Markets lackluster in run-up to Fed minutes

AMSTERDAM — Markets were trading in fairly narrow ranges Wednesday ahead of the publication of the minutes to the most recent policy meeting of the U.S. Federal Reserve.

Though tame U.S. inflation figures Wednesday may mean the Fed will feel less pressure to reduce its monetary stimulus soon, investors are more focused on the minutes given some divergent comments from a run of officials at the central bank.

"Investors remain hesitant to enter the markets before tonight's minutes," said Max Cohen, a trader at Spreadex.

In Europe, the FTSE 100 index of leading British shares closed down 0.3 percent at 6,681.08 while Germany's DAX rose 0.1 percent to 9,202.07. The CAC-40 in France ended 0.1 percent lower at 4,268.37.

In the U.S., the Dow Jones industrial average was up 0.1 percent at 15,979 while the broader S&P 500 index rose 0.2 percent to 1,791.

How U.S. markets close out the day could hinge on the minutes. Investors are looking for clues as to whether the Fed will begin reducing its $85 billion monthly asset purchases as soon as December. Most economists think the Fed will maintain the stimulus until early next year, at least. But the minutes could dislodge those expectations.

The Fed's stimulus, in its various guises, has helped shore up risky assets, such as stocks around the world and emerging market currencies, over the past few years as the money created has been recycled through financial markets.

The debate over tapering has been one of the main considerations in markets over the past few months and is likely to be a key driver in how they close out the year.

Earlier, Asian markets generally fell, though Hong Kong's Hang Seng added 0.2 percent to 23,700.86 and China's Shanghai Composite reversed losses to gain 0.6 percent to 2,206.61 after the Organization for Economic Cooperation and Development made positive remarks about the Chinese economy.

Seoul's Kospi was down 0.7 percent to 2,017.24. Australia's S&P/ASX 200 ceded 0.8 percent to 5,307.70. Japan's Nikkei 225 stock average shed 0.3 percent to 15,076.08, hurt by a rise in the yen.

Elsewhere, the euro was under pressure amid speculation that the European Central Bank may do more to shore up the muted economic recovery in the 17-country eurozone. Europe's single currency was trading 0.7 percent lower at $1.3451.

In the oil markets, a barrel of benchmark New York crude rate was up 18 cents at $94.07 a barrel.

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Frederick Sanger, double Nobel winner, dies at 95

LONDON — British biochemist Frederick Sanger, who twice won the Nobel Prize in chemistry and was a pioneer of genome sequencing, has died at the age of 95.

His death was confirmed Wednesday by the MRC Laboratory of Molecular Biology — which Sanger helped found in 1962.

The laboratory praised Sanger, who died in his sleep Tuesday at Addenbrooke's Hospital in Cambridge, as an "extremely modest and self-effacing man whose contributions have made an extraordinary impact on molecular biology."

Sanger was one of just four individuals to have been awarded two Nobel Prizes; the others being Marie Curie, Linus Pauling and John Bardeen.

Jeremy Farrar, director of the Wellcome Trust, called Sanger "the father of the genomic era."

Sanger first won the Nobel Prize in 1958 at the age of 40 for his work on the structure of proteins. He had determined the sequence of the amino acids in insulin and showed how they are linked together.

He later turned his attention to the sequencing of nucleic acids and developing techniques to determine the exact sequence of the building blocks in DNA.

That work led to Sanger's second Nobel Prize, awarded jointly in 1980 with Stanford University's Paul Berg and Harvard University's Walter Gilbert, for their work determining base sequences in nucleic acids.

Venki Ramakrishnan, deputy director of the MRC Laboratory, said it would be "impossible to overestimate the impact" Sanger had on modern genetics and molecular biology.

Sanger was born on Aug. 13, 1918, in Gloucestershire, southwestern England. While he initially planned to study medicine like his father, he switched fields and earned a degree in natural sciences from Cambridge University 1939. A conscientious objector in World War II, he went on to earn a PhD working on protein metabolism from the same university.

In addition to the Nobel Prizes, Sanger was made a fellow of the Royal Society in 1954, Commander of the Order of the British Empire in 1963 and the Order of Merit in 1986.

Sanger declined a knighthood, however, because he preferred not to be called "sir," according to the laboratory he helped found.

According to The Sanger Institute, when he was asked if he would mind an institute being named after him, Sanger agreed — but said "It had better be good."

Sanger is survived by three children — Robin, Peter and Sally.

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Follow Cassandra Vinograd at http://twitter.com/CassVinograd

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Turmoil at climate talks as blame game heats up

WARSAW, Poland — An old rift between rich and poor has reopened in U.N. climate talks as developing countries look for ways to make developed countries accept responsibility for global warming — and pay for it.

