that can absorb losses and prevent failure.

Controlling how big banks would fail — Institutions thought to be "too big to fail" might be allowed to fail under the new bills, but they would do so in an orderly fashion. Both bills would let the FDIC seize big financial institutions — banks and other players — and wind down their operations in a way least likely to cause systemic shock.

That might mean paying off some creditors, while stiffing others.

The bills require that failing companies be liquidated, not rescued. Shareholders’ investment would be wiped out, while unsecured creditors would take a haircut.

Right now, institutions that lend money to a too-big-to-fail bank think they’re taking little risk. That’s already changing as credit rating agencies threaten to trim their ratings on the nation’s too-big-too-fail banks. Big banks will have to pay more for financing, and that could trim their profits and perhaps restrict their lending.

No bank based in St. Louis would be considered too big to fail, but several such banks operate here, including Bank of America, U.S. Bank and PNC Bank. Citigroup has no branches here, but it owns a large mortgage operation in St. Charles, and Wells Fargo’s retail brokerage is based in downtown St. Louis.

Disallowing proprietary trading for banks — Big players, and some small ones, are howling over a Senate plan to ban banks from risking their own capital by playing the stock, bond, commodities and derivatives markets. They would be able to handle such trades for others, but not bet the bank’s own money.

Wall Street banks have made a lot of money playing the markets. Ron Kruszewski, CEO of investment firm Stifel Financial in St. Louis, warns that such a ban could reduce "liquidity." Banning the banks will mean fewer players buying and selling, raising the price of transactions for all sides, including small investors.

The ban, called the "Volker Rule," isn’t in the House bill, but House Financial Services Committee Chairman Barney Frank has said he would go along with it.

Debate brewing on debit card fees — A proposed change in debit card rules may spark a fight when Senate and House negotiators meet. Sen. Dick Durbin, D-Ill., sponsored an amendment that would let the Fed set "interchange" fees paid by merchants when customers use debit cards. The fees, about 1 to 2 percent of the purchase price, are big sources of income for banks and a major complaint of retailers. There’s no such thing in the House bill.

The Senate amendment also would let merchants offer discounts for customers who pay with cash or checks rather than credit or debit cards. Banks warn that the loss of fees could cause them to stop offering rewards, such as airline miles or cash back, to customers who use debit cards.

Some small banks may boost fees for checking accounts, Cook said. "All those banners that say ‘free checking’ are being taken down," he said.

Merchants say they will be able to lower prices, although it would also raise store profits.

New way to sell derivatives — Derivatives helped push some institutions over the brink during the credit crisis. The bills would force derivatives to be sold through clearing houses, which would make sure the companies issuing derivatives have the money to back them up. Most derivatives would also have to be traded on exchanges, which makes prices clearer.

Derivatives can be used to hedge risk, or to take risk on. AIG failed largely because it issued credit default swaps — the equivalent of insurance — on mortgage bonds. When the bonds began to weaken, AIG couldn’t pay up.

So, would these changes prevent the next big financial mess?

Dave Rolfe, chief investment officer at Wedgewood Partners in Ladue, has his doubts. Regulation doesn’t prevent catastrophe if the regulators aren’t sharp, and can’t fend off political pressure from the industry.

"Look at Fannie Mae and Freddie Mac. They failed miserably," said Rolfe, noting that the mortgage giants had a special federal regulator.

Stifel’s Kruszewski, who runs a brokerage and investment firm, says the bill fails to completely control "weapons of mass financial destruction," such as credit default swaps and synthetic collateralized debt obligations. Such derivatives allow speculators to make massive bets in the credit markets, raising the risk level in the system.

Kemper, of Commerce Bank, says the bills would put too much cost on small and mid-sized commercial banks, which had nothing to do the subprime mortgages and speculation that caused the crash.

"You don’t want to turn the banking system into the domestic airline business."


June 6, 2010

Midwest BankCentre hires Fennoy for development post

Filed under: term — Tags: , , — Snowman @ 8:45 am

Midwest BankCentre added Alex Fennoy as senior vice president and director of community development.

Fennoy will focus on starting St. Louis-area community outreach programs for the bank in lending, investment and financial education, as well as managing traditional middle market commercial banking relationships.

He has 18 years of experience in commercial banking, most recently serving as a vice president of National City Bank.

Fennoy sits on the St. Clair County Board for the United Way, mentors with Inroads Alumni and serves as finance committee chair for the Jackie Joyner-Kersee Foundation.
He earned a bachelor’s degree in accounting from Fisk University in Nashville, Tenn.


June 2, 2010

Stocks stage a big rally

Filed under: legal — Tags: , , — Snowman @ 1:36 am

U.S. stocks soared Thursday, with the major indexes gaining about 3%, after Chinese officials dismissed reports that they’re reviewing their nation’s investment in European bonds amid concerns about the continent’s debt problems.

