My finance view

World stock markets advanced Tuesday as investors awaited new U.S. economic data amid hopes that more measures are on the way to spur lackluster growth in the world’s biggest economy.

Oil prices hovered above $87 a barrel in Asia while the dollar strengthened against the euro but was down against the yen.

European shares were mostly higher in early trading. Britain’s FTSE 100 jumped 2.4 percent to 5,251.53, catching up on gains after being closed for a holiday Monday. Germany’s DAX slipped less than 0.1 percent to 5,664.99 while France’s CAC-40 rose 0.5 percent to 3,168.41.

But Wall Street turned jittery after a strong start to the week Monday. Dow Jones industrial futures fell 0.3 percent to 11,486 while S&P 500 futures lost 0.3 percent to 1,204.

Asian shares registered gains in a day absent the volatility that has shaken markets recently. The Nikkei 225 index in Tokyo added 1.2 percent to 8,953.90 as investors seized on positive U.S. consumer spending figures and overlooked a rise in Japan’s unemployment rate.

Hong Kong’s Hang Seng gained 1.7 percent to 20,204.17 and South Korea’s Kospi was 0.8 percent higher at 1,843.82. Australia’s S&P/ASX 200 rose 0.1 percent to 4,269.20.

Signs that the U.S. may be staving off another recession helped exporters that depend heavily on demand from the West. Sharp Corp. rose 2.8 percent and Panasonic Corp. was 3.3 percent higher. Isuzu Motor Corp. rose 3.4 percent.

One sign of possible help on the horizon was the Federal Reserve’s decision to extend its upcoming policy meeting to two days instead of one. That raised the possibility of action, at least in the eyes of traders, to jolt the economy.

Another reason for the upbeat mood: investors were anticipating an announcement next week by President Barack Obama on a new jobs initiative.

“I think the focus is on President Obama’s speech, which is related to measures that will revive the economy,” said Kwong Man Bun, chief operating officer at KGI Securities in Hong Kong. “All this provides some of sort positive expectations for investors.”

Mainland Chinese shares lost ground, however, with the benchmark Shanghai Composite Index falling 0.4 percent to 2,566.60. The Shenzhen Composite Index fell 1 percent to 1,148.29.

Shares in food-related companies and financials advanced while shares in manufacturing and plastics companies weakened on expectations that upcoming manufacturing data could be worse than earlier forecast guaranteed payday loans.

European shares jumped Monday after Greece’s second- and third-largest lenders agreed to combine, creating the country’s largest bank. Greece’s government and central bank have been urging banks to merge, saying it would help them survive.

In the U.S. on Monday, stocks rose broadly after it became clear that Tropical Storm Irene had caused far less damage than many had feared. Insurance shares rose sharply as analysts lowered their estimates of how much damage the storm would cause.

An increase in consumer spending also helped to push stocks higher. The government reported that spending rose 0.8 percent in July. It was a sharp turnaround from June, when Americans cut spending 0.1 percent, the first decline in 20 months.

The Dow Jones industrial average rose 2.3 percent to close at 11,539.25. The Standard & Poor’s 500 index rose 2.8. The technology-focused Nasdaq rose 3.3 percent to 2,562.11.

Despite Monday’s gains, analysts warned market sentiment will remain fragile ahead of U.S. economic indicators this week that could show slowing growth. Later Tuesday, the Consumer Confidence Index for August will be released. Then on Friday, the Labor Department will release U.S. employment data for August.

“The perception that stocks are more cheaply valued has helped to feed into appetite for equity markets. However, likely weak data in the days ahead both in the US and Europe may result in a reality check for markets,” Credit Agricole CIB said in a research note.

In currencies, the euro dropped to $1.4438 from $1.4505 late Monday in New York. The dollar slipped to 76.73 yen from 76.95 yen.

Benchmark oil for October delivery was down 22 cents to $87.05 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.90 to end at $87.27 per barrel on the Nymex on Monday.

In London, Brent crude for October delivery was down 23 cents to $111.64 on the ICE Futures exchange.

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More than 4 million homes and businesses were without power Sunday morning as Hurricane Irene continued to roar up the East Coast and took aim at the New York City area and New England.

