Sepia in on ground floor of red-hot condo market

With 60 percent of its condos sold before shovels hit the ground yesterday, the 83-unit Sepia at Ink Block project on the former site of the Boston Herald has timed the city's hot real estate market well.

"When we decided to build 83 luxury condos there, everyone was asking why we would do that in this part of the South End," said Ted Tye, managing partner of Newton-based developer National Development, at Sepia's groundbreaking yesterday. "Now they're asking us to build more condos."

There are still two more sites on the 6.2-acre property and Tye said he is considering building more condos in the rapidly changing area.

The Ink Block complex already has three luxury apartment buildings with 392 units under construction, along with a ground-floor 50,000-square-foot Whole Foods Market that will open early next year. Sepia's one- to three-bedroom condos, ranging from 510 to 2,000 square feet, are slated to open in the late fall of 2015.

Sue Hawkes, president of The Collaborative Cos., which is handling the sales and marketing for Sepia, said a lot of buyers are South End residents moving up from older properties as well as empty nesters from the suburbs.

"We are averaging about $1,000 a square foot, which is pulling up pricing in the entire neighborhood," Hawkes said.

The eight-story building designed by Boston Elkus Manfredi Architects has a jewel-box look with its projecting balconies and terraces. Amenities include a common rooftop deck, garage parking, a clubroom with kitchen, fitness facility and access to the Ink Block's outdoor pool. Sepia also will have ground-floor retail and restaurant space.

Boston Herald Publisher Patrick J. Purcell, who sold the site to National Development, is a minority investor. Tye said the former Herald outdoor sign will be incorporated into the Ink Block.

The Herald moved to new office space in the Seaport District.

The South End neighborhood was torn down in the 1950s as Boston's first urban renewal project and industrial companies relocated there. "This was once a vibrant neighborhood and we are bringing that back," said Tye.

The district revival also includes the 378-unit Troy Boston apartment project as well as about 600 apartments planned for the former Graybar Electric Co. property.

"This area had become something of a no man's land," said Mayor Martin J. Walsh. "Now its transformation is happening quickly. It's having a new chapter with new residents and new businesses."

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Dow hits 2nd record close in July

The Dow Jones industrial average surged to its second record close this month as major stock indexes rebounded yesterday.

The Dow added 77.52 points to close at 17,138.20. Its previous record high was 17,068.65, set July 3.

Investors had lots of market-moving news to consider, but trading appeared to get the biggest jolt from the latest batch of corporate deal news.

Investors drove Time Warner's stock up 17 percent on news that Twenty-First Century Fox made a takeover bid for the media giant. Other deals involving Apple and IBM as well as slot machine maker International Game Technology also helped lift the market.

"It's a continuation of what we've really been seeing this year, and it's almost a record amount of (mergers and acquisitions) going on," said David 
Chalupnik, head of equities at Nuveen Asset Management.

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Asia stocks surrender gains before earnings, data

SEOUL, South Korea — Asia's major stock markets abandoned earlier modest gains, trading mostly lower on Thursday ahead of the release of U.S. economic data and corporate earnings reports.

Most of the region's markets finished in negative territory or were little changed with the optimism from China's growth report the previous day proving to be short-lived.

South Korea was the only major market that finished higher. The Kospi in Seoul rose 0.4 percent to 2,020.90. The market was boosted by expectations that the country's new pro-growth finance minister would introduce measures to ease housing market regulations and encourage domestic spending.

Japan and Australia were little changed. Tokyo's Nikkei 225 closed 0.1 percent lower at 15,370.26 and Sydney's S&P/ASX 200 added 0.1 percent to 5,522.40.

Hong Kong's Hang Seng dipped 0.1 percent to 23,497.81 while China Shanghai Composite declined 0.6 percent to 2,055.59.

For the rest of the week, earnings reports from Google and IBM are key events on the corporate side. Investors cheered Intel's report of a 40-percent jump in its bottom line, a sign of recovery in PC demand.

The U.S. government is also set to release economic data including unemployment claims and home construction.

The escalation of the U.S. sanctions against Russia appeared to have no immediate impact on Asian markets, although the move hit Russian stocks. The new rounds of U.S. sanctions targeted two major energy firms, a pair of powerful financial institutions, eight weapons firms and four individuals. The U.S. penalties are meant to increase pressure to end the insurgency in eastern Ukraine believed to be supported by Moscow.

