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This looks like a banner year for grape producers in New York, according to the latest federal forecast.

The state’s producers, who are concentrated in Western New York and in the Finger Lakes, are expected to harvest 170,000 tons of grapes, based on the report from the National Agricultural Statistics Service. That’s up 28 percent from 133,000 tons a year ago.

The increase was attributed to unusually good growing conditions, with warm days, plenty of sunshine, and a sufficient amount of precipitation.

The national outlook for the grape industry is not as strong, with U.S. grape production expected to decline 3 percent this year.

New York is the nation’s third-largest producer of grapes, trailing only California and Washington state.

The forecasts are not as strong for other large fruit crops. The National Agricultural Statistics Service says that the 2010 apple crop will be 13 percent smaller in New York and 4 percent smaller nationwide. And the pear crop is expected to shrink by 20 percent in New York and 11 percent nationwide.

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A subsidiary of Astronics Corp. has been hired to design, develop and supply the electrical emergency lighting and passenger information signs for the Airbus A350 XWB program, the parent company announced Monday.

Terms of the deal between Luminescent Systems Inc., owned by East Aurora-based Astronics (NASDAQ: ATRO), and Diehl Aerospace were not disclosed.

The Airbus A350 XWB is the newest twin-engine wide-body aircraft family from Airbus. Diehl Aerospace was selected by Airbus as the prime contractor to supply the entire cabin and cargo lighting package for the new A350 XWB family of aircraft.

The system that will be installed by Luminescent will include ceiling emergency lights, emergency exit signs, seat and galley-mounted aisle floodlights, passenger information signs and exterior emergency lights.

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Albany Molecular Research Inc. reported a drop in net income for the first quarter.

The Albany, New York-based drug discovery firm had net income for the three months of $66,000, or less than a penny a share. That includes expenses from AMRI’s February purchase of Excelsyn Ltd, a chemical development company in Wales. Without those costs, first quarter income would have been $641,000, or 2 cents a share.

In the first quarter of 2009, AMRI had net income of $1.9 million, or 6 cents a share.

Revenue for the first quarter was $49.3 million, down from $54.0 million a year earlier. Contract revenue declined 10 percent, and recurring royalties from sales of the prescription antihistimine Allegra, and some generic forms of that drug, dipped 3 percent.

Mark Frost, chief financial officer of AMRI (Nasdaq: AMRI) said the company expects second quarter contract revenue to be up 11 percent from a year ago, to about $43 million. He put second quarter revenue at between $7 million and $8 million.

Frost expects the company to report a second quarter loss of between 3 cents and 7 cents a share.

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Sales of new homes dropped to a record low last month, dimming prospects for a swift recovery for the housing market.

Overall, sales were down 2.2 percent, to a seasonally adjusted annual rate of 308,000, the Commerce Department said Wednesday. Economists had forecast a 1.9 percent rise.

Those numbers followed a similarly bleak report on Tuesday that showed sales of existing homes dropped last month, despite a generous government tax credit meant to lure buyers.

Taken together, the data resurrected concerns that the market could fall into another downturn, with new downward pressure on prices as the supply of houses increases but demand dwindles.

"It was dismal no matter how one tries to slice and dice it," Joshua Shapiro, an economist for MFR Inc cash advance no faxing. wrote.

Sales of new homes have fallen 23 percent since October. Sales rose at a rapid pace last fall as buyers rushed to take advantage of an $8,000 tax credit before its original expiration date. The credit has since been extended to April 30, but there has been no evidence of a buying frenzy.

The drop in February was partly the result of stronger results the previous month: the government said sales reached a rate of 315,000 units in January, better than the 309,000 rate originally forecast. Economists said a series of snowstorms in February may also have contributed to the decline.

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After a nearly 30 percent drop in January, foreclosures were back on the rise in Alabama last month.

RealtyTrac, a national tracker of foreclosures, said 2,291 properties were reported to be in some form of foreclosure in the state in February, or one foreclosure for every 942 households.