Winds of up to 115 miles per hour whipped across the Eastern Seaboard, ripping power lines from poles and snapping trees in half. Hospitals, emergency call centers and other crucial facilities were holding up, but officials said it could get much worse as Irene churns north.

More than 1.3 million of the homes and businesses without power were in Virginia and North Carolina, which bore the brunt of Irene’s initial march. Maryland, Delaware and Washington, D.C. had about three-quarters of a million outages combined.

New Jersey and Pennsylvania each had about three-quarters of a million without power, and hundreds of thousands of other customers were in the dark in New York and Connecticut.

Officials in southern and mid-Atlantic states had warned of mass power outages, with some recalling the destructive Hurricane Isabel in 2003, and their predictions were confirmed after Irene moved over North Carolina as a Category 1 storm early Saturday.

New York’s biggest utility, Consolidated Edison, said it could cut power to the city’s most vulnerable areas if the storm causes serious flooding. Salt water and rain can damage electrical equipment.

ConEd operations chief John Miksad said the utility didn’t expect to cut power before the storm hits, but flooding Sunday could bring a shutdown to areas including the southern tip of Manhattan. That would cut off power to major Wall Street institutions through parts of next week.

The New York Stock Exchange has backup generators and can run on its own, a spokesman said. The exchange expects to open as usual Monday morning, though it may change plans depending on the severity of the storm.

New York is regularly blasted by winter storms, but Miksad said this hurricane will be different. Irene’s wind will pack a stronger punch than a nor’easter last March that knocked out power to 175,000 customers, he said.

ConEd has called in crews from as far as Colorado to help repair damage from the storm.

Spokesmen for the utilities said Saturday that hundreds more crews from as far away as Alabama, Michigan and Quebec are ready to help out in Connecticut.

Officials noted that crews wouldn’t begin restoring power until conditions are safe. Hurricane-force winds are expected to hit the state later Sunday morning.

Winds have already caused flooding and damage to many areas. North Carolina, Virginia, Maryland, New Jersey, New York, Connecticut and Rhode Island have declared emergencies. For the first time, New York City ordered people in low-lying areas to evacuate.

Power companies have called in several hundred workers from surrounding states to help. Crews were rushing out between bands in the hurricane, when the wind and rain ease. They’re looking for damage first at towering transmission lines, where an outage could put an entire county in the dark.

Gasoline supplies fell as drivers filled up before leaving town or just topped off their tanks as a precaution before the storm hit. Pump prices rose about 3 cents per gallon overnight in New Jersey and Pennsylvania.

Refueling barges waited out the storm off the coast, also causing gasoline supplies to fall. Widespread power outages could lead to fuel shortages as gas stations are no longer able to pump gas or have trouble replenishing their own gas supplies.

“Power is the lifeblood of oil supply on the East Coast,” said Ben Brockwell of the Oil Price Information Service, which tracks gasoline shipments around the country.

Some gas stations in New Jersey reported that they’d run out of fuel. Those shortages could become more widespread.

Retail gas prices were mostly unchanged in many cities that are expected to be hit this weekend. Rules against price gouging at gas stations took effect throughout Middle Atlantic states. Authorities will be looking for stations that try to take advantage of panicked drivers.

Pump prices were up slightly overnight, as much as 3 cents per gallon, to $3.44 in Philadelphia and $3.49 in New Jersey’s Atlantic-Cape May metro area. They seemed to hold in other areas, rising a penny or so on average in Maryland, Virginia and the Carolinas.

The Colonial Pipeline, which transports gasoline and other fuels from the Gulf Coast to the Northeast, stopped fuel deliveries to Selma, N.C., and to Virginia’s Tidewater area as the storm knocked out power. Pipeline spokesman Steve Baker said the pipeline may cut off deliveries further in Virginia and Maryland as the storm moves north.

Refineries, which make fuel from oil, have started to slow operations as Irene approaches.

OPIS says East Coast refineries will cut operating rates 10 to 25 percent in the next few days. Refineries in the Gulf Coast and the West should be able to keep supplies flowing to the rest of the country.

