Hopes for the fledgling economic recovery got a boost Monday from better-than-expected news on manufacturing, construction and contracts to buy homes. The surprisingly strong readings provided some comfort that the economy is packing more momentum than assumed going into the end of the year. Still, with jobs scarce, lending tight and consumers wary of spending, it’s unclear whether the gains can be sustained as government stimulus programs wind down. The Institute for Supply Management’s gauge of manufacturing activity grew in October at the fastest pace in more than three years. It was driven by businesses’ replenishing of stockpiles, higher demand for American exports and support from the government’s $787 billion stimulus program.
Stanley to buy Black & Decker
Stanley Works is buying rival Black & Decker Corp. for $4.5 billion, the two companies said Monday, bringing together mammoth brands in the toolmaking business. Stanley shareholders will own about 50.5 percent of the combined company, which will be named named Stanley Black & Decker. Black & Decker shareholders will own an approximate 49.5 percent stake. Stanley Chairman John Lundgren will be president and chief executive of the combined entity after the all-stock deal is complete. Boards of directors for each company approved the deal, which must receive regulatory and shareholder approval.
Southwest pilots OK new contract
Pilots for Southwest Airlines have approved a new 5-year labor contract that the union president said has smaller pay raises than his members wanted.
The union said Monday that the vote for ratification was about 87 percent, with about 93 percent of Southwest’s 5,900 pilots casting a ballot. The new contract includes retroactive pay raises of 2 percent for 2007 and 2008, plus 2 percent in 2011, the union said. Raises for 2009 and 2010 will be based on Southwest’s profitability — so far, the airline is losing money. The contract also boosted retirement contributions.
T-bill rates fall in Monday auction
The Treasury Department auctioned three-month bills at a discount rate of 0.06 percent, down from 0.075 percent last week. Six-month bills were auctioned at a discount rate of 0.17 percent, down from 0.185 percent last week. The discount rates on three- and six-month bills reflect that they sell for less than face value. For a $10,000 bill, the three-month price was $9,998.48, while a six-month bill sold for $9,991.41. That would equal an annualized rate of 0.061 percent for the three-month bills, and 0.173 percent for the six-month bills. Separately, the Federal Reserve said Monday that the average yield for one-year Treasury bills, a popular index for making changes in adjustable rate mortgages, was unchanged last week at 0.39 percent.
From Herald news services
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