No more Happy Meals in Silicon Valley?

NEW YORK

Elected officials in Santa Clara County, the area to the south of San Francisco that covers most of Silicon Valley, have introduced a law banning restaurants from offering toys with any children’s meals that fail to meet national health criteria.

In other words, the Happy Meal is for the chop. It is believed to be the first such law anywhere in the world.

Mr Ken Yeager, the supervisor who devised the ban, told the

“Obviously, toys in and of themselves do not make children obese.

“But it is unfair to parents and children to use toys to capture the tastes of children when they are young and get them hooked on eating high-sugar, high-fat foods early in life.”

Restaurants will be fined up to US$1,000 ($1,400) for every meal they are caught selling with a toy, should that meal be deemed unhealthy by federal standards.— Silicon Valley, the undisputed leader of the technology revolution, is seeking to add a new accolade to its reputation by becoming the leader of the fight against obesity induced by fast food.San Francisco Chronicle that the aim was to break “the link between unhealthy food and prizes”.

THE GUARDIA N

SINGAPORE

In its latest  

It revised its Asian growth forecast upward to 7.1 per cent for 2010, 1.25 percentage points higher than the projected figure in October 2009, and expects this trend to continue into 2011.

At the same time, the IMF expects the Singapore economy to grow 8.9 per cent this year, in line with the government’s latest growth estimate of 7 to 9 per cent. This is also higher than IMF’s 5.7 per cent forecast issued earlier.

The IMF report stated that Asia’s recovery from the recent economic crisis is driven by resilient domestic demand, backed by rising household consumption and public stimulus.

It expects domestic demand to remain robust as it has developed substantial momentum, despite stimulus packages being gradually withdrawn.

However, the IMF cautioned that while Asia is fast on recovery, policymakers in the region should guard against a build-up of imbalances in local asset and housing markets.

“Brighter economic growth prospects and widening interest rate differentials with advance economies are likely to attract more capital to the region,” stated the report.

“This could lead to overheating in some economies and increase their vulnerability to credit and asset price booms with the risk of subsequent abrupt reversals.”

Still, some economists do not share IMF’s optimism on the Singapore economy, posting lower growth forecasts amid concerns of inflation and sluggish recovery in the developed markets.

Mr Alvin Liew, economist at Standard Chartered, said that at 6.5 per cent, the bank’s outlook for Singapore’s growth is more cautious than the IMF forecast.

“External demand, while recovering, is likely to be lacklustre — especially from the G3 markets, where unemployment may remain stubbornly high,” said Mr Liew, referring to Europe and the US which are still battling the effects of the financial crisis.

Mr Leon Perera, managing director of Spire Research and Consulting, also has a conservative forecast for Singapore at 7 per cent, citing the bearish equity sentiment and commodity price hikes that may dampen growth momentum in the second half of the year.

While overheating threatens China’s equity and property market, he does not foresee a major downward correction in Singapore, despite the overexuberance in the property market here. This is because investor sentiment remains strong and buyers are in it for the long haul, he said.

With regard to lessening Singapore’s dependence on export trades with Western economies, he said it would be imperative for the country to tap more into the emerging markets such as Russia and Africa.

Jo-ann Hu ang and Millet Enrique z

Dow in triple-digit rally

Dow plunges 213 points, breaks 11K

The Dow Jones industrial average (INDU) tumbled 213 points, or 1.9%, closing below 11,000, a key psychological level. The Dow ended the previous session at its highest point in 19 months.

The S&P 500 index (SPX) fell 28 points, or 2.3%, closing below 1,200, a psychological level traders look at. The Nasdaq composite (COMP) slid 51 points, or 2%.

Stocks were flat to lower in the morning as Goldman Sachs sought to defend itself on Capitol Hill against allegations it profited from the housing market collapse. But news that ratings agency Standard & Poor's had cut Greece and Portugal's debt ratings overshadowed everything else, giving investors a reason to retreat on the back of an 8-week advance.