With two days left, there was commotion in the Warsaw talks Wednesday after the conference president — Poland's environment minister — was fired in a government reshuffle and developing country negotiators said they walked out of a late-night meeting on compensation for climate impacts.

"We do not see a clear commitment of developed parties to reach an agreement," said Rene Orellana, head of Bolivia's delegation.

U.S. climate envoy Todd Stern downplayed the dispute and said American negotiators who had attended the meeting were surprised to hear of a walk-out.

"The meeting ended with everyone leaving," Stern told reporters in Warsaw.

Differing views on what's been said and done in closed discussions is not unusual in the slow-moving U.N. effort to curb global warming, which has often been held back by mistrust between rich and poor countries.

The question of who is to blame for global warming is central to developing countries who say they should receive financial support from rich nations to green their economies, adapt to shifts in the climate and cover costs of unavoidable damage caused by warming temperatures.

Also, they say the fact that rich nations, historically speaking, have released the biggest amounts of CO2 and other heat-trapping gases, means they need to take the lead in reducing current emissions.

In Warsaw, Brazil even proposed developing a formula to calculate historical blame, to guide talks on a new global climate deal in 2015.

"They must know how much they are actually responsible ... for the essential problem of climate change," Brazilian negotiator Raphael Azeredo said.

Developed nations blocked that proposal, saying you must also look at current and future emissions when dividing the responsibility.

China overtook the U.S. to become the world's biggest carbon polluter last decade, and developing countries as a whole now have higher emissions than the developed world.

To focus only on past emissions "seems to us as very partial and not very accurate," Stern, the U.S. envoy, said earlier this week.

The 2015 deal is supposed to establish what climate actions countries will take after 2020. The Warsaw conference is supposed to lay the foundation for that agreement but it was unclear Wednesday whether countries would be able to agree on basic stepping stones including a timeline for when commitments should be presented.

The government of Poland, which has been criticized at the talks for hosting a coal summit at the same time, stirred things up further Wednesday by replacing Environment Minister Marcin Korolec, who is presiding over the climate conference. Korolec told reporters the move would not affect his duties as conference president.

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Associated Press writer Monika Scislowska contributed to this report.

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Ritter can be reached at https://twitter.com/karl_ritter

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Stocks edge higher after retail spending increases

NEW YORK  — Stocks are higher on Wall Street as investors react to a surprisingly big increase in U.S. retail sales last month and quarterly results from J.C. Penney and other retailers.

Investors were also waiting for minutes from the Federal Reserve's October policy meeting, which will be out later Wednesday afternoon.

The Dow Jones industrial average was up nine points, or 0.1 percent, to 15,976 as of noon Eastern. The broader Standard & Poor's 500 index was up three points, or 0.2 percent, to 1,791. The Nasdaq composite rose 13 points, or 0.3 percent, to 3,945.

J.C. Penney led the S&P 500 index higher with an 8 percent gain after reporting its first monthly sales increase since December 2011.

Lowe's lost 5 percent after its earnings fell short of analysts' forecasts.

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US retail sales rise solid 0.4 percent in October

WASHINGTON — Consumers shrugged off the 16-day partial government shutdown and spent more on autos, clothing and furniture in October, boosting U.S. retail sales by the most in four months.

Sales rose 0.4 percent, up from a flat reading in September, the Commerce Department said Wednesday. Overall sales were slightly held back by a steep drop in gasoline prices. Excluding sales at gas stations, retail spending rose an even stronger 0.5 percent.

Core sales, a category that excludes volatile spending on autos, building supplies and gas, also rose 0.5 percent, up from a 0.3 percent gain in September.

The retail sales gain indicates that consumers stepped up spending at the start of the October-December quarter. Their spending accounts for 70 percent of economic activity.

Economists were encouraged by the solid October gain.

"This release provides yet more evidence that, despite the shutdown, the economy is gaining momentum," said Paul Dales, senior U.S. economist at Capital Economics.

Dales said a strong start to the October-December quarter could mean that consumer spending will grow at an annual rate of 2 percent to 2.5 percent this quarter. That would mark a sharp improvement from the 1.5 percent annual growth in consumer spending in the July-September quarter.

Economists say they think cheaper gas will help boost sales during the crucial holiday shopping season. Gas prices have fallen sharply since Labor Day and now are around $3.21, the lowest level in nearly two years.

A sharp drop in auto sales caused largely by a calendar quirk had dampened retail sales in September. Labor Day weekend auto sales were counted in August. But in October, auto sales 1.3 percent, reversing September's 1.2 percent decline.

