Archive for September, 2010

Worthington 1Q profit more than triples

Wednesday, September 29th, 2010 | Finance News

COLUMBUS, Ohio – Metal manufacturer Worthington Industries Inc. said Wednesday that its fiscal first-quarter profit more than tripled with growth in its steel processing and pressure cylinders businesses.

Results handily topped estimates, and Worthington shares rose 73 cents, up 4.7 percent, to $16.25 in late trading after finishing regular trading unchanged at $15.52.

For the three months that ended Aug. 31, Worthington earned $23.3 million, or 30 cents per share, compared with a profit of $6.7 million, or 8 cents per share, in the year-ago quarter.

Revenue rose 48 percent to $616.8 million.

Analysts polled by Thomson Reuters expected a profit of 24 cents per share on $563.1 million in revenue.

The company also said that on Aug. 30 it declared a quarterly dividend of 10 cents per share. The dividend was paid Sept. 29 to shareholders of record as of Sept. 15.

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Obama faces voter policy doubts in backyard meeting

Wednesday, September 29th, 2010 | Finance News

DES MOINES (Reuters) – President Barack Obama defended his economic policies on Wednesday in the face of tough questions from skeptical Americans less than five weeks before congressional elections that threaten his fellow Democrats' grip on Congress.

Holding the latest in a series of backyard meetings with middle-class voters, Obama heard one small businessman's fears that his tax plans could "strangle" job creation. The president also fielded concerns about high unemployment and the impact of his healthcare overhaul.

It was a marked contrast to the enthusiastic university crowd that greeted Obama on Tuesday in Wisconsin when he sought to fire up his youthful base of support, and showed the obstacles his Democratic Party faces in the November 2 elections.

Obama stood up for his agenda but acknowledged the country faced "hard decisions" as he works to shore up the struggling economy and rein in huge budget deficits. "We're not going to be able to solve our big problems unless we honestly address them," he told about 70 people at an Iowa home.

One questioner brought up her 24-year-old son, who graduated from college and campaigned for Obama in 2008 but has been unable to find a full-time job. "He and many of his friends are struggling. They are losing their hope, which is a message that you inspired them with," she said.

A small businessman expressed concern about Obama's proposal to extend Bush-era tax cuts only on families with personal income of less than $250,000, and bemoaned policies he said would discourage hiring.

"As the government gets more and more involved in business and gets more involved in taxes to pay for an awful lot of programs, what you're finding is ... you're sort of strangling the engine that does create the jobs," the man said.

Obama said his tax proposal will help middle-class earners and avoid what he sees as unneeded tax breaks for wealthier Americans. The issue has sparked heated debate between Democrats and Republicans.

'PAYING OUR BILLS'

"I'd like to keep taxes low so that you can create more jobs. But I also have to make sure that we are paying our bills and that we're not ... putting off debt for the future generation," Obama told his questioner.

Representative Eric Cantor, a Republican whose Virginia district Obama also visited on Wednesday, sought to pre-empt the president's arrival with a call for him to support a bill that "will stave off tax hikes for every American."

In Virginia, Obama blasted Republicans - referring to Cantor without using his name -- for, he said, failing to offer concrete ideas and making a political calculation to refuse to work with him to address the country's problems.

"It's been a pretty successful strategy," Obama said. "Because right now, people are frustrated. All the good feeling we had coming in... has dissipated. That means a lot of the people who were supporting me are talking about maybe just staying home in the election. And meanwhile the other side's all ginned up: 'We can take power back,'" he told supporters crowding a community center to avoid a rainstorm.

Obama drew more than 26,000 people on Tuesday at the University of Wisconsin, where he appealed to young voters -- who tend to favor Democrats but are less likely to go to the polls -- to back his party. The mood was reminiscent of triumphant rallies late in his 2008 presidential campaign.

William Galston of the Brookings Institution called Obama the "best card that Democrats can play" to energize voters to stave off potentially steep losses in November. Polls show an enthusiasm gap, with Democrats less likely than Republicans to vote in the mid-term elections.