Refineries along the Louisiana Coast produce more than three times the gasoline and fuel of their East Coast counterparts, according to the Energy Information Administration. East Coast demand is going to fall as businesses close and people hunker down at home.

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JACKSON HOLE, Wyo paperless payday loans.

Moody’s downgraded Japan’s credit rating, citing the country’s weak growth prospects, massive government debt and constant political uncertainty.

The cut in Japan’s government bond rating Wednesday to Aa3 from Aa2 puts the country three notches below Moody’s top Aaa rating. Moody’s Investors Service said the outlook for the rating is stable.

The rating cut comes ahead of another leadership shuffle in Japan. With his popularity sinking, Prime Minister Naoto Kan and his Cabinet are preparing to resign next week. That would set the stage for a leadership election within the ruling party and a new prime minister _ Japan’s sixth in four years.

Frequent administration changes have prevented Japan’s government from adopting effective long-term economic and fiscal policies, Moody’s said.

Kan has been criticized for lacking leadership after the March 11 earthquake and tsunami and subsequent nuclear crisis, and survivors of the disasters complain of slow relief and recovery efforts. Polls show his approval rating is below 20 percent.

The country’s economic problems are compounded by the natural disaster and the ongoing nuclear crisis. Japan’s ballooning debt is now twice the size of the country’s gross domestic product.

“These developments further hamper the economy’s ability to achieve a growth rate strong enough to steadily reduce the budget deficit,” Moody’s said.

The downgrade puts Moody’s Japan rating in line with other major agencies. Both Standard & Poor’s and Fitch rate Japan AA-, three notches below their top AAA ratings.

In May, Moody’s warned it could downgrade Japan after the world’s No. 3 economy slipped back into recession in the first quarter due to tumbling output and exports following the March 11 earthquake and tsunami paperless payday loans.

Moody’s has maintained its AAA rating on the United States while Standard & Poor’s earlier this month took the unprecedented step of downgrading the U.S., blaming large deficits and political gridlock.

The decision compounded worries about the fiscal health of the world’s biggest economies and unnerved already volatile financial markets.

Reaction to Japan’s rating cut Wednesday was more muted. Analysts described the move as hardly a surprise, and bond markets remained calm.

Noriatsu Tanji, a fixed income strategist at Barclays Capital in Tokyo, said that unlike the U.S., a rating cut is not new territory for Japan. At one point in 2002, Moody’s had dropped its assessment on Japan to as low as A2 before gradually upgrading it starting 2007.

“The latest downgrade puts Japan’s rating at a level it has already seen before,” he said in a research note.

Japanese government bonds have historically weathered rating cuts without sharp drops. Unlike the U.S., the vast majority of the Japan’s public debt is owned domestically.

Even as it downgraded its view on Japan, Moody’s highlighted the country’s large economy and dependable domestic funding base that enables the government to fund itself “at a lower nominal cost than any other advanced economy.”

“Furthermore, throughout the global financial crisis, in the months after the March earthquake, and in recent days with renewed turmoil in global markets, (Japanese government bonds) continue to demonstrate exceptionally strong safe-haven features,” it said.

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The Dow Jones industrial average is closing with its biggest gain in nearly two weeks.

Investors were picking up beaten-down stocks Tuesday after fears that the U.S. would slip into a recession pounded the market over the last month.

The Dow rose 322 points, or 3 percent, to close at 11,177. That’s its best day since it jumped 423 points Aug. 11. It dipped about 60 points shortly after the quake hit the East Coast in the early afternoon, but recovered within minutes.

The S&P 500 index rose 39 points, or 3.4 percent, to 1,162. The Nasdaq rose 101 points, or 4.3 percent, to 2,446.

Five stocks rose for every one that fell on the New York Stock Exchange. Trading volume was higher than average at 5.2 billion shares.

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State-owned China Construction Bank Ltd., the country’s third-biggest commercial lender, says its first half profit rose 31 percent, buoyed by higher income from fees and interest.

The Beijing-based bank reported late Sunday that profit for January-June was 92.8 billion yuan ($14.5 billion), or 0.37 yuan (6 U.S. cents) a share. Profit for the same period a year earlier was 70.8 billion yuan.