In October, sales at department stores rose 0.5 percent after having fallen 0.6 percent in September. There were also solid sales gains at furniture stores, electronics and appliance stores and specialty clothing stores.

In addition to the drop at gas stations, sales at building supply stores fell 1.9 percent in October.

Growth in consumer spending slowed from July through September and economists have been concerned that spending may remain lackluster given weak income growth and the lingering impact of higher federal taxes at the start of the year.

Unemployment remains still high at 7.3 percent, and those Americans who have jobs are not seeing much in the way of pay increases. That's contributed to their more cautious mood.

But in one encouraging sign, hiring has picked up in recent months. The economy created 204,000 jobs last month, many more than expected. Employers have added an average of 202,000 jobs per month from August through October. That's up sharply from an average of 146,000 in May through July.

The overall economy grew at an annual rate of 2.8 percent in the July-September quarter, faster than expected, and up from 2.5 percent growth in the April-June quarter. But much of the growth came from an increase in business stockpiling. Without a corresponding increase in spending, many economists think companies will cut back on restocking in the October-December quarter, which would slow economic growth.

Most analysts have said they think the economy is growing at a weak annual rate below 2 percent in the current quarter. But some say the solid October retail sales may cause them to boost their estimates for the fourth quarter. Dales said he thinks the economy will grow at an annual rate between 2 percent and 2.5 percent this quarter.

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US consumer prices drop 0.1 pct. on cheaper gas

WASHINGTON — Cheaper gasoline lowered overall U.S. consumer prices slightly in October. But outside the steep drop at the pump, inflation stayed mild.

The consumer price index fell 0.1 percent last month, down from a 0.2 percent increase in September, the Labor Department said Wednesday. The October decline was due mainly to a 2.9 percent drop in gasoline costs, the largest since April. Over the past 12 months, overall prices have risen 1 percent, well below the Federal Reserve's inflation target of 2 percent.

PNC Bank chief economist Stuart Hoffman said the low inflation reading ensures that the Fed will continue its extraordinary measures to spur growth.

"From the Federal Reserve's perspective, inflation is too low, one reason why the central bank continues to provide massive stimulus to the economy," Hoffman said in a note to clients.

Excluding volatile energy and food costs, so-called core prices rose 0.1 percent in October from September and have risen just 1.7 percent over the past 12 months. The prices for new vehicles, clothing and medical care declined last month. But airfares rose a whopping 3.6 percent.

U.S. gasoline prices began falling in the spring and reached two-year lows earlier this month. The average price of a gallon of gas was $3.21, according to AAA's Daily Fuel Gauge Report.

The drop in fuel prices may be offset somewhat by slight increases in the cost of food, which rose 0.1 percent. That increase was driven by a 0.6 percent rise in the prices of meats, poultry, fish and eggs, the largest advance for any of the food categories.

Inflation has been modest over the past four years, with prices held down by the weak recovery from the Great Recession. High unemployment and modest wage hikes have made it difficult for Americans to spend more and retailers to charge more.

Low inflation gives the Fed more latitude to pursue its extraordinary stimulus to help drive economic growth. The Fed has been buying $85 billion a month in bonds to keep long-term interest rates low and encourage more borrowing and spending. It has also kept its key short-term interest rate near zero since late 2008.

Critics of the bond-buying program fear it will spark higher inflation in the future.

But a number of Fed officials have objected to slowing the program because inflation remains below 2 percent.

A small amount of inflation can be good for the economy, because it encourages consumers and businesses to spend and invest before prices rise further.

The Fed will release on Wednesday the minutes of its policymaker meeting that ended on Oct. 30. Economists expect the minutes to provide little insight into what steps the central bank will take next in terms of its bond buying and plans to keep the short-term interest rate it controls at nearly zero.

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German official cautions over more ECB stimulus

FRANKFURT, Germany — Germany's top central banker said it's too soon for the European Central Bank to talk about a further shot of stimulus for the struggling eurozone economy.

Jens Weidmann said the ECB only this month loosened monetary policy with an interest rate cut to a record low of only 0.25 percent.

"I don't think it's a good idea to announce the next round right away," he said in an interview with Die Zeit newspaper made available Wednesday.

Weidmann's warning follows remarks by ECB executive board member Peter Praet last week that the ECB could take the additional step of purchasing financial assets such as bonds — if the bank thought the economy was threatened by deflation, a corrosive, chronic fall in prices. Deflation undermines growth and investment as people hold off on purchases as goods become cheaper. It also makes debts harder to pay.

Deflation concerns have ratcheted up in recent weeks after inflation in the 17-country eurozone fell to 0.7 percent in the year to October, well below the ECB's target of keeping prices increases just below 2 percent.

