TODAY

– April 16, 2014

Stocks edge higher; Dow boosted by McDonald's

The Dow Jones industrial average rose 15 points with a strong report from McDonald’s. The S&P was flat; the Nasdaq rose 9 points. The Dow Jones industrial average rose 15 points with a strong report from McDonald’s. The S&P was flat; the Nasdaq rose 9 points. (AP) — Stocks edged higher Monday on Wall Street after a strong sales report from McDonald's offset concerns about the surprise resignation of Italy's prime minister. Investors also waited for developments in crucial U.S. budget talks.

The Dow Jones industrial average rose 14.75 points to 13,169.88. The index traded within a narrow range of just 56 points throughout the day. The Standard and Poor's 500 finished 0.48 point higher at 1,418.55. The Nasdaq composite ended up 8.92 points at 2,986.96.

McDonald's rose 93 cents to $89.41. A key sales figure rose in November as U.S. customers bought more breakfast offerings and limited-time Cheddar Bacon Onion sandwiches.

Robert Pavlik, chief market strategist at Palm Beach, Fla.-based Banyan Partners, said the company's strength was encouraging. McDonald's, one of the 30 stocks in the Dow, was trading as high as $100 at the beginning of 2012.

The pickup in McDonald's sales, he said, gave investors something positive to focus on as Italy's sudden political turmoil sent a jolt through European markets.

Hewlett-Packard rose 36 cents to $14.16 and also helped push the Dow higher. The company's stock has been battered the past two months following a weak earnings forecast and a public spat with the founder of Autonomy, a company it acquired for $10 billion last year.

Italian Prime Minister Mario Monti, who has been credited with restoring confidence in the nation's economy, announced that he would step down after former Prime Minister Silvio Berlusconi's party dropped its support for his government.

Italian government bond yields, a critical measure of how much the country has to pay to borrow, jumped. Concern that the European debt crisis was enveloping Italy, one of the euro region's largest economies, helped stymie markets around the world earlier in the year.

Investors were also following developments in budget talks in Washington. Tax increases and federal spending cuts start Jan. 1 unless a deal is reached to reduce the U.S. budget deficit. Economists say the measures, if implemented, could eventually push the economy back into recession.

The yield on the 10-year Treasury note fell 1 basis point to 1.62 percent.

President Barack Obama and House Speaker John Boehner met at the White House on Sunday while rank-and-file Republicans stepped forward with what they called pragmatic ideas to break the stalemate. The Obama-Boehner meeting was the first between just the two leaders since Election Day.

"There's a pretty good belief that the 'fiscal cliff' can be avoided," said Craig Johnson, a technical market strategist at Piper Jaffray. "Anytime somebody is talking, it's a good thing."

Other stocks making big moves:

— Priceline.com fell $33.14, or 5 percent, to $625.96 after Deutsche Bank cut its recommendation on the stock to "hold" from "buy" and lowered its price target to $710 from $800.

— Phillips 66, the refining and pipeline company, gained $1.24, or 2.4 percent, to $53.58 after saying late Friday that it was raising its quarterly dividend to 31.25 cents per share from 25 cents. The company also said it had approved the repurchase of another $1 billion in company stock, after approving the repurchase of $1 billion during the first quarter.

— Intermec, a maker of barcode printers and radio frequency identification products, jumped $1.85, or 23.2 percent, to $9.83 after it agreed to be acquired by Honeywell for about $603.4 million in cash.

— AIG fell 74 cents, or 2.3 percent, to $33.36 after the insurer said late Friday that it will take $1.3 billion in losses related to Superstorm Sandy, more than other major insurance companies have reported so far. UBS said in a client note that AIG's Sandy-related losses were above his estimate and cut his price target to $35 from $36.

