Sept. 14 - Summary of business headlines: Wall Street stays near five-year high as Fed euphoria overshadows August inflation spike, lackluster retail sales; Lehman collapse four years later; Apple shares hit record as iPhone 5 demand starts strong. Conway G. Gittens reports.
PLEASE NOTE: THIS EDIT CONTAINS CONVERTED 4:3 MATERIAL Wall Street rallies for a fourth day - fueled by the Federal Reserve's aggressive plan to boost the economy. Gains cooled by the end of the day but the Nasdaq rallied almost one percent. For the week: The Dow closed up near a five-year high and the Nasdaq near 12-year highs. It's been four years since the collapse of Lehman Brothers. And regulators are still playing catch-up when it comes to preventing banks from being too big to fail, warns Lawrence McDonald. He's a former Lehman vice president and author of "A Colossal Failure of Common Sense", which chronicles the bank's failure. SOUNDBITE: LAWRENCE MCDONALD, FORMER LEHMAN BROTHERS VP (ENGLISH) SAYING: "21st century financial products have advanced so much that there is a lot of systemic risk still out there and the regulators I don't think have moved as fast as the complexity of the Wall Street instruments. So, if you look at the regulatory regime in the United States it is still a lot of academics, there are not a lot of people from Wall Street in there. I would like to see more people from the Street on the regulatory side." Lehman Brothers is still the largest U.S. bankruptcy of all time. Retail sales were pumped up in August by higher gasoline prices. But that could be an economic burden on cash-strapped consumers. A separate report measuring inflation, showed consumer prices spiked last month at the fastest pace in more than three years. That means a rise in the Thomson Reuters/University of Michigan consumer sentiment reading for early September may be short lived. Outside of consumers, industrial production tumbled by the biggest rate in more than three years partly due to disruptions caused by Hurricane Isaac. Shares of Apple, the most valuable company, touched a record high. Apple says pre-orders for the iPhone 5 sold out within the first hour on its website. Two other stocks to watch: Kraft Foods is coming out of the Dow Jones Industrial Average and UnitedHealth Group is going in. Finally, European shares hit a 14-month high thanks to the Fed's new bond-buying program. Conway Gittens, Reuters