Modern News

CHICAGO (Reuters) – With the economy’s recovery likely to be slow and hampered by tight credit and a cautious consumer, the Federal Reserve is still far from needing to tighten its extraordinarily loose monetary policy, Chicago Federal Reserve Bank President Charles Evans said Thursday.

“If inflation actually started to rise, we’d be very concerned, and we would be altering the trajectory and calibration of our policy,” he said. But so far inflation is relatively stable, he said.

“We’ll be looking for the economy – is it beginning to recover in a truly vibrant fashion, or is it simply gaining momentum and it’s going to take some time,” he said.

“All of those will feed into our assessment of when the accommodation should be removed. At the moment, I think that that’s still quite a ways away.”

Fed policy makers are still discussing the right sequencing of exit strategies when the time comes for monetary tightening, he said. (Reporting by Ann Saphir, Editing by Chizu Nomiyama)

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By Jeremy Pelofsky

WASHINGTON (Reuters) – Two AIG units settled federal charges that they discriminated against black home buyers on fees for mortgages and will pay $7.1 million for restitution and education efforts, the U.S. Justice Department said on Thursday.

The units, AIG Federal Savings Bank and Wilmington Finance Inc, will provide $6.1 million to about 2,500 borrowers in at least 19 major metropolitan cities who were affected by the alleged discrimination, according to the department.

“This sort of practice is what I often call discrimination with a smile, because I would predict that many of the victims that we will contact will have no idea that they were victimized,” said Thomas Perez, head of the Justice Department’s civil rights division.

Blacks were charged fees by mortgage brokers that were on average one-fifth of a percentage point higher than whites for the mortgages, which were all subprime loans, Perez said. The victims will receive on average about $2,300 back.

He also said that there were some 45 lending discrimination cases pending.

The AIG subsidiaries will also provide at least $1 million to organizations that provide credit counseling, financial literacy and other educational programs that target blacks, according to the documents.

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SAN FRANCISCO (Reuters) – A federal appeals court affirmed on Thursday a contempt finding against Dish Network Corp and EchoStar Corp in their long-running patent case against digital video recorder maker TiVo Inc, sending TiVo shares soaring 52 percent.

The U.S. District Court for Eastern Texas had previously imposed contempt sanctions against sister companies Dish and EchoStar for violating a court-ordered permanent injunction to stop making and selling DVRs.

TiVo had sued EchoStar back in 2004, and a jury found that its DVR technology infringed TiVo patents.

Analysts hailed the ruling as a huge win for TiVo, one that potentially opens up major new market and licensing opportunities.

TiVo’s options volume heated up to 14 times the norm in afternoon trading. In all, about 191,000 calls and 75,000 puts had traded, according to option analytics firm Trade Alert.

Janney Montgomery Scott analyst Tony Wible recommended that clients “buy the stock aggressively up to $15.”

“Today’s overwhelming victory significantly improves TiVo’s ability to win new business and the rates it can demand for its technology from future deals, while also improving penetration of its DVR advertising platform,” he wrote in a research note.

He said the ruling should also help TiVo in its litigation against AT&T Inc, Verizon Communications Inc, and Microsoft Corp.

TiVo said it was pleased with the appeals court ruling, and said it paves the way for the company to receive $300 million in damages and contempt sanctions awarded to it for EchoStar’s infringement through July 1, 2009.

TiVo said it plans to seek further damages and contempt sanctions for infringement after July 1.

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By Alexei Oreskovic

SAN FRANCISCO (Reuters) – Yahoo Inc plans to integrate Twitter into its collection of websites, as the company seeks to enhance the appeal of its online properties with popular social networking features.

The partnership will allow web surfers to view the short, 140-character messages created by Twitter users, dubbed Tweets, directly within Yahoo sites as well as to publish their own Twitter messages without leaving Yahoo.

The move, which Yahoo announced late on Tuesday, comes a couple of months after Yahoo announced a similar deal with Facebook, the world’s No.1 social networking site.

