Financial Markets

Falling gasoline and heating-oil prices held overall wholesale prices to a modest rise in March, the government said yesterday, suggesting that inflation is in check despite fears in financial markets that it will pick up. The Labor Department said its Producer Price Index rose 0.2 percent last month after a 0.5 percent jump in February, when winter cold sparked a surge in the price of heating oil and other energy products. Prices rose 0.2 percent in January. An increase in food prices, including those for beef and vegetables, as well as advances in a variety of other products such as cars and tobacco, contributed to the March rise.

It was inevitable, but still shocking. The Wall Street wealth machine - lavishing investors with profits month after month, year after year - dropped off a cliff this week. So did stocks around the world. This meant pain for investors and puzzlement for policy-makers. Yet it also gave these folks, from stock-market dabblers to high officials, a wake-up call that could be invaluable. The bulls have run on Wall Street, with few breaks, since the early 1980s. In this kind of market, you could pick winning investments any which way - from buying mutual funds to researching companies to throwing darts at the stock listings.

Mary Johnson has a long day ahead of her, but right now it's 6 a.m., and that means it's StairMaster time. She's in from Chicago for business and has a day pass at the Sporting Club, Philadelphia's toniest gym. But as she puffs and sweats up those simulated staircases, her eyes are transfixed on the soundless TV above her. A half-dozen other TVs in the vast room filled with early-morning-workout folk on sophisticated machines have on the same...

The nation's unemployment rate fell 0.2 of a percentage point to 4.8 percent in July, matching the lowest rate in nearly a quarter-century, as the economy created new jobs at a surprisingly fast clip, the government said yesterday. The strength in the labor market, coupled with separate reports showing solid growth in consumers' incomes and a booming manufacturing sector, made financial markets nervous amid concerns that economic growth might pick up enough to spark inflation - and that the Federal Reserve would raise interest rates to slow the economy.

The stock market used to love George Bush. It spent much of last summer and fall pining over his sagging prospects for re-election. It plunged with despair the morning after the electorate voted to toss him out of office. But, ever fickle, the market soon fell for Bill Clinton. If recent stock performance is any gauge, the markets have come to idolize the young Arkansan with the Elvis hair and the gift for gabbing as fluently as an economics professor emeritus on subjects such as debts and deficits.

No Business Section U.S. financial markets were closed Monday for the Labor Day holiday.

U.S. financial markets were closed on Monday for the Memorial Day holiday. There is no Business section today.

Milwaukee-based mortgage insurer MGIC Investment Corp. announced today that Mark Zandi, chief economist at Moody's Analytics in West Chester, has joined its board of directors. "We are extremely pleased that MGIC will have the benefit of Mark's experience with macroeconomic models, financial markets and public policy," said Curt Culver, MGIC's chairman and CEO. MGIC said Zandi had recently conducted research on factors determining mortgage foreclosure and personal bankruptcy, analyzed the economic impact of various tax and government spending policies, and assessed the appropriate policy response to bubbles in asset markets.

NEW YORK - Stocks had their worst drop in more than three months as the prospect of political paralysis in Italy raised the specter of Europe's debt crisis flaring up again. The Dow Jones industrial average fell 216.40 points, or 1.6 percent, to 13,784.17, its biggest drop since Nov. 7. The Standard & Poor's 500 index fell 27.75 points, or 1.8 percent, to 1,487.85, dropping below 1,500 for the first time in three weeks. The Nasdaq composite dropped 45.57 points, or 1.4 percent, to 3,116.25.

WASHINGTON - Federal Reserve officials in 2007 underestimated the scope of the approaching financial crisis and how it would tip the U.S. economy into the worst recession since the Great Depression, transcripts of the Fed's policy meetings that year show. The meetings were held as the country was on the brink of the worst financial crisis since the 1930s. As the year went on, Fed officials shifted their focus away from the risk of inflation as they slowly began to recognize the severity of the crisis.

Just because President Obama and Congress haven't cut a deal to avoid tax hikes and spending cuts that will threaten a new recession, is that any reason for investors to freak out and sell stocks, bonds, and retirement funds? Investment advisers - including some notable ones in the Philadelphia region - trying to preserve healthy 2012 gains in the markets after a decade of pathetic results, are pushing clients to stay calm about the mess in Washington. While the financial markets will be nervous until there is a deal, "the underlying economic data continues to offer encouraging signs," wrote a hopeful Mark Luschini, chief investment strategist at Philadelphia-based brokerage Janney Montgomery Scott, in a note to clients Wednesday.

FRANKFURT, Germany - The worst of Europe's financial crisis appears to be over. European leaders have taken steps to ease the panic that has plagued the region for three turbulent years. Financial markets are no longer in a state of emergency over Europe's high government debts and weak banks. And this gives politicians from the 17 countries that use the euro breathing room to fix their remaining problems. Threats remain in Greece and Spain, and Europe's economy is forecast to get worse before it gets better.

Massive power outages. Mass transit disruption. Financial markets closed. Superstorm Sandy? Yes. But also the possible result of a cyberattack, to which we remain vulnerable. Before the storm, it was difficult to envision the havoc that could be wreaked by computer shenanigans. But now that risk should be readily apparent to us all. What remains to be seen is whether Sandy serves as a wake-up call in the face of this ongoing risk - one that lasts long after power has been restored, water has receded, and homes are rebuilt.

Sandy even interfered with the Philadelphia School District's huge bond sale. The district had been scheduled to go to the financial markets Tuesday to sell $300 million in bonds to bridge its operating deficit. Because the markets were closed Tuesday, the district will put the bonds on the market this coming Tuesday instead. The change was announced during a special School Reform Commission meeting that had been scheduled Wednesday morning for the commission to vote on the deal.

Sandy even interfered with the Philadelphia School District's huge bond sale. The district had been scheduled to go to the financial markets Tuesday to sell $300 million in bonds to bridge its operating deficit. Because the markets were closed Tuesday, the district will put the bonds on the market this coming Tuesday instead. The change was announced during a special School Reform Commission meeting that had been scheduled Wednesday morning for the commission to vote on the deal.

It is these two letters - U and N - that make the whole difference. The legal challenges against the euro bailout fund were "predominantly founded," said Andreas Vosskuhle, chief justice of the German Federal Constitutional Court, on Wednesday. Then, within a second, he corrected himself: The challenges were "predominantly unfounded . " With that, Germany became the last country to ratify the contract creating the European Stability Mechanism. The court's decision provoked huge relief for German Chancellor Angela Merkel, other European countries, and, to a degree Wednesday, the financial markets.

All U.S. financial markets were closed Monday because of Labor Day. There is no Business section in today's Inquirer.

NEW YORK - A two-day rally that sent stocks soaring last week fizzled out Monday. European leaders vowed Thursday and Friday to keep the continent's monetary union intact, and investors sent stock markets higher. But stocks were little changed Monday as investors waited to see whether leaders would back up words with action. The Dow Jones industrial average sank 2.65 points to close at 13,073.01. JPMorgan Chase & Co. led the Dow lower, falling 2 percent to $36.14. U.S. Treasury Secretary Timothy Geithner met separately with Germany's finance minister and the head of the European Central Bank, Mario Draghi, on Monday.