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WASHINGTON (AFP) – A key index tracking the US economy barely rose in February, indicating that economic growth after a brutal recession may have peaked, the Conference Board said Thursday.

The business research firm said its forward-looking leading economic index (LEI) gained just 0.1 percent following a rise of 0.3 percent in January and 1.2 percent in December.

The rise, the smallest in 11 months, was held down by the manufacturing and labor market components, underscoring the nearly double-digit unemployment crisis threatening growth.

The 0.1 percent increase, however, matched the consensus forecast of analysts who had expected the pace of recovery since the middle of last year to ease as government stimulus efforts to jolt the economy from recession fade.

"The LEI for the US has risen rapidly for almost a year now and it has reached its highest level," said economist Ataman Ozyildirim at The Conference Board, adding that the sharp pickup appeared to be stabilizing.

"As the economy moves from recovery into early phases of an expansion, the leading economic index points to moderately improving economic conditions in the near term," Ozyildirim said.

Analysts said the leading indicators were signaling slower growth as the boost from an inventory swing and the fiscal stimulus faded payday loans.

"The moderation is consistent with our view that the recovery is maturing and that the economy is downshifting to a slower rate of growth," said Michael Bratus, an associate economist at Moody's Economy.com.

Although some of the decline in manufacturing may have been related to snowstorms that wreaked havoc in February, "the underlying trend was likely still slow."

"In coming months, we will need at least a modest uptick in the labor market indicators to ensure that the recovery is on track to becoming a broad-based, self-sustaining expansion in 2011," Bratus said.

The Conference Board?s index of coincident indicators, which tracks current economic activity, also rose 0.1 percent in February after being flat a month earlier and rising 0.1 percent in December.

The index gauges the state of components including payrolls, incomes, sales and production.

US key indicators point to slower economic growth

TOKYO – Japan’s central bank is escalating the fight against deflation by offering more cheap loans to banks.

In a split decision, the Bank of Japan’s policy board decided Wednesday to double the amount available under its short-term lending program to 20 trillion yen ($221 billion) from 10 trillion yen.

Introduced in December, the three-month loans at a fixed rate of 0.1 percent are intended to nourish credit flows and reduce longer-term interest rates.

The seven-member board voted unanimously to keep its key interest rate at a super lean 0.1 percent. In a statement, it pledged to maintain an “extremely accommodative financial environment” for the time being. The central bank has not changed the overnight call rate target since December 2008, when the policy board lowered it from 0.3 percent.

The central bank’s expected move came amid growing political pressure to take stronger action to combat falling prices, which threaten to undermine Japan’s patchy economic recovery.

“The Bank recognizes that it is a critical challenge for Japan’s economy to overcome deflation and return to a sustainable growth path with price stability,” the central bank said. “To this end, the Bank will continue to consistently make contributions as a central bank.”

The world’s second biggest economy grew at an annualized pace of 3.8 percent in the fourth quarter thanks to robust exports, but that has done little to bolster demand or wages at home. Japan’s key consumer price index, which fell for the 11th straight month in January, is expected to keep declining for the next two years.

The troubling outlook separates Japan from growing economies elsewhere in Asia, where central banks are winding down stimulus measures and tightening monetary policy low interest personal loan. Interests rates are rising in Australia and Malaysia, while central banks in China and India are reducing liquidity to control inflation.

Meanwhile, Japan struggles with a familiar foe. The country has battled periods of deflation since the “Lost Decade” in the 1990s. Lower prices may seem like a good thing, but it hamstrings economic growth by shrinking company profits, sparking wage cuts and causing consumers to postpone purchases. It also magnifies debt burdens.

The government’s ability to counter deflation with increased spending is constrained because of Japan’s ballooning debt, the highest among industrialized countries and rising. Prime Minister Yukio Hatoyama has proposed a record $1 trillion budget for the next fiscal year starting April, which will require the government to issue some 44.3 trillion yen ($492 billion) in bonds.

With limited room to maneuver on the fiscal policy front, Finance Minister Naoto Kan has repeatedly called on the central bank to do more. He wants deflation gone by the end of the year and has suggested establishing an inflation target.

The latest move may appease the government for now. But it falls short of a meaningful fight against deflation, economists say.

Richard Jerram, chief economist at Macquarie Securities in Japan, described a temporary increase in liquidity or even a modest interest rate cut as “irrelevant.” Japan needs aggressive, government-led changes to shock prices higher, he writes in a recent report.

