Asia stocks dip on Dow drop, China data cuts loss

HONG KONG -- Most Asian stock markets dipped on Friday following a big sell-off on Wall Street but losses were limited by optimistic reports on China's economy.

KEEPING SCORE: Japan's benchmark Nikkei 225 index dropped 0.6 percent to 15,528.72 and Hong Kong's Hang Seng fell 0.5 percent to 24,623.81. South Korea's Kospi was 0.2 percent lower at 2,071.75. Australia's S&P/ASX 200 tumbled 1.4 percent to 5,554.40. In mainland China, the Shanghai Composite Index edged up 0.2 percent to 2,205.40.

US SELL-OFF: Asian stocks are lower after U.S. markets had their worst day in months. Factors include weak corporate earnings from big companies such as Exxon Mobil as well as the approaching end of stimulus from the Federal Reserve. Economic sanctions on Russia that have increased tensions with the West also played a role, as did Argentina's debt default Wednesday. And there's also the general worry by investors that stocks are overpriced.

ANALYST VIEW: Desmond Chua of CMC Markets in Singapore said Asian markets fell despite healthy China manufacturing figures as investors took profits following strong rallies by many benchmarks over the past week or two. "Investors are sitting on sidelines and holding on to cash waiting for more events to unravel before buying on the dips," said Chua. While he expects a "slow and gradual climb" in Asian markets based on economic fundamentals, "we haven't seen a pullback in a long time and with valuations at such extensive levels I wouldn't be surprised if we get one in due time."

CHINA'S FACTORIES: Upbeat data on Chinese manufacturing helped put a floor under Asian stocks. Monthly surveys of manufacturing in China signaled that the world's second biggest economy perked up further in July thanks to recent mini-stimulus measures. An official purchasing managers' index rose to its highest in 27 months while a similar factory report by HSBC showed the strongest rate of improvement in a year and a half.

ECONOMIES IN FOCUS: Investors will get more clues about the state of the global economy with the release of a raft of economic reports later in the day, starting with manufacturing data for major eurozone economies. After that, reports are expected on U.S. employment, consumer spending and sentiment, construction spending and manufacturing. The forecast for the much scrutinized employment report is that U.S. employers added 225,000 jobs in July and that the unemployment rate remained at 6.1 percent, the lowest since 2008. In June, the economy added 288,000 jobs.

WALL STREET: The Dow Jones industrial average fell 1.9 percent to 16,563.30, its worst one-day drop since February. The S&P 500 dropped 2 percent to 1,930.67, its biggest loss since April. The Nasdaq composite fell 2.1 percent to 4,369.77.

LOW ENERGY: Benchmark U.S. crude for September delivery slipped 15 cents to $98.02 a barrel in electronic trading in New York. The contract on Thursday fell $2.10 to close at $98.17, its lowest level since March 17. Brent crude, a benchmark for international oils used by many U.S. refineries, edged 3 cents lower to $105.99 in London.

CURRENCIES: The euro drifted down to $1.3386 from $1.3391 late Thursday. The dollar rose to 102.93 yen from 102.78 yen.

Probe exposes flaws behind HealthCare.gov rollout

WASHINGTON -- Management failures by the Obama administration set the stage for computer woes that paralyzed the president's new health care program last fall, nonpartisan investigators said in a report released Wednesday.

While the administration was publicly assuring consumers that they would soon have seamless online access to health insurance, a chaotic procurement process was about to deliver a stumbling start.

After a months-long investigation, the Government Accountability Office found that the administration lacked "effective planning or oversight practices" for the development of HealthCare.gov, the portal for millions of uninsured Americans.

As a result the government incurred "significant cost increases, schedule slips and delayed system functionality," William Woods, a GAO contracting expert, said in testimony prepared for a hearing Thursday by the House Energy and Commerce Committee. The GAO is the nonpartisan investigative agency of Congress.

Spokesman Aaron Albright said the administration takes its responsibility for contract oversight seriously and has already started carrying out improvements that go beyond GAO's recommendations. The congressional investigators recommended a cost-control plan and other changes to establish clear procedures and improve oversight.

But Sen. Orrin Hatch, R-Utah, one of the lawmakers who requested the investigation, said, "Millions of taxpayer dollars were wasted to build a website that didn't work, all because of bureaucratic incompetence."

Investigators found that the administration kept changing the contractors' marching orders for the HealthCare.gov website, creating widespread confusion and adding tens of millions of dollars in costs. Changes were ordered seemingly willy-nilly, including 40 times when government officials did not have the initial authority to incur additional costs.

The report faults the Centers for Medicare and Medicaid Service for ineffective oversight. Known as CMS, the agency is part of the Health and Human Services Department and was designated to administer Obama's health care law.

