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That’ll be $117.95 for laser printer toner, $9.95 for free trade organic hot cocoa and $16.95 for fruit tarts.

The prayer for peace in your home? No charge.

LaserMonks Inc. sells everything from office and school supplies to gifts such as gourmet mustards and CDs of Gregorian chants. And the six monks of the Cistercian Abbey of Our Lady of Spring Bank always make sure to pray for you, too.

Don’t let the size of the order fool you. Last year they sold $4.5 million worth of products and they’re on target to hit that again this year. You wouldn’t guess a multimillion-dollar business is housed on a quiet 600 acres in west-central Wisconsin. But that’s the monk way. The sales are needed, they say, so they can survive and continue their religious works.

Plenty of religious orders are embracing new technologies and trends — like monks in Oregon who store and ship wines for wineries, and others who make goat’s milk hand creams and soaps to pay for their ministries.

Many still cling to the usual — such as making fruitcakes and caramels — but their wares are getting more exposure thanks to inclusion on LaserMonks’ websites, which sell items made by religious orders.

Father Bernard McCoy, 41, superior of the abbey about 180 miles northwest of Milwaukee — or “poster monk” as he likes to joke — is chief executive of LaserMonks. The business started small in autumn 2002, when his printer ran out of toner as he and the order were trying to think of new ways to make money. It dawned on him that if he bought in bulk, he could save and pass that along to others — and make some money for the order, too.

That first year they did $2,000 in sales, and the next year $150,000. Now, they offer 43,000 products to people and groups like schools and churches.

The abbey is nonprofit and LaserMonks is for-profit, with all net proceeds going to charitable works like a school in Vietnam that teaches computer skills to children otherwise living on the streets, to domestic abuse shelters in California and Camp Heartland, a camp for children living with or affected by HIV or AIDS in Minnesota. Since 2004, they’ve given away half a million dollars. The monks use about $150,000 a year for operating expenses, though between 15% and 20% of that is given away to charities as well.

McCoy said LaserMonks can’t always match the prices of its big box competitors, but customers don’t mind.

“They want to know what they’re doing — the money they’re spending — is doing good in the world and not simply the bottom line or the profit margin base for stockholders of some mega-company,” he said.

McCoy gives talks to other businesses and religious orders, teaching them how to grow. The monks also help other orders by selling products they make on a companion website, monkegifts.com, which went live this past holiday season. They’re about to launch a site soon that will sell gift baskets featuring products made by religious orders.

Nuns at the St. Benedict Monastery in Canyon, Texas, sell their “Praylines” — a combination of pecans, cream, butter and, as the sisters note, prayer — on monkegifts.com and through their own efforts locally.

Sister Hildegard Varga said sales of the treats pay for about one-fourth of the order’s expenses. They sold about 1,100 boxes of Praylines for about $14 each this past winter, their third in the business.

“Like so many jobs you do in the monastery, you do what needs to be done and you may not have a lot of training for it. So we’re still feeling our way,” Varga said. “That’s one of the characteristics of monastic enterprises. You go on faith a lot.”

The Cistercian orders have always been self-sustaining and self-governing, said Rozanne Elder, director of the Institute of Cistercian Studies at Western Michigan University in Kalamazoo, Mich.

They follow the teachings of St. Benedict, who said monks live by works, and they generally have some focus for an industry, such as foods or crafts. They don’t depend on donations, for the most part. But they also don’t go out of their way to make products beyond what they need to survive.

Many of the orders used to farm for a living, but as that became less profitable they turned to mail-order sales, Elder said. That allowed them to continue living away from communities so they can immerse themselves in religious life, but still be able to make money.

“They do things that can be sold by mail-order mostly, so they don’t have a bunch of people tracking in and out,” Elder said. “They want separation from the world.”

Life couldn’t be more apart from the world in Sparta — a quiet, wooded region known for its bicycle trails. The monks live just a few miles from Fort McCoy, a military base that trains more than 100,000 troops a year.

At the abbey, McCoy — no relation to the McCoy the military base is named after — and the other monks live together, cook their own food, and take care of the grounds. They pray eight times a day, sometimes for as long as 40 minutes, and chant in Latin. They pursue hobbies, such as painting, playing with their two dogs — Luxor, a pharaoh hound and Ludwig, a doberman. They even have a workout room, where McCoy watches James Bond movies while exercising.

They aren’t bogged down too much by work on LaserMonks, which McCoy said is part of its success.

Orders for office supplies are filled by a couple of vendors and manufacturers at warehouses throughout the country. They’re then sent directly to customers using LaserMonks packaging. Overhead costs are minimal and they have only a handful of employees who handle day-to-day business, such as taking the 200 orders a day. The employees also handle marketing and orders for the other ventures, such as monkegifts.com and a new site that sells coffee called benevolentblends.com.

“Our investment in inventory is zero,” McCoy said. “You’re able to run an enormous business.”

The business is imbued with Cistercian hospitality, including a focus on customer service. The phone lines are answered by McCoy’s soothing recorded voice that says, “Greetings and peace.” Hold music is, of course, Gregorian chants. If customers fall behind on payments, the monks work with them.