“Japan is in such a deep deflationary hole that marginal policy changes are likely to be ineffective,” he said.

Bank of Japan expands lending to fight deflation

NEW YORK (MarketWatch) — Bank stocks led the financial sector lower Monday morning, ahead of details contained in a Democratic bank-reform bill to put before a key Senate panel.

The Keefe Bruyette & Woods Bank ETF shed 0.4%, which helped drive the broader exchange-traded fund Financial Select Sector SPDR down more than 0.5%. Shares of KeyCorp and Citigroup led all decliners.

On the upside, American International Group Inc. and Legg Mason topped the gainers column payday advance loans.

After months of efforts to craft bipartisan legislation, Senate Banking Committee Chairman Chris Dodd, D-Conn., plans to introduce a revised version of sweeping bank reform legislation on Monday, most likely without the support of the panel’s Republican members.

Financial Stocks: U.S. financial stocks slip in early trading

It is the Wall Street equivalent of a coroner’s report — a 2,200-page document that lays out, in new and startling detail, how Lehman Brothers used accounting sleight of hand to conceal the bad investments that led to its undoing.

The report, compiled by an examiner for the bank, now bankrupt, hit Wall Street with a thud late Thursday. The 158-year-old company, it concluded, died from multiple causes. Among them were bad mortgage holdings and, less directly, demands by rivals like JPMorgan Chase and Citigroup, that the foundering bank post collateral against loans it desperately needed.

But the examiner, Anton R. Valukas, also for the first time, laid out what the report characterized as “materially misleading” accounting gimmicks that Lehman used to mask the perilous state of its finances. The bank’s bankruptcy, the largest in American history, shook the financial world. Fears that other banks might topple in a cascade of failures eventually led Washington to arrange a sweeping rescue for the nation’s financial system.

According to the report, Lehman used what amounted to financial engineering to temporarily shuffle $50 billion of troubled assets off its books in the months before its collapse in September 2008 to conceal its dependence on leverage, or borrowed money. Senior Lehman executives, as well as the bank’s accountants at Ernst & Young, were aware of the moves, according to Mr. Valukas, the chairman of the law firm Jenner & Block and a former federal prosecutor, who filed the report in connection with Lehman’s bankruptcy case.

Richard S. Fuld Jr., Lehman’s former chief executive, certified the misleading accounts, the report said.

“Unbeknownst to the investing public, rating agencies, government regulators, and Lehman’s board of directors, Lehman reverse engineered the firm’s net leverage ratio for public consumption,” Mr. Valukas wrote.

Mr. Fuld was “at least grossly negligent,” the report states, adding that Henry M. Paulson Jr., who was then the Treasury secretary, warned Mr. Fuld that Lehman might fail unless it stabilized its finances or found a buyer.

Lehman executives engaged in what the report characterized as “actionable balance sheet manipulation,” and “nonculpable errors of business judgment.”

The report draws no conclusions as to whether Lehman executives violated securities laws. But it does suggest that enough evidence exists for potential civil claims. Lehman executives are already defendants in civil suits, but have not been charged with any criminal wrongdoing.

A large portion of the nine-volume report centers on the accounting maneuvers, known inside Lehman as “Repo 105.”

First used in 2001, long before the crisis struck, Repo 105 involved transactions that secretly moved billions of dollars off Lehman’s books at a time when the bank was under heavy scrutiny.

According to Mr. Valukas, Mr. Fuld ordered Lehman executives to reduce the bank’s debt levels, and senior officials sought repeatedly to apply Repo 105 to dress up the firm’s results. Other executives named in the examiner’s report in connection with the use of the accounting tool include three former Lehman chief financial officers: Christopher O’Meara, Erin Callan and Ian Lowitt.

Patricia Hynes, a lawyer for Mr. Fuld, said in an e-mailed statement that Mr. Fuld “did not know what those transactions were — he didn’t structure or negotiate them, nor was he aware of their accounting treatment.”

Charles Perkins, a spokesman for Ernst & Young, said in an e-mailed statement: “Our last audit of the company was for the fiscal year ending Nov. 30, 2007. Our opinion indicated that Lehman’s financial statements for that year were fairly presented in accordance with Generally Accepted Accounting Principles (GAAP), and we remain of that view payday loans for self employed.”

Bryan Marsal, Lehman’s current chief executive, who is unwinding the firm, said in a statement that he was evaluating the report to assess how it might help in efforts to advance creditor interests.