"We're seeing the fear factor kick in about Greece and Portugal," said Peter Cardillo, chief market economist at Avalon Partners. "That's rattling the market."

He said that fear was also reflected in the so-called flight to quality as investors poured money into bonds and the euro fell to a new low for the year.

That was reflected by a jump in the CBOE Volatility index, Wall Street's so-called "fear gauge." It spiked 24%, hitting the highest point since February. Typically a surge in the VIX corresponds with a selloff in stocks.

Greece: Standard & Poor's cut its ratings on Greece's long-term debt status to "BB+" with a negative outlook from "BBB+." The double-B plus rating is considered to be speculative or "junk," and reflects the ratings agency's concern about Greece's long-term ability to get out from underneath the its current fiscal crisis. S&P cut Greece's short-term debt even lower.

S&P also cut Portugal's long-term debt ratings by two notches and the short-term rating by one notch, but did not lower the debt to junk status.

The cost of insuring both Greece and Portugal's debt rose to record highs following the news.

Worries about the fiscal health of Greece and the other so-called PIIGS have weighed on the stock market on and off since the start of the year as investors worry the weakness will destabilize the euro and hurt global growth. The PIIGS are Portugal, Ireland, Italy, Greece and Spain.

Blankfein, in prepared testimony, denied that the company sought to profit from the housing market collapse, an allegation lawmakers have made recently.

Fabrice Tourre, the trader charged in the Securities and Exchange Commission's fraud case against Goldman Sachs defended himself, saying he categorically denied the SEC's allegations.

On the move: Financials, energy and technology, the three biggest movers of the market in terms of sectors, all fell.

Goldman Sachs (GS, Fortune 500) gained 1%, but other bank shares plunged, with the KBW (BKX) Bank index losing over 3%. Sliding oil prices dragged on energy stocks, including Dow components Exxon Mobil (XOM, Fortune 500) and Chevron (CVX, Fortune 500).

Declines were broad based, with 28 of 30 Dow components falling. In addition to the Dow's financial and energy components, other losers included heavily weighted tech stocks Hewlett-Packard (HPQ, Fortune 500) and IBM (IBM, Fortune 500), aerospace and defense names Boeing (BA, Fortune 500) and United Technologies (UTX, Fortune 500) and heavy-machinery maker Caterpillar (CAT, Fortune 500).

Caterpillar shares rallied Monday after the company reported better-than-expected earnings and boosted its 2010 profit forecast.

Market breadth was negative. On the New York Stock Exchange, losers beat winners five to one on volume of 1.68 billion shares. On the Nasdaq, decliners topped advancers by over four to one on volume of 2.77 billion shares.

Bernanke spoke at the first meeting of President Obama's bipartisan debt commission.

Federal Reserve: The central bank policymakers were meeting Tuesday and Wednesday with an announcement on interest rates and the outlook due Wednesday afternoon.

The Ben Bernanke-led Fed is expected to hold interest rates steady at historic lows near zero. However, what the bankers say in the statement about the outlook for the economy and interest rates will be scrutinized.

Investors will also pay attention to whether the Fed provides more details about how it plans to continue unwinding programs put in place to prop up the economy during the financial crisis.

Company news: Ford Motor (F, Fortune 500) reported a better-than-expected first-quarter profit that rose from a year earlier. But shares slumped after the company's revenue growth was shy of expectations.

After the market closed Monday, Texas Instruments (TXN, Fortune 500) reported quarterly sales and earnings that topped estimates and rose from a year earlier. Shares were slightly lower.

3M (MMM, Fortune 500) reported higher quarterly sales and earnings that topped estimates thanks largely to strong international sales. The Dow component, considered to be a good barometer of the economy because of the breadth of its business, also boosted its 2010 profit forecast.

However, 3M said growth in Asia and Latin America are the drivers of that forecast and that the U.S. economic recovery will be patchy. Shares gained 0.6%.