The LaserMonks never lose sight of their Catholic religion. Their website also accepts prayer requests, with several dozen or more coming in a day. The requests are printed and stacked several inches thick on a wooden table outside the monastery’s sanctuary. The monks look through them, pick a few and keep the requests with them during the day.

“People who are sick, people who need a job. A 12-year-old who wants a pony and in our own way, we offer those up to God,” McCoy said. “It’s kind of having a virtual way of having someone care about you.”

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. To report corrections and clarifications, contact Reader Editor Brent Jones. For publication consideration in the newspaper, send comments to letters@usatoday.com. Include name, phone number, city and state for verification.  Enlarge By Morry Gash, AP

CHICAGO (AP) — Many Americans allowed themselves to fantasize about large-screen TVs, European vacations and other luxuries when they learned of the federal rebates they’d be getting this spring and early summer.

Or maybe — shh, don’t tell the president — they’d pay off a credit card or set the rebate aside for a big purchase in the future, notwithstanding Washington’s intentions that they pump it immediately into the flagging economy.

USING YOUR REBATE: What’s good for you vs. U.S. economy?

“It’s not often you get a windfall like that that you can just stash away for something you need later,” said Sara Jackson, 29, a graphic designer in Chattanooga, Tenn.

But reality has interfered, in the form of ever-climbing food bills and $4-a-gallon gasoline. While some consumers got their dream TVs, as confirmed by a spike in April retail sales in anticipation of the economic stimulus payments, day-to-day living costs have sopped up the checks for many other early recipients and spoiled their rebate fantasies.

Based on a small but broadly diverse group of consumers who tracked their rebate spending in detail for The Associated Press, there was no mass rush to the malls for shopping sprees after the payments started showing up in bank accounts in significant numbers in May. The greater economic ramifications may not be seen for months.

Vanessa Church, a 49-year-old Chicagoan with six children, was grateful for the rebate but found there wasn’t much left over after big payments for utilities and other basic needs were taken care of. “Things are getting tighter and tighter,” she said, adding jokingly: “I’m thinking they should do this twice a year.”

Brandi Dobbins, 26, and her fiance each got their $600 checks just before their May wedding on the coast of Maine. The combined amount was spent almost instantly when their caterer called and, after asking ‘Are you sitting down?’, informed her that due to food inflation their bill for the wedding was jumping from $46.50 per guest to $59 — virtually the entire $1,200. “In the economic grand scheme of things, I’m not quite sure that’s what they intended us to spend our money on — inflation — but that’s where ours went,” Dobbins said.

Derek Houck, an actor in North Hollywood, Calif., planned to allow himself an indulgence or two with whatever was left of his rebate after he’d taken care of necessities. It turned out to be more modest than he’d thought. When his personal finance software program showed him he had a whopping 50 cents left from the $600, he still celebrated by shelling out $49.95 for a new Wii game.

All told, 131 million households are to receive a total of $110 billion by the time the last payments are doled out in mid-July. What people do with them will help shape the direction of the sputtering economy.

The last time Washington undertook such a program to combat an economic slowdown, taxpayers got rebates of $300 or $600 in the summer and early fall of 2001. The eight-month recession was over by November, but it’s not clear how much the payouts helped. The amount that people actually spent — excluding saving money, investing or paying down debt — was lower than many economists expected, although estimates vary so widely an exact total is hard to peg.

This year’s program provides more money, aimed at delivering a bigger shot of adrenaline to the economy by inducing people to buy items they didn’t otherwise have the cash for.

Most individual taxpayers are getting checks of up to $600, while couples receive $1,200 plus $300 for each eligible child under 17. People earning too little to pay taxes but at least $3,000, including seniors whose only income is from Social Security, get $300 if single or $600 if a couple. And there are no payments for the wealthy: The amount starts to phase out for those with incomes over $75,000, or $150,000 for joint filers.

Based on economists’ preliminary assessments, and echoed by the AP sample group of more than two dozen people, Americans are not hesitating to spend the money — but more for essentials than was anticipated. It’s easy to understand why: Gas prices are up more than 30% since the rebate check amounts were first announced and food prices are projected to increase 5% or more in 2008.

Joseph LaVorgna, chief U.S. economist at Deutsche Bank, thinks at least half the rebate money may go toward energy costs alone.

“It’s not going to give you the bang for the buck as originally envisioned,” he said. “The odds of it having a longer-lasting impact on the economy are less. … People were not planning to use so much of it on energy and food.”

Diane Swonk, chief economist for Mesirow Financial in Chicago, also estimates that consumers will spend more than half of the rebates — but much of it on the higher cost of living, citing evidence of a “very stressed consumer.”

That would be dramatically higher than what they signaled in an Associated Press-Ipsos poll in February, when only 19% of respondents said they would spend their rebates. Some 45% said they planned to pay off bills, 32% said they would save it or invest it, and 4% said they would donate it to charity. Consumers in the past have tended to spend significantly more than they told pollsters they thought they would.