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Written on 04/15/2014, 2:07 pm by Associated Press
(AP) — Aaron Kushner believes he can launch and grow a print newspaper in a world gone digital.
Written on 04/15/2014, 1:59 pm by Business Journal staff
Completion rates dropped throughout California's community college system, a testament of the five years of deep budget cuts that stifled opportunities for students. According to the Student Success Scorecard released by the California Community Colleges Chancellor's Office, only 48.1 percent of community college students who enrolled in 2007 transferred or received a degree within six years. That's down from 50.7 percent of students who enrolled in the previous six-year cohort. The figures were an even lower 40.5 percent for those entering college unprepared in math or English as opposed to 70.2 percent who did not need to take remedial education. At Fresno City College, which enrolls around 16,408 full-time students, the six-year completion rate was 41.7 percent overall for those that enrolled in 2007. That compares to 45.5 percent for 2006 enrollees and 47 percent for those that enrolled in 2003. College of the Sequoias, with some 14,000 students, went from a 47.2 percent six-year completion rate for new students in 2003 and 47.7 percent for 2006 enrollees to 42.8 percent for 2007. Reedley College, with nearly 17,700 students, stood at a 46 percent six-year completion rate for 2007 enrolled students. That's down slightly from 46.5 percent for students enrolling the year before and 47.6 percent for those that signed up in 2003. Porterville College, serving around 5,000 students, dropped from a 51.9 percent for 2006 first-time students to 45.2 percent for new students in 2007. That's still up from the 43.7 percent rate for 2003. West Hills College Coalinga, enrolling nearly 4,400 students, had a student success rate of 45 percent for 2007 enrolled students, down from 53.6 percent of new students in 2006 and 49.4 percent for those beginning classes in 2003. West Hills College Lemoore, with around 5,700 students, had a six-year completion rate of 42.5 percent for new students in 2007, down from 48.3 percent for the 2006 cohort. The Student Success Scorecard, available on the college chancellor's website at scorecard.cccco.edu/scorecard.aspx, includes measures such as persistence, career technical education courses taken, and the need for remedial education. The numbers are also broken down by age, sex, rate and ethnicity. Community College Chancellor Brice Harris said much of the decline in completion rates is due to the recession and budget cuts that led to 20 percent fewer credit classes throughout the 112 college system. "Students with goals of transferring competed for fewer seats at California State University and University of California," Harris said, in a  release. "Sadly, the only transfer activity that increased was for students who could afford to go out of state." However, the rate of students persistent past the first year of their education increased, as did the rate of students who completed 30 units.
Written on 04/15/2014, 1:56 pm by Associated Press
(AP) — It's not just tax day. Tuesday also is the two-week extension deadline to sign up for health coverage through California's insurance exchange. Consumers who were unable to create an account or fill out an application because of technical problems on the Covered California website have until midnight Tuesday to secure a health insurance policy and avoid a tax penalty. The agency offered the extension after its systems were overwhelmed by the number of people trying to sign up before the March 31 enrollment deadline under President Barack Obama's Affordable Care Act. Exchange officials are encouraging people to contact service representatives, enrollment counselors and certified insurance agents to help them complete the process. More than 1.2 million people had enrolled before the deadline. Covered California plans to release updated figures Thursday.
Written on 04/15/2014, 1:54 pm by Associated Press
(AP) — A research firm says Southern California's median home sale price has hit $400,000, setting a new six-year high. DataQuick said Tuesday that the median price for new and existing houses and condominiums was $400,000 in March, up 4 percent from $383,000 in February and up 16 percent from $345,500 in March 2013. It's the 24th straight annual gain, including the last 20 months in double digits. The median price was the highest since February 2008. Tight inventories kept a lid on sales in the six-county region. Slightly more than 17,600 homes sold during March, down 14 percent from the same period a year earlier. It was the slowest March in six years. DataQuick says price increases have put new homes out of reach for some buyers.
Written on 04/15/2014, 1:44 pm by The Associated Press
(AP) — Stocks managed to close with modest gains on Wall Street after a day of up-and-down trading. Coca-Cola rose 4 percent after reporting higher sales of non-carbonated beverages. Johnson & Johnson rose 2 percent after its income rose. Toll Brothers and other homebuilders fell after a measure of the industry's confidence in the housing market remained low. Apple and Netflix also fell. Major U.S. indexes moved between gains and losses all day before ending slightly higher. The Standard & Poor's 500 index rose 12 points, or 0.7 percent, to close at 1,842 Tuesday. The Dow Jones industrial average gained 89 points, or 0.6 percent, to 16,262. The Nasdaq added 11 points, or 0.3 percent, to 4,034. Bond prices rose. The yield on the 10-year Treasury note fell to 2.62 percent.
Written on 04/15/2014, 12:00 pm by Business Journal staff
