Wall Street rallies on positive economic data

NEW YORK, May 4 (Xinhua) -- Wall Street rallied on Monday as reports showed that construction spending and pending home sales rose in March.

The U.S. Commerce Department reported early on Monday that construction spending during March 2009 was estimated at a seasonally adjusted annual rate of 969.7 billion U.S. dollars, 0.3percent above the revised February estimate. It was the best reading since last September. Analysts had expected a 1.5-percent loss.

The Pending Home Sales Index, a forward-looking indicator based on signed contracts, increased 3.2 percent to 84.6 in March, the National Association of Realtors reported.

Major metal producers rose as metal prices were boosted by an encouraging report about manufacturing in China. The Purchasing Managers' Index of China's manufacturing sector rose for a fifth straight month in April to 53.5, up 1.1 points from a month earlier. Investors bet that rising demand from China would help stabilizing metal prices.

Stocks also gain momentum from a better-than-expected quarterly report from communications giant Sprint Nextel. The third largest mobile service provider posted a loss wider than the previous quarter, but its earnings per share excluding one-time items beat Wall Street expectations.

The Dow Jones average rose 214.33, or 2.6 percent, to 8,426.74.The SP 500 index rose 29.72, or 3.4 percent, to 907.24. The SP 500 is now up 0.4 percent for 2009.

The Nasdaq composite index rose 44.36, or 2.6 percent, to 1,753.56.

S Korea's money supply growth stands at 3-month low in March

SEOUL, May 11 (Xinhua) -- South Korea's money supply grew by the smallest
amount in three months in March with local banks remaining reluctant to extend
loans, the central bank said Monday.

The country's liquidity aggregate, which measures the nation's total
currency in circulation, stood at 2,340.9 trillion won (1.89 trillion U.S.
dollars) as of end-March, marking an on-year increase of 10.6 percent, the Bank
of Korea (BOK) said.

The March rise was a slow down from a 10.8 percent on-year increase of the
previous month, marking the slowest growth since December 2008, according to the
BOK.

"Slowing growth in the money supply in March came despite a large surplus
of the current account as local banks are cautious about extending credit to
households and firms," the BOK said.

Home sales in U.S. show signs of growth, but concerns remain

by George Bao

LOS ANGELES, May 8 (Xinhua) -- Home sales in the United States have begun
to pick up, particularly on the western coast, but it remains unclear if the
market has bottomed out.

According to media reports, banks in southern California are seeing more
people applying for mortgages.

Six months ago, a bank had to purchase a house in Sierra Madre, southern
California, from a man who was unable to pay his mortgage. The house was bought
by the man for 1.19 million dollars, but he had to surrender it to the bank for
910,000 dollars. The bank put the house on sale for 1.17 million dollars, but
there were no takers.

In April, the 4,200 square feet (390 square meters) house on a lot of 9,500
square feet (882.6 square meters) was listed for 799,000 dollars. Within a few
days, four buyers showed interest. It was eventually sold to a Chinese American
for 840,000 dollars.

To offer a price higher than listed has been rare in the U.S. in the past
year due to the financial crisis. In southern California, some short sale and
foreclosed homes have also been selling well since March.

At Hacienda Heights, southern California, a four-bedroom 2,000 square feet
(186 square meter) house, occupying a lot of 10,000 square feet (929 square
meters), was recently sold for 479,000 dollars, 20,000 dollars less than the
listed price.

According to official figures released earlier this week, the U.S. Pending
Home Sales Index increased 3.2 percent to 84.6 in March from 82.0 in February,
1.1 percent higher than March 2008 when it was 83.7. The index is a
forward-looking indicator based on contracts signed.

The chief economist of the National Association of Realtors, Lawrence Yun,
said it would take another few months for the market to gain full momentum.

"This increase could be an indicator of first-time buyers responding to
very favorable affordable conditions and an 8,000-dollar tax credit. The credit
has increased buying power even more in areas where special programs allow
buyers to use it as a down payment," Yun said.

President Barack Obama introduced the credit in mid-February for first-time
buyers to boost the housing market.

"We need several months of sustained growth to demonstrate a recovery in
the housing market, which is necessary for the overall economy to turn around,"
Yun said.

However, while home sales are increasing in the south and west of the
country, the situation is not the same in the northeast.

The Pending Home Sales Index for the south rose 8.5 percent to 93.2 in
March, 7.7 percent above a year ago. In the west the index increased 3.9 percent
to 93.1 in March, 1.7 percent higher than for the same period last year. The
index in the northeast fell 5.7 percent to 59.5 in March, 24.1 percent below a
year ago. In the mid-west, the index slipped 1.0 percent to 82.3 but was 8.2
percent higher than March 2008.

The country's Housing Affordability Index, however, remains near record
highs. According to the National Association of Realtors (NAR), the index was
166.7 in March -- down from an upwardly revised record of 174.4 in February due
to higher home prices in March. The index is 30.8 percentage points higher than
a year ago.

NAR president Charles McMillan said the increase in buying power has been
quite remarkable.

"Compared to a year ago, a typical family today can pay much less in
mortgage costs for the same home, or buy a better home without necessarily
increasing their monthly payments," McMillan said.

"For buyers who have been on the sidelines and have good jobs, the market
has never looked more favorable. Home ownership has always offered immediate
benefits and long-term value, but the advantages in today's market are unique,"
he said.