Swonk says economic growth won’t be affected by where people spend it — but consumer confidence will, which can influence the longer-term outlook. Over the long haul, spending on staples won’t provide the boost the government hoped for.

Millions of Americans can testify to the psychological impact of a fat check, whether or not they agreed with the idea.

“Honestly, I think it’s kind of silly that the government is paying us money when it’s having such a hard time paying its own bills,” said Jackson. “But shoot, who’s going to turn down money when they give it to you?”

‘We’re definitely in a recession’

Some economists are now saying we will avert a recession, or at least a severe downturn. Don’t tell that to people who have seen their living standards squeezed by the markups in supermarkets and at the pump — like Church, who’s raising six children on Chicago’s often hardscrabble West Side.

“We’re definitely in a recession — I can feel it,” she said over a sandwich in the cramped, bustling offices of the weekly neighborhood newspaper where she is a lifestyles and religion writer. “We get so much less for the same money. Milk and eggs and bread and vegetables and fruit are all very expensive. So the rebate was a good idea for that.”

Being pinched didn’t prevent Church and her husband from contributing $120 of her $1,200 rebate to their church — they tithe 10% of everything they earn, in good times and bad.

The rest went fast: $350 for a son’s eighth-grade class trip to Washington, D.C., $345 for an end-of-winter balloon payment on their heating bill, $225 for a daughter’s water-damaged cellphone and bill, $100 for their 15-year-old son’s savings account and $60 on transit passes. Another $600 is expected later — her husband filed separately — and living costs are likely to gobble up the bulk of that, too.

Church, who describes herself on a networking website as “a certifiable, bona fide bibliophile and the proud owner of over 5,000 books,” might have liked to make a few additions to her library or spend something on herself. Not at times like this, she can’t. But she’s not complaining about a payment she sees as a blessing.

“I don’t know how it affected other people’s budgets overall, but it helped our money stretch,” she said.

“I thought it was a really cool thing. It made me see my president in a different light. I was like, ‘Attaboy George!’ I can be swayed, I can be bought!”

The rebate couldn’t have come at a more perfect time for Dobbins and her fiance: just when payments for their wedding were coming due. Every penny was devoted to the big event, which will have cost about $24,000 by the time all the bills have been settled.

“When I learned about the tax payment I was thrilled,” said Dobbins, an account supervisor for a marketing firm in Washington, D.C. “I immediately factored that into what we would be able to pay off.”

The fact that the entire amount was consumed by food inflation, in the form of their caterer’s price hike, was appropriately ironic given the backdrop to today’s economic malaise.

“Do I think it accomplished what they wanted?” Dobbins said of the rebate. “No, because it’s going into people’s gas tanks, into their food bills or to pay off their credit cards. The cost of living is going up so fast that it’s really not going into the stores. It’s just keeping up with everyday costs.”

‘It’s a constant battle’

The most troubling economic indicator to Houck this year has been the cash flow predictor in his Microsoft Money software, showing his finances going “down, down, down, down, down.” So when the $600 rebate appeared in his bank account, it allowed the 24-year-old to splurge a little for the first time in months.

Splurging is relative for an actor-for-hire doing everything from carpentry to backstage lighting work to video game bug-testing in order to pay the rent.

Besides $30 on tickets to see a play a friend was in, his big “fun” purchase was the Wii game — “Super Smash Bros. Brawl.” He allowed those indulgences only after spending $245 on new head shots to get his face and name out to directors, $68 to renew his subscription to an acting submission service, and most of the rest on food, gas, laundry and bills.

“I don’t think I helped save the economy with my contributions from the rebate, but it worked well for me,” said Houck.

Angela Anderson, 50, of York, Pa., thought for weeks about how she might spend her tax rebate. She could create a gas account for the increased cost of her 54-mile daily commute, pay off credit-card debt, buy a piece of local original art, put some toward a trip to Europe, and maybe use anything left over to treat herself with a massage and manicure.

Alas, when the money showed up it was less than expected at $300, owing to the fact that she was unemployed for much of last year. So by the time she wrote two $250 checks to her son Michael and her daughter Jenna to support them on unpaid college internships, it was more than gone.

Despite the disappointment, she was thankful.

“Anything I can do to set a couple of bucks aside so I can pay for the increased cost of living, I’m grateful,” said Anderson, public relations director for an art school. “As a single parent, earning just a bit over $50,000, things are always tight for me.”

Hung Nguyen is one of those who dreamt of a fancy new TV and got it, thanks to his payment. The 26-year-old New Orleans resident spent his $600 stimulus check the same day he received it on a 32-inch plasma television for the bargain price of $400, using the rest to pay credit-card bills.

Nguyen, who works for the Federal Emergency Management Agency, lives with his parents and lost everything in Hurricane Katrina. They have since rebuilt, and he felt secure enough financially to spend the rebate on something that wasn’t a necessity.

“I guess I kind of just spent it as it was intended for, to boost the economy,” he said.