In theory, pumping money into the eurozone economy could help ease those deflation concerns and help the eurozone recovery from recession. Other central banks including the U.S. Federal Reserve and the Bank of England have made such purchases with newly created money to lower interest rates and spur growth.

The ECB, the chief monetary authority for the eurozone, had until recently said little about using the bond-purchase stimulus tool, or "quantitative easing" in economic jargon.

Last week, the Wall Street Journal quoted Praet as saying the bank could purchase assets if its mandate to maintain price stability was threatened.

If the price stability mandate is at risk, Praet said, then "we are going to take all the measures that we think we should take to fulfill that mandate." That includes "outright purchases that any central bank can do."

The idea of quantitative easing faces resistance in Germany, Europe's largest economy. Many in Germany are skeptical of central bank measures seen as potentially inflationary, or as bailing out troubled euro member governments that won't take steps themselves to improve growth.

Weidmann is only one vote however on the 23-member ECB rate-setting council, a post he holds as head of Germany's national central bank, the Bundesbank.

Weidmann said that Europe's troubles over slow growth, uncompetitive eurozone member economies and too much debt "certainly cannot be solved through the money printing press."

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US creates economic advisory team for Puerto Rico

SAN JUAN, Puerto Rico — The U.S. is sending a team of federal officials to help Puerto Rico manage an economic crisis as the island braces for its eighth year of recession.

A U.S. administration official said Wednesday that the team will be composed of officials from the departments of Education, Health and Human Services, and Housing and Urban Development, as well as the Environmental Protection Agency.

They will travel to Puerto Rico starting in December to work with the island's government on how to best maximize federal funds in those areas to help boost its economy. The officials will work in an advisory capacity and no additional federal funds are planned beyond current allocations.

The team was created by a presidential task force that previously worked with Puerto Rico on political status issues.

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In Philly newspaper spat, efforts to broker a deal

PHILADELPHIA — A judge says co-owners fighting over control of The Philadelphia Inquirer and Philadelphia Daily News are trying to broker a deal.

Common Pleas Judge Patricia McInerney said Wednesday that lawyers for George Norcross and Lewis Katz were holding talks. Norcross had been expected to testify in court but his side instead rested before the judge recessed the hearing so the two sides could negotiate.

Katz and co-owner H.F. "Gerry" Lenfest sued Norcross last month over the firing of veteran editor Bill Marimow, whom Katz supports. Norcross wants new leadership.

Both men invested $16 million apiece toward the $55 million purchase of the media properties in April 2012 and hold 26 percent stakes.

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Lowe's 3Q results rise, lifts fiscal 2013 outlook

MOORESVILE, N.C. — Lowe's third-quarter net income increased 26 percent and the home-improvement retailer raised its outlook for the year as it gets a lift from the housing market's ongoing recovery.

But its third quarter earnings and the new earnings outlook both came in short of Wall Street's expectations. Its shares fell almost 5 percent in midday trading.

Home improvement companies have been benefiting from record-low interest rates and rising home prices, spurring customers to spend more to renovate their homes.

One encouraging sign for Lowe's is that customers are spending more for larger projects, said CEO Robert Niblock in a phone interview with The Associated Press.

"Consumers have the willingness to tackle projects that have been on their to-do list," he said. That includes flooring projects and upgrading kitchen appliances. "We're seeing a nice trend there as long as housing continues to move in the right direction."

But Mooresville, N.C.-based Lowe's has not been benefiting as much as its larger rival, Home Depot, which reported third-quarter results Wednesday that topped analysts' estimates and it lifted its outlook.

To boost results, Lowe's has adjusted its pricing strategy, returning to offering what it says are permanent low prices on many items, instead of fleeting discounts.

The company also recently acquired Orchard Supply Hardware Stores for $205 million, a deal which was completed during the quarter, in order to expand in California.

Lowe's Cos. earned $499 million, or 47 cents per share, for the period ended Nov. 1. That's up from $396 million, or 35 cents per share, a year ago. Analysts polled by FactSet expected earnings of 48 cents per share.

Revenue rose 7 percent to $12.96 billion from $12.07 billion. Wall Street forecast $12.73 billion in revenue. Sales at stores open at least a year, a key retail metric, rose 6.2 percent

Lowe's now expects full-year earnings of about $2.15 per share, up from prior guidance of $2.10 per share. Revenue is predicted to climb approximately 6 percent, from an earlier estimate of 5 percent. Based on 2012's revenue of $50.52 billion, the new forecast implies approximately $53.53 billion.

Analysts predict fiscal 2013 earnings of $2.20 per share on revenue of $53.09 billion.

Its shares fell $2.47, or 4.9 percent, to $47.97 in midday trading. The stock is up 41 percent since the beginning of the year.

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