That’s a more than 27 percent increase over January and a more than 221 percent increase over the same month a year ago, said a news release.

Nationally, foreclosures decreased by more than 2 percent over the previous month, but increased more than 6 percent over February 2009, the smallest year-over-year increase since 2006.

“This leveling of the foreclosure trend is not necessarily evidence that fewer homeowners are in distress and at risk for foreclosure, but rather that foreclosure prevention programs, legislation and other processing delays are in effect capping monthly foreclosure activity – albeit at a historically high level that will likely continue for an extended period,” said James J free online credit report. Saccacio, CEO at RealtyTrac.

RealtyTrac said more than 60 percent of the national total of properties in some form of foreclosure were in six states – California, Florida, Michigan, Illinois, Arizona and Texas.

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Europe’s recovery almost came to a halt in the fourth quarter of 2009 as companies continued to cut investment while consumers held back spending, countering a gain in exports.

Corporate investment dropped 0.8 percent from the third quarter, when it fell 0.9 percent, while household spending was flat, the European Union’s statistics office in Luxembourg said today. Exports gained 1.7 percent and imports rose 0.9 percent. Gross domestic product rose 0.1 percent from the third quarter, when it increased 0.4 percent.

European governments are struggling to contain the fallout from Greece’s budget crisis as they phase out the stimulus measures used to pull the economy out of a recession. Economic confidence in the region fell last month and unemployment held at an 11-year high in January. Still, the EU forecasts growth will accelerate in the first quarter.

“Today’s figures clearly demonstrate that the euro-region recovery is still very much made abroad and that private domestic demand has yet to recover,” said Martin Van Vliet, an economist at ING Group in Amsterdam. “We suspect that first- quarter growth might only be slightly better than the fourth quarter’s meager performance.”

The euro pared declines against the dollar after the data, trading at $1.3681 at 12:33 p.m. in London, down 0.1 percent on the day. The yield on the German 10-year benchmark bond rose 0.1 basis point to 3.14 percent.

Government Spending

From a year earlier, euro-area GDP declined a seasonally adjusted 2.1 percent in the fourth quarter, the statistics office said today, confirming an initial estimate from Feb. 12. Government spending fell 0.1 percent from the third quarter, when it increased 0.8 percent, today’s report showed.

For the full year, GDP shrank 4.1 percent, compared with an earlier estimate of 4 percent. That compares with contractions of 2.4 percent in the U.S. and 5 percent in Japan last year, the statistics office said.

The German economy, Europe’s largest, stagnated in the fourth quarter after recording 0.7 percent growth in the previous three months, while Italian GDP fell 0.2 percent. France’s economic expansion accelerated to 0.6 percent from 0.2 percent. In Greece, the economy contracted 0.8 percent in the fourth quarter.

European companies are relying on exports to bolster sales as households in the region cut back spending. Consumer and executive confidence in the outlook worsened in February after unemployment held at 9.9 percent in January, the highest since November 1998.

European Environment

Carrefour SA Chief Executive Officer Lars Olofsson said on Feb. 19 that he doesn’t “see any change in the European environment for the next six months at least” after Europe’s largest retailer reported a 70 percent drop in 2009 profit free credit score.

The European Central Bank will probably keep its benchmark interest rate at 1 percent today, according to a Bloomberg survey. The ECB, which has started to phase out some of its stimulus measures introduced to fight the recession, will release its decision at 1:45 p.m. in Frankfurt.

“The phasing out of some unconventional measures should not be misinterpreted as a desire to remove policy accommodation,” ECB council member Athanasios Orphanides said in an interview on Feb. 12. “Policy accommodation continues to be needed in light of the very subdued inflation outlook and the unevenness and weakness of the economy.”

EU Forecasts

While euro-region GDP is seen rising 0.2 percent in the current quarter from the previous three months, the economy may fail to gather strength for most of 2010, according to EU forecasts on Feb. 25. In the year, the economy will probably expand 0.7 percent after shrinking 4 percent in 2009, the EU projects.