For three years, he drove a car with no air-conditioning — a major sacrifice in the sticky-hot South. Now he finally feels he has a good job and can buy things he wants, not just needs.

While Nguyen doesn’t consider himself overly thrifty, he didn’t start out intending to buy a TV. Initially, he thought he’d buy himself new glasses and pay off bills. But his brother saw the TV at a store and Nguyen thought ‘Why not?’ “It was worth it,” he said. “The picture is awesome.”

Moderately affluent Americans, too, are showing increasing signs of economic strain. Swonk says more and more households are shopping for groceries at big-box retailers rather than their local grocer, not going out to movies as often, or watching regular TV instead of rented DVDs or on-demand movies.

Chuck Gutman, 40, who lives in the well-off Chicago suburb of Lincolnshire, Ill., says he feels an underlying financial security but finds himself facing tougher decisions with his money.

“It’s a constant battle,” he said of rising costs. “I like leading the good life — going to plays, concerts, restaurants — but it’s harder.”

Gutman, who teaches English as a second language at a heavily Hispanic high school, didn’t let the increasing money squeeze prevent him from spending his rebate on his passion: helping prepare students from disadvantaged communities to go to college. The $600 paid for a large portion of a summer tour of colleges where he will meet with admissions counselors who may be in a position to assist his students.

“I got into teaching as a vehicle to salve my desire for making a difference,” he said. “Helping these students is really satisfying. Just seeing the spark in their eyes makes it worthwhile.”

Savings an option

Gene Murray also demonstrated the high value he places on education with his family’s rebate money.

He came up with an interesting twist for his son’s 15th birthday in May: He used the $300 dependent stipend to open a bank card account for him as a gift.

“I thought it was a good way to teach him how to be responsible,” said Murray, 55, an instructor of information security at a technical institute outside Denver. “He can go online and look at his account balance and see his transactions.”

Future allowance money for Patrick also will go into the account.

“He’s a saver,” Murray said of his son. “He will get money and it will sit around six or eight months and he’ll save up and get something substantial.”

Murray and his wife, Angie, 49, both are pursuing additional college degrees for themselves. They banked the rest of their economic stimulus check, worth $1,200, with the expectation that some will go for their tuition.

He said he wasn’t going out of his way to specifically spend the rebate money, but “I’m sure that it’ll be useful.”

For Mark and Toni Quero of Northfield, Vt., the rebates — $1,200 total — went straight into the bank, to be saved for home heating oil and replacing a picture window in their home to make it more efficient.

Quero and her husband earn about $44,000 a year between his job as a maintenance man at Norwich University and her Social Security disability checks.

They debated using the money for a vacation but decided instead to use it on heating oil for their three-bedroom ranch house, which they share with their 28-year-old daughter.

So they’re holding $1,000 for oil and $200 for the picture window replacement. The couple spent $800 on heating oil last winter, up from $600 the year before, and they expect it’ll be higher this year.

“Mark said ‘Maybe we’ll take part of it and go on a nice vacation,”‘ said Toni Quero, 59. “Then we said ‘That’s silly. We’ll regret it because we’ll wish we’d saved it for fuel.”‘

Another saver, Miami native Gani Rodriguez, 24, received her tax rebate check May 9 and immediately deposited it into her savings account. She and her boyfriend have been squirreling money away for the last year and a half to buy a house together.

“We’re already shopping for rings,” said Rodriguez, a purchasing agent at an interior design firm. “So if all goes well, we’ll do it at the same time — the house and the marriage.”

Asked if she felt any responsibility to spend the money to help jump-start the economy, Rodriguez demurred.

“It’s our money. I can do with it what I want,” she said. “It could help to spend it, but I don’t think anything big is going to change as far as (my spending for) food and gas. This is really chump change.”

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. To report corrections and clarifications, contact Reader Editor Brent Jones. For publication consideration in the newspaper, send comments to letters@usatoday.com. Include name, phone number, city and state for verification.  Enlarge By Mel Evans, AP

Private investment firm Catalina Holdings is buying up what’s let of Quanta Capital Holdings.

On Friday, insurance and reinsurance provider Quanta Capital (nasdaq: QNTA - news - people ) announced it had agreed to sell itself to Bermuda-based Catalina Holdings for $2.80 per share. The deal is worth $196.4 million and represents a 49.0% premium to Thursday’s closing price of $1.88. The deal is expected to close in the last quarter of 2008.

Shareholders seemed pleased with the prospects. Quanta’s shares jumped 42.0% in Friday trading, but this only amounted to an up-tick of 79 cents, and the stock closed the week at $2.67.

Quanta, also based in Bermuda, is a holder of specialty insurance and reinsurance that is in run-off. Run-off is a scenario where an insurer books no new business, and instead generates revenue only through already booked business.

Catalina Holdings specializes in the acquisition and management of non-life insurance and reinsurance companies and portfolios in run-off.

Quanta’s chairman, James J. Ritchie, said that combined with the companies previously announced dividend of $1.75 per share, the amalgamation would enable the company to return $4.55 per share to shareholders during this calendar year.