U.S. Federal Reserve chairman Ben Bernanke said on Tuesday the three-year
U.S. housing bust may be near bottom and the recession should end this year, as
long as there is no relapse of the credit squeeze that has strangled the
economy.

For those who intend to buy homes as an investment, some financial experts
said it was difficult to predict whether the housing bust was near a bottom. As
the unemployment rate remains high, it was difficult to predict whether housing
values would grow in the short term.

Also, banks have set more strict standards in the provision of mortgage
loans, making it difficult for many potential buyers to obtain loans, although
interest rates remain at record lows.

Dollar falls on positive economic data

Special
Report: Global Financial Crisis

NEW YORK, May 4 (Xinhua) -- The dollar fell against major currencies on
Monday as two positive economic reports boosted risk appetite in foreign
exchange trading.

The U.S. Commerce Department reported on Monday that construction spending
during March 2009 was estimated at a seasonally adjusted annual rate of 969.7
billion dollars, 0.3 percent above the revised February estimate. It was the
best reading since last September. Analysts had expected a 1.5 percent loss.

The Pending Home Sales Index rose in March with many first-time buyers
taking advantage of historically good housing affordability conditions, the
National Association of Realtors (NAR) reported.

The index, a forward-looking indicator for the housing sector based on
pending sales of existing homes, increased 3.2 percent to84.6 in March. A sale
is listed as pending when the contract has been signed but the transaction has
not closed.

Investors are waiting for two key reports due later this week. One is the
results of the government's stress test to major banks; the other is the
non-farm employment data from the Labor Department.

The euro bought 1.3373 dollars in late New York trading compared with
1.3267 dollars it bought late Friday. The pound rose to 1.4966 dollars from
1.4916 dollars.

The dollar fell to 1.1774 Canadian dollars from 1.1840 Canadian dollars,
and fell to 1.1284 Swiss francs from 1.1356 Swiss francs. It fell to 98.87
Japanese yen from 99.35 Japanese yen.

U.S. consumer spending falls by 0.2% in March

WASHINGTON, April 30 (Xinhua) -- U.S. consumer spending fell 0.2 percent in March, the first drop in three months, while income growth slipped for a second consecutive month, the Commerce Department reported Thursday.

The March drop followed gains of 1.1 percent in January and 0.4percent in February. The back-to-back increases came after consumer spending had posted six straight monthly declines as consumers slashed outlays in the face of a deepening recession.

Economists had been expecting a 0.1 percent decline for last month.

Personal income, the fuel for future spending, dropped by 0.3 percent in March, worse than the 0.2 percent dip that had been expected. Income rose by 0.1 percent in January and declined by 0.2 percent in February.

Americans' disposable personal income, or after-tax income, was flat in March, the same as the previous month.

But Americans were saving more. The personal saving rate, personal saving as a percentage of disposable personal income, increased to 4.2 percent last month from 4.0 percent in February.

Consumer spending, which accounts for two thirds of total economic activity, rose at an annual rate of 2.2 percent in the first quarter of this year after two consecutive quarters of declines.

However, many economists believe that consumer spending will dip back into negative territory in the current April-June period as the economy is still in a severe recession and the unemployment rate stands at 8.5 percent, the highest level since late 1983.

China's fiscal revenue down 0.3% in March

Special Report:Global Financial Crisis

BEIJING, April 13 (Xinhua) -- China's Ministry of Finance (MOF) said Monday that fiscal revenue fell 0.3 percent from a year earlier to 440.22 billion yuan (64.43 billion U.S. dollars) in March.

First-quarter fiscal revenue fell 8.3 percent to 1.46 trillion yuan, the ministry said on its website, while tax revenue shrank 10.3 percent to 1.3 trillion yuan.

Fiscal revenue includes taxes as well as administrative fees and other government income, such as fines and income from government-owned assets.

Business profits shrank as economic growth slowed, the MOF said, and tax cuts intended to spur the economy and the financial markets reduced government revenues. First-quarter business income tax revenue fell 16.7 percent.

China halved the purchase tax on cars with engine displacements of less than 1.6 liters on Jan. 20, and revenue from that tax was down 7.6 percent in the first quarter.

To shore up the stock market, the government cut the share trading stamp tax from 0.3 percent to 0.1 percent last April and scrapped the stamp tax on stock purchases in September. And even though the benchmark Shanghai Composite Index is up more than 35 percent so far this year, the tax cuts on share transactions meant a decline of 86.2 percent in revenue from that category in the first quarter.

Actual revenue amounts in each category were not released.

Customs tariff revenue fell 23.9 percent during the first quarter, the MOF said, without giving further details.

Central government fiscal revenue fell 17.7 percent in the first quarter to 721.3 billion yuan, while local government fiscal revenue rose 3 percent to 742.9 billion yuan.

First-quarter fiscal expenditures surged 34.8 percent to 1.28 trillion yuan, as both the central and local governments adopted a proactive fiscal stance to boost the economy and domestic demand.

China unveiled a 4-trillion-yuan stimulus package in November to be spent over in next two years, with 1.18 trillion yuan from the central government.

Fiscal revenue exceeded 6.13 trillion yuan in 2008, up 19.5 percent.