In energy trading, benchmark U.S. crude for August delivery was up 32 cents at $101.52 a barrel in electronic trading on the New York Mercantile Exchange. The contract added $1.24 to settle at $101.20 on Thursday.

In currencies, the euro inched down to $1.3526 from $1.3528. The dollar fell to 101.50 yen from 101.65 yen late Wednesday.

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Asia stocks lukewarm after China growth report

TOKYO — Asian stock markets were lukewarm Wednesday after China met expectations of solid but unspectacular growth in the second quarter.

The world's second-largest economy expanded 7.5 percent over a year earlier in the April-June quarter, picking up slightly from 7.4 percent growth in the first quarter, and suggesting the government's mini-stimulus measures had helped to offset a housing slowdown.

The Nikkei 225, the benchmark for the Tokyo Stock Exchange, was little changed at 15,379.30, closing down 0.1 percent after zigzagging in a short range throughout the day.

Hong Kong's Hang Seng added 0.1 percent to 23,489.78, while Seoul's Kospi inched up 0.04 percent to 2,013.48.

China's Shanghai Composite reversed earlier gains to fall 0.2 percent to 2,067.17 while Australia's S&P/ASX 200 inched up 0.1 percent to 5,518.90.

Other Asian stock markets were mostly higher, including shares in Singapore, Indonesia and Thailand.

Communist leaders in China have been trying to boost domestic consumption to drive the economy as its longstanding engines of exports and industrial investment lose momentum. They have acknowledged that growth won't return to the double-digit rates experienced for much of the preceding decade.

"The results were merely in line with expectations. There was relief but nothing was new," said Nobuhiko Kuramochi, head of the investment information department at Mizuho Securities Co. in Tokyo.

In Tuesday's trading, markets drifted as U.S. Federal Reserve chair Janet Yellen did not deviate too much from previous comments and following some lackluster U.S. retail sales figures.

The main focus had been on Yellen, who was delivering her half-yearly testimony to Congress. She largely stuck to her previous script telling lawmakers that the Fed intends to keep providing significant support to the U.S. economy to boost growth and improve labor market conditions.

Her comments didn't dislodge market expectations that the first interest rate increase from the Fed will come next summer. Yellen said the Fed's current monthly bond purchases will likely end in October.

Yellen spoke after figures showed U.S. retail sales grew by only 0.2 percent in June, less than the 0.6 percent expected. However, May's figures were revised up to show a 0.5 percent increase, so the net effect was negligible.

"Today's retail sales report, while not terrible by any means, just isn't all that great," said Dan Greenhaus, chief strategist at BTIG.

In Europe, Britain's FTSE 100 closed down 0.5 percent at 6,710.45 and the CAC-40 in France fell 1 percent to 4,305.31. Germany's DAX fell 0.7 percent to 9,719.41.

In the U.S., stocks finished the day mixed, with the Dow Jones industrial average eking out a tiny gain.

The Dow added 0.03 percent, to 17,060.68 while the Standard & Poor's 500 fell 0.2 percent to 1,973.28. The Nasdaq composite shed 0.5 percent to 4,416.39. The three stock indexes are all up for the year.

In currencies, the euro slipped to $1.3558 from $1.3571 late Tuesday. The dollar edged up to $101.73 yen from 101.68 yen.

Benchmark U.S. crude for August delivery was up 51 cents at $100.47 a barrel in electronic trading on the New York Mercantile Exchange.

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Follow Yuri Kageyama on Twitter at twitter.com/yurikageyama

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China growth edges up in possible sign of recovery

BEIJING — China's economic growth edged up in the latest quarter and more than 7 million new jobs were created in the first half of the year, easing pressure on communist leaders as they try to prevent a precipitous slowdown in the world's second-largest economy.

Economic growth rose to 7.5 percent over a year earlier in the three months ended June 30 from the previous quarter's 7.4 percent, data showed Wednesday. The first quarter matched a downturn in late 2012 for the slowest rate since the 2008 global crisis.