Pacific Gas & Electric Co. paid more than $302 million in property taxes and franchise fees across its service territory, boosting revenues for cash-starved Valley counties. The company, which provides gas and electric service to 15 million Californians, paid $158 million in property taxes to 49 counties and 243 cities in which it operates. The payment, covering the period from January 1 to June 30, is in addition to the year's first property tax installment of $158 million paid in December. PG&E's entire property tax bill for the 2013 fiscal year totaled nearly $317 million, an increase of $11 million over the previous year. Fresno County took in $11.85 million of the latest property tax installment, up from $11.45 million last year, followed by Madera County with $1.68 million, up from $1.6 million. Kings County got $974,557 of the total, up from $900,000 the year before, and Tulare County received $389,583, down from $401,058. In addition, PG&E completed its 2013 franchise fee payments to cities and counties this month. The fees, which give the utility the right to use public streets for gas and electric facilities, totaled more than $144 million, an increase of almost $8 million from the previous year's payments. Of that, $40 million was for natural gas facilities and equipment and nearly $104 million was for electric infrastructure. A recent economic impact report showed that PG&E contributed $22.2 billion of economic activity and supported nearly 71,600 jobs in its Northern and Central California service area in 2012.
Written on 04/15/2014, 11:17 am by The Associated Press
(AP) — Legislation set to be unveiled in San Francisco would make it legal for city residents to rent out their homes on sites such as Airbnb, but only if they have liability insurance and meet other requirements, a newspaper reported. Supervisor David Chiu was expected to unveil the legislation on Tuesday, according to the San Francisco Chronicle (http://bit.ly/1qXNLPc). Short-term rentals are currently banned in San Francisco. Officials in other parts of the country, including New York City, have raised concerns about them as well. New York's attorney general has demanded that Airbnb turn over data about New York City residents who have listed on the site as part of an investigation into whether they are breaking a state law barring sublets for fewer than 30 days if occupants are not present. On its website, Airbnb warns hosts to be aware of the laws in their city, noting that some restrict people's ability to host paying guests for short periods. Chiu's bill would lift the ban in San Francisco, but also impose regulations. It was applauded by some tenants' groups. Advocates for property owners, however, said it would not address their concern that short-term renters could pose a safety and health risk to other tenants. Chiu said San Francisco's blanket restriction was clearly not working given that tens of thousands of visitors to the city use sites such as Airbnb. "We believe a different approach is necessary to create a distinction between reasonable behavior and bad behavior ...," he said. "And on the other hand, (we support) the idea that working families, students and residents trying to make rent might be able to slightly supplement their income if they happen to go out of town for a weekend or go on vacation during summer break or visit family during the holidays." In multiunit buildings, Chiu's proposal would only allow short-term rentals at apartments where someone lives 75 percent of the year. The restriction would ban a unit from becoming a full-time vacation rental, the Chronicle reported. People renting out their places would also have to register with the city every two years. The legislation would not override lease agreements, though it would make it harder for landlords to evict tenants who rent out their units in violation of their lease, the Chronicle reported. San Francisco-based Airbnb said in a statement that it was reviewing the proposal and looked forward to working with policymakers. Airbnb recently agreed to pay San Francisco's 14 percent hotel tax, addressing at least one concern of critics who say the company is flouting regulations. "This legislative proposal acknowledges what our community already knows: San Franciscans should be able to share the home in which they live," the company said.
Written on 04/15/2014, 11:04 am by SCOTT SMITH, Associated Press
(AP) — The scarcity of irrigation water in drought-stricken California has created such a demand for well drilling services that Central Valley farmer Bob Smittcamp is taking matters into his own hands. He's buying a drilling rig for $1 million to make certain he has enough water this summer for thousands of acres of fruit and vegetable crops. "It's like an insurance policy," said Smittcamp, who knows two other farmers doing the same thing. "You have to do something to protect your investment." With California in a third dry year, well drilling is booming across the nation's most productive agricultural region, and some drilling companies are booked for months or a year. In some counties, requests for permits to dig new wells have soared, more than doubling over this time last year. Farmers expect to get only a fraction — if any — of the water they need from vast government-controlled systems of canals and reservoirs interlacing the state. In an effort to make up the difference, they are drilling hundreds of feet deep to tap underground water supplies. Smittcamp said a licensed driller he often hires approached him, saying the demand for drillers is so high that Smittcamp needs his own full-scale drilling rig. Smittcamp, whose Wawona Packing Co. farms thousands of acres, said he has written a $150,000 check as a deposit and the rest is due upon delivery of the $1 million rig, which he expects to happen soon. He estimates that he spends $4,000 an acre tending his peach and grape crops before the harvest. If a well were to run dry mid-season with nobody to call, Smittcamp said he could lose that investment — and perhaps entire orchards or vineyards. When the rig isn't being used on Smittcamp's land, he said the driller will put it to work on neighboring farms to recoup the investment. The boom driving farmers to such lengths is a result of drought and a steadily improving economy, said John Hofer, an underground water consultant and executive director of the California Groundwater Association. Hofer said his consulting firm started receiving more calls last year, and that's when he predicted the rising demand for drillers would follow. "I kept telling my friends and associates to look out, that