World financial news

Baltimore City Council should require that all city workers are paid a higher living wage before it takes a second look at imposing the requiring on large retailers, a key city councilman said.

Councilman Warren Branch, chairman of City Council’s Labor subcommittee, raised the issue during a hearing on a proposed living wage bill. The bill, rejected July 22, would have required retailers grossing at least $10 million in sales a year to pay their employees an hourly wage set by the city. That amount is $10.59 and applies now to city contractors that do business with the city.

Branch said before the city considers the matter again it should ensure its own workers are being paid a living wage as well.

“Shouldn’t we clean our own houses out first before we talk about cleaning someone’s house?” Branch asked at Thursday’s hearing.

The city’s living wage bill does not apply to city employees, whose wages are negotiated by collective bargaining agreements. Temporary workers for the Department of Public Works’ Bureau of Solid Waste are not part of those agreements, department spokesman Robert Murrow said. There are 66 seasonal workers who get paid $7.90 an hour. That amount is

more than the state and federal minimum wage rates of $7.25 an hour but less than the city’s living wage for contractors no faxing payday loan. Another group of 25 tempoary workers with commercial driver’s licenses earn $11 an hour.

Those temporary workers are supposed to become city employees after two years of employment, but many are kept on beyond that date if full-time positions are not available. There are a dozen of those employees, but Murrow said the department is now trying to place them into permanent positions. He said the department has looked at the pay disparity and hopes to pay its temporary workers a living wage when finances permit.

“At this time that might not be fiscally possible but we’re aware of that,” he said.

Branch said he will try to rally City Council to increase those workers’ wages, which he said should happen before it takes another look at requiring retailers to pay a living wage to their employees. “As a collective group, that’s what we should do,” Branch said in an interview.

Council members James Kraft and Mary Pat Clarke also expressed support for the idea. Clarke, who sponsored the defeated living wage bill for retailers, said she will look to Branch to sponsor the wage increase for temporary city workers.

Source

In need of some fash cash? Get instant approval. Apply now for a payday loan or faxless cash advance.

A Colorado delegation's weeklong economic development mission to Israel was "a success on all fronts — business, academic and research," said Gov. Bill Ritter, who led the group.

“We created a solid foundation for future economic activity, set the stage for immediate follow-up meetings in Colorado and laid the groundwork for long-term collaboration. I’m confident this mission will lead to increased jobs, investments and economic growth for Colorado,” Ritter said in a statement upon the group's return from the July 12-18 trip.

Ritter's group met with Israeli President Shimon Peres; Minister of Industry, Trade and Labor Benjamin (Fuad) Ben-Eliezer; Infrastructure Minister Uzi Landau; and Deputy Foreign Minister and former ambassador to the United States Danny Ayalon, among other officials.

In a statement, Ayalon applauded Colorado's interest in establishing cooperation with Israeli companies on such matters as renewable energy and water conservation.

"Renewable energy is the solution to the oil problem, and offers a solution to the reduction of negative oil politics around the world. Delegations such as these are important in strengthening the relationship of the people of Israel and the United States, and in the strengthening of future economic cooperation," Ayalon told Ritter during their meeting.

Among the accomplishments of the mission as cited by Ritter's staff:

• The Colorado delegation agreed to help establish workforce-development ties among Noble Energy Inc., the Israel Institute of Technology (Technion) and Colorado School of Mines. "Last year, Noble Energy discovered a vast natural gas reserve off the coast of Israel, but the country lacks the workforce to develop the resource," Ritter's office said in a statement.

In a statement, Houston-based Noble Energy (NYSE: NBL) — which has a Denver office — calls the Tamar natural-gas find "the largest exploration discovery in the history of Noble Energy, as well as the largest conventional gas discovery in the world in 2009."

• Ritter and Ben-Eliezer signed a bilateral agreement between Colorado and Israel to advance research and collaboration between companies and institutions in both areas.

