NEW YORK (AP) — A rally in financial stocks Thursday helped the market extend its grind higher to a third day.

The Standard & Poor’s 500 index cleared an important hurdle watched by traders when it closed just above its January peak to set a new 17-month high. That could bring some hesitant buyers into the market.

Financial shares rose after Citigroup Inc. CEO Vikram Pandit said the bank was on a path toward “sustained profitability” as it sells off risky assets. The bank has been the hardest hit by the financial crisis so the upbeat assessment helped boost expectations about the economy. The stock rose 5.6 percent.

The climb by financials helped offset concern about a spike in inflation in China. The country said its inflation rate rose to 2.7 percent in February from 1.5 percent in January. A steep rise in prices could force China to raise interest rates. That, in turn, could slow one of the world’s fastest-growing economies and put a damper on a global recovery.

Jim Dunigan, managing executive of investments at PNC Wealth Management, said he expects that China will be able to contain prices for now.

“We’ll see hints of inflation here and there but I don’t think we’ll see that problem for a while,” he said.

In the U.S., the Labor Department said workers filing for jobless benefits for the first time fell by 6,000 to 462,000 last week. Economists were predicting a slightly bigger drop, according to Thomson Reuters.

The report showed some easing in the labor market, but it didn’t point to the increase in hiring that investors want to see. Stocks have traded in a narrow range since the Labor Department said on Friday that employers cut fewer jobs in February than analysts expected. The market is looking for more signs of progress.

The week’s quiet trading comes as investors look for more signs about the direction of the economy.

According to preliminary calculations, the Dow Jones industrial average rose 44.51, or 0.4 percent, to 10,611.84. It is down 1.1 percent from its recent high in Jan. 19.

The S&P 500 index advanced 4.63, or 0.4 percent, to 1,150.24, above its Jan. 19 close of 1,150.23. The index now stands at its highest level since Oct. 1, 2008.

The Nasdaq composite index rose 9.51, or 0.4 percent, to 2,368.46 for its sixth straight advance.

Bond prices were little changed. The yield on the benchmark 10-year Treasury note, which moves opposite its price, was flat at 3.73 percent.

The dollar was mixed against other major currencies, while gold prices rose.

Crude oil rose 2 cents to settle at $82.11 per barrel on the New York Mercantile Exchange.

David Joy, chief market strategist at RiverSource Investments, said he was impressed that traders shrugged off the increase in China’s inflation in a week with few economic reports. Investors often become uneasy when there is little new news. That can lead them to sell stocks.

“The concept of an economic recovery is garnering a little more credibility,” he said. “We’ve arrived at a place where stocks are fairly valued.”

The close above the January high by the S&P 500 index could give some of the investors sitting out of the market new incentive to pump money into stocks. The market slipped Monday and inched higher Tuesday and Wednesday. Volume has been light, a sign that traders have limited faith in the market’s recent gains.

Corporate dealmaking continued. Oil company BP will pay $7 billion to acquire exploration rights from Devon Energy Corp. BP will acquire rights to explore in Brazil, the U.S. Gulf of Mexico and Caspian Sea.

Increased mergers and acquisitions in recent weeks has been a welcome sign that corporate leaders believe the economy is getting stronger.

Citigroup rose 22 cents, or 5.6 percent, to $4.18. It was a year ago this week, on March 10, 2009, that the Dow and the S&P 500 index began to pull off of 1-year lows after Citigroup said it had been making money.

Two stocks rose for every three that fell on the New York Stock Exchange, where trading volume came to 975.6 million shares, compared with 1.1 billion Wednesday.

The Russell 2000 rose 2.29, or 0.3 percent, to 677.22.

Britain’s FTSE 100 fell 0.4 percent, Germany’s DAX index slipped 0.1 percent, and France’s CAC-40 fell 0.4 percent. Japan’s Nikkei stock average rose 1 percent.

NEW YORK (AP) – Stocks traded in a tight range for a fourth day Thursday after China reported a jump in inflation. Mixed U.S. economic news also held the market back.

China said its inflation rate rose to 2.7 percent in February from 1.5 percent in January. A steep rise in prices could force China to raise interest rates. That, in turn, could slow one of the world’s fastest-growing economies and put a damper on a global recovery.

Meanwhile, the Labor Department said workers filing for jobless benefits for the first time fell by 6,000 to 462,000 last week. Economists were predicting a slightly bigger drop, forecasting new claims would fall to 460,000, according to Thomson Reuters.