Fellow Dow component DuPont (DD, Fortune 500) also reported higher quarterly sales and earnings that topped expectations, and lifted its 2010 profit forecast. But investors took a sell-the-news response and sent shares nearly 4% lower.

With 40% of the S&P 500 having reported, earnings are on track to have grown 50% from a year earlier and revenues 11%, according to the latest info from Thomson Reuters.

Roughly 82% of earnings have topped estimates. Should that figure hold up, it would be the highest percentage of companies topping earnings in Thomson's history.

The dollar and commodities: The dollar gained versus the euro and fell against the yen.

U.S. light crude oil for June delivery fell $1.76 to settle at $82.44 a barrel on the New York Mercantile Exchange.

COMEX gold for June delivery rose $8.20 to settle at $1,162.20 per ounce.

World markets: In overseas trading, European markets slumped, with London's FTSE down 2.6%, France's CAC 40 down 3.8% and Germany's DAX down 2.7%. Asian markets were mixed, with Hong Kong's Hang Seng index down 1.5% and Japan's Nikkei up 0.4%.

Bonds: Treasury prices rallied, lowering the yield on the 10-year note to 3.70% from 3.82% late Monday. Treasury prices and yields move in opposite directions. 

Stocks set for early retreat

Dow Jones industrial average, S&P 500 and Nasdaq 100 futures were lower ahead of the opening bell.

Futures measure current index values against perceived future performance and offer an indication of how markets may open when trading begins.

U.S. markets finished little changed Monday as investors had difficulty finding momentum after pushing stocks higher for eight straight weeks.

Fed: Investors remained cautious as central bank policymakers get ready to begin get their two-day policymaking meeting Tuesday.

The Fed's closely scrutinized statement comes out at the conclusion of the meeting Wednesday afternoon. No change is expected in the historically low interest rates near zero percent, but investors will look for comments on the state of the economy and how the central bank will begin to tighten its accommodative policy.

Economy: On the economic front, investors will take in reports on home prices and consumer confidence.

The Case-Shiller index on home prices comes out at 9 a.m. ET. Economists surveyed by Briefing.com expect prices rose 1.1% in February, after a decline of 0.7% the month before.

Companies: Shares of Ford Motor (F, Fortune 500) fell in electronic trading, despite the company's better-than-expected first-quarter results.

The automaker posted net income of $2.1 billion, or 50 cents per share, for the first quarter of 2010. Analysts surveyed by Thomson Financial had expected earnings per share of 31 cents.

CIT Group, (CIT, Fortune 500) a bank specializing in small business financing, said it earned $97 million, or 49 cents per share, in the first quarter.

After the market closed Monday, Texas Instruments (TXN, Fortune 500) posted a 35% rise in first-quarter sales. The company said it earned net income of $658 million, or 52 cents per share, on sales of $3.21 billion.

Meanwhile, investors will be keeping an eye on a hearing on Capitol Hill where top executives from Goldman Sachs (GS, Fortune 500) are expected to face tough questions in relation to the civil fraud charges brought against the firm by the Securities and Exchange Commission.

Bond prices rose, with the yield on the benchmark 10-year note at 3.78%.

Stocks sputter after hitting '10 highs

The Dow Jones industrial average (INDU) ended just above unchanged, with Caterpillar (CAT, Fortune 500) and a few other stocks countering the weakness in financials.

The S&P 500 index (SPX) lost 5 points, or 0.4%, after ending Friday's session at a 19-month high.

The Nasdaq composite (COMP) lost 7 points, or 0.3%, after ending the previous session at the highest point in almost two years.

Stocks seesawed through the session as investors welcomed Caterpillar's earnings and forecast but showed reluctance at the start of a busy week. Financial concerns continued to drag on the market.

Stocks gained Friday after a surprisingly strong new-home sales report, with the Dow, Nasdaq and S&P 500 all gaining on the week as well. The Dow has now gained eight weeks in a row, the longest wining streak since January 2004.

