By PAUL THARP Last Updated: 4:32 AM, May 13, 2010 Posted: 12:52 AM, May 13, 2010
Wall Street's recovery rally gained steam for the third straight day while gold raced to a new pinnacle as the world's safest bet against market jitters.
Gold approached the breakthrough $1,250-an-ounce mark, with analysts predicting its climb won't slow until the price hits $1,500, thanks to flat outlooks for both the dollar and euro as all currencies struggle to hold value against mounting sovereign debt.
"Every major government in the world has been reckless stewards of their currencies," portfolio manager James Daily of Team Financial Asset Management told Bloomberg News. He sees gold hitting $1,300 this month and $1,500 by the fourth quarter.
Gold continued its recent tear — breaking its previous record high of $1,226.30 yesterday. Since early February, spot gold prices are up 14 percent.
Gold futures reached a record $1,243.10 per ounce during New York trading, but climbed in after-market trading to an all-time high of $1,249.20 an ounce. Its price has soared 14 percent in the past three months. Dealers said demand for pure gold jumped 10-fold since last Thursday's Wall Street crash and Europe's controversial $1 trillion bailout package.
Meanwhile, investors pushed up stocks here and abroad amid signs that the global economy is showing hints of a comeback.
US shares posted their best three-day run in nearly a year, led by technology stocks.
The Dow Jones industrial average climbed 1.4 percent to 10,896.91, up 148.65 points, while the Standard & Poor's 500 index rose 1.4 percent to 1,171.67, up 15.88 points. The Nasdaq composite index fueled the rally with a 2.1 percent jump to 2,425.02, a gain of 49.71 points.
Among tech winners, China's big search company Baidu soared 9.6 percent to $78.30 following a 10-for-1 split to make the shares more widely available to investors. Strong earnings outlooks also boosted US tech giants, such as IBM, which jumped 4.6 percent to $132.68 after it issued an upbeat outlook, and Intel, up 3.6 percent to $23.09.
Investors also took some solace from a report yesterday that showed the eurozone's GDP rose a bigger-than-expected 0.2 percent, indicating that despite the rampant worries about the region's debt loads there are signs economies there are beginning to turn a corner.
In addition, Spain unveiled its own belt-tightening measures, including laying off 13,000 civil servants, cutting public-sector wages by 5 percent and imposing a hiring freeze next year and paring back the country's generous pension plan.
Further, Portugal was able to raise $1.3 billion in new cash at much lower interest rates than expected, with a 10-year bond offering yielding 4.5 percent vs. 6.3 percent a year ago. Borrowing costs for Spain and Italy also dipped below 4 percent. However, that positive news wasn't enough to staunch a slide in the euro, which retreated yesterday to $1.2628, and is down 12 percent this year against the dollar.
"I still think the euro is going to continue to slide," said currency trader Fabian Eliasson at Mizuho Corporate Bank. With Post wires paul.tharp@nypost.com
>> Minerals Management Service, the oil industry's regulator, apparently gave dozens of firms (including BP (BP)) permission to drill in the Gulf of Mexico before getting approval from an agency that assesses wildlife threats, and routinely pressured its internal staff to change report findings if a study predicted an accident was likely to occur.
U.S. Said to Allow Drilling Without Needed Permits By IAN URBINA Published: May 13, 2010
GOP offers new oil liability standard — one year's profit
WASHINGTON — A day after Alaska Republican Lisa Murkowski shot down a Democratic-led effort to lift the liability cap on oil companies, Florida Sen. George LeMieux and three other Gulf Coast Republicans introduced legislation they say would "dramatically increase" the industry's liability.
The legislation -- which also has the backing of Sens. David Vitter, R-La., Jeff Sessions, R-Ala. and Roger Wicker, R-Miss., would set a new cap equal to the last four quarters of the responsible party's profits -- or double the current limit, whichever is greater.
"BP is already responsible for the costs of the cleanup, but we must ensure taxpayers are not forced to pay for associated damages," LeMieux said. He said economic damage from the spill will "far exceed" the current $75 million cap, and that under the bill, BP's liability would jump to $17 billion dollars.
Murkowski Thursday scuttled Florida Democrat Sen. Bill Nelson's effort to lift the cap to $10 billion, saying it would prevent smaller, independent companies from drilling along the Outer Continental Shelf. "What this would do is give all of America's offshore resources to the biggest of the big oil companies," she said.
New Jersey Democrat Sen. Bob Menendez said Thursday that the $10 billion, "seems to be a figure that could encompass the possibility of people getting relief right away.''
The Republican bill also calls for a "thorough report" to Congress from all agencies involved in the response to the spill by Sept. 1. The report, the senators say, "will evaluate what went wrong with the immediate response to the spill by private entities and the federal government."
The bill would also require that "the best technologies and equipment are staged to respond to potential spills within 24 hours" and establish greater reserve requirements for the amount of oil containment barriers.
Under the bill, enough flame retardant booms capable of withstanding six-foot waves to corral 100 square miles of ocean would have to be available for deployment anywhere in the country within 24 hours. It also requires the development of capping or dome technology capable of working at depths 2,000 feet below the current deepest well that can also be deployed in 24 hours.
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