The Dow Jones industrial average (INDU) added 285 points, or 2.9%, and finished at 10,259. American Express (AXP, Fortune 500), Intel (INTC, Fortune 500) and Alcoa (AA, Fortune 500) led the advance, rising more than 5%.

The S&P 500 (SPX) index rose 35 points, or 3.3%, and the Nasdaq (COMP) composite increased 82 points, or 3.7%.

Stocks erased gains in the last hour of trade Wednesday, with the Dow finishing below 10,000 for the first time in three months, as the focus shifted from strong economic reports to lingering concerns about global economic recovery and the weakening euro.

But investors’ confidence got a boost Thursday after China’s State Administration of Foreign Exchange refuted reports that the country was reconsidering its holdings in European bonds, calling the claims "groundless."

"China has always firmly supported the EU integration process. We support the European Union and the International Monetary Fund package of financial stability measures being taken," said agency chief Yi Gang in a statement.

China holds $2.45 trillion of foreign exchange reserves, with U.S. Treasury debt and Euro zone government bonds making up key investments.

"The news out of China denying rumors that they’re going to reevaluate their European assets sparked a nice rally," said Peter Cardillo, chief market economist at Avalon Partners.

Had the rumors been true, Cardillo said the euro would have crashed and sent markets into a free fall.

"That kind of move would have been detrimental for China, too," Cardillo said. "If Europe falls apart, so will the global economy."

Although worries about Europe’s debt problems will continue, Cardillo said it’s only a matter of time before fears subside.

The CBOE Volatility index, or the VIX (VIX), Wall Street’s fear factor, sank more than 14%.

"With the facts we have now, we know Europe’s troubles will impact economic activity on a global scale, but not by much and that’s key," Cardillo said.

But markets could continue to remain volatile as investors remain jittery.

"Anytime we see moves of this kind of magnitude, even if it’s positive, investors take a little more caution," said Russel Lundeberg, chief investment officer at Barrett Capital Management. "A nervous environment keeps volatility high."

Economy: The government revised its reading on first-quarter gross domestic product (GDP), the broadest measure of U.S. economic activity, to an annual growth rate of 3%. The figure was below expectations of 3.3%, according to a consensus of economists surveyed by The initial reading, released last month, was a 3.2% rate.

But the revision also showed that the rate of consumer spending has doubled since the fourth quarter of 2009, and remains consistent with the forecast for annual GDP to grow between 3% and 3 payday advance.5% in 2010, Cardillo said.

The Labor Department said filings for first-time unemployment insurance fell last week to 460,000 from a revised 474,000 the previous week. Economists were expecting claims to fall even lower, to 455,000.

Companies: Johnson & Johnson (JNJ, Fortune 500) executives told lawmakers that the widespread recall of children’s Tylenol medicines earlier this month was a precautionary measure taken against "remote" health risks. But the Food and Drug Administration is investigating reports of at least 775 serious side effects from the recalled drugs.

Johnson & Johnson’s stock was the only Dow component to slip into the red Thursday, falling 0.2%. Since the May 1 recall, the company’s shares have fell more than 7%.

BP (BP) executives also took the hot seat on Capitol Hill in ongoing testimony about the Gulf oil spill. The company’s shares soared 7% after an Oppenheimer analyst raised the stock’s rating, saying that the recent sell-off has gone too far. Shares of BP have dipped 30% since the April 20 explosion.

Apple’s (AAPL, Fortune 500) market capitalization overtook Microsoft’s (MSFT, Fortune 500) for the first time in 20 years at the close Wednesday, making it the second most valuable company in the nation after Exxon Mobil (XOM, Fortune 500). Both tech giants added about 4%.

World markets: Stocks around the world also advanced on the news from China. In Europe, the CAC 40 in France jumped 3.4%. Britain’s FTSE 100 added 3.1% and the DAX in Germany also gained 3.1%

Asian shares also finished higher. The Hang Seng in Hong Kong and Japan’s Nikkei added 1.2%. The Shanghai Composite gained 1.2%.

Dollar and commodities: The euro, which has seesawed since falling to a four-year low last week amid concerns about the region’s economic stability, rebounded against the dollar, rising 1.5% against the U.S. currency.

The greenback was down 1.3% against the British pound, but it was up 1% versus the Japanese yen.

The weaker dollar gave momentum to oil prices. Oil for July delivery rose $3.04, or 4.3%, to $74.55 a barrel.

Gold for June delivery dipped $1.50 to settle at $1,211.60 per ounce.

Bonds: Treasury prices tumbled Thursday, pushing the benchmark 10-year note’s yield up to 3.35%. Bond prices and yields move in opposite directions.

Trading volume: Market breadth was positive. On the New York Stock Exchange, winners beat losers nearly 13 to one on volume of just under 1.4 billion shares. On the Nasdaq, advancers topped decliners seven to one on volume of 2.4 billion shares.  


Powered by WordPress