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A government official says a system to treat radioactive water pooling at a nuclear power plant is not performing as well as hoped but should be working fully next month.

The system is key to stabilize the crisis at the Fukushima Dai-ichi plant because the contaminated water poses health risks and impedes workers as they try to repair damage at the plant.

Goshi Hosono, director of the government’s nuclear crisis task force, said Thursday the contaminated water problem is “the biggest barrier” now personal loans for people with bad credit.

The water is used to cool the reactors, but 110,000 tons of it have accumulated. The contaminated water could overflow by early July if there is no progress on the treatment system.

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Stocks faded to a weak close Wednesday after Federal Reserve Chairman Ben Bernanke said the drags on the U.S. economy may be worse than previously thought.

Major indexes had been mixed for much of the day but turned lower in mid-afternoon trading as Bernanke spoke at a news conference.

Responding to a reporter’s question, Bernanke said that some of the problems plaguing the economy such as weakness in the financial industry and the housing market and “may be stronger and more persistent than we thought.”

Earlier, the Fed released a slightly lower forecast for U.S. economic growth this year. The Fed said it now expects the economy to grow between 2.7 percent and 2.9 percent this year, down from its previous estimate of 3.1 percent to 3.3 percent after its last meeting in April.

The Federal Reserve left interest rates unchanged at the end of its two-day meeting Wednesday.

The Dow Jones industrial average and the Standard & Poor’s 500 index slumped after Bernanke’s cautious remarks about the economy. Bernanke also said Greece’s debt crisis was a “very difficult situation.”

The Dow closed down 80.34 points, or 0.7 percent, at 12,109.67. The S&P 500 index fell 8.38 points, or 0.7 percent, to close at 1,287.14. The Nasdaq fell 18.07 points, or 0.7 percent, to 2,669.19.

Even with the dimmer outlook, the Fed pledged no new help to boost the economy. The central bank’s $600 billion bond-buying program draws to a close at the end of this month.

Among heavily traded companies, FedEx Corp. reported a 33 percent jump in income and said it expects global economic growth to continue. The package delivery company’s stock rose 2.6 percent.

Analysts consider results from FedEx and its rival UPS Corp. important indicators for the broader economy because they ship orders for all kinds of businesses.

CarMax Inc. rose 7 percent, the biggest gain in the S&P 500 index. The dealership owner said profit rose 25 percent on higher used-vehicle prices.

Jabil Circuit Inc. rose 3 percent after the electronics part maker said its earnings doubled last quarter.

AeroVironment Inc. jumped 21 percent after the maker of unmanned aerial drones and charging systems for electric cars said its income rose 13 percent.

In Greece, the new government narrowly won a vote of confidence. That may help it push through budget cuts and other austerity measures that it needs to secure more emergency loans.

The cash will help the country at least delay a default on its debt, an event that would hurt banks and the European economy. Worries about a Greek default have weighed on global financial markets since May.

Three stocks fell for every two that rose on the New York Stock Exchange Wednesday. Volume was light at 3.3 billion shares, below the daily average of 3.9 billion over the previous two months.

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U.K. retail sales unexpectedly rose in March as the biggest jump in spending on food in 10 months outweighed a decline at other shops.

Sales climbed 0.2 percent from February, when they dropped 0.9 percent, the Office for National Statistics said today in London. The median forecast of 20 economists in a Bloomberg News survey was for a 0.5 percent decline. From a year earlier, sales increased by 1.3 percent.

The report suggests a surge in commodity prices and inflation that’s double the central bank’s 2 percent target has yet to dent shoppers’ spending at a time when they face a government budget squeeze. The Bank of England kept its benchmark interest rate at a record low of 0.5 percent this month and minutes of the meeting show officials saw risks that an increase to tame price gains could hurt confidence.

“The figures show pretty slow unexciting growth, but growth nonetheless,” said Philip Rush, an economist at Nomura International Plc in London. “It’s relatively encouraging for the Bank of England, and they’ll take some comfort from signs the consumer is returning to more stable though muted growth.”

