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Image 21 of The Courier Journal, February 28, 2012

Part of Porter, Jean

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Time: 02-27-2012 THE TICKER DOW NASDAQ S&P 500 tss 12,981.51 2,966.16 1,367.59 -1.44 +2.41 +1.85 MONEY & MARKETS NEXT PAGE GAS COSTS HOW MUCH $3.71 $3.58 24 25 Feb. 26 User: cdye 27 SOURCES: AAA (Data from Oil Price Information Service with Wright Express) THE COURIER-JOURNAL BUSINESS WATCH NEWS FROM THE REGION Ford’s Focus sedan sees higher February sales PubDate: 02-28-2012 Business Zone: KY Edition: 1 Page Name: B 4 Federal safety officials want changes in how equipment is mounted to overhead bins on Boeing 737 jets to prevent the 12-pound units from falling on passengers during survivable crashes. The National Transportation Safety Board said it was swayed by evidence from several accidents since 2008 in which oxygen and ventilation equipment tore loose and likely caused head injuries. The board said in a letter released Friday that the government should require changes in the design and testing of how the “passenger service units” are mounted under overhead bins. — From staff, wire reports Submit items by e-mail to businessnews@courier-journal.com Q&A SPENDING & SAVING Q: What is a “zero-coupon convertible”? A: Investopedia.com says it’s a fixed-income financial instrument that is a combination of a zero-coupon bond and a convertible bond. Due to the zero-coupon feature, the bond pays no interest and is issued at a discount to par value, while the convertible feature means that the bond is convertible into common stock of the issuer at a certain conversion price. B4 Market news on your cell Go to courier-journal.com/mobile for daily market news or stock quotes. By Marcus Green magreen@courier-journal.com The Courier-Journal The Kentucky State Fair Board has fired Ted Nicholson, the general manager of the KFC Yum! Center, a spokeswoman said. The move comes less than a month before the building at Second and Main streets will be host of second- and third-round games in the NCAA men’s basketball tournament. Fair board spokeswoman Amanda Storment said Nicholson, who was hired in early 2010 and oversaw the arena’s opening, was let go Monday. She declined to give the reason for the termination, saying it was a personnel matter. Attempts to reach Nicholson on his cellphone were unsuccessful. Storment would not say who initiated the move or whether the position will be filled. She said other members of the fair board staff are assuming Nicholson’s duties for now. Board President Harold Workman declined to be interviewed, Storment said. The fair board manages the building, which is home to the University of Louisville basketball teams, for the Louisville Arena Authority. Arena authority Chairman Jim Host said he was notified of Nicholson’s dismissal in an email sent by Workman Monday to members of the authority and fair board. “It’s certainly troublesome to me, especially since there was no communication with anybody on the arena authority board before it happened,” Host said. “I’ve got to find out more facts before I can comment further.” Nicholson, a former employee of Churchill Downs Inc., TUESDAY FEBRUARY 28, 2012 worked in management roles at Churchill’s racetracks in New Orleans, suburban Miami and Arlington Heights, Ill., prior to his work at the KFC Yum! Center. In February 2010, The Courier-Journal reported that Nicholson’s annual salary was $150,000, according to documents obtained under Kentucky’s open records laws. The fair board is anticipating net income of about $500,000 from arena operations in 2011. The final year-end results haven’t been made public. Reporter Marcus Green can be reached at (502) 582-4675. Detroit racing to meet demand Automakers adding jobs By Tom Krisher Volkswagen, Porsche reportedly near deal Safety officials seek changes in 737 jet bins Black Yellow Magenta Cyan KY Ford Motor Co. reported Monday that sales of its compact Focus sedan doubled in February as consumers traded into smaller vehicles in response to rising gasoline prices. Gas prices Monday averaged $3.70 per gallon for regular unleaded nationwide, compared with $3.35 one year ago, AAA reported on its “Daily Fuel Gauge Report.” Focus sales will eclipse 20,000 this month, roughly twice that of 10,879 in February 2010, Ford reported in a preview of its upcoming announcement of monthly car sales Thursday. Volkswagen, Europe’s largest carmaker, is closing in on a deal to purchase the remaining 50.1 percent stake in Porsche’s automotive business that it does not already own, people familiar with the matter said. Approval from German tax authorities is one hurdle to an agreement, which VW and Porsche are still negotiating, the sources said. VW may announce the plan within the next two weeks, the sources said. VW has considered alternatives to a 2009 agreement, which called for a full merger by the end of 2011, after lawsuits against Porsche in the U.S. and Germany complicated the company’s valuation. VW’s main alternative to the original merger agreement has been to exercise options to acquire the remaining stake in Porsche’s automaking business for $5.2 billion, leaving Porsche as the holding company for the 50.7 percent of Volkswagen’s common stock that it owns. Color: Yum Center manager fired Nicholson hired in early 2010 Average price per gallon of regular gas in Louisville $3.71 $3.73 $3.72 23 20:40 Associated Press Traders work on the floor of the New York Stock Exchange on Monday, as stocks pulled back from some of their highest levels in 3½ years. AP Dow slips, slides, stays below 13,000 Housing news sparks rally By Joshua Freed Associated Press The Dow Jones industrial average narrowly missed 13,000. Again. A burst of selling at the closing bell drove the Dow lower after it hovered around the milestone for most of the afternoon. The average finished the day about 19 points shy of the mark. The Dow broke through 13,000 several times last week but hasn’t closed above that level since May 19, 2008, four months before the fall of Lehman Brothers investment bank and the worst of the financial crisis. For the day, the Dow lost 1.44 points and closed at 12,981.51. The Standard & Poor’s 500 index rose 1.85 points to 