Europe’s governments face a growing dilemma as they seek to bolster recoveries at a time when rising sovereign-debt burdens threaten to hobble economic expansion. The euro has declined 8.1 percent against the dollar over the past three months amid concern Greece’s budget crisis will spread to other countries.

Greek Prime Minister George Papandreou’s government yesterday approved an additional 4.8 billion euros ($6.6 billion) in deficit cuts after EU officials said the nation’s financial woes pose a threat to the entire region. The country, which has pledged to lower the budget gap beneath the EU limit of 3 percent of GDP by 2012, today started a sale of 10-year bonds amid street protests in Athens against the cuts.

‘Slow and Patchy’

“The recovery in the euro-area economy as a whole in 2010 will be slow and patchy,” said Colin Ellis, an economist at Daiwa Securities in London. “It is hard to see a strong engine of domestic growth in the euro-area economy, consistent with our view that exports may have to do the heavy lifting.”

While the euro’s slide against the dollar is boosting some raw-materials costs for companies, it’s also improving the competitiveness of European exports just as the global economy gathers strength. Europe’s service and manufacturing industries expanded for a seventh month in February.

Volkswagen AG, Europe’s largest carmaker, is facing a “strong headwind” in Europe and a “tailwind” in the U.S. and China, CEO Martin Winterkorn said on March 1. BASF SE, the world’s biggest chemical company, last month forecast higher earnings this year.

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President Barack Obama needs to grasp Southeast Asia’s economic potential and help boost U.S. investment when he travels to Indonesia three weeks from now, economic ministers from the region said.

“There’s still a lack of awareness in the U.S., a misperception that we have to address,” Indonesian Trade Minister Mari Pangestu said in an interview in Putrajaya, Malaysia, where envoys from the Association of Southeast Asian Nations met at the weekend. “We have to keep up the momentum” to expand cooperation, she said.

Asean ministers plan to travel to the U.S. in May to meet with business executives. The association plans to showcase its position as an economic hub in competing for funds with China and India, the world’s fastest-growing economies.

Obama, who became the first U.S. leader to meet with the 10-member bloc in November, is aiming to increase trade with Asia to help meet a January pledge to double exports in five years. Southeast Asia was the third-biggest market for U.S. goods in 2008 behind Canada and Mexico.

The region is rich in coal, oil and precious metals as well as containing sea lanes vital to world trade. Asean aims to form an economic community modeled on the European Union, though without a common currency, by 2015. It has already signed free- trade accords with China, Japan, South Korea, Australia and New Zealand.

Economic Recovery

“It’s important that Mr. Obama look more to the East,” Thai Deputy Commerce Minister Alongkorn Ponlaboot said in an interview. “There has been a power shift toward this region after the financial crisis, and I hope Obama will have a clear message for Asean when he visits.”

Asia’s export-dependent economies are emerging from recession as global demand increases for the region’s computer chips, cars and commodities. In January, Detroit-based General Motors Co. received local funding to open a diesel-engine plant in Thailand, and Santa Clara, California-based Intel Corp. plans to start operations of a chip assembly and testing plant in Vietnam later this year.

Asean leaders will aim to make the U.S. “understand why we have been able to succeed and why we will continue to undertake the policies that would ensure that this economic recovery is not just a coincidence,” Pangestu said. “We’ve actually moved further than you think and the opportunity is there.”

Investment Programs

Foreign direct investment from the U.S. into Asean from 2006 to 2008 amounted to $12.8 billion, or 6.9 percent of the bloc’s total, down from 17 percent from 1995 to 2001. The EU invested $42.1 billion into Asean from 2006 to 2008 while Japan put down $28.7 billion, statistics show.

Economic disparity among Asean members has hindered the region’s ability to leverage its market of 584 million people guaranteed online payday loans.

The region’s four largest economies — Singapore, Thailand, Malaysia and Indonesia — account for almost 80 percent of all foreign investment into Asean. The Philippines, Brunei, Cambodia, Laos, Myanmar and Vietnam are the other members of the 10-nation group.