The pound rose 0.5 percent against the dollar after the report and traded at $1.6562 as of 11:26 a.m. in London. The yield on the benchmark two-year government bond was up 1 basis point today at 1.157 percent.

Food Stores

Sales at food stores rose 0.7 percent on the month and were down 1 percent on the year. A 12.3 percent increase from February at small stores, which employ less than 100 people, offset a 3.1 percent drop in non-specialized food stores such as supermarkets.

Excluding fuel, sales rose 0.2 percent in March from the previous month and were 0.9 percent up on the year, the statistics office said.

Three members of the Monetary Policy Committee voted at the April 7 meeting to raise the key interest rate best payday advance. Inflation was at 4 percent in March and the bank sees a “significant risk” that it may climb above 5 percent.

The majority of the MPC saw a risk that an increase in borrowing costs could undermine the economic recovery. A Nationwide Building Society index of consumer confidence climbed to 44 in March from to a record low of 39 the previous month.

Confidence Concern

“An increase in bank rate in current circumstances could adversely affect consumer confidence, leading to an exaggerated impact on spending,” the minutes said. It is too soon to say “whether the weakness in the contemporary indicators of household spending heralded a more protracted weakness in consumption growth.”

Economists at Barclays Capital including Simon Hayes, its chief U.K. economist, cut their forecast today for growth in British gross domestic product in the first quarter to reflect “both subdued retail sales data” and “more general anecdotal evidence of weak consumer demand.”

Barclays now forecasts growth of 0.5 percent from the final three months of 2010, down from an earlier prediction of 0.7 percent. The statistics office publishes the data on April 27.

The bank’s next decision is May 5, when policy makers will have new quarterly inflation forecasts and a preliminary estimate of first-quarter growth. Ten of 16 economists in a Bloomberg News survey say the bank will raise the key rate a quarter point from the record low of 0.5 percent in the second quarter. The remainder forecast no change.

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Employees of Liberty Mutual Group took heart in October when Missouri Gov. Jay Nixon announced their company would rake in $1.6 million in state tax credits

The Democratic leader of the Senate vowed Friday that any compromise on a government-wide spending bill won’t include GOP proposals blocking the Environmental Protection Agency from enforcing new rules on greenhouse gases or regulations on a host of other issues.

“Neither the White House or the Senate leaders is going to accept any EPA riders,” said Majority Leader Harry Reid, D-Nev., in a conference call with reporters.

Reid was referring to a raft of Republican policy provisions attached to a House-passed government-wide funding bill currently being negotiated in hopes of avoiding a government shutdown next weekend. In addition to blocking new regulations on greenhouse gases, such riders include language blocking EPA plans to clean up the Chesapeake Bay, and to close down mountaintop mines the agency believes will cause too much water pollution.

That was a reversal from comments Reid made Tuesday in which he signaled flexibility on riders, though he would not say which one.

Reid’s comments came two days after The Associated Press reported that the White House was signaling in private meetings with lawmakers that some Republican proposals on the EPA’s regulatory powers would have to make it into the final bill. The lawmaker providing the information insisted on anonymity because the discussions were private Business Card Holders. Reid himself had signaled flexibility. Taken together, the revelations ignited a firestorm among environmental activists.

House Speaker John Boehner of Ohio, who’s the leading negotiator for Republicans, has insisted publicly and privately that some GOP policy prescriptions will have to make it into the final bill.

Friday’s announcement promises to make it far more difficult to reach final agreement on the spending bill, required to fund the government through the end of September and avoid a partial shutdown next weekend.

Reid also said that any final agreement will have to curb increases in the Pentagon’s budget so that cuts to domestic programs won’t be as deep. And he said Republicans will have to accept some cuts to so-called mandatory programs, whose budgets run on autopilot.

At a news conference Thursday, Boehner said Republicans would fight for all the spending cuts they could. But he noted they could not “impose our will” on the Democrats and pointedly refrained from insisting on the full $61 billion contained in legislation the House passed more than a month ago.