Communist leaders are trying to steer China toward growth based on domestic consumption instead of trade and investment. But the unexpectedly sharp slowdown raised fears of politically dangerous job losses. Beijing responded with mini-stimulus measures based on higher spending on construction of railways and other public works.

"A lot of the June data looks quite strong, stronger than expected," said economist Julian Evans-Pritchard of Capital Economics. "I think it should vindicate policymakers' approach to targeted measures to stimulate growth."

China's steady decline from the explosive double-digit growth rates of the past decade has had global repercussions, cutting demand for iron ore, copper and other commodities that helped to fuel its expansion.

The latest growth was in line with the ruling Communist Party's 7.5 percent target for the year. Analysts say Chinese leaders are willing to accept even slower growth so long as the economy generates enough new jobs to prevent unrest.

A relatively healthy 7.4 million urban jobs were created in the first half, according to a government spokesman, Sheng Laiyun. He said just over 3 million rural migrants moved to cities during that period to work, a sign of demand for labor.

"In the first half of the year, economic growth was stable. Employment was stable," said Sheng at a news conference.

Second-quarter consumer spending rose 12.1 percent over a year earlier, though that was down 0.3 percentage point from the previous quarter, Sheng said. He said investment in factories, real estate and other fixed assets rose 17.3 percent.

In other positive signs, foreign direct investment in China rose 0.2 percent in June, rebounding from a decline in May, the government reported earlier. June bank lending grew faster than expected, suggesting growing business activity.

The top economic official, Premier Li Keqiang, had promised earlier the second quarter would show an improvement, though he warned the economy still faced "downward pressure."

Trade growth this year has been well below the 7.5 percent level forecast in the ruling party's plans. That has raised the threat of job losses in export-driven manufacturing industries that employ millions of workers.

The economy also has suffered a blow from a slump in real estate prices and sales due to government controls imposed to cool a surge in housing costs and encourage developers to build more low-cost housing. That has sent shock waves through construction, steel and other industries that rely on real estate and employ millions of people.

Despite the latest uptick in growth, analysts expect China's expansion to cool further over the coming year.

The International Monetary Fund expects growth to slow to 7.3 percent next year and to below 7 percent in 2016. Some analysts expect an even deeper decline, with growth as low as 6.8 percent this year. That would be stronger than the United States, Japan or Europe but China's weakest annual growth in two decades.

The latest data show the economy's reliance on higher government spending to offset weakness in real estate investment, a key growth driver, said Evans-Pritchard.

"We don't think this is a sign that growth is stabilizing," said Evans-Pritchard. "The stabilization has been largely a result of government stimulus measures."

The ruling party has promised sweeping reforms to make the economy more competitive and productive. They include opening more industries such as health care and transportation to private and foreign competition, simplifying taxes and regulation and directing the state-owned banking industry to provide more credit to entrepreneurs that create most of China's new wealth and jobs.

"The Chinese leadership plans to rely on faster reforms to unleash new sources of growth during the period of structural adjustment," said UBS economist Tao Wang in a report this week.

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National Bureau of Statistics of China (in Chinese): www.stats.gov.cn

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Naver says Line messenger app mulls IPO

SEOUL, South Korea — Line Corp., the operator of a popular mobile messaging app, has submitted an IPO application to the Tokyo Stock Exchange but might also seek a New York listing, its parent company Naver Corp. said Wednesday.

Naver, South Korea's largest Internet company, said the plan for an initial public offering in Tokyo is not final. Line, which is also the name of the app, could list in either New York or Tokyo, or both.

The move highlights the growth of Asian mobile messaging apps, driven in large part by the popularity of smartphones and connecting to the Internet through mobile devices. The apps have been a threat to longer-established Internet companies, which have responded by taking a stake in the upstart industry through acquisitions.

As of last month, Line had more than 450 million users. It has tens of millions of users in Japan, Thailand, Indonesia and Spain.

If listed, Line's market capitalization will be at least 23 trillion won ($22.2 billion), according to Lee Chang-young, an analyst at Tongyang Securities Co. That would be the same level as the market cap of Twitter Inc.

Lee said the number of monthly average users at Line is growing faster than that of Facebook or Twitter.

