European Stocks Advance as Banks Beat Analyst Estimates

European stocks advanced for the third time in four days after lenders including Credit Suisse Group AG (CSGN) reported profits that beat estimates, while minutes showed the Bank of England may reconsider the case for an interest-rate cut.

Credit Suisse, the second-biggest Swiss bank, jumped 4.5 percent after announcing a higher cost cutting-target and boosting capital. Bankia SA (BKIA) surged 14 percent after Economy Minister Luis de Guindos said Spain will block banks selling preferred stocks to retail investors. ASML Holding NV (ASML) was among the main gainers on a measure of technology stocks.

The Stoxx Europe 600 Index (SXXP) added 1.1 percent to 258.93 at the close of trade. Shares have climbed 11 percent from this year’s low on June 4 as the European Central Bank and People’s Bank of China cut their benchmark interest rates and euro-area leaders eased repayment rules for Spanish banks.

“We have a lot of monetary stimulus coming from others like the ECB and the Bank of England and even if the Fed doesn’t join in with QE3, the feeling is still that QE3 could be forthcoming, should the economy weaken,” Edmund Shing, an equity strategist at Barclays Capital, said, referring to a potential third round of quantitative easing by the Federal Reserve. “The hope is that the economy will improve and if that doesn’t happen there will be monetary stimulus.”

Fed Chairman Ben S. Bernanke delivered the second part of his semi-annual testimony on the economy and monetary policy to the House Financial Services Committee today. Bernanke yesterday outlined options to stimulate the U.S. economy should it fail to spur more jobs growth.
Beige Book

The Fed will release its Beige Book survey of business conditions in 12 U.S. districts today, two weeks before the Federal Open Market Committee meets to set monetary policy. The U.S. economy was described as growing at a “moderate pace” pace in the Fed’s June Beige Book survey.

Beginning construction of U.S. homes rose more than forecast in June to the fastest rate in almost four years, indicating a brighter outlook for the residential real estate market.

Housing starts rose 6.9 percent last month to a 760,000 annual pace after a revised 711,000 rate in May that was faster than initially estimated, the Commerce Department reported today in Washington. The median forecast of 79 economists surveyed by Bloomberg News called for a 745,000 rate. Building permits fell, reflecting a drop in applications for apartment construction.
U.K. Rates

In the U.K., minutes from the Bank of England’s recent July Monetary Policy meeting showed policy makers voted 7-2 to increase stimulus and said they may reconsider the case for an interest-rate cut after assessing the impact of new lending and liquidity measures on the economy.

U.K. Chancellor of the Exchequer George Osborne outlined plans to encourage as much as 51 billion pounds ($80 billion) of spending on infrastructure and exports in the latest effort pull the economy out of recession.

The Treasury will operate a 40 billion-pound loan-guarantee program to underwrite a share of projects that face financing difficulties and are ready to begin in the next 12 months. It will also provide 6 billion pounds in loans to 30 public-private partnership projects and a further 5 billion pounds of export guarantees for infrastructure and manufacturing companies.

U.K. unemployment fell to a nine-month low in the quarter through May as the London Olympics helped to create jobs, underlining the resilience of the labor market in the face of a recession and Europe’s debt crisis. Unemployment based on International Labour Organization methods fell to 8.1 percent of the workforce from 8.2 percent in the period through April, the Office for National Statistics said today in London.
Indexes Gain

National benchmark indexes rose in all western European markets except Finland and Iceland. The U.K.’s FTSE 100 gained 1 percent. France’s CAC 40 climbed 1.8 percent and Germany’s DAX advanced 1.6 percent.

Credit Suisse advanced 4.5 percent to 17.91 Swiss francs. The bank announced measures to cut costs and boost capital by 8.7 billion francs ($8.9 billion) after a central bank report last month called for an increase in equity. The cost savings target was increased to 3 billion francs from 2 billion francs, the bank said.

Second-quarter net income rose to 788 million francs from 768 million a year earlier, the Zurich-based bank said.