Repos, short for repurchase agreements, are a standard practice on Wall Street, representing short-term loans that provide sometimes crucial financing. In them, firms essentially lend assets to other firms in exchange for money for short periods of time, sometimes overnight.

But Lehman used aggressive accounting in its Repo 105 transactions: it appears to have structured transactions such that they sold securities at the end of the quarter, but planned to buy them back again days later. These assets were mostly illiquid real estate holdings, meaning that they were hard to sell in normal transactions.

The effect of the accounting was to artificially and temporarily lower the firm’s debt levels to hit certain targets, making the firm look healthier than it really was.

In a series of e-mail messages cited by the examiner, one Lehman executive writes of Repo 105: “It’s basically window-dressing.” Another responds: “I see … so it’s legally do-able but doesn’t look good when we actually do it? Does the rest of the street do it? Also is that why we have so much BS [balance sheet] to Rates Europe?” The first executive replies: “Yes, No and yes. :)”

Mr. Valukas was appointed by the United States Trustee in the case in January 2009 to investigate the causes of the Lehman bankruptcy, as well as to find out if any fraud or misconduct took place.

Mr. Valukas writes in the report that “colorable claims” could be made against some former Lehman executives and Ernst & Young, meaning that enough evidence existed that could lead to the awarding of damages in a trial. He added that Lehman’s directors were not aware of the accounting engineering.

By his reckoning, Lehman managed to “shed” about $39 billion from its balance sheet at the end of the fourth quarter of 2007, $49 billion in the first quarter of 2008 and $50 billion in the second quarter. At that time, Lehman sought to reassure the public that its finances were fine — despite pressure from short-sellers like the hedge fund manager David Einhorn.

Executives, including Herbert McDade, who was known internally as the firm’s “balance sheet czar,” seemed aware that repeatedly using Repo 105 was disguising the true health of the investment bank. “I am very aware … it is another drug we r on,” he wrote in an April 2008 e-mail cited by the examiner’s report. At other times, he is described as calling for a limit to the number of Repo 105 transactions.

By May and June of 2008, a Lehman senior vice president, Matthew Lee, wrote to senior management and the firm’s auditors at Ernst & Young flagging “accounting improprieties.” Neither Lehman executives nor Ernst & Young alerted the firm’s board about Mr. Lee’s allegations, according to the report.

Mr. Fuld is described in the examiner’s report as denying having knowledge of the Repo 105 transactions, and there is no evidence that he directed subordinates to make use of that aggressive accounting. (He did recall issuing several directives to reduce the firm’s debt levels.) But Mr. McDade is reported as telling Mr. Fuld about using Repo 105 to achieve that goal.

Lehman Brothers Hid Borrowing, Examiner Says

SMITHFIELD, Va. – Meat processor Smithfield Foods returned to a profit in the third quarter, partly due to strength in its packaged meats business and higher sales overseas.

Smithfield, like many meat companies, has been gradually recovering from a mix of high feed prices, low demand and industry consolidation.

Earnings were $37.3 million, or 22 cents per share, for the period ended Jan. 31. That compares with a loss of $105 business

CINCINNATI – The Kroger Co.’s profit fell 27 percent in the fourth quarter, even as sales rose with a boost from the grocer’s gasoline incentives for regular customers.

The nation’s largest traditional grocery chain Tuesday reported profit of $255.4 million, or 39 cents per share, down from $349.2 million or 53 cents, a year ago.

Sales rose 7 percent to $18.6 billion. Excluding fuel, sales were up 2 percent.

Analysts expected 34 cents per share on $17 cash advance america.73 billion of revenue.

In the heated competition for recession-strapped households, Kroger has expanded discounts at its gas stations for regular customers, who can get at least 10 cents off a gallon for every $100 in grocery store purchases.

Kroger 4Q profit down 27 percent

NEW YORK – A hotel has opened on the edge of ground zero, and executives say the view it offers on the World Trade Center site rebuilding is a selling point.

The World Center Hotel is still under construction on some floors but began taking reservations last month. Its Web site features photographs of a memorial and the construction.

The hotel offers some rooms with floor-to-ceiling windows that open directly onto the work site. Guests and members will have access to the restaurant patio with views of giant cranes, jackhammers and metal scaffolding auto loan rates.

Australian tourist Josh Rowlands says he would like to stay at a hotel with a view of the rebuilding, especially because it’s so hard to see into the pit from the street.

But German tourist Michael Meindorfer says he thinks staying there would be too sad.