Like other Chinese lenders, the bank has benefited from rising interest rates and higher fees and commissions as it diversifies its revenue sources.

Interest income in the first half of the year rose 24 percent, while income from fees and commissions jumped 42 percent to 47.7 billion yuan ($7.5 billion).

The bank said it was strictly controlling lending to industries designated by the government as having excess capacity, such as iron and steel, coal and plate glass. Meanwhile, it boosted lending to small and medium-size companies.

Smaller businesses have usually struggled to get bank financing. Such lending increased 9.5 percent by the end of June over December of last year, compared with a 6.8 percent increase in total corporate lending.

Construction Bank, which is relatively heavily exposed to the property sector, also said it was limiting lending to local government investment entities, whose debts have ballooned in the wake of a binge of recession-fighting construction investments.

Lending to the real estate sector climbed a modest 4.1 percent in January-June, the bank said.

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Hurricane Greg has gained a little strength as it heads farther out over the Pacific away from Mexico’s coast.

Meanwhile, a tropical depression formed Thursday night off the coasts of Honduras and Guatemala.

The U.S. National Hurricane Center in Miami says winds are at 35 mph (56 kph) and that the government of Guatemala has issued a tropical storm watch for its coast. Tropical storm force winds are also possible along the north coast of Honduras and the Bay Islands.

It is moving west and is expected to strengthen into a tropical storm.

Greg’s maximum sustained winds had decreased to 80 mph (130 kph) by late Thursday.

The Category 1 hurricane is expected to weaken more over the next couple of days as it heads over cooler waters.

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The Louisiana Gaming Control Board gave unanimous approval Thursday to a $181 million proposal to build a sixth riverboat casino-hotel in the Shreveport-Bossier City market in that state.

A group known as Bossier City Casino Venture LLC has an option to buy one of the two riverboat licenses in Lake Charles that are now owned by Isle of Capri Casinos Inc. Plans call for a one-story casino boat to be built on a Red River site in Bossier City, along with a 396-room hotel, four restaurants and a multi-use facility for concerts and meetings.

The development is named the Margaritaville Resort Casino. Bossier City Casino Venture has a licensing agreement with Jimmy Buffett’s Margaritaville Properties, which has hotels, restaurants and consumer items.

The development company is owned by Louisiana businessman William Trotter and Silver Slipper Gaming LLC, which has a casino in Hancock County, Miss.

Plans call for the project to open in May 2013. Voters in Louisiana’s Bossier Parish must approve it in a Nov. 19 referendum for the project to proceed.

If the plan wins voter approval, Isle of Capri would be shutting down its Crown Casino in Lake Charles. It also owns the Grand Palais riverboat casino in that city. The Crown typically is the lowest-winning riverboat in the state, taking in less than $2 million a month.

Paul Alanis, chief executive officer of Silver Slipper, discounted the idea that Margaritaville would only chop away at gambling winnings of the other riverboat casinos in Shreveport-Bossier City, along with the Louisiana Downs track casino. In recent years, Indian nation casinos in Oklahoma have grown to about $3 billion in annual winnings from players, while the Shreveport-Bossier City market has leveled out at around $780 million a year, he said.

Both markets compete for players from the Dallas-Fort Worth area. Analysts have said Oklahoma has gained an advantage because of its closer proximity to the area.

“We will grow this market and capture some of that $3 billion that is going to Oklahoma,” he said.

Alanis said the Margaritaville brand will appeal to middle- and high-end players, will attract players back from Oklahoma and will be appealing to those who have had experiences with the Margaritaville label. Its site will be adjacent to the Louisiana Boardwalk, a riverside complex of 92 stores and restaurants.

Although Bossier City Casino Venture is buying the Crown Casino as part of the license deal, Alanis said an all-new one-story dockside gambling boat would be built on-site in Bossier City.

According to what the developers called conservative figures, Margaritaville will help grow the Shreveport-Bossier City market to $842 million in gambling revenue in 2014.