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Investors are becoming more discriminating about European creditworthiness, increasing bets that Greece, Ireland and Portugal may restructure their debts while Spain and Italy survive the euro region’s deficit crisis.

The average annual cost of protecting of Greek, Irish and Portuguese bonds in the credit-default swaps market for five years exceeded the average of Spanish and Italian contracts by a record $496,000 this week. That’s up from $384,000 on Feb. 2 and $77,000 a year ago. Swaps on Greece signal a 60 percent probability of default in five years.

The division between peripheral nations widened this week after Greece was downgraded deeper into junk by Moody’s Investors Service and speculation increased that the European Union will fail to agree on a comprehensive package to end the crisis. Traders are betting Spain will avert an EU bailout as budget cuts and growth help repair its balance sheet.

“Spain has skillfully managed to navigate itself away from the sick list,” said Georg Grodzki, London-based head of credit research at Legal & General Investment Management, which oversees more than $500 billion. “If Spain continues structural reforms, especially in the labor market, it could start moving towards the core.”

Economic Overhaul

Spanish companies led by Banco Santander SA and Telefonica SA are reaping rewards from Prime Minister Jose Luis Rodriguez Zapatero’s economic overhaul, delivering the best bond returns among nations with the most corporate debt. Spanish company notes returned 1.4 percent this year, compared with 0.2 percent for the Bank of America Merrill Lynch Global Broad Market Corporate Index. The securities are the top performing of the dozen nations with the most debt in the index.

Credit-default swaps on Spain have tumbled to 250 basis points from 350 at the start of the year, while Italy has dropped to 179 from 240, according to CMA. Germany trades at 48 basis points. Swaps pay the buyer face value in exchange for the underlying securities or the cash equivalent should a borrower fail to adhere to its debt agreements.

An overhaul of labor laws and pensions, increased job creation and the introduction of core-capital requirements for savings banks are among the reasons for Spain to outperform the region’s smaller economies, Morgan Stanley economist Daniele Antonucci and analysts Owen Roberts and Leef Dierks wrote in a note to investors published on March 7.

‘Growth Trajectory’

“Spain’s growth trajectory looks more reassuring than that of Greece and Portugal,” they wrote totally free credit score. “We think that Portugal is likely to double-dip, while growth in Greece should remain in negative territory.”

Spain this week raised 4 billion euros ($5.6 billion) in the first syndicated sale of bonds due in 15 or more years from a peripheral European nation since Italy issued 6 billion euros of notes due 2026 in September.

Credit swaps on Greece closed at a record 1,035 basis points yesterday from 800 basis points in February after Moody’s lowered its rating three steps to B1. The risk of default is rising because of lagging tax collection and “implementation risks” in the budget cuts demanded as a condition for a 110 billion-euro bailout last year, Moody’s said.

Greece will inflict losses of about 50 percent on investors and extend bond maturities by five to 10 years in a series of moves to reduce its debt, according to investors. Almost all the 400 people at this week’s Euromoney Bond Investor Congress in London expect a European nation to restructure in the “next couple of years,” according to a show of hands.

Irish Swaps

Swaps on Ireland, which became the second nation to request an EU bailout after the government was nearly sunk by the weight of guaranteeing its banking system’s debt in November, now cost 587.5 basis points and imply an almost 40 percent likelihood of default within five years, according to CMA.

Investors are betting Portugal will have to follow Greece and Ireland in asking for international aid as the cost of issuing debt becomes unsustainable. EU finance ministers are meeting tomorrow in Brussels to debate how to construct a comprehensive debt-support package ahead of a summit scheduled for March 24-25.

Portugal sold 1 billion euros of bonds due in 2013 at an average yield of 5.993 percent yesterday, compared with 4.086 percent at a Sept. 8 auction. The sale attracted bids for 1.6 times the amount offered, compared with a so-called bid-to-cover ratio of 1.9 six months ago.

Default swaps on Portugal soared to 497 basis points from 387 in February, suggesting about a 34 percent chance of default, according to CMA.