• Colorado State University and Ben Gurion University’s Desert Research Center signed a collaborative agreement on water-conservation and related technologies.

• The State of Colorado, through its Departments of Natural Resources and Agriculture, entered into a memorandum of understanding with the Desert Agro Research Center focused on water and agriculture research and development in arid and semi-arid climates. The agreement focuses on such water technologies as desalination, treatment and conservation.

• The Governor’s Energy Office entered an agreement with BrightSource Energy to examine whether cogeneration technologies involving large-scale concentrated solar and natural gas can be utilized on projects in Colorado. Oakland, Calif.-based BrightSource officials will be in Colorado later this month to begin those discussions.

• Ritter, Colorado Economic Development Director Don Marostica and state Energy Director Tom Plant met with a number of Israeli clean-energy, water-technology, bioscience and venture-capital companies that may be interested in doing business in Colorado.

• Colorado Agriculture Commissioner John Stulp promoted Colorado beef exports to Israeli officials, some of whom will be in Colorado next month for livestock discussions.

• Colorado Chief Operating Officer Don Elliman met with Israeli officials regarding homeland security, including discussions about an upcoming homeland security expo taking place in Denver later this year.

• The delegation visited Ramat Negev, the Allied Jewish Federation of Colorado’s "partnership region" in Israel, where Ritter and the delegation were hosted by Mayor Shmulik Rifman.

The privately-supported trip was sponsored by the Allied Jewish Federation of Colorado. A state ethics panel created under voter-approved Amendment 41, which bars gifts of more than $50 to public officials, agreed to participation by Ritter and other state employees in the trip in a ruling beforehand.

"The mission was a great success for Colorado citizens,” Doug Seserman, CEO of the Allied Jewish Federation of Colorado, said in a statement. “We look forward to working with both Colorado and Israel in the months and years ahead to further the business relationships built on this trip.”

Source

Seeking to appease deficit hawks, Senate Democrats scaled back unemployment benefits and Medicare physician reimbursement measures on Wednesday.

The revised jobs bill eliminates a $25 weekly supplement for the jobless that had been part of the last year’s stimulus act. Those currently receiving the supplement in their unemployment benefits check will continue to do so until they exhaust their extended benefits, or until the week of Dec. 7, whichever comes first. That cut will reduce the bill’s cost by $5.8 billion over the next decade.

The new version of the bill would also freeze a 21% cut to Medicare physician reimbursement rates only through November, instead of through 2011. This will reduce the bill’s size by $16.4 billion over 10 years.

The legislation, which has been stuck in the Senate for more than a week, originally came in at about $140 billion and would have added about $78.7 billion to the deficit. The revised bill would raise the deficit by $55.1 billion.

Lawmakers are hoping to vote on the bill as early as Thursday. But if Democratic leaders can’t rustle up enough support, the vote could be pushed back to next week.

The Senate’s actions mirror what happened in the House, which twice had to shrink its version of the jobs and tax extenders bill to secure enough votes among members wary of raising the federal deficit even further. Representatives ultimately passed a measure in late May that would increase the deficit by $54.3 billion.

The grab-bag legislation pushes back the deadline to file for federal unemployment benefits until the end of November, renews expired tax provisions, lengthens a small business lending program and adds to infrastructure investments.

It also increases the tax on money paid to managers of hedge funds and investment partnerships to ordinary income levels instead of the much-lower capital gains rate. Under the revised bill introduced Wednesday, investment fund managers would have to treat 75% of this money as ordinary income, beginning in 2011.

The revised bill further hiked a tax on oil that finances the Oil Spill Liability Trust Fund to 49 cents, up from the 34 cents in the House version. The current tax is 8 cents. This measures is now projected to raise $18.3 billion over 10 years.

The revised Senate bill retained $24 billion in Medicaid funding to states, a provision the House had to jettison. President Obama and governors pressed lawmakers to keep the money, which many state officials have already included in their fiscal 2011 budgets, which begin July 1.