Share prices for Quanta have traded below $4.00 since early 2006. In the trailing-12 months, the stock peaked on March 25 at $3.42 after the specialty lines insurance provider declared a special cash dividend of $1.75 per share for shareholders of record as of that day.

The Associated Press contributed to this article.

Financials Lead Market Into Fed

Subprime Plan Keeps Markets Afloat

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Alan Greenspan has some bad news and some sorta bad news for Americans on Friday: Inflation is here and stagflation might be around the corner.

At a conference in Montreal on Friday, the former Federal Reserve chairman said said he expected oil prices to continue to increase over the long term although he predicted significant periods of decline. He said current high prices are due partly to speculation, but also to strong demand.

When asked about the potential for stagflation, a combination of weak growth and high inflation, Greenspan said, “Oh certainly.”

Greenspan also said, contrary to many the opinion of many, that there isn’t a commodities bubble building. “Once you get inflation pressure starting to emerge, you don’t get bubbles.” he said.

Economic reports published Friday echoed Greenspan’s concerns.

The University of Michigan/Reuters consumer sentiment report on Friday, while slightly stronger than expected, shows Americans are deeply concerned about inflationary pressures.

The consumer sentiment reading fell to 59.8 in May from 62.6 in April coming in just a few tenths of a point above the 59.5 economists had expected on average. The survey indicated clearly that consumer anxiety is being fueled by the rising costs of basic consumer goods.

Consumer prices are currently about 4.0% over year-earlier rates after growing in the 3.0% range from 2004 to 2007. The dollar itself has fared poorly, losing more than a quarter of its value against the euro in the past five years.

The 500 folks surveyed revealed much higher one-year median inflationary expectations of 5.2% versus 4.8% in April. Perhaps more alarming, five-year inflation expectations jumped to 3.4%, the highest level since April 1995, from April’s 3.2%.

Stuart Hoffman, chief economist for PNC Financial Services, said that there is still one key element missing in order for inflation to start getting out of control: wage increases.

Hoffman recalled that during the 1970s in the United States, the flames of inflation were fanned by employers matching the rising cost of goods with bigger paychecks. Companies passed their additional payroll expenses onto clients perpetuating a vicious cycle of rising costs.

Nowadays, U.S. employers can’t just raise wages because Americans are competing in a global economy where outsourcing is the rule and international consumers won’t pay more for goods from high-wage countries. The wage reality check will ironically help keep inflation from running wild, which is good for the economy in the long run.

The bad news is that if wages aren’t going up and prices are, then the aggregate standard of living in the U.S must go down unless Americans can become much more productive than they are now or start working much longer hours.

Wall Street watches consumer sentiment closely because it directly influences consumer spending which represents roughly 70.0% all final goods and services bought and sold in the United States. Consumers are already pulling back on discretionary spending and clipping more coupons. (See “Sears Losses Out To Costco and Big Lots”)

Also on Friday, the Commerce Department reported today that April personal consumption expenditures rose 0.2% as expected by economists polled by Thomson Financial. On a good note, March’s spending was revised up to a 0.4% increase. May was the third consecutive month of falling nominal incomes after 0.5% and 0.4% increases in February and March, respectively. The agency said that without the government’s one-time stimulus payments, up to $600 for many taxpayers, personal income would have risen 0.1%.

Two other key economic indicators published this week were a bit better than expected.

On Thursday, the Commerce Department posted a rosier version of its first-quarter gross domestic product than its first estimate, with an expansion rate of 0.9%, up from 0.6%. The newer figure looked stronger with inventory contributing less of the growth and trade much more. (See “GDP Gets Revised Up”)

On Wednesday, the U.S. government reported that new orders for U.S. durable manufactured goods fell a smaller-than-expected 0.5% in April, do to decline in transportation. (See “Durable Goods Fairly Durable”)

The Associated Press and Reuters contributed to this article.

Stocks Seek Steady Footing

Investors Applaud Inflation Report

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Despite negative comments from the U.S. Food and Drug Administration earlier this week, Ligand Pharmaceuticals and GlaxoSmithKline received nods of approval from the Oncologic Drugs Advisory Committee on Friday concerning the two companies’ blood-clotting drug Promacta.

The advisory committee voted unanimously in favor of Promacta for short-term use at a meeting held in Chicago that was meant to review the new drug application by GlaxoSmithKline (nyse: GSK - news - people ). This would allow the drug for uses before and after surgery. Ligand partnered with GlaxoSmithKline in 1997 to work on Promacta, a drug designed to treat an immune system disorder that can cause excessive bleeding.

Shares of Ligand Pharmaceuticals (nasdaq: LGND - news - people ) fell almost 40% on Wednesday after the negative briefing, but shot up 49.4%, or $1.16, to $3.51 after the meeting. GSK was up 1.5% to close at $44.63 on Friday.

The briefing on Wednesday said that patients used in the study did not need the drug for short-term use, but rather had a chronic condition. The data showed that the drug lessened bleeding more than the placebo, but returned to the same level as the placebo once the drug was no longer administered.