Alanis was once a top official with Horseshoe Casinos, which has a Bossier City riverboat _ now owned by Caesars Entertainment Corp. _ that leads the market in casino winnings. He and Trotter said they immediately began working on bringing a casino to Bossier City after losing a competitive heat for the state’s final riverboat license in Lake Charles.

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China’s oceanic administration says it is preparing to sue ConocoPhillips China for damages to the environment resulting from offshore oil spills that began in June.

The State Oceanic Administration said Tuesday in a notice on its website that it was recruiting legal advisers to pursue compensation claims against the company, which operates the leaking oil wells in Bohai Bay.

ConocoPhillips said in a statement Monday that it expects to have mud affected by the oil cleaned up by the end of August. A company spokesman said the process was slowed by concerns for worker safety in the unclear waters affected by the spill.

The spills have added to concerns over damage to the marine environment in Bohai, a major fisheries base, from industrial, agricultural and other types of pollution.

ConocoPhillips China operates the wells in the Bohai’s Penglai 19-3 oilfield in partnership with state-run China National Offshore Oil Corp. The spills covered 840 square kilometers (324 square miles), according to oceanic administration reports, and have drawn criticism from environmentalists and local media over potential damage and apparent delays early on in notifying the public.

The ConocoPhillips spokesman, John McLemore, said in an e-mailed message that local media reports of a fresh leak were erroneous.

“To my knowledge there are no new leaks. If there are they are very small and cleaned up immediately,” he said. “All we actually reported was that we found some additional drilling mud on the seabed.”

Most of what was released was drilling mud, which sinks to the seabed and is relatively easy to clean up, he noted.

The company said the seep was less than 1 liter (0.26 gallon) per day. Resumption of pumping in some wells that had been shut down earlier was helping to reduce pressure and “should help alleviate the seep,” it said.

“We are taking some heat for not cleaning it up faster but as you know Bohai Bay is not the most pristine water to begin with so our 60 plus divers can only see a meter or two in front of their face,” said McLemore. “ConocoPhillips is not going to be put on a time schedule by anyone that puts workers at risk. We say safety comes first at ConocoPhillips and we mean it.”

ConocoPhillips said it had recovered 326 cubic meters (2,050 barrels) of “mineral oil-based mud” from around the Penglai 19-3 platform and has more than 900 staff and more than 30 vessels working to resolve the problems.

The company said the total amount of oil and drilling fluids leaked in the spills was estimated at about 240 cubic meters (1,500 barrels). Some of the oil found on the sea surface was analyzed and determined to be coming from a seep in the seabed rather than Penglai 19-3 wells, it said.

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The wars in Iraq and Afghanistan are winding down, Osama bin Laden is dead, and the federal government is deeply in debt. This spells the end of what was a golden decade for the defense industry.

In the decade since the Sept. 11 attacks, the annual defense budget has more than doubled to $700 billion and annual defense industry profits have nearly quadrupled, approaching $25 billion last year.

Now defense spending is poised to retreat, and so are industry profits. “We’re about to go into the downhill side of the roller coaster here,” said David Berteau, a defense industry analyst at the Center for Strategic and International Studies.

Congress agreed last month to cut military spending by $350 billion over the next 10 years. The defense budget will automatically be cut by another $500 billion over that period if lawmakers fail to reach a deficit-cutting deal by November.

Defense industry stocks have already begun to suffer; they are lagging the S&P 500 in recent months. During the last defense spending downturn, which lasted from 1985 to 1997, defense stocks underperformed the broader market by 33 percent, according to an analysis by RBC Capital Markets.

The Sept. 11 attacks forced the world’s biggest and best-funded military to quickly retool itself. It needed to develop technologies, weapons and strategies to find and fight an elusive network of terrorists that seemed more sophisticated and dangerous than ever imagined.

The U.S. spent $1.3 trillion in the ten years following the attacks chasing al-Qaida and fighting two wars. That was on top of baseline military spending in excess of $4 trillion.

“After 9/11 the floodgates opened,” says Eric Hugel, a defense industry analyst at Stephens Inc.

The defense budget grew from $316 billion in 2001 to $708 billion in 2011. Federal spending on homeland security, which includes everything from airport security to border control, also rose dramatically. Last year dozens of federal agencies, including the Department of Homeland Security, spent $70 billion on such programs, according to the Office of Management and Budget. That’s up from $37 billion in 2003, the first year after DHS was formed.

