Yellen: No rush to start tightening credit
The Federal Reserve’s second-highest ranking official on Monday said the economy is not strong enough for the Fed to begin tightening credit, countering a vocal minority of members who argue the central bank’s stimulus programs are contributing to higher inflation.
Janet Yellen, the Fed’s vice chairwoman, said the Fed’s $600 billion Treasury bond-purchase program and record-low interest rates are necessary to help lower unemployment, which was 8.8 percent last month. She is part of a majority of members, including Fed Chairman Ben S. Bernanke, who feel those programs are essential, even with oil and food prices surging.
A few members have raised concerns that the Fed’s programs could spur higher inflation.
Richard Fisher, president of the Federal Reserve Bank of Dallas; Charles Plosser, president of the Federal Reserve Bank of Philadelphia; and Narayana Kocherlakota, president of the Federal Reserve Bank of Minneapolis, have suggested in recent weeks that it may be time to exit the programs. The Fed meets next on April 26-27.
Stocks weaken as earnings season approaches
NEW YORK | Stocks turned lower Monday as an initial burst of enthusiasm over a new pair of corporate deals faded. First-quarter earnings season gets under way later in the day when Alcoa Inc. reports results.
Alcoa had been higher earlier in the day but started to fade around lunchtime as the time for its earnings report approached.
Analysts have been hopeful that overall corporate earnings will come in ahead of expectations for the ninth consecutive quarter, but they still have a long list of worries, including high oil prices and an aftershock that struck Japan on the one-month anniversary of the March 11 earthquake and tsunami disaster. It was the second major aftershock in less than a week to hit the country, which is the world’s third-largest economy.
Stocks started higher after Endo Pharmaceuticals Holdings Inc. and Level 3 Communications Inc. announced takeovers before the market opened. By early afternoon all major stock indexes had turned lower.
Biggest version of 747 to come to airports
NEW YORK | The biggest version yet of Boeing’s iconic 747 could soon be flying into airports that have never seen aircraft that large, raising hackles among some airport neighbors.
Medium-size airports in Toledo, Ohio; Rockford, Ill., and Huntsville, Ala., are among those asking the Federal Aviation Administration for approval to receive the massive 747-8 freighter. Boeing expects to deliver the first planes to customers later this year.
The airports are eager to grab a share of the air-cargo market, which is growing faster than passenger traffic as the economy recovers. But some residents feel threatened by the big cargo planes currently flying over their homes and doubt Boeing’s claims that the new 747 won’t be as noisy.
The 747-8 is the biggest airplane Boeing has built, with a wingspan 11 feet wider and a body 18 feet longer than the current 747-400 model. Despite its size, Boeing says the 747-8’s engines will be 30 percent quieter.
Dealers warned of Toyota shortages
DETROIT | Toyota Motor Corp. is telling U.S. dealers that new vehicles could be in short supply this summer.
In a memo to dealers obtained Monday by the Associated Press, Toyota’s U.S. general manager, Bob Carter, said new-vehicle supplies could be “significantly impacted” owing to production slowdowns in Japan and North America.
Toyota has had trouble getting some parts after its suppliers were damaged by the March 11 earthquake and tsunami in Japan.
Mr. Carter said plants won’t be running at full capacity this month and that production schedules haven’t been set for May through July.
Toyota also says some paint colors won’t be available because of damage to a supplier.
Still, Mr. Carter said the company is optimistic about April sales and has more than 300,000 vehicles in stock.
• From wire dispatches and staff reports