Ground zero hotel wants to attract WTC tourists

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BERLIN — As protesters upset with sharp cuts in Greece’s budget clashed with police in Athens on Friday, talks here between Greek and German leaders ended with Germany making no public offers of financial support.

In an appearance following their meeting, the German chancellor, Angela Merkel, praised Greece’s latest austerity measures as an “inordinately important step,” and the Greek prime minister, George A. Papandreou, defended the package — which has provoked outrage at home — as critical to stabilizing his country’s finances.

“We had to take difficult decisions, but these decisions were necessary if we are to lead our country out of the crisis,” he said. He added that he had not asked Germany for financial support.

In the Greek capital, meanwhile, strikes hit schools, hospitals and public transportation and police used tear gas on the rioters in Athens as Parliament adopted its latest austerity package. Seven police officers were injured in the protests, among the most violent since Greece’s financial crisis hit, and at least five demonstrators were arrested.

The oversubscribed sale of nearly $7 billion in bonds on Thursday gave the Greek government much-needed breathing room in its scramble for new loans, and also took pressure off Mrs. Merkel to make a firm commitment to help Greece out of its fiscal predicament.

The two countries have been locked in an increasingly bitter war of words fought through the news media and lower-ranking politicians over Greece’s debt problems and the expectation that taxpayers from Germany, Europe’s largest economy, would bail them out. The dispute has exposed a gap between the declarations of solidarity in Europe and the nationalist sentiments that still rule public opinion.

While the Greek government is struggling to convince markets to help it bridge its financing gap, there is plenty at stake for Germany as well. With $43.6 billion in loans, German banks have the third-highest exposure to Greece. Deutsche Bank’s chief executive, Josef Ackermann, even flew to Athens last week to meet with Mr. Papandreou and other senior officials, sparking rumors a deal with the Germans was imminent.

A bailout of Greece would be far less expensive than the potential fallout from a chain reaction a debt crises leading to larger countries with budget woes, like Spain and Italy. But Mrs. Merkel, known at home for her patience and often described by friends and foes alike as a consummate political poker player, has stuck to platitudes, generalities and lectures that the Greeks must do their “own homework.”

“So far she’s kept her cards hidden, which I think is smart,” said Michael Stürmer, the chief correspondent for the German newspaper Die Welt. “In principle, her tactic is to hold herself in reserve, hold Germany in reserve.”

Even before Mr. Papandreou arrived in Berlin Friday, the German economy minister, Rainer Brüderle, had a stark message for him.

“The German government does not intend to give one cent,” Mr. Brüderle told reporters here in the capital.

An interview with Mr. Papandreou published Friday in the German daily the Frankfurter Allgemeine Zeitung ahead of his visit, aimed to calm public sentiment in Germany.

“We have not asked the German taxpayers to rescue us, to pay for our retirements and vacations,” Mr. Papandreou said. “We are not asking for money. What we need is the support of the E.U. and our European partners so that we can receive credit from the market at better terms inferred heaters.” Relations between the two countries have taken a sour turn in recent weeks as German news media outlets accused the Greeks of corruption, tax evasion and falsifying their budget numbers to join the euro zone. Greek politicians in turn have asked for reparations for damage inflicted by Nazi occupiers during World War II.

Germany has the most fiscal flexibility among European Union members to help Greece, but public opposition to any assistance has been vehement. The debate has crystallized broader German misgivings about the European project into a public outcry.

“It’s like a mosaic and the Greece crisis is the last stone,” said Wolfgang Nowak, a former senior adviser to Mrs. Merkel’s predecessor, Gerhard Schröder, and head of Deutsche Bank’s International Forum. “More and more there is the feeling that French farmers, Polish farmers, Spanish infrastructure, that Europe is not a community but something held together by a German pay check.”

While protesters have not taken to the streets of Berlin in large numbers the way they have in Athens, Mrs. Merkel faces rising dissatisfaction at home. A new poll Friday found nearly three-quarters of Germans critical of her government’s performance since she was reelected last September.

With a crucial election in Germany’s largest state, North Rhine-Westphalia, barely two months away, Mrs. Merkel would be taking an enormous political risk by pledging support to Greece, which is seen as having a bloated public sector and excessively generous benefits, even by European standards.

“There would be no understanding in the population or in her own party if Germany would go it alone with help for Greece,” said Jürgen Falter, a political science professor at the University of Mainz.