The GAO concluded:

— Contractors were not given a coherent plan, and instead jumped around from issue to issue.

— The cost of a glitchy computerized sign-up system for consumers ballooned from $56 million to more than $209 million from September 2011 to February 2014. The cost of the electronic backroom for verifying applicants' information jumped from $30 million to almost $85 million.

— CMS, representing the administration, failed to follow up on how well the contractors performed.

— A third contract, for fixes to the website, grew from $91 million in January to $175 million as of last month.

Two contractors initially took the lead building the system:

Virginia-based CGI Federal built HealthCare.gov, the consumer-facing portal to subsidized private coverage for the uninsured. The site serves 36 states, while the remaining states built their own systems, with mixed results.

QSSI, based in Maryland, was responsible for an electronic back office that helps verify personal and financial information to determine whether consumers are eligible for tax credits to help pay their premiums.

The consumer end of the system locked up the day it was launched, Oct. 1, and was down most of that initial month. The electronic back office had fewer problems.

A few months before the launch, the CMS agency notified CGI it was so dissatisfied that it would start withholding payments. Then it rescinded that decision.

CMS ultimately paid nearly all of CGI's $12.5 million in fees, withholding only $267,000, the report said. The agency later ended its contract with CGI. Another contractor, Accenture, was brought in to make website fixes.

Confronted with a public relations disaster, the White House sent in a troubleshooter, management consultant Jeff Zients. He removed CMS as project leader, relegating it to a supporting role.

CMS administrator Marilyn Tavenner later personally apologized to Congress, saying, "The website has not worked as well as it should."

Zients' rescue operation got the site working by early December. Eventually, some 8 million people managed to sign up, far exceeding expectations.

Nonetheless, Health and Human Services Secretary Kathleen Sebelius stepped down amid complaints by White House officials that the president was blindsided by the problems.

The original contractors testified to Congress that they did not have nearly enough time to test the system before it went live.

Indeed, Tavenner took the unusual step of signing the operational security certificate for HealthCare.gov herself, after CMS security professionals balked. The site has since passed full security testing.

The GAO's findings added to earlier conclusions in a report by Zients after his team got the website to work.

Beyond a maze of technical problems, Zients said he found "inadequate management oversight and coordination" that "prevented real-time decision making and efficient responses."

Obama has already weathered the worst storms from the bungled health care launch, so the report is unlikely to create major political problems for the White House and Democrats generally.

But it does shine a light on what was going on behind the scenes even as administration officials fostered the impression that signing up for health care would be simple, like shopping online.

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Online:

GAO report: http://1.usa.gov/XmOce5

Solid US job gains expected for 6th straight month

By CHRISTOPHER S. RUGABER The Associated Press

WASHINGTON -- With a host of reports this week pointing to a healthier U.S. economy, analysts expect Friday's monthly jobs report to send a similar message.

Economists predict that the government will say employers added 225,000 jobs in July, according to a survey by data provider FactSet. That would follow June's big 288,000 increase. And it would mark the sixth straight month of gains above 200,000, the longest such stretch since 1997.

The Labor Department will issue the jobs report at 8:30 a.m. Eastern time.

This year's burst of hiring has lowered the unemployment rate to 6.1 percent from 6.7 percent at the start of the year. The rate is now the lowest it's been in six years.

Economists think the rate will remain at 6.1 percent for July, particularly if more people start looking for jobs. The government counts people as unemployed only if they're actively seeking work. So when more people start looking, the unemployment rate can rise or remain flat — even if hiring picks up.

More encouraging economic news could stoke fears among investors, though, that the Federal Reserve will decide to raise its benchmark short-term interest rate sooner than expected. Such fears likely contributed to Thursday's 317-point plunge in the Dow Jones industrial average — its worst day since February.

The economy strengthened significantly during the April-June quarter, the government said Wednesday, after contracting sharply in the first three months of the year. Last quarter's bounce-back assuaged fears that the economy hadn't been strong enough to support this year's rapid hiring.

The economy expanded at a 4 percent seasonally adjusted annual rate in the second quarter after a steep 2.1 percent contraction in the first quarter. Americans stepped up their spending, particularly on autos, furniture and other big-ticket items. Businesses also spent more on plants, office buildings and equipment.

Signs suggest that employers have kept hiring at a healthy pace. ADP, a private payroll provider, said Wednesday that businesses added 218,000 jobs in July, with most industries showing solid gains. (ADP's figures capture only private businesses and sometimes diverge from the government's more comprehensive numbers.)

In addition, far fewer Americans are seeking unemployment benefits, a sign that companies are cutting few jobs. The number of first-time applications for benefits fell two weeks ago to its lowest level in 14 years. The four-week average of applications is at an eight-year low. When companies are confident enough to retain their staffs, it suggests that hiring will pick up.

