Dow ends modestly higher after a day of big swings

It was another day of big swings in the Dow Jones industrial average, but at least Monday ended with a gain.

The Dow soared 200 points in the morning, an encouraging start after four weeks of losses. By noon that gain shriveled to just 2 points, then came a rise of another 100 in the afternoon. At the end of the day, the Dow closed up 37 points.

Compared with the even wilder fluctuations over the past two weeks, Monday’s trading looked relatively calm. The Dow has gained or lost at least 200 points on eight days in August, including a 419-point plunge last Thursday. A flare-up of Europe’s debt crisis and fears of a new U.S. recession have shaken investors, taking the Dow down 15 percent in one month.

Hewlett-Packard Co. rose 3.6 percent, the most of the 30 large companies in the Dow. H-P sank 20 percent Friday after saying it planned to sell its PC business and stop selling other products.

Bank stocks took another fall. Bank of America lost 7.9 percent, the biggest drop among the 30 Dow companies.

 

Tepid pay raises forecast for salaried U.S. workers

A new survey says salaried U.S. workers can expect another year of modest raises in 2012.

After increasing salaries by 2.6 percent this year and last year, companies are planning a 2.8 percent bump in 2012, benefits and human resources consultancy Towers Watson reported Monday.

That’s somewhat smaller than raises in the last decade. From 2000 to 2006, the year before the Great Recession began, salaries rose an average 3.9 percent for workers who were not executives.

Salary increases have been small, though many companies are sitting on huge cash stockpiles. They’re being conservative with permanent salary hikes because of uncertainty about the economy and memories of the deep cuts during the recession, said Laura Sejen of Towers Watson.

 

Shrinking Greek economy adds to deficit-cutting woes

Greece’s finance minister said Monday that the crisis-afflicted economy will shrink more than expected this year, putting further pressure on the country’s ambitious deficit-cutting.

Evangelos Venizelos said the ministry forecasts annual output to shrink in 2011 between 4.5 percent and 5.3 percent of gross domestic product.

Venizelos had previously admitted that the recession might exceed last year’s 4.5 percent drop, a whole percentage point worse than initially estimated. The government has forecast a timid return to growth in 2012, but that now seems very unrealistic.

After living above its means for years until punishing interest rates forced it out of bond markets, Greece is now kept solvent only by a double rescue loan deal worth $317 billion from its European partners and the International Monetary Fund.

In return, the Socialist government has promised to reduce a bloated budget deficit and strictly abide by a highly unpopular austerity program.