Regulatory changes mean smaller FairPoint penalties

Regulatory reforms passed earlier this year in Maine, New Hampshire and Vermont reduce the potential penalties FairPoint Communications could incur for falling short of service standards by more than $31 million a year, the company said Wednesday.

The reduced penalties come from legislation in Maine and New Hampshire and the Vermont Public Service Board’s approval of its four-year regulatory plan, the company said.

The changes in the three states reduce the penalties the company could face for failing to meet specific quality performance standards. The potential penalties have been cut by $12.5 million in New Hampshire, $10.5 in Maine and $8.8 million in Vermont, the company said.

The changes also allow more pricing flexibility, said CEO Paul Sunu, making the company more competitive in the marketplace a year and a half after emerging from bankruptcy.

“The reforms recognize the need to promote a competitive marketplace and they encourage innovation and continued investment in telecommunications services,” he said. 

Housing market news sends stocks up for second day

A new sign of recovery in the housing market and strong corporate earnings sent stocks higher for a second day.

The Dow Jones industrial average rose 103.16 points, or 0.8 percent, to 12,908.70 on Wednesday, a strong showing for what has been a mediocre July so far. The index has risen four times in the last 12 trading days.

“The market expects bad news, so when it doesn’t get it, it rises,” said John Manley of Wells Fargo Advantage Funds. “Earnings haven’t been disastrous for the quarter.”

A big gain by Intel after it posted a strong earnings report drove up technology stocks, especially other chip makers. Those companies, plus industrials, were responsible for much of the market’s gains. The Nasdaq composite climbed 32.56 points, or 1.1 percent, to 2,942.60. The Standard & Poor’s 500 index rose 9.11 points, or 0.7 percent, to 1,372.78. 

Oversight group names potentially risky exchanges

Federal regulators have tagged eight exchanges and clearinghouses that settle trades as potential threats to the stability of the financial system that need strict government oversight.

They include the Chicago Mercantile Exchange, the Depository Trust Co., the National Securities Clearing Corp. and the Options Clearing Corp.

The announcement was made Wednesday by the Financial Stability Oversight Council, a group of the top regulators that includes Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke. The action was mandated by the 2010 financial overhaul law.

The agencies that regulate the exchanges and clearinghouses will set rules for them to manage risks.

The move came as the oversight group issued an annual report that identifies the European debt crisis, weak economic growth around the world and U.S. money-market mutual funds as risks to U.S. financial stability.

Weaknesses in money-market funds were exposed when a large fund collapsed in 2008 during the financial crisis. That created a scare that led the government to temporarily guarantee money fund assets so investors could be assured they’d be protected from losses.