BUSINESS BRIEFS
Bernanke says economy seems on safer ground
Associated Press
WASHINGTON — Despite a recent spike in the nation's unemployment rate, the danger that the economy has fallen into a "substantial downturn" appears to have waned, Federal Reserve Chairman Ben Bernanke said yesterday.
Addressing a Fed conference in Chatham, Mass., Bernanke said a government report last week showing the unemployment rate rising from 5 percent in April to 5.5 percent in May — the biggest one-month jump in two decades — was "unwelcome." However, the Fed chief said other forces should "provide some offset to the headwinds that still face the economy."
The Fed's interest rate cuts, the government's $168 billion stimulus package, further progress in the repair of problems in financial and credit markets, a gradual ebbing of the drag from the deep housing slump and still solid demand from abroad for U.S. exports should help the economy over the remainder of this year, he said.
Although economic activity is "likely to be weak" during the current April-to-June quarter, Bernanke said "the risk that the economy has entered a substantial downturn appears to have diminished over the past month or so."
PENDING HOME SALES UP IN APRIL
NEW YORK — Pending home sales unexpectedly rose in April to the highest reading since October, an industry group said yesterday, but experts say the large proportion of distressed property sales will continue to weigh down prices.
The National Association of Realtors' seasonally adjusted index of pending sales for existing homes rose to 88.2 from a March reading of 83.0, the lowest since the index was started in 2001. However, it's still 13 percent below April 2007's reading of 101.5.
Wall Street economists polled by Thomson/IFR had predicted the index would remain steady at 83.
LEHMAN BROS. LOSES ALMOST $3B
NEW YORK — Lehman Brothers Holdings Inc., the nation's fourth-largest investment bank, yesterday said wrong-way trading moves and risky mortgage-backed securities plunged it into a nearly $3 billion second-quarter loss.
It marks the first time Lehman was unable to post a profit since going public in 1994.
Its stock fell nearly 9 percent and helped drive a broad sell-off in bank and brokerage shares.
Lehman's top executives, who have repeatedly assured investors that their books were safe, will fund the firm's survival by raising $6 billion of fresh capital.
CALIFORNIA REIT GOES BANKRUPT
LOS ANGELES — A 15,000-acre California real estate partnership that has the nation's largest public employees pension fund as a big investor has filed for Chapter 11 bankruptcy protection.
LandSource Communities Development LLC's assets include 15,000 acres of undeveloped land north of Los Angeles in the Santa Clarita Valley, among the largest land deals to falter amid the national housing glut.
The California Public Employees' Retirement System, an investor in the partnership that provides pension, healthcare and other retirement services for about 1.5 million public employees, did not immediately return calls yesterday.
SCIENTISTS UNVEIL FASTEST COMPUTER
WASHINGTON — Scientists unveiled the world's fastest supercomputer yesterday, a $100 million machine that for the first time has performed 1,000 trillion calculations per second in a sustained exercise.
The technology breakthrough was accomplished by engineers from the Los Alamos National Laboratory and IBM Corp. on a computer to be used primarily on nuclear weapons work.
The computer, named Roadrunner, is twice as fast as IBM's Blue Gene system at Lawrence Livermore National Laboratory.