“The market is starting to price in that Portugal may have to come to the table,” said Brian Yelvington, head of fixed- income strategy at Knight Capital Americas LP in Greenwich, Connecticut. “Portugal and Ireland will be very, very political in the short run and force an eventual solution.”

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Nearly everything is going according to the plan Federal Reserve Chairman Ben Bernanke hatched six months ago.

During a speech in Jackson Hole, Wyo., on Aug. 27, Bernanke outlined an effort to spur economic growth, prevent prices from falling and push markets higher through the purchase of government bonds. Since then stocks have soared, the unemployment rate has dropped and Americans have started to spend more.

“It’s been a success,” says Bill Gross, who manages the world’s largest mutual fund at Pimco. Gross had skewered Bernanke’s attempt to boost the economy, comparing it to a Ponzi scheme. “It’s hard to dispute that since Jackson Hole the market is up around 25 percent.”

But the Fed’s $600 billion program to buy Treasurys ends in June. And investors like Gross are worried the stock and bond markets will fall without the Fed’s $75 billion monthly injection. “At the end of June, the biggest bond buyer steps away,” he says. “The markets could have a shock in store.”

And now there’s a different economic issue. Higher prices for food and energy have replaced a double-dip recession as the major concern for economists and investors. Bernanke begins two days of Congressional testimony Tuesday and is sure to face criticism that the bond-buying program known as quantitative easing is to blame.

On the surface, Bernanke’s speech in Jackson Hole was full of Fed-speak. But the language was clear to those in the audience at the Fed’s annual Board of Governors meeting in the Wyoming resort. “He was saying, ‘Whatever it takes we’re going to do,’” says Richard Hoey, chief economist at BNY Mellon. “It was a Rambo message.”

The move, which began in November, was unorthodox, but the logic was simple: Buying $600 billion in Treasurys would make borrowing cheaper and move investors out of low-yielding bonds into riskier investments like stocks. A rising stock market could then give Americans confidence in the economy and spur consumer spending, which leads to higher corporate profits.

A lot has happened in the markets and the economy since then _ most of it good.

_The unemployment rate dropped to 9 percent in January, the most recent month for which data is available. It was 9.6 percent in August.

_The Consumer Price Index rose 0.4 percent in January and 1.6 percent over the previous year. Prices rose 0.2 percent last August from the month before and just 1.1 percent over the previous year.

_The Standard & Poor’s 500 stock index is up 27 percent since Aug. 26, the day before Bernanke’s speech, powered by stronger corporate profits and people moving their savings into stock funds.

_Consumer spending has climbed seven months in a row. In the last quarter of 2010, it grew at the fastest pace in three years. Spending rose 0.2 percent in January, according to data released Monday.

“Measured in the fairest possible way, and by just about every measure, QE2 has succeeded so far,” says Anthony Chan, chief economist at JPMorgan’s wealth management unit no credit check payday loans. QE2 is market slang for the Fed’s quantitative easing program.

Long-term interest rates are the exception. They’ve been on a steady climb, until the recent turmoil in Egypt and Libya pulled them lower. The benchmark 10-year Treasury rate recently hit 3.50 percent. That’s up from 2.49 percent on Aug. 26. But rates fell after the Jackson Hole speech and then began rising on each bit of good news about the economy. Economists say that’s how it’s supposed to work. Interest rates typically rise during an economic recovery to compensate bond holders for the negative hit from inflation.

“When this stuff starts to work, interest rates go up,” Chan says. “Otherwise, it’s just not working.”

It’s another story if rates jump too quickly. “Obviously, higher rates can stop an economy dead in its tracks,” he says.

How could rising rates derail the Fed’s efforts? A common worry among investors is that the Fed proves too successful in pushing up prices and inflation gets out of control, leading to a spike in rates.

A similar but separate concern, Hoey says, is that people come to expect rampant inflation and begin preparing for it. Companies raise prices in anticipation. Investors ditch bonds en masse, interest rates jump and borrowing turns suddenly expensive.