The market was unimpressed. While the report showed some easing in the labor market, it didn’t point to the increase in hiring that investors want to see. Stocks have traded in a narrow range since the Labor Department said on Friday that employers cut fewer jobs in February than analysts expected. The market is looking for more signs of progress.

The Commerce Department said the country’s trade deficit fell in January because of a big drop in imported oil and cars. U.S. exports dipped 0.3 percent. The drop in U.S. exports might give investors pause because a drop in overseas sales could slow the recovery.

In midday trading, the Dow Jones industrial average fell 1.74, or less than 0.1 percent, to 10,565.59. The Standard & Poor’s 500 index dropped 1.12, or 0.1 percent, to 1,144.49, while the Nasdaq composite index fell 1.39, or 0.1 percent, to 2,357.56.

Bond prices dipped. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.75 percent from 3.73 percent late Wednesday.

The dollar was mixed against other major currencies, while gold prices fell.

Crude oil fell 19 cents to $81.90 per barrel on the New York Mercantile Exchange.

Corporate dealmaking continued. Oil company BP will pay $7 billion to acquire exploration rights from Devon Energy Corp. BP will acquire rights to explore in Brazil, the U.S. Gulf of Mexico and Caspian Sea.

Increased mergers and acquisitions in recent weeks has been a welcome sign that corporate leaders believe the economy is getting stronger.

Major indexes slipped Monday and inched higher Tuesday and Wednesday. Volume has been light. The Dow and S&P 500 index have been hovering near 15-month highs, but investors haven’t been in a rush to send those indexes much higher.

Four stocks fell for every three that rose on the New York Stock Exchange, where trading volume came to 323.7 million shares.

The Russell 2000 index of smaller companies fell 2.47, or 0.4 percent, to 672.46.

In afternoon trading, Britain’s FTSE 100 fell 0.7 percent, Germany’s DAX index fell 0.2 percent, and France’s CAC-40 fell 0.6 percent. Earlier, Japan’s Nikkei stock average rose 1 percent.

WASHINGTON (AP) – Unable to muster bipartisan agreement on key banking provisions, Senate Banking Committee Chairman Christopher Dodd said Thursday he will offer his own version of a sweeping overhaul of financial regulations without Republican support.

A month of talks between Dodd and Republican Sen. Bob Corker found some common ground but failed to yield agreement on consumer protections and other sticking points.

“Together we have made significant progress and resolved many of the items, but a few outstanding issues remain,” Dodd said in a statement. Dodd said he still aimed to get a consensus bill, but said time was running out.

Dodd’s go-it-alone choice is in keeping with an emerging culture of high partisanship on Capitol Hill, where Democrats and Republicans have been at odds for over a year on health care changes, little progress has been made on climate change and energy legislation, and members of both parties watch warily as an angry voting public continues to show heavy disdain for incumbents.

“We have reached a point where bringing the bill to the full committee is the best course of action to achieve that end,” he said. Dodd, a Connecticut Democrat, plans to have the Banking Committee take up the bill the week of March 22.

He said he and Corker would continue to hold talks. Corker planned to comment on the legislation later Thursday morning.

The development raises new questions about one of President Barack Obama’s top priorities. Congress and the administration have been trying to assemble an overhaul of regulations in hopes of preventing a recurrence of the financial crisis that hit the nation in the fall of 2008. The House passed its version of a bill in December on a party-line vote.

Dodd in November proposed a draft bill that drew swift Republican objections. Dodd, aware that he now needs Republicans on the bill to overcome a Senate filibuster, then tried to negotiate with the committee’s ranking Republican, Sen. Richard Shelby of Alabama. When those talks stalled, Dodd turned to Corker, of Tennessee, in hopes of bridging some differences.

The main obstacle remains a proposed Consumer Financial Protection Agency that the president has made one of the central provisions in the bill. The House version provides for such a stand alone agency, which would regulate institutions that offer credit, mortgages or other consumer financial products.

Republicans, bankers and many in the business sector oppose a separate agency, saying it would add another layer of regulation and bypass existing bank regulators.

Dodd had proposed placing such an agency inside the Treasury Department and giving federal bank supervisors some say in the consumer entity’s regulations. Corker countered with a proposal to place the agency inside the Federal Reserve. But the two were unable to find common ground on how much independence to give it.

