June 20 - Summary of business headlines: Fed extends debt swapping program and issues downbeat forecast; Wall St. closes mixed; Corporate leaders downgrade outlook; Procter and Gamble tempers expectations. Conway G. Gittens reports.
PLEASE NOTE: THIS EDIT CONTAINS CONVERTED 4:3 MATERIAL Wall Street got what it wanted, but not what it hoped. The Federal Reserve will keep exchanging short-term debt for long-term debt through the end of the year, in a program known as Operation Twist. The goal: entice consumers and businesses to open up their wallets by pushing long-term rates lower. But that extension fell short of hopes the Fed would launch a third round of quantitative easing or QE3. Wall Street had a hard time figuring out which way to go and in the end only the Nasdaq finished higher. The Fed signaled the economy is not in as good a shape as predicted in April, bringing down growth forecasts and taking up unemployment predictions. Jim Glassman is senior economist at JPMorgan Chase. SOUNDBITE: JIM GLASSMAN, SENIOR ECONOMIST, JPMORGAN CHASE (ENGLISH) "Investors see what is going on and they see the Fed having to go through such extreme measures to get the economy moving. It's a reminder that the economy is still struggling, so it can feed the pessimism because when the Fed is having to do these kinds of things you know that the economy has a long way to go before it's got a real recovery." The Fed says it will keep rates near zero through late 2014. Corporate leaders also have a less optimistic view of the economy. Fewer leading CEOs expect to see higher sales six months down the road and only a third plan to add new workers, according to a survey by the Business Roundtable. Procter and Gamble's turnaround plan is not much of a turnaround, the company admits. The world's largest household products maker lowered growth forecasts, saying costs are not coming down fast enough and it still lacks a new blockbuster product. In European action: stocks rose to new one-month highs as investors bet stimulus in on the way. Conway Gittens, Reuters