"If you see the enthusiasm gap ... cut significantly between now and election day, I think the president can claim some victory," said Galston, a veteran of the Clinton White House.

Questioners in Des Moines were polite and respectful; some expressed appreciation for Obama's hard work. But some questions were more pointed than at other such events.

Iowa traditionally stages the first nominating contest for presidential candidates and is in many ways a bellwether for the national mood. A poll in the Des Moines Register found 55 percent of likely voters in Iowa, which Obama won in 2008, said they were dissatisfied with him, while 42 percent approved of his job performance.

Richmond, Virginia, was the last stop on Obama's four-state trip meant to reinvigorate his party's base.

He appealed to Hispanics in weekend interviews on Spanish-language television and an education-focused backyard event in New Mexico. He targeted young voters in Madison and talked economics and the middle class in Iowa and Virginia.

(Writing by Patricia Zengerle and Matt Spetalnick; Editing by Peter Cooney and Todd Eastham)

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Regulators vow team effort on financial reform

Wednesday, September 29th, 2010 | Finance News

WASHINGTON (Reuters) – U.S. regulators will put up a united front before a divided Congress on Thursday, promising to cooperate on hundreds of new rules aimed at preventing Wall Street excesses from triggering another financial crisis.

In testimony obtained by Reuters on Wednesday, Federal Reserve Chairman Ben Bernanke and other top regulators said they were well aware of the daunting task ahead.

The hearing before the Senate Banking Committee marks regulators' first joint testimony since the financial regulatory overhaul was signed into law two months ago.

"It is imperative that regulators work together, with both speed and openness in the implementation of the Dodd-Frank Act in order to dispel uncertainties and foster a smooth transition by the industry," said Sheila Bair, chairman of the Federal Deposit Insurance Corp.

The reform act, named after the two Democratic lawmakers who spearheaded what became a lengthy, contentious process, was intended to close some of the gaps in oversight exposed after the U.S. housing bubble burst in 2007.

Included in the law were the creation of a "systemic risk" council of regulators to look out for potential financial trouble spots, and new measures designed to safely shut down failing firms and avoid costly, unpopular government bailouts.

Skeptics, however, question whether the provisions really will end the problem of firms being too big to fail. Some Republicans have said they would roll back certain regulatory measures if their party wins control of Congress in November's elections. They are likely to use the hearing as an opportunity to express some of their reservations about the law.

Bair said the reforms included in the legislation provided tools necessary to "end" too big to fail.

"It must be made clear to these companies that their financial folly could result in losses to shareholders and bondholders and in the dismissal of their senior managers," she said.

REAMS OF RULES

Bernanke said past regulations did not keep pace with profound changes in the financial system, and the Fed was committed to working with other agencies to implement the new law.

"All told, the act requires the Federal Reserve to complete more than 50 rulemakings and sets of formal guidelines, as well as a number of studies and reports, many within a relatively short period."

The FDIC has 44 rules to write, and the other agencies have scores more.

"Implementation will require extensive coordination among the regulatory agencies and will fundamentally change the way we regulate large complex financial institutions," the FDIC's Bair said.

The Commodity Futures Trading Commission said about 80 global and regional banks would have to register to continue to trade in contracts that let investors bet on a host of variables including interest rate movements and debt defaults.

Democrats are eager to argue that their response to the worst financial crisis in 80 years will crack down on financial firms' riskiest behavior without choking off economic growth, and that progress is already being made.

Senators on the panel said they would probe regulators on broad issues such as how they plan to avoid turf fights while also focusing on specifics such as how the law will affect community banks.

In addition to Bernanke and Bair, the list of witnesses includes Neal Wolin, a deputy Treasury secretary; Mary Schapiro, chairman of the Securities and Exchange Commission, Gary Gensler, chairman of the Commodity Futures Trading Commission; and John Walsh, acting Comptroller of the Currency.

The same group will convene Friday for the first meeting of the Financial Stability Oversight Council, a group created under the new law to detect risks to financial markets before they threaten to bring the system to its knees.

(Additional reporting by Rachelle Younglai and Roberta Rampton, Writing by Emily Kaiser; Editing by Tim Dobbyn)

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