Although there are no economic reports due Monday, the pace picks up later in the week. The Fed's two-day policy meeting concludes Wednesday, with a statement due in the afternoon, while reports on jobless claims, consumer confidence and gross domestic product are also on tap.

While the trend for the market remains up, there are still headwinds, including any fallout from Goldman Sachs' fraud charge, the debate over financial reform and Greece's lingering debt issues.

Financials: Goldman Sachs (GS, Fortune 500) shares fell ahead of a Senate hearing Tuesday aimed at investigating the role investment banks played in the 2008 financial crisis. Goldman CEO Lloyd Blankfein, Fabrice Tourre, the only Goldman employee named in the SEC's fraud charge, and other Goldman employees will be among those testifying.

E-mails released Monday showed that Tourre -- who helped create a bond deal tied to subprime mortgages that regulators say defrauded investors -- knew the complex deals were bunk.

The federal government said it will sell up to 1.5 billion shares in Citigroup (C, Fortune 500), in its latest move toward withdrawing some of the support for big banks it put in place during the height of the financial crisis. The sales are equivalent to about one-fifth of the government's ownership stake and would reduce its holdings to roughly 22% of the company.

Shares plunged 5%.

Other bank shares fell too, dragging the KBW Bank (BKX) sector index down 3%.

Quarterly results: Heavy-machinery maker Caterpillar (CAT, Fortune 500) reported higher quarterly earnings that beat estimates on weaker revenue that missed estimates. The company said that the economic outlook is improving, but that it is cutting its outlook for housing starts by 20% due to the weak labor market. The Dow component also boosted its 2010 profit forecast. Shares gained 4.2%.

Whirlpool (WHR, Fortune 500) reported higher quarterly sales and earnings that beat estimates due to stronger sales of its appliances both domestically and abroad. The company also reported a stronger 2008 profit. Shares gained 14%.

With roughly 34% of the S&P 500 having reported results, earnings are currently on track to have risen 50% from a year ago, while revenues are on track to have risen 11%, according to tracker Thomson Reuters.

So far, about 83% of earnings and 81% of revenues have topped estimates.

Corporate news: Hertz (HTZ, Fortune 500) said it will buy Dollar Thrifty in a $1.2 billion cash and stock deal that combines the two car rental companies.

Market breadth was negative. On the New York Stock Exchange, losers beat winners by eight to seven on volume of 1.23 billion shares. On the Nasdaq, decliners topped advancers by a narrow margin on volume of 2.38 billion shares.

The dollar and commodities: The dollar gained versus the euro and yen.

U.S. light crude oil for June delivery fell 92 cents to settle at $84.20 a barrel on the New York Mercantile Exchange.

COMEX gold for June delivery rose 30 cents to settle at $1,153.70 per ounce.

World markets: In overseas trading, European markets rallied, with London's FTSE up 0.5%, France's CAC 40 up 1.2% and Germany's DAX up 1.2%. Asian markets fell, with Hong Kong's Hang Seng index up 1.6% and Japan's Nikkei up 2.3%.

Bonds: Treasury prices were little changed, with the yield on the 10-year note at 3.82%, unchanged from late Friday. Treasury prices and yields move in opposite directions. 

For the 16 eurozone countries, the combined deficit more than trebled in 2009 to 6.3 per cent of output from 2 per cent in 2008, hitting more than twice the level permitted under the bloc’s budgetary rules.

Ireland was the worst offender, at 14.1 per cent, followed by Greece, Spain on 11.1 per cent and Portugal with 9.4 per cent. AGENCIES

Stocks seesaw on mixed earnings

The Dow Jones industrial average (INDU) added 8 points, or less than 0.1%, to end at 11,124.92. The S&P 500 index (SPX) fell 1 point, or 0.1%, to settle at 1,205.93, and the Nasdaq composite (COMP) rose 4 points, or 0.2%, to close at 2,504.61.

"As we get beyond earnings, attention is going to turn right back to the housing and job markets," said Dave Hinnenkamp, chief executive of KDV Wealth Management. "The downturn has left a really big scar, and investors who got burned will be cautious for some time."