“There is a lot of unutilized potential” for joint investments between Southeast Asian countries, Mustapa Mohamed, Malaysia’s minister of international trade and industry, said in an interview. “We are underperforming in intra-Asean trade, so that’s a priority this year.”

Trade Initiative

Southeast Asian countries are split on Obama’s top trade initiative, the Trans-Pacific Partnership, which he aims to turn into a platform for economic integration in the Asia-Pacific region. Vietnam, Singapore and Brunei will join New Zealand, Chile, Peru, Australia and the U.S. for talks on the TPP later this year.

“The success of the TPP depends very much on the attitude and the viewpoint of the U.S.,” Vu Huy Hoang, Vietnam’s minister of industry and trade, told reporters.

Malaysia and Indonesia are both reviewing the TPP and haven’t decided whether to join talks. Thailand prefers a free- trade deal between the U.S. and Asean as a bloc, Alongkorn said.

“We have noted that investments from the U.S. have dropped,” Surin Pitsuwan, Asean’s secretary-general, told reporters yesterday after the meeting, which ran from Feb. 27 until today. “There is very keen interest in strengthening cooperation, but because of the differences and diversity among us we have not yet made a definite decision whether or not this is going to be a free-trade agreement.”

China Trade

Indonesia notified its partners in Asean earlier this year that it wants to revise the group’s free-trade agreement with China, which took force on Jan. 1 and scraps tariffs on about 90 percent of goods.

Textiles, food and electronics companies have said they will suffer from the inflow of cheaper Chinese goods.

China’s trade with Asean has jumped sixfold since 2000 to $193 billion in 2008. The country’s share of Southeast Asia’s total commerce increased to 11.3 percent from 4 percent in that time, whereas the U.S. portion fell to 10.6 percent from 15 percent, Asean statistics show.

“We don’t worry so much about having to compete with the U.S. in the way some sectors worry about having to compete with China,” Indonesia’s Pangestu said. “From the Asean-U.S. perspective of increasing trade and investment, it’s more like, ‘Hey guys, the U.S. is back.’”

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The dollar turned mixed Friday afternoon, with the euro recovering from steep losses, as U.S. stocks gained and traders continued to mull the Federal Reserve’s decision to raise its discount lending rate.

What prices are doing: The dollar fell 0.6% against the euro to $1.3609, after climbing to a nine-month high earlier in the day. But it gained 0.4% against the British pound at $1.5465. Against the Japanese yen, the dollar fell 0.3% to ¥91.82.

The dollar index (DXY), which measures the greenback against a basket of major rival currencies, rose 0.2% to 80.54.

What’s moving the market: The dollar rallied throughout the morning on expectations that the Federal Reserve could move to tighten monetary policy sooner than expected.

But the euro recovered in the afternoon as traders gravitated towards higher yielding assets. Stocks ended a choppy session higher, marking the fourth straight day of gains.

Some analysts said the euro’s rebound was due to a "short squeeze," which occurs when traders rush to unwind bets that a currency will fall.

"The price action in the forex markets is clearly indicative of a short squeeze," said Kathy Lien, director of currency research at trading firm GFT. "The recovery in the euro poses little threat to the dollar’s rally because fundamentally, the Eurozone is in worse shape than the U.S."

Meanwhile, investors continue to digest the Fed’s decision to increase its discount rate, which is what banks pay to borrow directly from the Fed, to 0.75% Thursday.

The increase is not expected to impact the price of consumer loans — such as mortgages and credit card rates — because the discount rate is what the Fed charges banks for emergency short-term borrowing.

The Fed left its benchmark lending rate, which has a bigger impact on the price of consumer loans, near zero. And given the sluggish labor market and tepid economic recovery, the closely watched rate will remain near its historic low for the foreseeable future.

Still, the increase in the discount rate is a small sign that the Fed thinks the market can begin to stand on its own. That confidence helped boost the dollar earlier in the day.

What analysts are saying: "Although the Fed went out of their way to say that this does not equate to a change in their monetary policy outlook, action speaks louder than words," Lien said. "Their decision to begin normalizing rates before the next central bank meeting indicates how hawkish they must be and how serious they are about tightening monetary policy."