1,367.59, a 3½year high. The Nasdaq composite index rose 2.41 points to close at 2,966.16. The Dow fell 100 points at the open Monday, then climbed back above 13,000 after a report that the number of Americans who signed contracts to buy homes rose in January to the highest in almost two years. The National Association of Realtors said its index of sales agreements rose 2 percent last month to a reading of 97, the highest since April 2010. A reading of 100 is considered healthy. Scott Wren, senior equity strategist for Wells Fargo Advisors in St. Louis, said investors have gotten ahead of themselves since October. The S&P 500 is up 8.8 percent this year alone. He said he thinks U.S. economic growth is likely to be a mild 2 percent this year, there are fewer people working now than there were at the end of 2007, and Europe may be in a recession. “I don’t see any reason for the market to be on some incredible run,” he said. The price of oil fell below $109 a barrel as investors booked profits after a 14 percent gain this month driven by signs of an improving U.S. economy and fears of an Iranian supply cut. Government figures show that growth in demand for crude oil has slowed in the U.S. from a year earlier, although some oil traders are betting a strengthening economy will eventually boost consumption. “Four dollar gas, that’s not going to really shut down the economy,” said Wren of Wells Fargo.$5, $6 gas, that’s a different story.” Rise in home sales contracts another good sign for market By Derek Kravitz Associated Press WASHINGTON — The number of Americans who signed contracts to buy homes rose in January to the highest level in nearly two years, supporting the view that the housing market is gradually coming back. The National Association of Realtors said Monday that its index of sales agreements rose 2 percent last month to a reading of 97. That’s the highest reading since April 2010, the last month that buyers could qualify for a federal home-buying tax credit and the last time the reading was above 100. A reading of 100 is considered healthy. The Realtors’ group also released revised data for 2011. That lowered November’s initial 19-month high of 100.1 to 96.9. But contracts have been mark- edly up since the summer, when some feared a second recession loomed. Contract signings typically indicate where the housing market is headed. There’s a one- to two-month lag between a signed contract and a completed deal. A sale isn’t final until a mortgage is closed. One-third of Realtors complain that they’ve had at least one contract scuttled in January, December, November and October, according to the Realtors’ group. That’s up from 18 percent of Realtors in September. Nonetheless, the gain in signed contracts supports other evidence of improvement in the housing market. Pierre Ellis, an economist at Decision Economics, said home sales and building is in the midst of “ongoing general, but gentle, progress.” Builders are growing more optimistic after seeing more people express interest in buying this year. Sales of previously occupied homes are at their highest level since May 2010. More first-time buyers are making purchases. And the supply of homes fell last month to its lowest point in nearly seven years, which could push home prices higher. Homes are the most affordable they’ve been in decades. And mortgage rates have never been cheaper. Much of the optimism has come because hiring has picked up. More jobs are critical to a housing rebound. “Easier mortgage lending criteria, very low rates and the improving labor market are all contributing to the beginnings of a real upturn in home sales, if not yet prices,” said Ian Shepherdson, chief U.S. economist at High Frequency Economics. DETROIT — Auto sales are growing so fast that Detroit can barely keep up. Three years after the U.S. auto industry nearly collapsed, sales of cars and trucks are surging. Yearly sales could top 14 million, well above last year’s 12.8 million. The result: Carmakers are adding shifts and hiring thousands of workers around the country. Carmakers and parts companies added more than 38,000 jobs last year, reaching a total of 717,000. Automakers have announced plans to add 13,000 more this year. Ford has said that by August it may employ as many as 4,200 people to make the 2013 Escape at the Louisville Assembly Plant on Fern Valley Road, following a renovation of the factory that cost more than $600 million. But there’s a downside. The success is straining the Detroit automakers’ factory network, as well as the companies that make the thousands of parts that go into each vehicle. This could lead to shortages that drive up prices. And it also has auto executives in a quandary. They got into trouble in the first place largely because their costs were too high. Now, they fear adding too many workers. Ford, for instance, is “squeezing every last component, transmission, engine out of the existing brick and mortar,” says Jim Tetreault, vice president of North America manufacturing. Still, the surge in hiring bolsters the argument of those who supported the federal bailout of General Motors and Chrysler in 2008. The bailout has been a major issue leading up to today’s Michigan Republican Party primary. Republican Mitt Romney opposed the bailout, which was supported by then-President George W. Bush and later by President Barack Obama. The hiring is good news for communities that saw hundreds of thousands of manufacturing jobs disappear. Starting in 2005, GM, Ford and Chrysler closed 28 factories and eliminated 88,000 jobs. Parts companies cut an additional 234,000. Now, if sales hit 15 million by 2015, as some experts predict, the three Detroit automakers could hire 20,000 more people, predicts Sean McAlinden, chief economist for the Center for Automotive Research in Ann Arbor, Mich. Foreign carmakers are also shifting production to the U.S. because of higher sales and the weak dollar, which cuts the profits they get from selling vehicles exported to America. Nissan is adding workers in Tennessee. Toyota just hired staff at a new plant in Blue Springs, Miss. Honda is hiring in Alabama and Ohio. Hyundai can’t meet demand for some models such as the Sonata and Elantra.

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