Bankia, the part government-controlled Spanish lender, jumped 14 percent to 60.5 euro cents, reversing an earlier decline of as much as 9.3 percent. Spain will introduce legislation to prevent banks miss-selling preferred stock to retail investors after savers lost money on the securities.

“What we are going to do is modify the legislation to prevent this happening again,” De Guindos said during a debate in parliament today. “Unfortunately, the changes won’t have a retroactive effect.”
ASML Advances

ASML paced gains among European technology companies, rising 6.8 percent to 44.23 euros, as Chief Executive Officer Eric Meurice said on a conference call that he expects a “steady increase in profitability,” even as the producer of machines for chipmakers joined Applied Materials Inc. and Intel Corp. in predicted a weaker chip market.

Second-half net sales will be in a range of 2.2 billion euros ($2.7 billion) to 2.4 billion euros, the Veldhoven, Netherlands-based company said today. That compared with an average 2.45 billion-euro estimate of analysts in a Bloomberg survey and the 2.67 billion-euro revenue reported a year earlier. Second-quarter net bookings topped estimates.
Nordea Advances

Nordea (NDA) rose 2.4 percent to 62.05 kronor after saying second-quarter profit jumped 17 percent as an increase in lending income outweighed higher loan losses. Net income rose to 820 million euros from 698 million euros a year earlier, the Stockholm-based lender said in a statement. That beat the 722 million-euro average estimate of 14 analysts surveyed by Bloomberg.

Ericsson AB rose 2.2 percent to 60.20 kronor, reversing an earlier decline of as much as 5.1 percent. The biggest maker of mobile network equipment reported second-quarter profit that missed analysts’ estimates as wireless carriers curbed spending to cope with a slowing global economy. Net income fell 64 percent to 1.11 billion kronor ($158 million), Stockholm-based Ericsson (ERICB) said today in a statement. Analysts had predicted 1.64 billion kronor, according to the average of estimates compiled by Bloomberg.

Puma SE (PUM) plunged 4.8 percent to 214.65 euros after Europe’s second-largest sporting-goods maker cut its forecasts for sales and profit growth in 2012 as business slowed in the first half of the year. Net income will fall “significantly” from last year’s 230.1 million euros because of a 100 million-euro charge for speeding up and expanding the scope of the company’ transformation program, Puma said in a statement today.

Waertsila Oyj (WRT1V), the world’s biggest maker of ship motors and power plants, fell 8.1 percent to 24.82 euros. The company said customers postponed deliveries during the second quarter amid a shaky global economy.

Deutsche Bank and HSBC Traders Investigated for Libor Collusion

Traders at Deutsche Bank AG (DBK), HSBC Holdings Plc (HSBA), Societe Generale SA (GLE) and Credit Agricole SA (ACA) are under investigation for interest-rate manipulation in a global probe that led to more than $450 million in fines for Barclays Plc (BARC) last month, a person with knowledge of the matter said.

Regulators are investigating the possible roles of Michael Zrihen at Credit Agricole, Didier Sander at HSBC and Christian Bittar at Deutsche Bank, the person said on condition of anonymity because the investigation is continuing. The names of the banks and traders were reported earlier by the Financial Times.

Philippe Moryoussef, who last month left his job as a Singapore-based derivatives trader at Nomura Holdings Inc., is also under investigation for his role in the conduct at Barclays, where he worked from 2005 to 2007, according to two people with knowledge of the matter.

Barclays, the U.K.’s second-largest bank by assets, was fined a record $451 million by U.K. and U.S. regulators in June for rigging the London and euro interbank offered rates. Traders tried to manipulate the benchmark to boost profit, while managers instructed rate-setters to make artificially low submissions to avoid the perception the lender was under stress amid turmoil in credit markets in 2007 and 2008.

The probe has engulfed officials from the Bank of England, who have been accused of encouraging banks to communicate about their rates. Three top Barclays executives -- Chairman Marcus Agius, Chief Executive Officer Robert Diamond and Chief Operating Officer Jerry Del Missier -- have resigned under pressure from regulators and Parliament.
Trading Aligned

The U.S. Commodity Futures Trading Commission, in its settlement with Barclays, said one of the bank’s traders tried to align strategies with at least four other banks’ traders in order to profit from positions in certain futures contracts.