Other mobile messaging apps have also been involved in big deals. Facebook Inc. paid $19 billion to acquire WhatsApp and Viber Media was bought by Japan's Rakuten Inc. for $900 million.

For Internet companies that started when PCs were the predominant gateway to the Internet, messaging apps have provided a way to expand their reach to mobile phone users.

Naver owns South Korea's most-visited online search portal but is little known abroad. It reversed its fading fortunes with Line.

As the messaging app became a household name in many Asian countries, its revenues from sales of big emoticons known as stickers surged. It has diversified its revenue by courting advertisers and offering games.

Technology research company Ovum said the IPO would boost Line's presence outside Asia where most of Line's users are based.

"The IPO will not only help them get further visibility in markets outside Asia, but the resources can also be put to further marketing efforts and product innovation to grow their user base internationally," said senior analyst Neha Dharia.

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Federal Reserve's Yellen giving Congress good news

WASHINGTON — Federal Reserve Chairwoman Janet Yellen will have some good news to tell Congress this week about the health of the labor market. But lawmakers will likely press her to provide more information on just how the central bank intends to react to the good news.

Yellen is scheduled to deliver the Fed's twice-a-year report to Congress on interest-rate policy and the economy. She testifies before the Senate Banking Committee on Tuesday and will follow that with testimony Wednesday before the House Financial Services Committee.

She delivered her first monetary report to Congress in February, just a week after being sworn in to succeed Ben Bernanke as the first woman to head the central bank.

While unemployment stood at 6.7 percent in February, it has now fallen to 6.1 percent, the lowest point since September 2008, reflecting strong job growth in recent months. The economy has created an average of more than 200,000 jobs a month over the past five months, the strongest stretch since the late 1990s.

That will be the good news that Yellen will relate. But lawmakers are certain to quiz her about what the performance of the labor market will mean for the Fed's handling of interest rates in coming months.

In recent comments, Yellen has stressed that while jobs are now being produced at a faster clip, the economy still needs the Fed's help in the form of low interest rates because a variety of indicators, from measures of long-term unemployed to wage growth, still remain weak.

Yellen's comments will be followed closely to see whether there are any shifts in her view that inflation, while rising at a slightly faster pace than back in February, remains low with no danger that it is about to get out of hand.

The Fed's twin goals are to promote maximum employment while keeping inflation under control.

Lawmakers will want to hear Yellen's views on both goals and on related subjects such as whether she has any concerns that the Fed's prolonged period of low interest rates could be setting the stage for financial instability once the central bank starts raising rates.

And lawmakers will also be looking for insights on how the Fed plans to unwind its massive holdings of Treasury bonds and mortgage-backed securities, which are approaching $4.5 trillion, more than four times the amount on the balance sheet when the financial crisis struck in the fall of 2008. The Fed's bond purchases were aimed at keeping long-term interest rates low to give the economy a boost.

Minutes of the Fed's June discussions released last week show that Fed officials are now in broad agreement that they will likely announce an end to their monthly bond-buying program in October with a final $15 billion reduction in the bond purchases.

The minutes showed that the Fed had a lengthy discussion on just how it planned to accomplish that reduction in its balance sheet. No final decisions were made, although officials expect to produce a plan before the end of this year.

The Fed has kept a key short-term interest rate at a record low near zero since December 2008. At its June meeting it kept language signaling that it plans to keep short-term rates low for a "considerable time" after the bond purchases end.

But the minutes showed there is a split between Fed officials who are still worried about low inflation and economic weakness and those concerned that the Fed may need to start raising interest rates more quickly than investors now expect.

Most private economists believe the Fed's first rate hike will not occur until next summer, although some believe the move could occur a few months sooner if the labor market continues to show healthy gains in employment.

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Study: US Alzheimer's rate seems to be dropping

The rate of Alzheimer's disease and other dementias is falling in the United States and some other rich countries — good news about an epidemic that is still growing simply because more people are living to an old age, new studies show.

An American over age 60 today has a 44 percent lower chance of developing dementia than a similar-aged person did roughly 30 years ago, the longest study of these trends in the U.S. concluded.

Dementia rates also are down in Germany, a study there found.

