Federal Reserve Chairman Ben Bernanke says federal regulators were closely monitoring the financial markets after yesterday's big sell-off. Speaking to the House Budget Committee, Bernanke says so far the markets appear to be "working well.'' Bernanke says there did not appear to be a "single trigger' behind the drop in the Dow of some 416 points.
Bernanke adds there has been no major change in the outlook for the economy, reiterating that the fed expects "moderate growth'' this year. Before the Q&A, Bernanke told lawmakers that long-term fiscal challenges must be addressed including the growing costs from the social security, and Medicare and Medicaid.
Stocks closed higher today as yesterday's huge plunge presented investors with an opportunity to buy stocks at bargain prices. The Dow Jones industrial average finished with a gain of 52 points at 12,268--but down more than 353 points for the month of February. Advancing issues on the New York Stock Exchange led losers seven-to-four on volume of about 3.7 billion shares. The NASDAQ composite index was up 8.25 points at the 2416 level, cutting the loss for the month to nearly 48 points. Roughly 2.5 billion shares traded. And the S&P 500 added 7.75 points, closing at 1407, for a February decline of 31.5 points. A recovery in some overseas markets following yesterday's worldwide sell-off also supported the U.S. market.
The economy may not have grown as robustly during the final three months of last year as initially reported. Economists surveyed by Dow Jones Newswires are calling for a sharp downward revision in gross domestic product growth to an annual rate of 2.2 percent. Last month, the government put the rate of expansion at 3.5 percent. Analysts expect the change to reflect more complete and revised data on inventories, the trade deficit, retail sales and construction.
CompUSA plans to shut 126 shops by the end of May—more than half of its stores—because of competition in the consumer electronics market. That means 103 stores will remain. Four stores in Texas, Illinois and California will be closed. Some job losses will occur at CompUSA's Dallas headquarters, which employs 1,000 workers.
The proposed buyout of electric provider TXU has some legislators wondering if state regulators should review the deal. Dallas-based TXU's board has approved the $32 billion buyout offer from Kohlberg Kravis Roberts, Texas Pacific Group and others. Shareholders and federal regulators would have to approve the sale. Texas lawmakers this week introduced measures to give the Public Utility Commission power to approve or block the sale of a utility. A state senate committee voted 9-to-0 for a bill that would clear the way for the PUC review. The Associated Press reports Senator Troy Fraser of Horseshoe Bay seemed miffed that KKR lawyers seemed to boast Monday that they didn't need state approval to buy TXU. KKR's Frederick Goltz told a House committee that his firm would hold TXU for at least five years. But Goltz says if the legislature imposes new regulatory conditions, it would be difficult for the group to make a commitment like he made.
A future Texas home of a House of Blues concert venue had a visit from one of the original Blues Brothers--hard hat and all. Actor, singer and musician Dan Aykroyd was in Dallas Tuesday to tour the under-construction site. The official opening of the 60,000-square-foot entertainment complex is set for May 12th. Aykroyd's Blues Brothers band is expected to take the stage in the more than 1,600-seat music hall near the American Airlines Center. The House of Blues also will have a restaurant that seats more than 300. Aykroyd and the late John Belushi co-starred in the 1980 hit film The Blues Brothers.