Senate lawmakers also voted Wednesday to include a measure in the bill that would push back the deadline to close on home purchases and still qualify for a federal tax credit of up to $8,000. Homebuyers would have until September 30, instead of June 30, to complete the transaction. The provision will cost $140 million over 10 years. 

Source

With mortgage delinquencies at an all-time high, there are lots of desperate homeowners seeking to avoid foreclosure — and tons of scam artists trying to take advantage of that.

The fraudsters promise the moon but rarely deliver any help.

In Times Square on Friday, the non-profit community development organization NeighborWorks launched a campaign to heighten awareness of foreclosure prevention scams.

"[For scam artists,] the all time high foreclosure rate is an opportunity in the same way that pushing toxic subprime loans was during the housing boom," said Bernell Grier, CEO of Neighborhood Housing Services of New York (NHS), a NeighborWorks affiliate.

From October through the end of April, community development groups handled more than 10,000 reports of foreclosure-prevention scams, according to Susan Jouard, a spokeswoman for NHS.

Grier said alert consumers can identify fraud from legitimate help if they’re aware of these three tell-tale signs.

Avoid anyone who:

Asks for a fee in advance. If you pay them these fees, which can range from $1,000 to as much as $5,000, that’s probably the last you’ll ever hear from them. Most never even go through the motions of talking to lenders and trying to work out modifications.

Tells you they can guarantee foreclosure will stop. Nobody can do that, especially before they find out more about your individual circumstances.

Urges you to stop paying your mortgage and pay them instead. They’re trying to add to the money they already bilked you out of by keeping up the pretense of trying for a modification.

Many community groups, including those affiliated with NeighborWorks, offer expert, free help for homeowners, but they often don’t have the funds to advertise their services. It’s easier for the scammers to invest in fliers, mailers, even Internet and TV advertising to get their message out.

"Call us if you’re having a problem with your property," said Grier. "You shouldn’t have to pay for these services." 

Source

Decades of booming personal computer sales helped Intel become a chipmaking behemoth, but consumers’ rapid shift away from PCs may leave the tech giant out in the cold.

As Intel’s old marketing campaign proclaimed, the company’s chips are "inside" practically every kind of computer, from PCs to Macintoshes to netbooks. But PCs are yesterday’s news. Mobile Internet devices like smart phones and tablets are where all of the growth is but Intel (INTC, Fortune 500) hasn’t been able to gain much traction.

Where Intel has so far failed, a little-known British company called ARM has had roaring success. ARM is to mobile devices what Intel is to computers — the company develops and licenses the basic chip designs for practically all of the world’s cell phones, smart phones and Apple’s (AAPL, Fortune 500) iPad.

Tech analysts left and right are proclaiming that the mobile device market will outpace or perhaps even replace the PC market in the next five years. In fact, the market grew 56.7% during the first quarter, according to IDC.

Could a tiny British company that took in just less than $500 million in sales last year really be in a better position to take advantage of that forecasted growth than Intel, which had over $35 billion in revenue during the same period?

"Few companies have championed and invested in the shift to wireless computers and PC-like devices like Intel has," said Intel spokesman Bill Kircoss.

Analysts also say it’s premature to dismiss Intel. "ARM is ahead right now, but I’ve become smart enough to know that Intel can’t be counted out," said John Bruggeman, CMO of Cadence Design Systems. "Intel will figure it out, or it’ll spend its way out."

How we got here

Next to Microsoft (MSFT, Fortune 500), Intel has perhaps been the greatest benefactor of the PC boom of the past three decades. Intel’s patent on the x86 processor, which is required to run Windows, helped it become the biggest chipmaker in the world. Intel designed its chips for performance and power, making PCs lightning-fast and able to perform multiple complex tasks simultaneously.