All that spending was reflected in the soaring performance of the defense industry, led by the top five defense contractors: Lockheed Martin, Boeing, Northrop Grumman, General Dynamics and Raytheon.

In 2001, revenues for U.S.-based defense contractors totaled $217 billion, according to data compiled by the analytics firm Capital IQ. By 2010 revenues had grown to $386 billion. Profits grew more than twice as fast over the same time period, from $6.7 billion to $24.8 billion. Contractors based abroad, such as BAE Systems, also flourished. BAE was the sixth biggest defense contractor in 2010, with $7.2 billion in U.S. military contracts.

Stock prices of defense companies in the S&P 500 index have risen 67 percent since September 11. The index as a whole climbed 8 percent in that period.

Military spending typically rises during wartime and falls during peacetime. But after Sept. 11, and as the wars in Iraq and Afghanistan evolved, it became clear the country needed to spend money on very different military technologies and strategies.

Fighter jets, missile defenses and other Cold War-era systems designed to deal with the perceived threats of nation-states were less useful. The U.S. military had to increase its ability to find, recognize and track enemies that were scattered in many countries and dispersed among the civilian population same day payday loans.

During the war in Iraq the military realized that it couldn’t protect troops from a low-tech, but potent threat: jerry-rigged road side bombs. In Afghanistan, commanders needed ways to find and root out insurgents that had tucked themselves in caves in hard-to-reach mountains.

These challenges led to new hardware. Among the most important:

_ Transport trucks that protect troops and supplies from roadside bombs. Mine-resistant, ambush-protected vehicles, or MRAPs, quickly became crucial equipment for the Army. Oshkosh Corp., a maker of these trucks, was the 9th biggest military contractor last year. Before 9/11, it wasn’t in the top 20.

_ Identification tools. Soldiers now carry small portable devices that identify a person by scanning fingerprints, irises and faces. These devices, made by L-1 Identity Solutions, which was recently acquired by Safran, can weigh as little as 3 pounds, transmit data by several different wireless methods and remember 1 million identities.

_ Unmanned aircraft. General Atomics’ Predators, drones that can fire missiles, have killed several al-Qaida commanders. Lockheed Martin’s RQ-170 Sentinel reportedly kept watch on Osama bin Laden’s compound as the raid that killed him was taking place.

Another type of company surged in importance in the last decade: Companies that provide services and support to military operations.

As of March, the Defense Department had more contractor personnel in Afghanistan in Iraq than uniformed personnel, according to a study by the Congressional Research Service. Afghanistan has the highest ratio of contractors to military personnel than any other U.S. war.

This has boosted companies like KBR, once a division of Halliburton. KBR, which builds and maintains military bases and other facilities, had $4.7 billion in military contracts in 2010, up from $860 million a decade earlier.

Analysts say the heavy reliance on contractors should allow the military to wind down spending more quickly, because it is easier to terminate a contract than to reduce uniformed troop levels. Also, the government isn’t responsible for pensions, health care and other benefits for contract workers, which should save money.

Equipment spending is already being scaled back. In 2009, funding for the F-22 fighter jet, a $65 billion program, was discontinued. Spending on the F-35 fighter jet is in danger of being cut back. An advanced warship called the DDG1000 has been canceled, and an upgrade to the Bradley tank called the Ground Combat Vehicle may also be scaled back or canceled.

Over the past six months, defense company stocks in the S&P 500 index have fallen 16 percent. That compares with an 11 percent decline for the entire index.

During wartime, when dollars are flowing, the new equipment developed to battle new enemies is used together with the equipment that had been developed for earlier wars. But as budgets shrink this time, some of the technologies that were developed during the past decade, such as the unmanned aircraft, will have to replace older systems entirely.

“The era of manned airplanes should be seen as over,” says Michael O’Hanlon, a defense policy expert at the Brookings Institution. “The problem is nobody wants to give up the previously agreed on platform.”

Jonathan Fahey can be reached at http://www.facebook.com/Fahey.Jonathan

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