Federal Reserve Chairman Ben S. Bernanke said regulators, including the CFTC and U.S. Securities and Exchange Commission, are investigating.

“There’s any number of enforcement agencies, including the Department of Justice, CFTC, SEC and foreign and state regulators, looking at this,” Bernanke told a House panel yesterday as part of his semi-annual testimony to Congress. “I’m sure that they will apply the law appropriately.”

Traders involved in the alleged manipulation may be charged by U.S. prosecutors before the Labor Day holiday on Sept. 3, said a person familiar with the Justice Department investigation in Washington.

Libor is determined by a daily survey that asks banks to estimate how much it would cost them to borrow from one another for different timeframes and in different currencies.

Bittar and Zrihen didn’t reply to e-mails seeking comment, and Sander didn’t answer a message sent to a Facebook account under that name.
Bittar Departure

Michael Golden, a spokesman for Deutsche Bank, confirmed that Bittar left the bank last year and declined to comment on the investigation. Deutsche Bank has disclosed that it is cooperating with regulators in the U.S. and Europe in the probe.

Barclays spokesman Giles Croot, James Galvin, a spokesman for Societe Generale in New York and Juanita Gutierrez, a spokeswoman for HSBC declined to comment. Mary Guzman, a New York-based spokeswoman for Credit Agricole, did not respond to a request for comment.

Fed Beige Book Says Growth Was ‘Modest to Moderate’ in June

The Federal Reserve said the economy expanded at a “modest to moderate” pace in June and early July, as retail sales and manufacturing cooled in some regions.


“Manufacturing activity continued to expand slowly in most districts,” the Fed said today in its Beige Book business survey, which is based on reports from its 12 district banks. “Employment levels improved at a tepid pace.”

The New York, Philadelphia, and Cleveland districts “noted that activity continued to expand, but at a slower pace since the last report, while Richmond cited mixed activity.”

The report, which gives central bankers anecdotal evidence on the economy two weeks before they meet in Washington, supports Fed Chairman Ben S. Bernanke’s view that the U.S. lost momentum in the first half of 2012. Bernanke, in a second day of congressional testimony today, repeated that progress on unemployment may be “frustratingly slow” and the Fed is ready to take further action to boost the recovery if necessary.

“Overall, the report is tepid,” Diane Swonk, chief economist at Mesirow Financial Inc. in Chicago, said in an interview on Bloomberg Radio’s “The Hays Advantage” with Kathleen Hays. “It really echoes what the chairman has been telling us for the last two days, and that is that economic outlook is not looking too great. The economy has slowed.”

The Atlanta, St. Louis, and San Francisco districts were described as having “modest growth,” while Boston, Chicago, Minneapolis, Kansas City, and Dallas were “advancing moderately.” By comparison, in the June 6 report, seven districts were growing “moderately” and just one was reported to have slowed.
Shares Rise

Stocks held gains after the report. The Standard & Poor’s 500 Index advanced 0.7 percent to 1,372.47 at 2:37 p.m. in New York after housing starts increased at the fastest rate in almost four years and companies from Intel Corp. (INTC) to Honeywell International Inc. reported profit that beat estimates. The benchmark 10-year Treasury yield declined three basis points, or 0.03 percentage point, to 1.48 percent.

Today’s Beige Book reflects information collected on or before July 9 and summarized by the Atlanta Fed.

“Retail sales increased slightly in all reporting Districts except Boston and Cleveland, where sales were categorized as flat, and New York, where sales softened,” the report said.
FOMC Meeting

The policy-making Federal Open Market Committee meets for two days starting July 31. The group voted last month to extend Operation Twist, a program intended to push down long-term borrowing costs by extending the maturities of assets on the Fed’s balance sheet. As many as four policy makers were “quite receptive at this time” to more asset purchases, Atlanta Fed President Dennis Lockhart said July 13, citing minutes of the June meeting.