While the agency will make the final approval decision on the drug, it usually follows the advisory committee’s recommendations. The companies were previously granted priority review by the FDA for the drug. The briefing on the FDA Web-site said that the lack of effectiveness does not support the claim on the labeling of the drug that it reduces or prevents bleeding. Another problem the briefing cited was potential for liver damage caused by the drug. Preliminary studies showed that the drug could cause liver problems if used for a chronic condition.

The phase 3 long-term study is currently on-going. Under the partnership agreement, GlaxoSmithKline is responsible for marketing and registration of the drug worldwide.

Update: Merrill Surprise

On The Move: Pharmacyclics

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Calpine is playing hard to get when it comes to advances from NRG Energy, but the energy company isn’t flat-out rejecting the larger rival’s offer.

After two weeks of reviewing the facts, Calpine (nyse: CPN - news - people ) told NRG Energy (nyse: NRG - news - people ) on Friday that is feels the unsolicited offer is too low. Yet, in almost the same breath, Calpine said it looks forward to a call to discuss a possible combination.

“We respect the Calpine board’s decision but are disappointed that they have decided not to move quickly to deliver the benefits of our proposal to Calpine’s shareholders,” said David Crane, NRG’s chief executive officer. “We continue to believe that our proposal offers significant strategic and financial benefits and we remain interested in a combination with Calpine on the terms we have proposed.”

The drama started on May 14, when NRG sent a letter to Calpine offering an all-stock buyout of the company’s 485.0 million outstanding shares. The proposed fixed exchange ratio would be 0.534 NRG share per Calpine share, worth $22.26 at Friday afternoon’s price, or a total $10.8 billion.

Shares of both companies were up after Calpine issued its response to the bid, with Calpine rising 1.1%, to $22.94, slightly above the bid price, and NRG jumping 2.2%, to $41.68.

The Princeton, N.J-based utility company made its offer quietly, but was outed by a third party shareholder of Calpine on May 19. The letter sent to Chairman William Patterson of Calpine addressed the strengths of the deal and even included a top 10 list of the proposed company’s advantages in the market.

Some of the pluses that were highlighted in the letter included a company that would have four distinct regions to operate in (Texas, California, the Northeast, and the South), a strong management base, and a better stock position.

JPMorgan analyst Andrew Smith echoed NRG’s sentiments, agreeing the acquisition would be beneficial to both companies.

“The combined company would have significant scale and scope across the United States with added fuel and asset diversity,” said Smith in a note to clients.

While NRG said the acquisition could result in $100.0 million in cost savings, Smith believes that the estimate is conservative and would likely be closer to $200.0 million.

“This is about in line with current valuations for other merchant power companies,” said Smith. “However, we believe the merchant sector as a whole is undervalued.” Merchant companies generate power to sell to other utilties.

Deals And Sovereign Wealth Funds

Financials Lead Market Into Fed

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By Madlen Read, Associated Press NEW YORK — Stocks closed out a winning week with a narrowly mixed performance Friday after the government reported that Americans’ spending rose slightly in April to keep pace with rising costs.

Investors who sent stocks higher for three straight sessions turned cautious after the Commerce Department said personal spending rose 0.2% last month and personal income rose 0.2%. The department also said inflation at the personal spending level, after stripping out food and energy costs, ticked up in April by a tame 0.1%.

The readings were in line with the market’s expectations, and supported the notion that high commodities costs are not yet causing a sharp pullback in spending or lifting prices for other goods. Meanwhile, the technology sector got a lift after computer maker Dell and chipmaker Marvell Technology Group posted stronger-than-expected quarterly results.

But Wall Street’s concerns about the economy and inflation are far from erased, despite the stock market’s healthy gain this week. Although the government estimated Thursday that first-quarter gross domestic product grew by nearly 1%, Americans still face rising costs for necessities such as groceries and gasoline. Furthermore, crude oil remains near record highs — a serious drag on consumer spending which accounts for more than two-thirds of the U.S. economy.

Investors will get a clearer picture with economic reports to be released next week. Analysts believe strong data on job growth and manufacturing will boost stocks — or, if the reports are disappointing, deliver a setback to the markets.

“It is now all about the economy, and I think we’re going to get numbers that might be a requiem for the recession forecasters,” said Peter Cardillo, chief market economist at New York-based brokerage house Avalon Partners. “Not to say the numbers will be great, but not as bad as people might have anticipated. That will give the market a lift.”

He said some as many investors were adjusting their positions Friday ahead of the data. According to preliminary calculations, the Dow Jones industrial average fell 7.90, or 0.06%, to 12,638.32.

Broader stock indicators edged higher. The Standard & Poor’s 500 index added 2.12, or 0.15%, to 1,400.38, and the Nasdaq composite index rose 14.34, or 0.57%, to 2,522.66.

All three indexes finished higher for the week, recovering from the previous week’s sharp losses. The dollar stabilized and oil prices pulled back from record highs during the past four sessions, giving investors some relief as they parsed data suggesting that the economy is weak but not technically in recession.