ARM, meanwhile targeted a different, smaller market. By designing chips that use as little power as possible, ARM made its way into practically every cell phone on the market (about 20 billion mobile devices over the past 19 years, according to the company). Unlike Intel, ARM doesn’t actually make chips, but licenses designs to 220 companies around the world, including giants like Qualcomm (QCOM, Fortune 500), Texas Instruments (TXN, Fortune 500), Nvidia (NVDA), Samsung and Apple.

Both companies were humming along until Apple introduced the iPhone in the summer of 2007. The iPhone was years ahead of any other phone on the market at the time, allowing users to carry a device in their pockets that performed PC tasks.

"There was a huge technological disruption that took place at the launch of the iPhone," said Bruggeman. "Now, mobile is the high volume category and it’s the only one that matters. The only question is will it be Intel-based or ARM-based?"

Because of its vast experience in the mobile sector, ARM won the contract to design the iPhone’s processor and has since appeared in a large number of smart phones. Apple’s iPad also uses an ARM-licensed chip.

Atom bomb

The Intel vs. ARM battle is far from over. Mobile devices are rapidly improving, but none yet offer the same deep, rich Internet experience of a PC or run all of the complex tasks of a computer.

Next year, Intel plans to unveil a new "Atom" mobile device processor (code named "Moorestown"), which Intel thinks can outperform competitors and help it give ARM a run for its money.

First-generation Atom chips can be found in just about every netbook on the market. Though Intel offers the chips for smart phones, most devices with Intel inside only run the unsuccessful MeeGo platform. Intel so far has not been able to tap into the rampant success of Apple’s iPhone OS or Google’s (GOOG, Fortune 500) Android platform.

But the Atom 2 might change that. Though experts say Atom chips won’t soon be found in an iPhone, Intel recently demonstrated its Moorestown chip seamlessly running Android 2.1 at the Computex technology expo in Taipei.

"In just the past 30 days alone, we’ve expanded this chip line to cars, TVs, tablets and smartphones and plan to keep bringing new, and even more power-sipping Atoms to market," said Intel’s Kircoss.

Even ARM admits that its market dominance doesn’t mean that it has won.

"People don’t care what’s underneath, they just want to buy stuff that they think is cool," said Bob Morris, director of mobile computing at ARM. "Intel eventually will be successful in this area, though they’ll be one of many."

But there’s one potential hang up for Intel: Compared to its traditional PC chips, the profit margins for the Atom chip are atrocious. A small number of analysts even suggested that Intel would like the mobile market to go away.

"Maybe Intel doesn’t care who wins the mobile space," said Phani Saripella, analyst at Primary Global Research and a former Intel manager. "It might be better off defending its turf [on the higher end devices]."

Stay tuned. 

Source

Luby’s Inc. said Thursday that a regulatory panel has ordered Credit Suisse Securities (USA) LLC to buy back certain auction rate securities from the company.

An arbitration panel of the Financial Industry Regulatory Authority, or FINRA, ruled Credit Suisse was liable to Luby’s and would have to repurchase the securities and accrued interest.

Houston-based Luby’s (NYSE: LUB) had asserted it had been unable to liquidate its auction rate securities as a result of Credit Suisse’s actions.

Auction-rate securities are debt investments issued by municipalities, student-loan agencies, closed-end funds and others, with interest rates that are reset at weekly or monthly auctions run by the investment firms.

As of Feb. 10, the company’s most recent quarterly filing, Luby’s held $7.1 million par value or $5.2 million fair value in auction rate securities. As a result of the award, Luby’s expects to record a pre-tax gain of approximately $1.8 million, net of expenses, on the sale of investments in its fourth quarter fiscal 2010.

Luby’s filed the FINRA claim against Credit Suisse in October 2008. Luby’s asserted that Credit Suisse knew but failed to disclose to Luby’s that auction rate securities were only liquid at the time because broker-dealers and others were artificially supporting and manipulating the auction market to maintain the appearance of liquidity and stability.