Retail sales unexpectedly declined in June for a third straight month, a sign that limited progress in job creation is holding back the biggest part of the economy, Commerce Department figures showed July 16.

The U.S. added 80,000 jobs in June, and the unemployment rate remained at 8.2 percent, the Labor Department reported July 6. Growth in private payrolls was the weakest in 10 months. The figures underscore Bernanke’s concern that growth may not be fast enough to lower unemployment stuck above 8 percent since February 2009.

“Consumers across the globe continue to feel the effects and impacts of prolonged uncertainty in Europe, the further cooling of the economy in China, and a protracted recovery here in the United States,” Coca-Cola Co. (KO) Chief Executive Officer Muhtar Kent said in a conference call yesterday. The Atlanta- based company is the world’s biggest soft-drink maker.
Housing, Construction

The Beige Book said housing reports were “largely positive as sales and construction levels increased and home inventories declined.” In addition, “Rental markets continued to strengthen.”

“We have seen modest signs of improvement in housing,” Bernanke said in his testimony to Congress. “In part because of historically low mortgage rates, both new and existing home sales have been gradually trending upward since last summer.”

At the same time, he said, tight lending standards are making it difficult for would-be home-buyers to get financing, and an overhang of vacant homes is diverting demand from new construction.
Housing Starts

Housing starts rose 6.9 percent to a 760,000 annual pace after a revised 711,000 rate in May that was faster than initially estimated, the Commerce Department reported today. The median forecast of 79 economists surveyed by Bloomberg News called for a 745,000 rate.

“Manufacturing activity continued to expand slowly in most Districts, and Cleveland, Atlanta, Chicago, and Kansas City cited slight increases in production levels,” the Fed said. “However, several districts reported a deceleration in new orders.”

Manufacturing in the U.S. unexpectedly shrank in June for the first time since the economy emerged from the recession three years ago, the Institute for Supply Management’s index showed July 2.

The recovery over the past three years has been marked by periods of solid growth followed by disappointing slowdowns, Fed Kansas City Bank President Esther George said July 16. “It looks like this summer’s slowdown will be no exception to that” and annual growth will be “not much beyond 2 percent.”

The U.S. economy will probably expand 2.1 percent in 2012 and 2.2 percent in 2013, according to the median of 72 economists surveyed by Bloomberg News July 6 to July 10.

U.S. Stocks Gain With Treasuries, Commodities; Euro Falls

U.S. stocks rose for a second day amid better-than-estimated earnings and a jump in housing starts. Treasuries climbed while the dollar fell against most peers and natural gas led commodities to a sixth straight gain.

The Standard & Poor’s 500 Index added 0.7 percent to 1,372.78 at 4 p.m. in New York and the Stoxx Europe 600 Index closed up 1.1 percent. Ten-year Treasury yields dropped one basis point to 1.49 percent. German two-year notes rose after the nation sold 4.17 billion euros ($5.1 billion) of the securities with a negative yield for the first time, and the government’s five-year rate declined to the lowest ever. The euro halted a three-day advance to trade 0.1 percent lower.

Intel Corp. climbed 3.3 percent to pace the advance in technology companies and Honeywell International Inc. (HON) surged 6.7 percent to help lead industrial shares up after profits topped analyst estimates. U.S. housing starts jumped 6.9 percent to the highest level since 2008. Federal Reserve Chairman Ben S. Bernanke testified to Congress for a second day on the state of the economy, telling lawmakers in the House that monetary policy has helped growth and the job market.

“Earnings have been a mixed bag so far but given the healthy state of corporate America with cash on the balance sheets and valuations undemanding, we can weather this environment in terms of share prices,” Mark Luschini, chief investment strategist for Philadelphia-based Janney Montgomery Scott LLC, which manages about $54 billion, said in a telephone interview. “Looking at the markets, all I can see in them is the Bernanke bid.”
Bernanke Watch

Stocks rallied yesterday, sending the S&P 500 up 0.7 percent, after Bernanke told the Senate Banking Committee that policy makers are studying options for further easing that may include additional asset purchases. Bernanke today said central bankers are capable of removing record stimulus from the financial system and raising interest rates when needed to avoid triggering inflation.