Earlier this month, Google Inc unveiled a new service dubbed Google Buzz that replicated many of the social networking features that have made services like Twitter and Facebook Internet success stories.

Facebook and Twitter – which said on Monday that users of its service generate more than 50 million Tweets every day – pose an increasing threat to established Internet giants like Yahoo and Google whose businesses depend on selling online ads to large audiences.

In January, Facebook overtook Yahoo to become the second most visited website in the United States, according to a recent report by web analytics firm Compete. A separate study by comScore showed Yahoo maintaining its No.2 rank with roughly 164 million unique U.S. visitors, while Facebook was the No.4 site with 112 visitors, behind third-ranked Microsoft Corp.

Yahoo said that beginning on Tuesday its Internet search engine results will display up-to-the-second Tweets about various topics, matching the so-called “real time search” capabilities that Google and Microsoft announced in their own respective deals with Twitter last year.

Yahoo also plans to display a live stream of Tweets within other online properties including its email service and sites devoted to sports, entertainment and finance later this year.

Yahoo executives said that the company was looking at ways to make Twitter messages relevant to each property, such as by customizing the selection of messages that appear alongside an article about a particular sporting event, for example.

“We believe that the content and context side of things is very unique,” Yahoo Vice President of Communities Jim Stoneham told Reuters in an interview.

Yahoo would not comment on any financial terms involved in the deal with Twitter.

According to some media reports, Microsoft and Google paid a combined $25 million for the right to include Twitter data in their search results.

(Reporting by Alexei Oreskovic; editing by Carol Bishopric)

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LONDON (Reuters) – Digital dumping is on the rise, according to a survey, with growing numbers of people preferring to use email and social networking Web sites to break up with their partners.

Over one third of 2,000 people polled (34 percent) said they had ended a relationship by email, 13 percent had changed their status on Facebook without telling their partners and six percent had released the news unilaterally on Twitter.

By contrast, only two percent had broken up via a mobile phone text.

The rest had split up the old-fashioned way by face-to-face conversation (38 percent) and by telephone (eight percent).

“Digital Dumping will soon take over when it comes to ending a relationship,” said Sean Wood, Marketing Manager for DateTheUk dating service for whom the survey was carried out.

“It’s often easier, quicker and avoids any misunderstandings.”

(Editing by Paul Casciato)

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(Reuters) – U.S. technology giant Intel Corp <INTC.O> is planning to set up a $2 billion fund to invest in U.S. companies, the Wall Street Journal said, citing people familiar with the matter.

The chipmaker, which has a unit that invests in many technology companies, is in talks with venture capital firms to seek investment ideas, the daily said.

The investment plan would not require raising additional capital, the business daily said, adding that the response to Intel’s proposal was not immediately known.

Intel Chief Executive Paul Otellini is scheduled to give a speech Tuesday at the Brookings Institution, the paper said.

Brookings said in its invitation to the event that Otellin’s speech will focus partly on “the need to create a culture of investment in the United States,” according to the paper.

Intel could not be immediately reached by Reuters for comment outside regular U.S. business hours.

(Reporting by Archana Shankar in Bangalore; Editing by Mike Nesbit)

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By Tarmo Virki, European technology correspondent

HELSINKI (Reuters) – The cellphone market will rebound more strongly strongly than expected this year as improving economies boost spending on new gadgets and handset vendors push cheap smartphones, research firm Gartner said on Tuesday.

The market fell 1 percent in 2009, the first decline in eight years as consumers cut spending amid recession.

But Gartner analyst Carolina Milanesi said she now expects the market to grow 11-13 percent this year, compared with the firm’s December forecast for a 9-percent increase.

“The economy seems to be stabilizing more into a recovery trend than we forecast back in December,” Milanesi said.

“Sales will return to low-double-digit growth, but competition will continue to put a strain on vendors’ margins.”