Multiple lawsuits were filed in 2008 by various companies and authorities in Texas, New York and Massachusetts, as well as the U.S. Securities and Exchange Commission, related to the sale of auction-rate securities at the peak of the credit crunch and financial system meltdown.

Source

The banking industry in St. Louis isn’t quite over the recessionary hump, but it’s heading in the right direction, industry observers say.

Overall, the 78 banks headquartered in St. Louis turned a small profit — $15 million — in the first quarter after losing $433 million in 2009. Only nine banks lost money from January through March.

"These are the best numbers we’ve seen since the first quarter of 2008," said Julie Stackhouse, chief bank regulator at the Federal Reserve Bank of St. Louis. "It is a turning point, and that’s a good thing to see."

That doesn’t mean that it’s easier to get a loan. As of March, loans were down 4 percent from last December and down 9 percent from March of last year.

That drop isn’t solely due to fearful bankers’ becoming tight-fisted. Bankers say their best business borrowers are hoarding cash and not ready to borrow to fund expansions.

"They’re still waiting," said Rick Sems, regional president for PNC Bank, which owns National City Bank in St. Louis. Local business have seen their profits rise, but that’s because of cost cutting.

"They’ve completely rationalized their organizations, and now we’re seeing a little bit of top line growth," Sems said. That revenue growth should lead to more borrowing over time.

The Fed’s national survey of lenders shows that bankers have at last stopped tightening their lending standards for business loans, although they haven’t begun to loosen. "We expect that credit is going to continue to be tight," said Craig Fehr, financial services analyst for the Edward Jones brokerage.

The count of problem loans held steady at local banks from December through March, although it’s still up 43 percent from March 2008.

"Unless we have an economic shock, it’s reasonable to expect that we’ll see stabilization," says Stackhouse.

About 4.6 percent of loans are troubled at local banks — more than double the figure that banks see in normal times. The count includes loans where payments are far behind, foreclosed loans and loans that were modified because borrowers couldn’t pay.

The wild card involves commercial real estate. Loans for office buildings, apartment complexes and the like make up 36 percent of loan portfolios at local banks.

Commercial real estate loans go bad with a lag — landlords can keep up their loan payments for a while even after tenants have moved out payday loans no faxing. The Congressional Oversight Panel, set up to monitor the federal bank bailout, warned in February that "a wave of commercial real estate loan failures could threaten America’s already-weakened financial system."

Meanwhile, banks are benefitting from a widening profit spread between the interest they must pay depositors and what they can charge borrowers, says Joe Stieven of Stieven Capitol Advisors, a longtime St. Louis bank analyst.

The recession killed off much competition from non-banks — insurance firms, business finance companies and other lenders who often undercut the interest rates offered by banks. "They had destroyed rational loan pricing for about five years," said Stieven.

The local bank numbers exclude banks with big St. Louis operations but that are based elsewhere — such as U.S. Bank and Bank of America. They generally don’t break out their results by region.

Among local banks, nearly all of last year’s loss came from a single player, First Bank of Clayton. The bank lost $405 million last year, much of it on development loans made in California. First Bank lost money in this year’s first quarter, but the loss was down dramatically to $23 million.

First Bank has been selling off pieces of its business, including some loans, to raise cash and improve its capital levels. Only about a third of the bank’s operation is in St. Louis. Excluding First Bank, loans by St. Louis banks are down only 3 percent from a year ago.

Three small locally based banks — Westbridge, First Advantage and People’s Bank & Trust — failed to meet the federal standards as "well capitalized" as of March. A spokesman for First Advantage said it climbed back to the well-capitalized level in April. David Thompson, president of Peoples, called it a "temporary setback" and said the bank had a plan to improve capital.

Westbridge was below the level of "adequate" capital under federal guidelines. A bank without adequate capital is considered in danger of failure. Westbridge CEO Rick Hummell said that a group of investors still planned to buy and rescue the bank, and that they hoped to get regulatory approval in June.