The German press has been filled with stories detailing the tens of billions of dollars worth of European Union funds Greece has received in recent years. At the same time, stories of tax-dodging doctors and marinas filled with yachts have become staples of news reports here.

One of the most-cited statistics, and for Germans most infuriating, comes from the Organization for Economic Cooperation and Development, showing that the median Greek retiree takes home 95.7 of his or her last salary, while the German pensioner gets only 43 percent. That is viewed as evidence that the Germans have taken painful cuts in their benefits to keep industry competitive and budget deficits under control, while the Greeks have not.

“We Europeans, despite our long history of cooperation, often indulge in the habit of throwing stones at each other, forgetting that we live in a glass house,” said Loukas Tsoukalis, president of the Hellenic Foundation for European and Foreign Policy, an Athens research group. The good news, according to Mr. Tsoukalis, was that a large majority of Greeks recognized that the problem was theirs to solve.

“It’s really something new that you have a government that announces pretty unpleasant measures that will have a real effect on people’s standard of living, and you have 75 percent of Greeks, depending on the opinion poll, who say they agree with the measures,” said Mr. Tsoukalis.

Niki Kitsantonis contributed reporting from Athens.

Germany Makes No Promise of Financial Support to Greece

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ALAMEDA, Calif. – Celera Corp., a laboratory testing products and disease management services company, reported a fourth-quarter profit on lower costs and a tax benefit.

The company said it earned $7.8 million, or 9 cents per share, compared with a loss of $6.1 million, or 8 cents per share, during the same period a year prior. Revenue fell 15 percent to $40 million from $47.3 million.

Analysts polled by Thomson Reuters expected a loss of 3 cents per share on revenue of $39.6 million.

Celera was part of Applera Corp. until July 2008, but was separated from Applera after that company’s other component, Applied Biosystems, was sold to Invitrogen Corp. Those two companies combined into Life Technologies Corp.

Lab services revenue fell 25 percent to $22 million, while products revenue increased 1 percent to $11.3 million. Corporate revenue fell 3 percent to $6.7 million.

Meanwhile, selling and general expenses fell 17 percent to $22.4 million. The company had a tax benefit of $9 payday loans guaranteed no fax.1 million.

For the full year, the company lost $32.7 million, or 40 cents per share, compared with a loss of $124.6 million, or $1.56 per share, in 2008. Revenue fell to $167.1 million from $175.2 million.

Looking ahead, the company expects a loss between 11 cents and 13 cents per share on revenue between $30 million and $32million in the first quarter. It expects a loss between 15 cents and 21 cents per share on revenue between $145 million and $155 million in 2010.

Analysts expect a loss of 1 cent per share on revenue of $40.5 million in the first quarter and profit of 4 cents per share on revenue of $173.5 million in 2010.

Shares of Celera rose 1 cent to $6.15 in after-hours trading after falling 1 cent to close at $6.14 during the regular trading session.

Celera sees 4Q profit on tax benefit, lower costs

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Warner Chilcott PLC said Monday that its fourth-quarter loss narrowed as its acquisition of Procter & Gamble’s global branded prescription drug unit added to revenue.

The Irish company, which makes women’s health and dermatology products, recorded a loss of $9.5 million, or 4 cents per share, in the three months that ended Dec. 31. That compares with a loss of $115.7 million, or 46 cents per share, in the same quarter of 2008.

Revenue more than doubled to $686.2 million.

Not counting one-time items like a $127 million amortization charge, adjusted earnings were 65 cents per share for the quarter.

The company also recorded a $33.5 million gain in the quarter from the sale of certain inventories to Leo Pharma in connection with a deal it completed in the third quarter of 2009.

Analysts polled by Thomson Reuters expected, on average, earnings of 60 cents per share on $588.1 million in revenue business cards.

In October, Warner Chilcott completed a $3.1 billion buyout of P&G’s global branded prescription drug unit. The company gained a portfolio of products worth about $2.3 billion in annual revenue including blockbuster osteoporosis drug Actonel.

Products from P&G contributed a total of $351.8 million in revenue growth in the fourth quarter. Aside from Actonel, that included the ulcerative colitis treatment Asacol and Enablex, a treatment for overactive bladders.

Warner Chilcott also said selling, general and administrative expenses more than quintupled in the quarter, to $277.5 million, due in part to costs tied to the P&G deal.

The company’s shares fell 67 cents, or 2.5 percent, to close at $26.55.

New products help Warner Chilcott narrow 4Q loss