WASHINGTON (AP) — Mortgage rates held below the 5 percent threshold for the second straight week, a report said Thursday, weeks before a government program that has been keeping rates low is scheduled to expire.

The average rate on a 30-year fixed rate mortgage was 4.95 percent this week, down from 4.97 percent a week earlier, mortgage finance company Freddie Mac said.

Rates dropped to a record low of 4.71 percent in December and have hovered around 5 percent since, kept down by a Federal Reserve campaign to stabilize the housing market by lowering mortgage rates.

The central bank’s $1.25 trillion program to buy up mortgage securities issued by Freddie Mac and sibling companiy Fannie Mae is set to expire March 31. But the Fed has held the door open to extending the program if the economy weakens.

Some analysts argue that rates could rise once the Fed’s program ends, hurting both the recovery in housing and the overall economy. But government officials are optimistic that the Fed will be able to end its program without a major disruption.

Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders around the country. Rates often fluctuate significantly, even within a given day, often in line with long-term Treasury bonds.

This week, the average rate on a 15-year fixed-rate mortgage was 4.32 percent, down from 4.33 percent last week, according to Freddie Mac.

Rates on five-year, adjustable-rate mortgages averaged 4.05 percent, down from 4.11 percent a week earlier. Rates on one-year, adjustable-rate mortgages fell to 4.22 percent from 4.27 percent.

The rates do not include add-on fees known as points. One point is equal to 1 percent of the total loan amount.

The nationwide fee for loans in Freddie Mac’s survey averaged 0.7 of a point for 30-year and 15-year loans and 0.6 of a point for five-year and one-year loans.

WASHINGTON (AP) — The Treasury Department sank billions into auto finance giant GMAC Inc. without an exit strategy or proof the company was viable — a decision that could cost taxpayers $6.3 billion, a new watchdog report says.

The government said the $17.2 billion bailout was a necessary step to save troubled automakers General Motors and Chrysler. GMAC provides critical financing to auto dealers, who borrow to finance their fleets until the cars can be sold to consumers.

Yet GMAC faced far fewer conditions than the bailed-out automakers, the report says. When the automakers were rescued, they were forced into bankruptcy. Shareholders lost their investments, creditors took a hit and executives were forced to detail plans for making the companies viable.

GMAC was treated more like banks that received bailouts without having to explain what they were doing with the money, the report says.

The report was released Thursday by the Congressional Oversight Panel overseeing the $700 billion financial bailout that Congress passed in October 2008.

“Treasury missed many opportunities to improve accountability and protect taxpayer money,” panel chair Elizabeth Warren said in a conference call with reporters. She said Treasury didn’t make GMAC show how it would return the taxpayer money, or how the investment would increase credit to consumers.

“These decisions mean that Treasury is now struggling to deal with a GMAC that is not financially rehabilitated, Treasury has no exit strategy and taxpayers are not fully protected,” Warren said.

The Treasury Department responded by reiterating that backing GMAC was necessary to preserve dealer financing for GM. It disputed the report’s core finding, that alternative approaches might have saved taxpayer money and provided better transparency.

“Treasury viewed the course taken as the least costly and least disruptive of all the options available,” Treasury spokeswoman Meg Reilly said in a statement.

The watchdog report, however, calls GMAC’s three-part bailout “one of the more baffling decisions made” to stabilize the financial sector. It says there was no evidence that GMAC’s failure would upend the financial system, or that it was “too big to fail.”

GMAC started as the finance arm of General Motors, providing crucial funding for consumers buying cars and dealers financing wholesale purchases. In recent years, it became a key player in subprime mortgage lending and other risky finance that fueled the financial crisis.

The company began to see major losses in 2007 as the housing market turned south and subprime mortgage investments lost much of their value.

GMAC CEO Michael Carpenter referred to the company’s money-losing mortgage unit as the “millstone around the company’s neck.”

The new report says the bailout effectively saved GMAC’s mortgage arm and other unprofitable businesses. It questions whether the government should have wound down GMAC’s operations that are not related to auto financing, perhaps by orchestrating the same sort of bankruptcy it arranged for GM and Chrysler.

The auto finance arm might have been merged back into GM, said Warren, who also is a bankruptcy expert and a professor at Harvard Law School. She said Treasury did not fully consider that course.