Gartner is more optimistic than the top cellphone maker Nokia, which has forecast growth around 10 percent, and also slightly ahead of analysts consensus of 11 percent in a Reuters poll this month.

Gartner sees smartphone market volume growing a whopping 46 percent from 172.4 million sold last year, boosted by cheaper models. The most affordable now cost just over $100 excluding operator subsidies.

Gartner said it expects average sale prices in 2010 to fall more slowly than last year — when intense competition hurt pricing in markets such as China and India — helped by an improving economy and consumers upgrading to cheap smartphones.

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By Antony Bruno

DENVER (Billboard) – It’s been more than six years since then-Microsoft CEO Bill Gates admitted that Apple caught the company “flat-footed” in the digital music market and directed his team to make up for lost ground, according to recently surfaced internal e-mails.

To date, Microsoft’s effort to address the digital music market has largely focused on its Zune player and Zune Pass subscription service, which have won favorable reviews but few customers. But with the recent unveiling of its Windows Phone 7 Series operating system at the Mobile World Congress conference in Barcelona, Microsoft hopes to reboot its struggling digital music strategy.

Even the well-received Zune HD device, introduced last fall, hasn’t been enough to convince music fans to convert to the Zune Pass. The company says it has sold only 3.8 million players since 2006, and NPD Group estimated in November that it has a 2 percent share of the U.S. portable media player market, compared with 70 percent for Apple’s iPod.

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By Edward Krudy

NEW YORK (Reuters) – U.S. stocks fell on Tuesday as consumer sentiment dropped sharply and house prices unexpectedly dipped, denting optimism about a economic recovery.

Concerns about the economy overshadowed better-than-expected quarterly earnings from retailers, including Home Depot Inc <HD.N>. The top U.S. home improvement chain beat estimates and raised its profit forecast, sending its shares up 1 percent to $30.62.

The February consumer confidence data fell in February to the lowest in 10 months, and the Standard & Poor’s/Case-Shiller indexes unexpectedly slipped in December. The releases followed an unexpected decline in business sentiment in Germany, which pressured overseas markets and fed uncertainty among investors who were worried about the U.S. Federal Reserve’s plans for interest rates and worries over possible sovereign debt defaults in Europe.

“Overall, there’s not a lot of positive stuff to see,” said Michael Sheldon, chief market strategist at RDM Financial in Westport, Connecticut. “With equity markets having retraced about two-thirds of their recent decline, today’s report (on consumer sentiment) could be the catalyst that leads to profit taking.”

The Dow Jones industrial average <.DJI> dropped 60.16 points, or 0.58 percent, to 10,323.22. The Standard & Poor’s 500 Index <.SPX> fell 8.84 points, or 0.80 percent, to 1,099.17. The Nasdaq Composite Index <.IXIC> lost 22.37 points, or 1.00 percent, to 2,219.66.

Investors were also confronted by a report from the Federal Deposit Insurance Corp that the total number of “problem” U.S. banks jumped 27 percent to 702 during the fourth quarter of 2009, reaching the highest level since 1993 amid signs the industry’s recovery is still shaky.

(Reporting by Edward Krudy; Additional reporting by Ryan Vlastelica; editing by Jeffrey Benkoe)

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By Wanfeng Zhou and John Parry

NEW YORK (Reuters) – U.S. consumer confidence sagged to a 10-month low on worries about jobs while the housing market remains under strain, data revealed on Tuesday, underscoring the fragility of the economy’s recovery.

U.S. consumer confidence fell in February to the lowest in 10 months, as consumers’ short-term outlook on jobs worsened, according to a report from an industry group.

The Conference Board said on Tuesday its index of consumer attitudes fell to 46.0 in February from a revised 56.5 in the prior month. February’s reading is the lowest since April 2009.

The median of forecasts from analysts polled by Reuters was for a February reading of 55.0.

“This is just a flat-out bad report,” said Tom Porcelli, senior economist at RBC Capital Markets in New York.

(more…)

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