"For an individual, the actual risk of dementia seems to have declined," probably due to more education and control of health factors such as cholesterol and blood pressure, said Dr. Kenneth Langa. He is a University of Michigan expert on aging who discussed the studies Tuesday at the Alzheimer's Association International Conference in Copenhagen.

The opposite is occurring in some poor countries that have lagged on education and health, where dementia seems to be rising.

More than 5.4 million Americans and 35 million people worldwide have Alzheimer's, the most common form of dementia. It has no cure and current drugs only temporarily ease symptoms.

A drop in rates is a silver lining in the so-called silver tsunami — the expected wave of age-related health problems from an older population. Alzheimer's will remain a major public health issue, but countries where rates are dropping may be able to lower current projections for spending and needed services, experts said.

Recent studies from the Netherlands, Sweden and England have suggested a decline, and the new research extends this look to some other parts of the world.

THE UNITED STATES

The federally funded Framingham study tracked new dementia cases among several thousand people 60 and older in five-year periods starting in 1978, 1989, 1996 and 2006. Compared with the first period, new cases were 22 percent lower in the second one, 38 percent lower in the third and 44 percent lower in the fourth one.

The average age at which dementia was diagnosed also rose — from 80 during the first period to 85 in the last one.

During that time, there were declines in smoking, heart disease and strokes, factors linked to dementia, and a rise in the number of people using blood pressure medicines and getting a high school diploma, which reduce the likelihood of developing the condition.

"The results bring some hope that perhaps dementia cases might be preventable, or at least delayed" by improving health and education, said the study leader, Claudia Satizabal of Boston University.

Dallas Anderson, epidemiology chief at the National Institute on Aging, agreed.

"For those who get the disease, it may come later in life, which is a good thing. Getting the disease in your 80s or 90s is a very different than getting it in your early 70s," he said.

GERMANY

Researchers from the German Center for Neurodegenerative Diseases say that claims data from Germany's largest public health insurance company suggest that new cases of dementia declined significantly between 2007 and 2009 in men and women.

Dementia prevalence — the proportion of people with the disease — also declined dramatically in women ages 74 to 85. There was a trend toward a smaller decline in men but the difference was so small researchers couldn't be sure of it.

The trends corresponded with fewer strokes and better treatment of high blood pressure, cholesterol and diabetes, and more education, they said.

ASIA, AFRICA

An updated study of dementia prevalence by Alzheimer's Disease International in 2009 concludes that its previous estimates for the disease worldwide were too low. The group now says dementia prevalence appears to have increased from about 5 percent to about 7 percent in East Asia, and in Sub-Saharan African from between 2 percent and 4 percent to nearly 5 percent.

The estimates were revised based on studies in China and sub-Saharan Africa, and the latest United Nations population projections.

COLOMBIA

Researchers from the Universidad Icesi in Colombia used current population and other sources of information to update a 20-year-old study on dementia and determined that current projections might underestimate dementia cases by up to 50 percent.

In countries where dementia appears to be declining, the rise in obesity and diabetes threatens to undo progress.

"It may be that what we have now is a sweet spot," where people with these problems are still relatively young, said Anderson, of the National Institute on Aging. "They're not in the dementia range yet, but what's going to happen? We know they're all in the pipeline."

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Online:

National Institute on Aging: http://www.nia.nih.gov/Alzheimers

Patient, family info: http://www.alzheimers.gov/

Alzheimer's Association: http://www.alz.org

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Marilynn Marchione can be followed at http://twitter.com/MMarchioneAP

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FCC receives more than 677,000 comments on net neutrality proposal

The FCC has collected more than a half million comments on its latest proposal to establish rules of the road for the Internet, with a deadline on Tuesday for weighing in on how or if the agency should adopt regulations prohibiting Internet providers from blocking, slowing or prioritizing web traffic.

An FCC official said that they have received 677,000 comments as of Monday. By contrast, the FCC received some 1.4 million comments following the notorious Janet Jackson "wardrobe malfunction" during the 2004 Superbowl halftime show and, according to the Wall Street Journal, the agency received more than 2 million comments over a 2003 order on rules for media ownership.

"Believe it or not, every single #netneutrality comment will be read by @FCC staff. Staff will sort & summarize," Gigi Sohn, the FCC's special counsel for external affairs, wrote in a Twitter chat on Monday.