Source

Gov. Bev Perdue confirmed late Thursday afternoon that American Express will build a new data center in eastern Guilford County.

American Express had sought a location for a new $400 million data center that would employ up to 150 people.

“The decision today by American Express is great news for Guilford County and for North Carolina,” Perdue said in a statement. “I spoke recently to the American Express CEO, during the company’s final decision-making process, and emphasized North Carolina’s outstanding work force and business-friendly environment. We clearly made a compelling case to land this important project, bolstering our already-strong reputation as an excellent location for data centers, which bring sustainable jobs and significant investment.”

American Express already employs more than 2,000 people in Greensboro at a customer service center.

Source

If you can’t fight the federal government, you may as well pay ‘em. Especially if you’re Goldman Sachs.

In recent days, Wall Street has been abuzz with speculation that Goldman attorneys have entered preliminary talks with the Securities and Exchange Commission with the hopes of settling the outstanding federal fraud charges now facing the company.

Executives at the New York City-based investment bank have offered similar hints.

"There are a myriad of opportunities out there and I won’t rule any of them out," Gary Cohn, the company’s president and chief operating officer, said at the conclusion of the firm’s annual shareholder meeting last week.

A settlement with the SEC would likely bring to an end at least some of the negative publicity Goldman has had to endure since regulators charged the company and one of its employees with defrauding investors in the sale of a complex mortgage investment dubbed "Abacus."

Determining just how much Goldman (GS, Fortune 500) might be on the hook for however, is not simple.

Some legal experts said that a settlement could exceed the $1 billion the SEC claims that investors lost on the deal. That’s due to the high-profile nature of the case and the lack of bargaining power Goldman may have with regulators.

"As a principal regulator, [the SEC] can negatively impact Goldman’s ongoing businesses," said David Desser, managing director of the Chicago-based Juris Capital, a privately-held fund that invests in commercial litigation. "That is a big hammer that no other litigant has against an adversary in court."

A penalty of more than $1 billion would rank as the largest SEC settlement in the post-Sarbanes-Oxley era, eclipsing the $800 million AIG (AIG, Fortune 500) paid to the agency to settle claims related to misstatement of financial results in 2006, according to NERA Economic Consulting.

Others suggest that the SEC may be willing to accept just a fraction of that amount, citing some of its recent settlements as well as the mountain of other enforcement cases the agency has to deal with.

But what Goldman ultimately pays may prove to be of secondary importance.

After all, for a company that is expected to earn $13 billion in pre-tax profits in the next three quarters, according to Thomson Reuters, any fine will likely be quite manageable, especially if a settlement allows Goldman to avoid being in the public spotlight as much it has during the last year.

Instead, legal experts suggest that Goldman may be particularly fearful of any additional demands the SEC may have as part of a settlement.

The agency could, for example, require the company to create greater distance between its mortgage underwriting and trading operations or provide greater transparency to clients about its different investment products.

"Part of it was the difficulty in valuing these derivatives," said Elizabeth Nowicki, a securities law professor at Boston University, who formerly served as a staff attorney for the SEC. "It might be reasonable for the SEC to insist on some best practices disclosures regarding valuation."

Such a move would not be a major departure for the SEC. In the high-profile settlement it reached earlier this year with Bank of America (BAC, Fortune 500) over bonuses paid to Merrill Lynch employees, the banking giant was required to implement a number of corporate governance measures through 2013, including giving its shareholders an advisory vote on the pay of its executives.

Any deal that is struck between Goldman and the SEC might also resolve the fate of Fabrice Tourre, the 31-year-old French trader who helped broker the now infamous investment deal.

Most experts agree that if Tourre is included in a settlement, chances are he could face a fine as well as a suspension from the securities industry for as much as a year.

