MANUFACTURING

FACTORY ORDERS ACCELERATE IN NEW YORK STATE

Manufacturing in New York State unexpectedly accelerated this month, encouraging factories to step up the pace of hiring as the economy strengthens.

The Federal Reserve Bank of New York’s general economic index rose to 31.2, the highest since July 2004, from 21 in February. A number greater than zero signals more companies reported an improvement in business than deterioration.

Manufacturing is gathering momentum as companies upgrade equipment and consumers keep spending, supporting forecasts that the economy this quarter will be the strongest in more than two years. Order books swelled and a measure of the factory workweek in New York State rose to the highest on record.

“Business investment is strong and factories are scrambling to keep up with demand,” an economist at Bank of Tokyo-Mitsubishi UFJ in New York, Ellen Zentner, said. “If manufacturers are as busy as they are, they’ll have to continue to hire workers to meet that demand.”

– Bloomberg News

WALL STREET

LEHMAN QUARTERLY PROFIT RISES 24%, BEST IN ITS HISTORY Lehman Brothers Holdings reported the best quarterly profit in its 156-year history as revenue from trading stocks and investment banking rose to records, complementing its traditional strength in bonds.

Net income at the New York-based firm climbed 24% to $1.09 billion, or $3.66 a share, in the fiscal first quarter from $875 million, or $2.91, a year earlier. The earnings were higher than the average analyst estimate of $3.18 a share.

The fourth-largest securities firm in America by market value said in a statement that revenue from stock trading jumped 52% and investment-banking fees rose 22% as Chief Executive Officer Richard Fuld reduced Lehman’s dependence on bond trading. The earnings follow Goldman Sachs’s report of the largest quarterly earnings ever in the industry, and put Wall Street on track for its best year.

– Bloomberg News

IN THE COURTS

JUDGE DENIES DISMISSAL ATTEMPT BY FORMER NYSE CHIEF

The judge overseeing the executive-compensation lawsuit against Richard Grasso formally shot down the former New York Stock Exchange chairman’s attempt to throw out much of Eliot Spitzer’s case against him.

New York State Supreme Court Justice Charles Ramos denied a move, made by Mr. Grasso’s lawyers, to have four of the New York attorney general’s six claims against their client dismissed. Judge Ramos previously indicated that he was inclined to deny the motion.

“We will be appealing,” an attorney for Mr. Grasso, Gerson Zweifach, said in an e-mail message.

– Dow Jones Newswires

PROSECUTORS PLAN THIRD TRIAL OF FORMER CENDANT CHAIRMAN

Prosecutors plan to try former Cendant chairman Walter Forbes for a third time on charges he participated in a massive fraud that cost the company and investors more than $3 billion. Mr. Forbes’s first two trials ended in mistrials when jurors could not reach a verdict. His second trial ended in February after a U.S. District Court jury in Hartford deliberated for 27 days.

– Associated Press

FUTURES

REFCO TROUBLES MAY BE WORSE THAN THOUGHT

Refco held offshore accounts with as much as $525 million in fake bonds, indicating the futures broker’s troubles may be more extensive than previously reported, according to four people with direct knowledge of evidence gathered by U.S. prosecutors investigating Refco’s collapse. New York-based Refco held the securities for Bawag P.S.K. Bank, Austria’s fourth-largest bank, and Liquid Opportunity, an offshore hedge fund, under identification numbers that don’t correspond to registered bonds, said the people, who declined to be identified because the investigations are ongoing. One person said Bawag and Liquid Opportunity had shares in six Anguilla companies, which in turn held the bonds.

– Bloomberg News