“It has brought us closer to an unstable rise of inflation expectations,” he says. “There’s a risk of exceptional instability.”

Another danger: There will be nobody to replace the Fed when the program ends in June. “Who will buy when the fed stops buying?” Gross asks, rhetorically. “Who will take their place? Mutual funds like Pimco?”

That’s unlikely, he says, because investors have been pulling money out of bond funds. Other institutional investors, like insurances companies and banks, are beginning to put their money elsewhere. And even bond managers like Gross have been warning investors away from Treasurys for months. If rates rise too high and too quickly, they squelch the economic recovery and drive down stocks.

Jack Albin, chief investment officer at Harris Private Bank, worries that the U.S. could wind up with a similar experience to Japan’s. The Japanese central bank also managed to boost prices and spur economic growth through pushing money into financial markets starting in 2001. Bond yields began rising. But the benefits evaporated when the central bank pulled back.

“Maybe it was a problem of timing,” he says. “But once they took the quantitative easing programs off, the economy just sagged back to where it was before.”

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India’s food inflation accelerated to a one-month high and services growth quickened, bolstering the case for more interest-rate increases.

An index measuring wholesale prices of agricultural products rose 17.05 percent in the week ended Jan. 22, the commerce ministry said in a statement in New Delhi today. The Purchasing Managers’ Index rose to 58.1 in January from 57.7 in December, according to HSBC Holdings Plc and Markit Economics. A reading above 50 indicates an expansion.

Asian economies from South Korea to China and India are facing inflation pressures, prompting the International Monetary Fund Managing Director Dominique Strauss-Kahn to say this week that central banks in the region need to raise borrowing costs further. The Reserve Bank of India on Jan. 25 boosted rates for the seventh time in a year and signaled more increases.

“Demand pressures are growing in India,” Jay Shankar, chief economist at Religare Capital Markets Ltd. in Mumbai, said before the release. “Food costs are also feeding into inflation.” He expects the central bank to increase rates by at least 100 basis points by December.

Eleven-year government bonds in January posted their first monthly loss since October on investor concern inflation in India will erode returns on the securities. The yield on the 8.13 percent bond due in September 2022 gained two basis points to 8.19 percent at 12:01 p.m. in Mumbai, after increasing 14 basis points in January.

The Bombay Stock Exchange’s Sensitive Index jumped 1.5 percent as of 12:01 p.m.

Onion Prices

India’s benchmark wholesale-price inflation index advanced 8.43 percent in December, led by higher food costs.

Onion prices, a staple in the local cuisine, surged 130 percent in the week ended Jan. 22, while eggs and meat rose 15 percent, today’s statement showed.

The government on Jan. 13 blamed the late arrival of rains for disrupting supplies of fruits and vegetables including onions. It said prices of milk, eggs, meat and fish have gained because of consumer demand, strengthened by rising incomes generated by economic expansion.

Prime Minister Manmohan Singh’s government is importing onions from Pakistan and has banned exports of lentils and edible oils.

Growth in India’s $1.3 trillion economy is being spurred by services such as telecommunications and banking, which make up almost three-fifths of the nation’s gross domestic product.

Phone Customers

Indian mobile-phone operators including Bharti Airtel Ltd. added 22.88 million new customers in November, a 3.24 percent increase from a month earlier. That’s the biggest gain since June and signals strong consumer demand in Asia’s third-largest economy.

Reserve Bank Governor Duvvuri Subbarao last month increased the key repurchase rate by a quarter of a percentage point to 6.5 percent and raised the inflation forecast to 7 percent by March 31 from the earlier prediction of 5.5 percent.

In South Korea, consumer-price gains breached the central bank’s 4 percent ceiling in January, the government said Feb. 1. Indonesian inflation quickened and input prices rose in China, separate reports showed this week.