That left Treasury owning 56.3 percent of a company that continues to lose money.

Treasury spokeswoman Reilly described the government as a “reluctant shareholder” in GMAC and said it is managing its investment in the company in “a hands-off commercial manner consistent with the administration’s established principles that guide Treasury’s management of financial interests in private firms.”

The estimate that taxpayers could lose $6.3 billion was released earlier by the White House’s Office of Management and Budget, but it was not publicized before Thursday’s report.

The Congressional Oversight Panel is one of three mechanisms Congress built into the $700 billion bailout bill. The fund also is subject to audits by the Government Accountability Office and investigation by a special inspector general.

Besides Warren, the panel includes New York state banking superintendent Richard Neiman, former Securities and Exchange Commissioner Paul Atkins and attorney J. Mark McWatters. Damon Silvers, a senior official with the labor federation AFL-CIO, is on the panel but recused himself from all consideration of the auto

NEW YORK (Reuters) – Two years ago, a poisonous brew of bad economics, lax regulation, and egregious behavior boiled over, scalding the financial system and pitching the United States into its steepest downturn since the Great Depression.

The antidotes to the crisis, concocted by many of the players who stirred the original toxic brew, have pulled the U.S. economy back from the brink.

But those remedies won’t prevent future crises, Joseph Stiglitz, winner of the 2001 Nobel Prize for Economics, writes in “Freefall: America, Free Markets, and the Sinking of the World Economy” (Norton, $27.95).

In contrast to the regulations that emerged from the Great Depression, which promoted growth and stability, the response to this crisis has led to a less-competitive financial system dominated by banks that are too big to fail, he writes.

Stiglitz, former chief economist at The World Bank and now a professor at Columbia University in New York, focuses on banks’ failure to assess and manage risk, especially when risk is disguised by complex financial instruments. Such “modern alchemy” transformed risky sub-prime mortgages into A-rated products dubbed safe enough to be held by pension funds, he says.

America’s financial markets also failed to allocate capital productively, he says. “At their peak in 2007, the bloated financial sector absorbed 41 percent of profits in the corporate sector,” Stiglitz writes.

To add insult to injury, some of those profits were spent influencing Congress to make certain the government would not regulate risky derivatives or curb predatory lending.

Finally, flawed incentive structures fostered corruption, encouraging deceptive accounting that would lead to higher stock prices and higher bonuses for Wall Street managers.

By 2008, the nation’s economy was in a freefall and the United States, a country that purported to revile socialism, had to socialize the risks banks had taken and intervene in markets in unprecedented ways, Stiglitz writes.

But where does that leave the financial system and, more importantly, the U.S. economy?

“It’s very likely we will have a very slow recovery, I hope not as protracted as the Japanese did, but no one thought in 1990 that they would have one that long either,” Stiglitz said in a recent conversation with Reuters.

Japan is viewed as having lost a decade of growth during the 1990s before the economy bounced back in 2004-06.

Stiglitz said one difference between Japan and the United States is that Japan has zero labor force growth, while the United States has a 1 percent labor force growth rate.

Thus, if U.S. jobs grow at a 1 percent pace, “it’s as bad as Japan’s growing at zero percent,” he said.

Other differences exist between Japan and the United States, some of which argue for a quicker comeback for the United States and others than point to a slower one, Stiglitz said.

For one thing, while Japan could export its way out of its slowdown, the United States cannot because European growth is also slow.

For another, Japan began its recession with a high savings rate and that enabled it to expand by decreasing savings and increasing consumption.

“The United States is in the opposite situation, having begun with a savings rate of zero,” Stiglitz said. “Thus, the likelihood that our savings rate is going to go up is very high and rising savings can contribute significantly to a prolonged slowdown.”

The healthcare situation in the United States, with its issues of equity and access, also has implications for U.S. growth, Stiglitz told Reuters. Health affects productivity, and the cost of healthcare affects competitiveness, he said.

“To make things worse, we have made the fundamental mistake of linking the provision of healthcare to employment, creating strong interactions between deficiencies in the health care system and problems in the labor market,” he said.

The solution to that problem would be to move to a single payer system that recognizes health as a social cost, not an employment cost, Stiglitz said.

“Providing low-skilled workers who earn minimum wage with health insurance almost doubles the cost of employing them so the adverse affects of the current system are most marked on the low-wage part of the labor force,” he said.