“It will be a similar pattern to what we’ve seen in previous episodes where the Fed cut rates, provided support for the recovery, and when the recovery reached a point of takeoff where it could support itself on its own, then the Fed pulled back, took away the punch bowl,” Bernanke told the House Financial Service Committee as part of his semi-annual testimony to Congress.

The Fed said the economy expanded at a “modest to moderate” pace in June and early July, as retail sales and manufacturing cooled in some regions, according to the central bank’s Beige Book business survey today, which is based on reports from its 12 district banks.
Market Leaders

Technology shares surged 1.9 percent as a group and industrial companies added 1.7 percent to lead gains among the 10 main industries in the S&P 500. Intel’s earnings of 54 cents a share topped the average analyst estimate of 52 cents. The company said revenue will increase 3 percent to 5 percent in 2012, lower than an earlier prediction for growth in the high single-digit percentages.

Intel had the biggest gain in the Dow Jones Industrial Average, followed by gains of more than 2 percent in Cisco Systems Inc., Microsoft Corp., International Business Machines Corp. and Hewlett-Packard Co.
‘Not Disastrous’

“Intel lowered guidance but it was not unexpected and not disastrous,” Michael James, a managing director of equity trading at Wedbush Securities Inc. in Los Angeles, said in an e- mail. “Pessimism (INTC) was pretty high and we’re now seeing people both covering and getting long some names. Intel’s leading the the technology group higher.”

EMC Corp. surged 9.4 percent after the software company said Pat Gelsinger will succeed Paul Maritz as chief executive officer of VMware Inc. Maritz will return to EMC, which owns 79 percent of VMware, as chief strategist. VMWare jumped 12 percent.

Honeywell rallied 6.7 percent after the maker of flight controls and thermostats reported better-than-estimated results driven by sales in its aerospace unit. Amphenol Corp., a maker of fiber-optic cables, and W.W. Grainger Inc., a distributor of building maintenance supplies, surged more than 11 percent for the biggest gains in the S&P 500 after releasing improved earnings forecasts.
Earnings Season

The S&P 500 has climbed for two straight days after slumping in seven of the previous eight sessions. The index is down more than 3 percent from a four-year high in April amid concern the economic recovery was slowing while investors braced for what is projected to be the first drop in quarterly earnings in almost three years.

Earnings have exceeded analyst estimates at 72 percent of the 68 companies in the S&P 500 that have reported results so far, according to data compiled by Bloomberg. Profits have slumped 3.3 percent for the group and the entire index is projected to report a 2.1 percent decrease in earnings.

Credit Suisse Group AG (CSGN) cut its year-end forecast for the S&P 500 to 1,425 from 1,440, citing the potential of a U.S. recession induced by so-called fiscal cliff. Andrew Garthwaite, global equity strategist, said he sees a 10 percent chance of the economy contracting should lawmakers do nothing to prevent about $607 billion of tax increases and spending cuts from kicking in at the end of the year.

The dollar weakened against 10 of 16 major peers, losing more than 0.3 percent versus the Japanese yen, Swedish krona and Australian dollar. The U.S. currency was little changed at $1.2284 per euro.
Commodities Gain

Natural gas surged as much as 8 percent, leading gains in 22 of 24 commodities tracked by the S&P GSCI Index, amid predictions of a smaller-than-normal increase in stockpiles. Cattle futures and hogs gained more than 2 percent on speculation that the declining U.S. herd size caused by rising feed costs will lead to a shortage of supplies.

Wheat rose for a sixth straight session on forecasts that dry weather will persist for the next week, further cutting the condition of U.S. crops.