Lien added that that the rate hike is a "game changer for the foreign exchange market" and will boost the dollar because it signals that the Fed is beginning to implement an exit strategy, which is not the case for other central banks.

Though the Fed’s action and strong U.S. economic data will continue to make the dollar a more attractive investment, Lien said the buck will also gain ground as investors focus on Europe’s debt crisis.

"At the end of the day, the U.S. dollar is still a safe haven currency, which means that as long as investors remain nervous, the dollar should hold onto its gains." 

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Spending by U.S. consumers increased in December for a third consecutive month, signaling the biggest part of the economy will contribute more to growth in coming months.

The 0.2 percent increase in purchases was less than anticipated and followed a 0.7 percent gain in November that was larger than previously estimated, Commerce Department figures showed today in Washington. Incomes climbed 0.4 percent, exceeding expectations.

Retailers such as Amazon.com Inc. are posting profits on increased sales as Americans spent more this past holiday season than the year before. Employment is key to propelling bigger gains in spending, one reason the Obama administration is proposing a fiscal 2011 budget today that calls for $100 billion in additional stimulus focusing on jobs.

“Consumers have the wherewithal to support good spending, however they are going to be reticent until they see a few good months of job gains,” said Craig Thomas, a senior economist at PNC Financial Services Group Inc. in Pittsburgh, who correctly forecast the gain in spending. “2010 is lined up to be a moderately good year.”

Stock-index futures held earlier gains following the report. The contract on the Standard & Poor’s 500 Index rose 0.6 percent to 1,076.5 at 9:10 a.m. in New York. Treasury securities fell.

The median estimate of 65 economists surveyed called for a 0.3 percent increase in spending, after an originally reported gain of 0.5 percent the prior month. Projections ranged from no change to 0.7 percent.

Income Gains

The gain in incomes followed a 0.5 percent increase in November and exceeded the 0.3 percent median estimate in the Bloomberg survey. Wages and salaries climbed 0.1 percent in December after increasing 0.4 percent the prior month.

Today’s report showed prices were stabilizing. The inflation gauge tied to spending patterns rose 2.1 percent from December 2008, less than the survey median forecast.

The Fed’s preferred price measure, which excludes food and fuel, climbed 0.1 percent in December from the previous month and was up 1.5 percent from a year earlier.

Adjusted for inflation, spending climbed 0.1 percent following a 0.4 percent rise the prior month.

Because the increase in spending was smaller than the gain in incomes, the savings rate rose to 4.8 percent from 4.5 percent the prior month.

Disposable income, or the money left over after taxes, increased 0.4 percent.

Better Sales

Amazon, the world’s largest Internet retailer, posted profit and sales that beat analysts’ estimates and said revenue growth may accelerate this quarter as consumers start spending more following the recession. Sales may rise as much as 43 percent to $7 billion in the first quarter, more than last year’s 18 percent growth, the Seattle-based company said last week in a statement. Analysts surveyed by Bloomberg had estimated sales of $6.42 billion.

Inflation-adjusted spending on durable goods, such as autos, furniture, and other long-lasting items, climbed 0.2 percent in December after rising 2.3 percent the prior month.

Purchases of non-durable goods decreased 0.8 percent, and spending on services, which account for almost 60 percent of all outlays, increased 0.4 percent.

The economy grew at a 5.7 percent annual rate in the fourth quarter, exceeding the median forecast of economists surveyed, figures from the Commerce Department showed last week. Consumer spending, which accounts for 70 percent of the economy, climbed at a 2 percent pace, also exceeding expectations.

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For top executives, ’tis the season to get paid in company stock - unless you happen to work at Fannie Mae or Freddie Mac.

The taxpayer-backed mortgage giants disclosed Thursday that they could pay out as much as $40 million to their top 10 executives for work in 2009.