it was going to get crazy, and it has," he said. "Drilling is up big-time." The figures prove it. In Fresno County, which leads the nation in agricultural production, officials issued 256 permits to dig new wells in the first three months of 2014, more than twice the number compared to the same time last year. That includes all types of water wells used for agriculture and homes. In Tulare County, the number of permits issued to dig farm wells alone has tripled to 245. In Kern County, farmers took out 63 new well permits in the first quarter of the year, more than quadrupling last year's number. The price to dig a well depends on the depth and ground composition, drillers say, costing a farmer anywhere from $50,000 to $500,000 before installing the pumps. Tapping groundwater has other costs. The water that was deposited underground naturally over thousands of years isn't being replaced as rapidly as it's being drawn, causing the ground in the Central Valley to sink in a process called subsidence. In California, there is little if any regulation of groundwater pumping by the state. In most years, Central Valley farmers draw one-third of their water from wells, while the remaining two-thirds comes from California's State Water Project and the federal Central Valley Project. Most farmers expect to receive no water from either this summer, and that ratio is dramatically shifting to underground water supplies, which could eventually run dry. Matt Rottman, president of Rottman Drilling Co. based in Lancaster, said his mid-sized firm of three rigs is backlogged 15 months. For a recent job near Bakersfield, his crew dug a 1,840-foot well. Three wells coming up later this year in the Central Valley will hit depths of 2,000 feet. Farmers calling Rottman tell him they're in a pinch. They don't expect any water from the state and federal water projects this summer, and Rottman said the market price of buying irrigation water elsewhere has shot up three or four times. "They're shut off," he said. "They'll be looking at crop damage if they don't get wells in." Mike Maggiora, owner of Gillroy-based Maggiora Bros. Drilling Inc. and president of the California Groundwater Association, said he suspects that some drillers are backlogged because farmers are calling several firms to see who responds first. He's booked for the next three months. His eight crews work 24 hours a day for weeks drilling each well, which Maggiora said is a nice change from two years ago when the economy was bad and work was hard to find. Now, Maggiora said he has trouble finding workers willing to put in the grueling hours. He also fears today's boom will cause a run on supplies, such as the steel casings used to keep the walls from caving in. So he's ordering them by the truckload. Smittcamp said he worries that so much drilling could cause underground water supplies to run dry in little more than a decade. He blames politicians for failing to give farmers any other options, leaving them to fend for themselves. This summer, Smittcamp said he has to come up with two-thirds of his water that would normally come from the state and federal water deliveries. "This year, we get none out of the projects," he said. "So we've got to pump the whole enchilada."
Written on 04/15/2014, 10:51 am by Business Journal staff
A Fresno software company has raised $2 million in private investment to expand its suite of products geared toward the nonprofit sector. The investment brings Aplos Software's total funding to $3.4 million, according to a news release. The firm that provides Web and software-based accounting and donor management solutions to more than 10,000 users in the nonprofit sector was founded in 2009. The private investment will go toward new features in existing software offerings as well as an application interface that will work with popular Web-based software used by churches and nonprofits. “Nonprofits use a mix of online and desktop business software that is not made for their unique needs. This means time is wasted with complicated work-arounds and duplicating entries in multiple systems,” said Tim Goetz, co-founder of Aplos Software, in a statement. “Aplos is leading the nonprofit software sector into SaaS so nonprofits have one simple, integrated software designed specifically for their management needs.” The Aplos suite of nonprofit software includes Aplos Accounting, a fund accounting software; Aplos Donor Management, a donor management software; Aplos e-File, a tax-prep and submission software; and Aplos Oversight, a management software for accountants or administrators to easily oversee the finances of multiple nonprofits or churches. For more information, visit the Aplos website.
Written on 04/15/2014, 10:18 am by Gordon M. Webster
Food costs are likely to increase if two proposals to mandate California-only labeling for certain foods become law. Senate Bill 1381 is a California–only labeling requirement for genetically modified foods that will increase costs for families, raise liability and compliance costs for the food industry and confuse consumers with a label that lacks context and scientific evidence and stigmatizes food ingredients that are safe and healthy. This bill would add up to $400 per year to the grocery bill of the average California family, based on past economic studies. The other, Senate Bill 1000, imposes an economic burden on some beverage manufactures and food outlets by requiring specific state-only labels on some sweetened beverages as a warning to consumers. In addition to containing inconsistencies that would be confusing to consumers and expensive for businesses, it also duplicates a new national effort on packaging by the U.S. Food & Drug Administration.

Latest State News

Written on 04/15/2014, 2:07 pm by Associated Press
(AP) — Aaron Kushner believes he can...
Written on 04/15/2014, 1:56 pm by Associated Press
(AP) — It's not just tax day. Tuesday...
Written on 04/15/2014, 1:54 pm by Associated Press
(AP) — A research firm says Southern...
Written on 04/15/2014, 11:17 am by The Associated Press
(AP) — Legislation set to be unveiled...

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