FCC chairman Tom Wheeler proposed rules in April that would prohibit Internet providers from "commercially unreasonable" practices in the way that they deliver content to the consumer.

Critics blasted the proposed rules as too weak to prevent Internet providers from prioritizing content, such as websites or video that pay for such special access to consumers. Wheeler has said that he believes that such "paid prioritization" would be prohibited under the rules, but the FCC is also asking for comments on whether such "fast lanes" should be banned outright. The FCC also is asking whether the rules should apply to wireless providers, not just wireline, and whether the FCC should consider a bolder regulatory step. That would be to classify the Internet like a utility, a move that would give the commission greater oversight over broadband.

After Tuesday's deadline, the FCC will take reply comments until Sept. 10, with the expectation that the commission will rule by the end of the year.

Among those submitting comments on Monday was the Internet Assn., which represents Google, Facebook, Netflix, eBay and a host of other Internet giants.

The Internet Assn.'s Michael Beckerman called for "simple, light-touch rules to ensure that the Internet remains open, dynamic and spontaneous." He called for rules that prevent providers from blocking or discriminating against certain types of content, and that the regulations should apply "regardless of whether a consumer accesses the Internet from a fixed wireline or a mobile wireless access provider."

Beckerman wrote that that the "commercial reasonable" proposal would fall short of preventing providers from discrimination or blocking of content. Instead, he wrote that the association supports rules that are "clearer and more straightforward prohibitions against blocking and paid-prioritization."

"Charging for enhanced or prioritized access -- essentially, charging to discriminate against or degrade competing content -- undermines the Internet's level playing field," he wrote.

Berckerman also wrote that the FCC should find ways to prevent Internet providers from "market abuses" when it comes to establishing "peering" arrangements. The interconnection issue is the subject of a separate FCC investigation, but the Internet Assn. said that it "should not be used as a choke point to artificially slow traffic or extract unreasonable tolls from over-the-top providers."

The association, however, stopped short of endorsing a reclassification of the Internet as a utility.

Meanwhile, the National Cable and Telecommunications Assn., which represents major Internet providers like Comcast and Time Warner Cable, said that it planned to file comments that warn the FCC against reclassifying the Internet like a utility, suggesting that it "would likely fail to survive judicial scrutiny" and impose costs and regulatory restrictions "that would deter ongoing investments and innovation."

"If further action is necessary, it can be done in a manner that will avoid the tangible harms of [reclassification], that can be firm enough to prevent unreasonable discrimination, that can be flexible enough to consider new facts and circumstances as the Internet continues to grow and evolve, and that can be both platform and application agnostic," the NCTA said.

(C) 2014 Variety Media, LLC, a subsidiary of Penske Business Media; Distributed by Tribune Content Agency, LLC

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Samsung suspends China supplier over child labor

SEOUL, South Korea — Samsung Electronics Co. said it has suspended business ties with a Chinese supplier that allegedly hired children.

The South Korean company, which is the world's biggest smartphone maker, said in its blog Monday that it had found possible evidence of child labor and illegal hiring at Dongguan Shinyang Electronics Co.

Samsung said last week it would urgently look into the Chinese supplier following a New York-based watchdog's report that it hired at least five children under the age of 16.

China Labor Watch said children as well as minors under 18 worked at Shinyang for three to six months to meet production targets during a period of high demand. The watchdog said the child workers were paid for 10 hours a day but worked 11 hours.

The report detailed 15 labor violations discovered during its undercover investigation. They included child labor, the absence of safety training, no overtime wages and no social insurance for temporary workers, who constituted at least 40 percent of 1,200 employees at the Chinese cellphone parts supplier for Samsung.

China Labor Watch's report came shortly after Samsung said its audit found no child labor at hundreds of Chinese suppliers. Samsung began inspecting its Chinese suppliers after the labor watchdog raised the child labor issue in 2012.

Samsung said Chinese authorities are investigating the case and if the investigation finds child labor, Samsung will permanently stop doing business with Shinyang.

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Samsung's statement: http://global.samsungtomorrow.com/?p=38650

Full report by China Labor Watch: http://chinalaborwatch.org/pdf/2014.07.10_Shinyang_Electronics_report__FINAL.pdf

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