Americans are also slowly gaining confidence in the economy, which means spending could accelerate in coming months. The Conference Board's consumer confidence index jumped to its highest level in nearly seven years in July.

The Conference Board's survey also asks Americans whether they consider jobs "plentiful" or "hard to get." In July, the percentage who chose "plentiful" rose to 15.9 percent, the most since May 2008. Consumers' perceptions of the job market have been a generally reliable predictor of the unemployment rate.

Yet the pickup in hiring has yet to translate into larger paychecks for most Americans, thereby hobbling the recovery. Average hourly pay has risen just 2 percent in the past year, barely keeping pace with inflation. In a healthy economy, wages before inflation would increase 3.5 percent to 4 percent annually.

Weak pay gains are restraining the housing market, usually a key driver of growth. A measure of signed contracts to buy homes slipped in June, the National Association of Realtors said this week. That suggests that home sales will decline in coming months.

Home owned by Trump holdout auctioned for $530,000

She once called Donald Trump "a maggot, a cockroach and a crumb." This week, he remembered her as "an impossible person."

The woman who became a folk hero for resisting decades-long efforts by big-name developers like Trump to displace her Atlantic City boardinghouse is now 91 and, apparently, the victor.

Vera Coking has moved to California to be near her family. And the 29-room property she and her husband bought for $20,000 in 1961 and fought to hold onto is on the auction block Thursday for a $199,000 starting bid. The now-vacant property had been listed for $995,000 since September.

The long-running saga has paralleled the rise and fall of Atlantic City's real estate fortunes, which in recent months imploded. The decision to auction the property was made by Coking's family after they could not find a buyer in recent years, said Oren Klein of AuctionAdvisors, which is handling the sale.

The road to the auction block has been circuitous. Coking first took on Penthouse publisher Bob Guccione in the 1970s, who was reportedly so angered by her refusal to sell that he started building his casino above and around her property.

Trump, who bought Guccione's unfinished project, also tried to buy Coking's building to tear it down and use the land for his Trump Plaza Hotel and Casino. Coking battled with Trump and prevailed in a 1998 state Supreme Court case that blocked attempts by the state to use eminent domain to condemn the property.

Coking's one-woman battle was closely followed in the press and by the people of Atlantic City, where she and her property, sitting defiantly in the shadow of Trump's casino, have been a familiar sight for decades.

The modest, three-story clapboard structure is a block from the famous Atlantic City boardwalk and adjacent to the casinos, that like Trump's, have sought to expand their parking facilities or outdoor footprint.

AuctionAdvisors has been stressing the boardinghouse's location just steps from a planned Bass Pro shop and adjacent to an outlet mall that the city advertises as a main attraction. Klein and his associates say that they are confident that Atlantic City will bounce back and that the Coking property is a great buy in one of the last affordable beachfront towns in New Jersey.

Since then, Atlantic City's real estate market and casino businesses have faltered. Trump Plaza may close in September, although Trump himself is largely divested.

The portrait of Coking as a principled holdout is wrong, Trump said, asserting that she had been willing to sell but that they could never agree on a price.

"She could have lived happily ever after in Palm Beach, Florida; instead, she was an impossible person to deal with," Trump told The Associated Press this week. In addition to millions of dollars, he said, he had offered Coking housing for the rest of her life in one of his properties.

The famously stubborn Trump laughed off a question as to whether he would bid on Coking's home — just to have the last word.

Coking's grandson, Ed Casey, previously told the Press of Atlantic City that it wasn't true his grandmother had once been offered millions. He said she wasn't opposed to selling but was proud to live in and fight for her longtime home.

Messages left at a California listing for Casey were not returned, and Klein said the family had told him they no longer wished to speak publicly about the matter. Information about Coking's health wasn't available.

But back in the day, Coking wasn't afraid to throw a zinger. At the height of their battle in 1998, the 70-year-old Coking said of Trump to the New York Daily News: "A maggot, a cockroach and a crumb, that's what he is."

"If Trump's thinking I'm gonna die tomorrow, he's having himself a pipe dream," she said then. "I'm gonna be here for a long, long time. I'll stay just to see he's not getting my house. We'll be going to his funeral, you can count on that."

Henry reported from Newark, New Jersey.

Raw Video: The President Takes a Walk Down Main Street

President Obama traveled to Kansas City, Missouri this week — where he grabbed some BBQ with Americans who had written him letters, and delivered a speech about how he's working to get things done for hardworking Americans even as Congress chooses not to act to move this country forward.

And before he left, the President took a walk down Main Street (literally), spending time with store owners, touring an antique watch shop, and chatting with customers at a local coffee shop.

We got it all on video, and we think you'll want to see it — watch, then pass it on:

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