The CEOs - Fannie’s (FNM, Fortune 500) Michael Williams and Freddie’s (FRE, Fortune 500) Charles Haldeman - are in line to receive as much as $6 million apiece, on an annualized basis (though both will get less this year because they took their jobs midway through the year).

That’s a nice chunk of change for running two companies that together lost $72 billion in the first nine months of 2009 and have received $112 billion in Treasury aid.

But what’s remarkable is that every penny Fannie and Freddie will pay out will be in cash - at a time when the White House is pressuring companies to pay more in stock, in the name of suppressing the bet-the-ranch mentality that helped pave the way for Wall Street’s 2008 collapse.

The government’s pay czar, Kenneth Feinberg, has cut cash payouts at taxpayer-backed companies like AIG (AIG, Fortune 500), Chrysler Financial and GMAC.

But his message has been heard everywhere, notably on Wall Street, where some big banks that have repaid Treasury loans have set plans to offer more compensation in stock.

"It’s amazing that the government is pushing companies with which it has no contractual standing to pay executives in stock, but isn’t doing the same with companies that it actually controls," said Len Blum, a managing director at investment bank Westwood Capital in New York.

For its part, the government agency that oversees Fannie and Freddie notes that this year’s payouts are 40% below the levels that obtained before the government takeover. Much of the money will be deferred over several years and some will be paid only if the companies hit certain targets.

Fannie adds that Treasury, which approved the payouts, prohibits it "from issuing common stock in connection with any new compensation arrangements without Treasury’s prior consent."

That stands in contrast to two of Fannie and Freddie’s big peers in the government-backed stable: insurer AIG and carmaker GM, which are now paying their executives mostly in stock.

AIG chief Robert Benmosche agreed in August to receive an annual salary of $7 million - $3 million in cash and $4 million in common stock. He won’t be able to sell the shares for five years. Benmosche also gets up to $3.5 million annually in stock-based incentive pay.

At GM, new finance chief Chris Liddell agreed this month to receive $750,000 annually in cash salary, $3.45 million in stock salary and $2 million in stock incentive pay.

Even at firms that have repaid their Troubled Asset Relief Program loans, the pay-in-stock message has sunk in.

Goldman Sachs (GS, Fortune 500) said this month it will pay its top executives’ bonuses in stock in 2009, a year in which the big trading firm is expected to set aside some $21 billion for employee pay.

"We believe our compensation policies are the strongest in our industry and … incentivize behavior that is in the public’s and our shareholders’ best interests," CEO Lloyd Blankfein said in a statement Dec. 10.

Of course, there are big differences between these companies and Fannie and Freddie.

Since September 2008, the government has been propping up Fannie and Freddie in the name of stabilizing the financial markets and ensuring that home mortgages remained available for Americans.

With their emphasis focusing from investor profits to supporting home prices, the firms’ financial results have collapsed. Fannie lost $58 billion in the first nine months of 2009 and Freddie $14 billion, as their share of the U.S. mortgage market soared near 90%.

The availability of Fannie-Freddie financing allows loans that "no one would normally make" to be extended, said Blum.

Shares of Fannie traded as high as $70 in August 2007, as the global credit bubble was getting ready to collapse. But in the past year, they have closed above $2 just once.

Even that is probably too high, Blum said, given the companies’ giant debt to taxpayers and the prospect of additional losses should this year’s recovery peter out.

Indeed, the giant paychecks also show little progress has been made in resolving the key conflict at the heart of these firms.

Given their obvious public policy function and their ballooning losses, it makes sense to simply take over Fannie and Freddie and make them into full-fledged government agencies, Blum said.

But in doing so, the government would have to wipe out the shareholders, foreclosing a possible sale of the firms back to the public. And it would have to start paying the firms’ workers on the federal pay scale - which would mean no more $6 million paydays for CEOs.

So as officials in Washington posture about the need to end too-big-to-fail and put the financial system on a sounder footing, action remains in short supply.

"These companies are never going to turn a profit again, but the government hasn’t come clean and wiped out the stock," said Blum. "After the crisis we have had, I don’t understand why we’re still allowing conflicts like this in our financial system." 

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