But the biggest risk to the economic recovery is the “very, very strong political risk” posed by those who argue for deficit reduction, he said.

“President Obama is trying to walk a very fine line on that issue now, saying he will cut the deficit over the long run and stimulate the economy over the short run,” he said. “But the myopia of the deficit hawks won’t let them buy into that.”

(Reporting by Ellen Freilich; Editing by Eddie Evans)

China’s consumer price inflation rose a faster-than-expected 2.7% in February, the sharpest increase since October 2008. Coming on the heels of Tuesday’s strong import/export data and amid a surge in real estate speculation, China’s central bank may take more action to quell growth in the world’s most populous nation.

The People’s Bank of China (PBOC) has raised bank reserve requirements in recent months, but may now feel compelled to hike its lending rate, something it hasn’t done since 2007. In addition to the data above, the PBOC must be concerned that the nation’s banks made 1.39 trillion yuan in new loans in January, or 18.5% of the government’s full-year target, according to Xinhau.

Rapid bank lending in China and the reaction of its central bank stands in stark contrast to developments in the U.S., where the Fed is trying (unsuccessfully so far) to spur bank lending vs. tamp it down.

As Henry and I discuss in the accompanying clip, the real story here is how China’s economy has gone from the proverbial tail wagging the dog to where the PBOC has become the “swing” central bank for the entire global economy.

“The China tightening trade is increasingly becoming synonymous with risk aversion; primarily via lower commodities and a more robust U.S. dollar,” writes Ashraf Laidi, chief market strategist at CMC Markets in London.

This trend could explain some of the dramatic intraday volatility in commodities like gold, copper and oil in recent days. And while the U.S. stock market has been noticeably quiet this week – and again midday Thursday – don’t be surprised if stock traders don’t start taking their cues from China’s central bank in the near future — especially now that the Greek “crisis” has passed.

NEW YORK (AP) – Oil settled above $82 on Wednesday after driving past $83 briefly following a government report that showed U.S. crude oil supplies didn’t grow as much as analysts expected last week.

Benchmark crude for April delivery rose 60 cents to settle at $82.09 on the New York Mercantile Exchange.

The Energy Information Administration said crude inventories grew last week by 1.4 million barrels to 343 million barrels. Analysts expected a build of 2.1 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos. The lower build raised hopes that demand might be picking up, although there’s still a lot of oil on hand.

“There was nothing inherent in the report to justify buying up to $83 per barrel,” said oil analyst and trader Stephen Schork. He cautioned against focusing on one week of data which “doesn’t mask the fact that we have seen enormous builds and smaller draws in the weeks prior to this.”

Meanwhile OPEC said world oil demand should grow by 900,000 barrels per day this year, an upward revision from last month’s forecast. OPEC said its forecast depends on a sustained global economic rebound, particularly in the U.S.

While oil prices have risen about 17 percent since early last month, crude demand in the U.S., the world’s largest consumer of oil, has remained sluggish.

“We really have to look overseas for growth,” said Andrew Lipow, president of Lipow Oil Associates. “Oil demand is increasing in the usual suspects like China and India, but it’s also increasing throughout the Arabian Gulf and in Africa.”

This means higher gasoline prices for U.S. consumers, he added. Retail gasoline prices climbed again on Wednesday. The nationwide average rose 0.9 cents to $2.768 per gallon, according to AAA, Wright Express and Oil Price Information Service.

Prices have risen 11.6 cents in the last month and are now 82.7 cents higher than levels of a year ago.

The dollar edged down slightly against the euro in afternoon trading. A weaker dollar makes crude cheaper for investors holding foreign currencies.

In other Nymex trading in April contracts, heating oil rose 2.64 cents to settle at $2.1162 a gallon. Gasoline gained 2.48 cents to settle at $2.2851 a gallon. Natural gas rose 4.3 cents to settle at $4.559 per 1,000 cubic feet. Earlier, natural gas hit a 52-week low of $4.450.

In London, Brent crude rose 57 cents to settle at $80.48 on the ICE futures exchange.

Associated Press writers Pablo Gorondi in Budapest, Hungary and Alex Kennedy in Singapore and Joe McDonald in Beijing contributed to this report.

The U.S. stock market eked out a modest gain ahead of an important resistance level for the S&P 500 Index and a Chinese CPI report, which market participants will use to gauge the likelihood of a rate hike in the near future.