Thailand and South Korea increased rates last month and China’s central bank has moved twice since mid-October and also pushed banks’ reserve requirements to the highest in more than two decades. Bank Indonesia has kept its policy rate at 6.5 percent since August 2009, delaying an increase to avoid attracting more capital inflows. Indonesia is scheduled to announce its next rate decision tomorrow.

Asian economies led a global recovery last year that’s been restrained by Europe’s sovereign-debt crisis and a U.S. job market where unemployment has exceeded 9 percent since May 2009.

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What began more than three years ago as a routine audit of Laclede Gas Co.’s natural gas purchases has boiled over into a bitter dispute between the state’s largest natural gas utility and consumer advocates.

At the heart of the disagreement: Should the utility’s sister company, Laclede Energy Resources, be forced to turn over boxes of records involving gas purchased from third parties? Ultimately, the records could show whether Laclede Gas Co. overcharged its 630,000 customers for fuel to heat their homes.

The Public Service Commission staff - a group of accountants, engineers, lawyers and economists that reviews Laclede’s gas purchases - says the records it seeks are necessary to make sure transactions between affiliated companies don’t harm consumers. The PSC staff advises regulators but doesn’t have rulemaking authority.

So-called affiliate transactions concern the PSC staff and other consumer advocates because of the potential for nonregulated affiliates to charge utilities inflated prices for fuel, in effect padding corporate profits at the expense of utility customers. In this case, Laclede Gas and Laclede Energy Resources operate independently but under the same corporate parent, Laclede Group Inc.

“We always scrutinize affiliate transactions very closely, because they’re not at arm’s length,” said Kevin Thompson, chief counsel for the PSC staff. “So they’re inherently dangerous to a ratepayer. That does not mean we’ve found any evidence of anything improper. That’s why we’re seeking the documents.”

St. Louis-based Laclede Gas agrees that such transactions deserve extra scrutiny. And the utility says it has gone out of its way to provide thousands of pages of records that prove prices its customers paid for natural gas were fair.

“Laclede Gas has provided a substantial amount of information to demonstrate what the market prices of these transactions were,” utility attorney Michael Pendergast said. “We also cooperated with our affiliate, Laclede Energy Resources, and they have provided information related to these transactions including cost information and other market data.”

Cases involving utility audits are notoriously tedious and complex. But this one is tortuous even by those standards.

The stalemate has dragged on since 2007, involving tens of thousands of pages of testimony and pleadings and countless hours of hearings. The PSC has reversed itself on the matter twice. The dispute has since been to state court and back, and may ultimately be headed there again.

The current dispute originated during its audit of gas purchases made by Laclede from 2005 to 2007. Every November, Laclede estimates the price it will pay for natural gas on the wholesale market over the next year. That is the price paid by consumers. Actual gas purchases are later audited by the PSC staff to determine if they match the utility’s estimated costs. Customers are billed or credited the difference.

The PSC staff has asked regulators to disallow $6 million in costs related to transactions between Laclede Gas and Laclede Energy Resources.

To prove its case, it sought records involving transactions between Laclede Energy Resources and third-party gas suppliers.

Those records will show what Laclede Energy Resources paid for natural gas that was later sold to the utility and, ultimately, customers, Thompson said.

“We want to understand the entire universe of sale and purchase transactions that LER made in order to establish the fair market price,” he said.

Laclede Gas only purchases a small volume of gas from its affiliate, usually less than 5 percent of the volume used by utility customers. And the company has turned over all records involving those sales as well as records showing what the utility paid to other suppliers. That’s enough to demonstrate that prices paid were appropriate, Pendergast said.

The PSC staff has two complaints against Laclede Gas. One accuses Laclede of not following special rules that govern how related companies do business with each other.

The other complaint claims the utility violated terms of an agreement that allowed it to restructure in 2001. The restructuring allowed the company to establish Laclede Energy Resources, a wholesale gas marketer.

Meanwhile, Laclede filed its own complaint against the PSC staff. But that case was dismissed by the commission.

If the PSC upholds the complaints against Laclede, it could sue the utility in circuit court and seek penalties of up to $2,000 per day for each violation.

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