Stocks finished Tuesday's session in positive territory, thanks to better-than-expected earnings from Goldman Sachs and several consumer companies.

"Investors were holding their breath for this earnings season, and it looks like it's going to be decent," Hinnenkamp said. "This makes people comfortable saying we're in a recovery process, but it's going to be a slow one."

Tech earnings: Late Tuesday, iPod and Mac maker Apple (AAPL, Fortune 500) posted a record quarter that blew past Wall Street's estimates. Apple shares ended more than 6.1% higher.

Yahoo (YHOO, Fortune 500) also delivered earnings that beat expectations, but its sales came in below estimates. Shares closed down 4.9%.

"The tech sector leads out of the recession," Hinnenkamp said. "After that we'll be looking for the industrial and material sectors to rise -- and once we move forward, attention will turn to the energy sector."

Financial earnings: Earlier Wednesday, Morgan Stanley (MS, Fortune 500) said it swung to a $1.8 billion profit in the first quarter Wednesday before the bell, as strong trading revenue boosted the Wall Street firm's latest results. Shares of Morgan ended 4.2% higher.

Wells Fargo (WFC, Fortune 500) reported a $2.5 billion profit before the bell, beating Wall Street expectations. The company said that credit conditions have "turned the corner" from the weakness of the financial crisis. Still, Wells shares fell almost 2% by the end of trading.

Overall, the finance sector ended 10.8% higher Wednesday.

"We're not unreasonably priced at these levels, considering earnings," Hinnenkamp said, "but it's not a deep-value market, either."

Other corporate results: In addition to banks, investors digested quarterly results from several Dow components:

-- AT&T (T, Fortune 500) beat estimates on a boost from strong sales of Apple's iPhone;

-- Boeing (BA, Fortune 500)'s profit and revenue dropped amid fewer airplane deliveries;

-- McDonalds (MCD, Fortune 500)' earnings rose above predictions as sales rose across all its markets, especially Europe and Asia;

-- United Technologies (UTX, Fortune 500) also beat estimates.

Also, Chrysler announced that it earned its first operating profit since exiting bankruptcy on June 10, 2009. The profit follows nearly $4 billion of losses logged by the automaker during that time.

The results continued after the markets closed, with Starbucks (SBUX, Fortune 500) and other major names reporting results after the bell. The coffee chain handily beat profit and sales estimates, and the company lifted 2010 guidance. Shares were up 2% in after-hours trade.

In other company news, General Motors announced Wednesday morning that it had made a final payment of $5.8 billion late Tuesday to the U.S. and Canadian governments, paying off the last of its $6.7 billion in loans.

Outlook: "Psychological issues will continue to drive the markets," said KDV's Hinnenkamp.

He expects a slow but continued higher trend, with the S&P around 1,200 in the coming weeks, and the Dow around 11,250.

"The economy is improving, but slowly," Hinnenkamp said. "Thus recovery wont come as quickly hoped for, and a sustained bounceback can come only once housing and jobs kick in."

But even negative news outside of the real estate and employment sectors could put a damper on the uptick, Hinnenkamp added.

"Any piece of bad news, people worry there's an Armageddon," he said. "But there's always good and bad news out there -- it depends where you choose to focus."

World markets: European shares, including the FTSE 100 in Britain, France's CAC 40 and Germany's DAX, ended lower.

Asian markets ended the session mixed. Japan's Nikkei rallied 1.7% and the Shanghai Composite surged 1.8%. The Hang Seng in Hong Kong lost 0.5%.

Other markets: The dollar edged higher against the euro but remained weak versus the Japanese yen and the U.K. pound.

The price of oil fell 17 cents to settle at $83.68 a barrel. Wednesday marked the first day of the June contract.

COMEX gold for June delivery prices rose $9.60 to settle at $1,148.20 an ounce.

Treasury prices were higher, with the yield on the benchmark 10-year note at 3.78%. Bond prices and yields move in opposite directions.