The Dow rose 1.27%, the S&P 500 gained 1.78% and the Nasdaq picked up 3.19%.

Government bonds edged up Friday. The yield on the 10-year Treasury note, which moves opposite its price, fell to 4.06% from 4.08% late Thursday.

The energy markets continued to weigh on investors, however, with oil prices down from record levels but threatening to surge again. Crude oil futures settled up 73 cents at $127.35 a barrel in erratic trading on the New York Mercantile Exchange.

“We’ve hit a level where you’re starting to see demand destruction,” said John Massey, portfolio manager at AIG SunAmerica Asset Management.

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

Wall Street will look for signs of how rising inflation is affecting the economy in several reports due next week. The Institute for Supply Management will release an index of conditions in the manufacturing sector on Monday and its services sector report on Wednesday.

The Labor Department on Friday will release its May employment report, one of the most closely-watched indicators of economic health.

In corporate news, the technology-dominated Nasdaq got a boost after Dell, the world’s second-largest seller of personal computers, issued a profit report late Thursday that was stronger than analysts expected due to growth in Asia and robust sales of notebook computers.

Dell shares jumped $1.25, or 5.7%, to $23.06, and injected some optimism into Wall Street that foreign economies are helping many companies weather the weak U.S. market.

Marvell Technology swung to a larger-than-expected profit in the quarter ended May 3, and its revenue also beat analyst forecasts. Shares rose $3.28, or 23.3%, to $17.36.

The Russell 2000 index of smaller companies rose 2.73, or 0.37%, to 748.28.

Declining issues outnumbered advancing issues by about 8 to 7 on the New York Stock Exchange, where volume came to a light 1.01 billion shares.

Overseas, Japan’s Nikkei stock average closed up 1.52%. Britain’s FTSE 100 fell 0.24%, Germany’s DAX index advanced 0.59%, and France’s CAC-40 rose 0.77%.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. To report corrections and clarifications, contact Reader Editor Brent Jones. For publication consideration in the newspaper, send comments to letters@usatoday.com. Include name, phone number, city and state for verification.

Little turquoise boxes remain in demand around Europe and Asia, even as U.S. consumers cut back on extravagant purchases, first-quarter results at jeweler Tiffany indicated on Friday.

Better-than-expected results pushed Tiffany (nyse: TIF - news - people ) shares up by $1.57, or 3.3%, to $49.31, Friday afternoon and helped nudged shares of ritzy Internet competitor Blue Nile (nasdaq: NILE - news - people ), up by 23 cents, or 0.4%, to $53.06. Stock of lower-end shopping mall jeweler, Whitehall Jewelers, however, slipped 4 cents, or 20.0%, to 16 cents a share.

First-quarter net earnings at Tiffany rose 19.0% to $64.4 million, or 50 cents a share, from $54.1 million, or 39 cents a share, in 2007’s first-quarter. Worldwide sales jumped 12.2% to $668.1 million from $595.7 million in the same period a year ago. Excluding foreign currency gains, sales increased 8.0% and same-store sales rose 3.0%.

Analysts polled by Thomson Financial had been expecting earnings of 40 cents a share and sales of $649.0 million.

“We are maintaining a cautious outlook for U.S. sales and do not expect an improvement until later this year. Worldwide sales performance in May-to-date is meeting our expectation, which, consistent with the first-quarter pattern, reflects strength in markets throughout Asia-Pacific–other than Japan–and Europe more than offsetting softness in U.S. sales,” said Chairman Michael Kowalski.

Sales in the company’s Asia-Pacific region, which includes Japan and the Middle East, rose 21.0%, to $222.0 million, or 10.0%, on a constant-exchange-rate basis. European sales shot up 38.0%, to $60.1 million, or 30.0%, excluding currency gains, while sales from the Americas rose 6.0%, to $373.6 million from $353.3 million.

On a constant-currency basis, European same-stores sales grew the most, at 12.0%, followed by 4.0% growth at stores in Asia-Pacific. U.S. same-store sales were flat thanks to a 16.0% boost in revenue at the company’s flagship Fifth Avenue store in New York, a favorite shopping destination for foreign tourists. Sales at other U.S. stores slumped 4.0% during the first quarter.

The company plans to continue its expansion plans, including the introduction of smaller U.S. stores.

Tiffany’s expects full-year earnings of $2.80 to $2.90 a share and global sales growth of 10.0%, which would bring its revenue to $3.2 billino. Analysts had been expecting earnings of $2.73 a share on sales of $3.2 billion.

At the beginning of the month, Blue Nile also beat first-quarter expectations, though its earnings fell 19.0%, to $2.6 million, while sales rose a mere 3.8%, to $70.5 million. The results were considered respectable given the weak U.S. consumer environment. International sales more than doubled during the quarter, following the company’s recent launches into 25 new countries.

In February, Blue Nile projected sales would be flat in the first quarter as consumers scaled back on spending, especially for big or extravagant purchases such as consumer electronics and jewelry. The online jeweler also predicted that rising gold and platinum prices would further pressure profits (See: Blue Nile Frozen By Gold).