Goldman Sachs, which has already moved to distance itself from the London-based employee, will most certainly be looking for ways to insulate itself from any future legal action.

Experts said Goldman could also push the SEC to include language in any settlement that Goldman neither "admits nor denies" the SEC charges.

James Cox, a securities law professor at Duke University, said that the company might also attempt to seek a so-called "global settlement," which would absolve the company of any outstanding current or future federal or state lawsuits over the 2007 Abacus transaction or similar mortgage deals.

That would at least alleviate some of the legal headaches the firm is currently facing.

In two separate securities filings this month, Goldman acknowledged it now faces a variety of related lawsuits, as well as investigations from a number of international regulatory agencies, including Britain’s Financial Services Authority, over the sale of mortgage-related investments.

"[Goldman] wants peace and assurance going forward," said Cox.  

Source

Stocks plunged around the world Tuesday as fear spread that Europe’s attempt to contain Greece’s debt crisis would fail. The euro fell to its lowest point against the dollar in a year.

The Dow Jones industrial average lost 225 points, its biggest drop in three months. The Dow and broader indexes each fell more than 2 percent. Meanwhile, Treasury prices rose on increased demand for safe investments.

Stocks have seesawed in the past week as European countries’ efforts to agree on a bailout package for Greece proceeded in fits and starts. An agreement finally came together over the weekend, but its ballooning size of $144 billion has investors worried that Europe would have an even tougher time assembling an aid package if a larger country such as Spain or Portugal were to get in trouble. Traders are concerned that problems in Greece and other countries could spill over to the rest of Europe and in turn, the U.S.

The stock drop was a reminder that it doesn’t take much to rattle investors who are on alert for anything that could disrupt the recovery. The avalanche of selling could continue while investors await answers on Greece. But analysts said most drops were likely to be mild because buyers had been using pullbacks as opportunities to buy.

Tuesday’s slump marked the fifth time in six days that the Dow rose or fell by triple digits. The market’s moves are reminiscent of the fearsome swings in the fall of 2008 and early in 2009 when investors panicked over how bad the recession would get.

Scott Fullman, director of derivatives investment strategy for WJB Capital Group in New York, said sudden turns in the market were to be expected as traders wrestled with concerns that stocks were overheated. "The market has kind of gotten itself into a volatile trading range," Fullman said.

Investors are worried that other cash-strapped European governments could also ask for emergency loans while the economy of the entire region is still recovering.

"It’s not as though even the strongest economies of Europe are doing particularly well," Mike Shea, managing partner at Direct Access Partners LLC in New York, said. "Why is a plumber in Germany going to bail out Greece or Portugal?"

Investors rushed to safer holdings such as Treasurys, pushing interest rates sharply lower. The yield on the benchmark 10-year Treasury note fell to 3.61 percent from 3.69 percent late Monday.

The Chicago Board Options Exchange’s Volatility Index, which is known as the market’s fear gauge, soared 18 percent. That is a signal that more investors are betting on big drops in the market.

The euro again fell against the dollar as traders turned away from the currency used by 16 European Union countries including Greece. When investors start doubting a country’s economic strength, they tend to sell its currency.

Anthony Chan, chief economist at J.P. Morgan Private Wealth Management in New York, said that Greece’s troubles weren’t enough to spoil a global rebound but that investors were concerned that this small hole in the world economy would become bigger.

"My suspicion is that this won’t end up being large enough to really cause the kind of problems that the market is obsessed with," he said.

The dollar rose against other major currencies, especially the euro. The euro sank as low as $1.2994 in New York, its weakest point since April 2009. It was worth $1.3212 late Monday and had traded as high as $1.51 last November.

The stronger dollar is a negative for investors because it would cut into profits for U.S. companies with sizable foreign operations. When the dollar is up, overseas profits translate into less money. The rising dollar also makes it more expensive for foreign buyers to purchase commodities like oil. That hurts demand.

Source