Bernanke interview sends stocks lower

Bernanke interview sends stocks lower

NEW YORK

Stocks spent most of Monday in a funk brought on by cautious comments about the economy from Federal Reserve Chairman Ben Bernanke. Hopes for a compromise on extending Bush-era tax cuts and unemployment benefits erased some of the losses.

The Dow Jones industrial average ended down 20 points, breaking a three-day winning streak. Stock indexes traded in a tight range all day and volume was light.

Stocks began the day on a sour note after Federal Reserve Chairman Ben Bernanke said the economic recovery is still struggling to become “self-sustaining” without government help.

In an interview with CBS’ “60 Minutes” that aired Sunday, Bernanke argued that Congress shouldn’t cut spending or boost taxes given how fragile the economy remains. He also said it could take four or five more years for unemployment, now at 9.8 percent, to fall to a historically normal 5 percent or 6 percent.

Congress confronts unfinished budget

WASHINGTON

Democrats controlling the House are proposing to freeze the Pentagon’s budget in a massive $1 trillion-plus measure that would wrap most of Congress’ unfinished budget business into a single catchall spending bill.

The draft document, by House Appropriations Committee Chairman David Obey, D-Wis., would deny the Pentagon the $23 billion budget increase requested by President Barack Obama in February, making exceptions in only a number of cases, such as for the Pentagon’s Tricare health-care program.

Most other agencies would also face budget freezes at current level.

The House is expected to pass the measure as early as this week — over Republican protests that it still spends too much money.

Bank to pay up to $500M to victims

NEW YORK

A private Swiss bank has agreed to pay up to $500 million to investors defrauded by Bernie Madoff.

The trustee appointed to recover money for the notorious Ponzi schemer’s victims Monday said he reached an agreement with Geneva-based bank Union Bancaire Privee, and M-Invest Ltd., a corporation the bank set up in the Cayman Islands to invest with Bernard L. Madoff Investment Securities LLC.

Trustee Irving H. Picard said the settlement is for no less than $470 million in cash and could reach $500 million. The deal was submitted for approval Monday with the U.S. Bankruptcy Court for the Southern District of New York. A hearing was scheduled for Jan. 6.

Report: Chinese firm buying GNC

NEW YORK

The Wall Street Journal is reporting that Chinese food company Bright Food Group Co. is nearing a deal to acquire GNC Holdings Inc. for up to $3 billion.

In its report late Monday, the newspaper cited unnamed people familiar with the matter.

The Journal says the deal for the U.S.-based vitamin retail chain is for between $2.5 billion and $3 billion.

Associated Press