Last week, Johnson Matthey, a leading platinum distributor and refiner, predicted that platinum prices could climb to $2,500 an ounce. Platinum futures traded at around $2014 an ounce in New York trading Friday. Power outages at South African mines have further strained supplies of the precious metal (See: Blackouts Power Platinum).

The Associated Press contributed to this article.

Exclusive Luxury Gifts

Luxurious Love

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Everyone’s looking to push the rising costs of energy and raw materials onto the consumer. And now the packaging sector seems to be jumping on the inflation band wagon.

With energy costs soaring, packagers can no longer subsidize rising raw material costs. A year ago, a barrel of crude oil cost less than $60; on Friday it traded above $130. The price of natural gas has gone up more than 65% since the end of 2007.

“Behavior is quickly changing in the packaging sector, as an unprecedented surge in energy costs has translated into massive price increases,” said Wachovia Capital Markets analyst Ghansham Panjabi.

On Wednesday Dow Chemical (nyse: DOW - news - people ) announced it would raise product prices across the board by up to 20.0% to offset the rising costs of energy, raw materials and transportation. (See “ Dow Jacks Prices, Blames Washington”) Chairman Andrew N. Liveris blamed high costs on the United States government’s failure to develop a sound energy policy; this in turn led the firm to try and mitigate the astonishing rise in energy and raw material costs.

Panjabi said that chemical producer Huntsman recently reported price increases up to 25.0% in addition to an energy surcharge, and Rohm and Haas (nyse: ROH - news - people ) also announced energy surcharges.

U.S. chemical companies, Albemarle (nyse: ALB - news - people ), Nalco Holding (nyse: NLC - news - people ) and Praxair (nyse: PX - news - people ), have also raised their prices in recent months.

Dow’s move may inspire plastics packagers to divert their attention away from their previous volume focus and concentrate on price increases of their own, Panjabi said. Plastics packagers are heavy consumers of petrochemicals. The higher the oil price, the higher plastic resin prices jump. (See ” Packagers Also Pounded By Pricey Oil”)

Panjabi said that even label maker Avery Dennison (nyse: AVY - news - people ) and food packaging producer Pactiv (nyse: PTV - news - people ), which were hesitant to raise prices previously, have been slightly more bullish on the pricing side.

Meanwhile, resin price increases will likely be the push package manufacturer Sealed Air (nyse: SEE - news - people ) needed to move away from subsidizing raw material costs for customers, Panjabi said.

Stocks Seek Steady Footing

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Cost cutting and strong sales kept semiconductor maker Marvell Technology Group’s head above water in the first-quarter despite turmoil in the U.S. economy.

On Friday, optimistic investors took Marvell Technology (nasdaq: MRVL - news - people )’s good news as a sign that any slowdown in tech spending may be stabilizing.

Marvell reported better-than-expected first-quarter earnings after the bell on Thursday impressing investors and sending the company’ shares soaring 22.9%, or $3.22, to $17.30 in afternoon trading on Friday.

Marvell’s cost-cutting initiatives and its acquisition of cell phone chip unit XScale from Intel (nasdaq: INTC - news - people ) in 2006 were finally paying off in the first-quarter. Chief executive Sehat Sutardja also said the company saw better-than-expected sales of wireless devices.

Marvell’s chips are used in Apple (nasdaq: AAPL - news - people )’s iPhone and Research in Motion (nasdaq: RIMM - news - people )’s BlackBerry. Last month, Apple blasted past second-quarter earnings estimates by 9 cents on strong demand for its desktop and laptop computers. (See “ Mac Attack Beats Street”)

Blackberry maker Research in Motion also reported late, but surprisingly strong, results last month for its latest quarter as consumers shifted to smartphones of all stripes. (See “ RIMM Rocks”)

First-quarter net income rose to $69.9 million, or 11 cents per share, compared with a net loss of $52.8 million, or 9 cents per share, in the prior year. Revenue rose 27.0% to $804.1 million, up from $635.1 million, in the prior year, beating analysts’ revenue expectations of $783.6 million. Marvell’s revenue even beat the company’s guidance of $785 million.

Excluding special items such as stock-based compensation costs and amortization expenses, the company said it earned 24 cents per share.

Analysts polled by Thomson Financial expected profit of 13 cents per share.

“We surpassed our revenue targets, despite an uncertain economic environment and continuing pricing pressures in our core markets,” said Sutardja, Marvell’s chairman. “Cost cutting initiatives implemented in prior periods also paid off, improving Marvell’s performance.”

Meanwhile, on Thursday, Marvell named Clyde Hosein as chief financial officer, effective June 23.

Semiconductor stocks were on the rise on Friday. Intel’s shares rose 1.3%, or 30 cents, to $23.44 in afternoon trading, while Broadcom (nasdaq: BRCM - news - people ) jumped 6.5%, or $1.77, to $28.90.

Reuters contributed to this article.

Stocks Seek Steady Footing

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