Business news with words department+prices+raised. 7 news.

WALL Street skidded yesterday after the assassination of Pakistani opposition leader Benazir Bhutto and after the Commerce Department's durable goods orders exacerbated concerns about the US economy. The major indexes each lost well over 1 percent and the Dow Jones industrial average fell 192 points. Bhutto's assassination raised the possibility of increasing political unrest abroad, always an unsettling prospect for investors who have already been contending with domestic economic concerns for months. Oil prices rose following the news, and that unwelcome inflationary trend only added to Wall Street's uneasiness. Meanwhile, the government said orders for durable goods, big-ticket items from commercial jetliners to home appliances, rose by just 0.1 percent last month. Economists had been looking for a rise of 2.2 percent. Still, November saw the first rise in durable goods orders in the last four months. The Labor Department said the number of workers seeking unemployment

OIL prices drifted higher in light holiday trading yesterday after predictions of a drop in crude inventories raised new supply concerns. With little other news to motivate buying or selling, investors focused on forecasts by analysts including Addison Armstrong, director of exchange traded markets at TFS Energy Futures LLC, who predicted crude inventories fell by 1.5 million barrels last week. Tim Evans, an analyst at Citigroup Inc, predicted that crude stocks fell by 2 million to 3 million barrels. The Energy Department's Energy Information Administration reports oil inventories on Thursday this week, a day late due to Christmas. Light, sweet crude for February delivery rose 82 cents to settle at US$94.13 a barrel on the New York Mercantile Exchange after falling as low as US$92.50 earlier. Prices rose more than US$2 on Friday after the government reported consumer spending jumped more than expected in November, raising hopes that the economy will weather the crisis roiling

GOVERNMENT subsidy support for meat production will be stable even when pork prices fluctuate, the Ministry of Finance said yesterday. Speaking at an online press conference, Zeng Xiao'an, deputy director of the MOF's Department of Economic Development, said the government would take subsidies for piglet keepers into a long-term mechanism framework. "It does not matter whether pork prices are rising or falling, the supportive policies will be successive," said Zeng. "We will only adjust the strength of the policies based on real conditions," Zeng said when asked about the policies' time limit. To combat escalating inflation, China pledged to draw up a series of measures, including more subsidies for farmers. From July next year to the end of June in 2009, subsidies for each reproductive female piglet will be raised from 50 yuan (US$6.75) to 100 yuan, said Zeng. Also, the central government will allocate 2.5 billion yuan next year to support the

STOCKS sold off yesterday after a jump in consumer inflation raised concerns about how much freedom the Federal Reserve has to continue cutting interest rates. The Dow Jones industrial average gave up more than 178 points. The Labor Department said the consumer price index rose 0.8 percent in November amid a spike in gasoline prices. The report also found large increases in the cost of clothing, airline tickets and prescription drugs. The report raises questions about the Fed's options for priming the economy. The Fed this week lowered interest rates and announced a plan to align with other key central banks and offer loans to pressed lenders around the world. But while it wants to stimulate the U.S. economy and make lending easier among banks wary of faltering debt, the Fed also has to keep a watchful eye on inflation. Robert Dye, senior economist at PNC Financial Services Group, said the economic readings this week painted a mixed picture for investors, spurring some of the

CRUDE oil prices shot higher and then retreated yesterday, reaching a new record of US$96 a barrel before concerns about the US economy and France's decision to release oil from its strategic petroleum reserve motivated investors to cash in some of their recent gains. The Commerce Department's report that consumer spending rose by 0.3 percent in September, less than the 0.4 percent increase analysts expected, raised the prospect of a slowing economy that could depress demand for oil. And downbeat news about manufacturing came from the Institute for Supply Management, which said industrial activity grew in October at the weakest pace since March. Still, oil prices have surged 20 percent in one month, and when any market rises that far that fast, investors tend to sell to lock in some of their gains. The Federal Reserve's decision to cut interest rates a quarter-percentage point on Wednesday got a mixed reception in the oil market but probably contributed to some of Thursday's

Increased production of corn-based ethanol has raised U.S. food prices this year but not nearly as much as high oil prices and weather problems, the head of the Agriculture Department said Tuesday.

THE People's Bank of China's research department raised its economic growth forecast yesterday and said inflation will probably accelerate to 4.6 percent this year. The economy may expand 11.6 percent this year, according to the report published in the China Securities Journal, faster than the agency's June estimate for a 10.8-percent expansion. Inflation this year will quicken to 4.6 percent from 1.5 percent in 2006 and up from the 3.2 percent forecast previously. The trade surplus will widen to about US$250 billion this year from US$177.5 billion in 2006. The forecasts put pressure on central bank Governor Zhou Xiaochuan to raise lending and deposit rates for the sixth time this year to cap surging asset prices and cool the overheating economy, said Bloomberg News. The bank on Thursday raised interest rates on some home mortgages and increased minimum down payments in an effort to cool property price gains. "The central bank may need to raise key interest rates again" to cool inflation, said Tao Dong, chief Asia economist at Credit Suisse Group in Hong Kong. "In three months from now, the economy will be cooler than it is right now." The government is also concerned that a surge in lending is creating a bubble, which would drive up bad loans should it collapse. Investment in real-estate development jumped 29 percent in the first eight months of this year. The rate on loans for second homes and on commercial real estate was pushed to at least 1.1 times "benchmark" rates that the People's Bank of China didn't specify in a statement at midnight on Thursday. Buyers will have to pay not less than 40 percent of a property's value as down payment, up from 30 percent. Until now, banks were barred from charging less than 90 percent of the benchmark rates for mortgages. Interest rates on loans for first homes are unchanged. The decision by the central bank and the China Banking Regulatory Commission is "to prevent credit risks and protect the borrower's repayment ability," according to the statement on the People's Bank of China Website.