The S&P 500 closed up 5.17 points, or 0.45 percent, at 1,145.61. The Dow Jones Industrial Average closed up 2.95 points, or 0.03 percent, at 10,567.33. The Nasdaq Composite closed up 0.78 percent.

Financials, tech, and transportation were the best performing sectors. Impressive gains by big banks and recovering crude oil price helped the market end positive for the day.

2010 High

The Nasdaq broke its 2010 high last week and the Dow and S&P 500 are set to challenge theirs later this week.

With important U.S. economic releases on Thursday and Friday, investors will watch closely to see if the S&P 500 can break above the January 15 high of 1,150.

* EMAIL PRINT
* TEXT SIZE:
* SHARE
* RATE:

Related Topics

* Citigroup
* Bank of America
* Goldman Sachs
* Wells Fargo
* NYSE
* ConocoPhillips

The index traded as high as 1,148.26 on Wednesday.

Chinese CPI

Investors will eye China’s CPI, which will be released early in the Asian session on Thursday, to gauge inflation and determine if the government will raise interest rates soon.

Concerned with inflation, Chinese authorities have already raised the nation’s bank reserve ratio twice in 2010. An interest rate hike is expected to be the next step of monetary tightening.

In 2010, world markets have generally declined on any news of Chinese monetary tightening.

Big Banks

Big banks in the U.S. performed well on Wednesday. Citigroup (NYSE:C) led with a gain of 3.66 percent. Bank of America (NYSE:BAC) closed up 1.85 percent. Wells Fargo (NYSE:WFC) rose 2.04 percent. Goldman Sachs (NYSE:GS) was up 1.83 percent.

According to a Reuters report, these stocks rose because of “momentum bets and short-covering on hopes the entities were on the road to recovery.”

Banks also rose on the expected healthy demand for Citigroup’s issuing of its trust preferred securities (TruPS), paving the way for other banks to raise capital using similar methods.

Oil

Oil futures have been volatile on Wednesday, boosting the stock market when they gained and dragging the stock market lower when they declined.

At the closing of the U.S. stock market, NYMEX oil futures were trading at $81.88, up 0.48 percent for the day. Earlier, futures traded as high as $83.03 and as low as $80.81.

Energy stocks are modestly up, with Exxon Mobil (NYSE:XOM) up 0.66 percent and ConocoPhillips (NYSE:COP) up 1.22 percent.

OPEC revised its outlook for global oil demand on Wednesday. It expects demand to grow by 900,000 barrels per day, which is 100,000 higher than its February outlook.

EIA also released a report at 10:30 a.m. EST showing lower than expected U.S. oil inventories and growing gasoline consumption.

By Katie Hoffmann and Hugo Miller (Bloomberg) – CA Inc., the second-largest maker of software for mainframe computers, agreed to buy closely held Nimsoft Inc. for about $350 million to expand in cloud computing.

The all-cash deal will probably hurt earnings in fiscal 2011, the Islandia, New York-based company said today in a statement. CA expects the transaction to close by March 31, when the company’s current fiscal year ends.

Nimsoft’s products help customers monitor so-called cloud systems, which access computers, applications and data through the Internet. The acquisition is CA’s third this year as Chief Executive Officer Bill McCracken steps up competition with larger rivals, including International Business Machines Corp. The companies are chasing a cloud-computing market projected to top $40 billion within three years.

CA was little changed in late trading after closing at $22.60 today on the Nasdaq Stock Market. The stock has gained less than 1 percent this year. The company announced the transaction after the close of regular trading.

The majority of Nimsoft’s 120 employees, including Chief Executive Officer Gary Read, will join CA once the deal is complete. Redwood City, California-based Nimsoft, founded in 1998, has about 800 customers, mostly in the U.S. and Europe.

CA agreed to buy closely held 3Tera Inc. for an undisclosed sum last month and Oblicore Inc. in January. Spending on cloud computing will rise to $44.2 billion by 2013, according to research firm IDC in Framingham, Massachusetts.

–With assistance from Rochelle Garner in San Francisco. Editors: Julie Alnwick, Ville Heiskanen

To contact the reporters on this story: Katie Hoffmann in New York at khoffmann4@bloomberg.net; Hugo Miller in Toronto at hugomiller@bloomberg.net

To contact the editor responsible for this story: Julie Alnwick at jalnwick@bloomberg.net