Among European stocks, Credit Suisse jumped 4.5 percent after it announced measures to cut costs and boost capital by 8.7 billion Swiss francs ($8.9 billion). Puma SE tumbled 4.8 percent after Europe’s second-largest sporting-goods maker cut forecasts for sales and profit in 2012.

Analysts are cutting European profit forecasts at the fastest rate since 2009 as the region heads for a recession and growth in China slows for a sixth quarter.
European Yields

U.K. five-year note yields fell six basis points to 0.49 percent after Bank of England minutes indicated policy makers may reconsider the case for an interest-rate cut.

Germany’s two-year note yield dropped one basis points to minus 0.06 percent, while Finnish two-year yields fell below zero for the first time. Spain’s 10-year bond yield rose 14 basis points to 6.96 percent as the securities dropped for a fifth day.

The MSCI Emerging Markets Index declined 0.2 percent, halting a three-day gain. China’s Shanghai Composite Index rose 0.4 percent. The Hang Seng China Enterprises Index of Chinese companies listed in Hong Kong dropped 0.9 percent. South Korea’s Kospi index slid 1.5 percent while Taiwan’s Taiex Index and the Philippine Stock Exchange Index lost more than 1 percent.

Chinese Premier Wen Jiabao said the nation’s labor situation will become more “severe,” stoking bets he’ll announce measures to spur growth as the State Council meets.

“There are expectations for more measures to boost the economy at the State Council meeting so investors are using that as a reason to buy,” said Wu Kan, a Shanghai-based fund manager at Dazhong Insurance Co., which oversees $285 million.

U.S. drought wilts crops as officials pray for rain

Oppressive heat and a worsening drought in the Midwest pushed grain prices near or past records on Wednesday as crops wilted, cities baked and concerns grew about food and fuel price inflation in the world's top food exporter.

Soybean prices at the Chicago Board of Trade set a record high and corn closed near a record as millions of acres of crops seared in triple-digit heat in the Corn Belt. Corn fields have been plowed up in many locations for lack of rain. Now soybeans, which develop later than corn, are in the bull's eye.

"I get on my knees everyday and I'm saying an extra prayer right now," Agriculture Secretary Tom Vilsack told reporters after briefing President Barack Obama. "If I had a rain prayer or a rain dance I could do, I would do it."

Vilsack said the drought was getting worse for hard-hit farmers and the wilting crops will mean higher food prices.

"Part of the problem we're facing is that weather conditions were so good at the beginning of the season that farmers got in the field early, and as a result this drought comes at a very difficult and painful time in their ability to have their crops have good yield," Vilsack said.

Drought conditions now extend over more than 60 percent of the lower 48 states, the government said. The Department of Agriculture on Wednesday extended drought aid to an additional 39 counties designated as primary natural disaster areas, bringing such aid to a total of 1,297 counties across 29 states.

Vilsack said rising grain prices would mean meat and poultry prices will be higher this year and next, although the inflation may be delayed as farmers start culling their herds due to high feed prices and meat supplies stay adequate.

But the outlook for higher food prices could add up to another headache for Obama as he faces a November election with high joblessness and slower economic growth.

Hard-hit livestock producers and other groups want the Environmental Protection Agency to give oil refiners a waiver from the mandate to blend ethanol into gasoline, arguing demand for the corn-based fuel was driving up corn prices. About 40 percent of the U.S. corn crop now is used to produce ethanol.

But Vilsack said there was no need for such action as yet.

"There is no need to go to the EPA at this time based on the quantity of ethanol that is in storage," he said.

The U.S. drought is expected to be felt worldwide as the world's biggest grain exporter struggles with shortfalls. The United States exports more than half of all world corn shipments and is also the single top exporter of wheat and soy.

"The dramatic rise in grain prices in the past few weeks is shaping up to be a serious financial blow for wheat importing countries," one German trader said on Monday.

"African and Middle Eastern countries are now facing painful rises in import bills."

WEATHER OUTLOOK STILL HOT AND DRY

Forecasters were calling for scattered showers on Wednesday evening in some parts of the east coast and Midwest. But relief was seen as too little and too late for many of the key areas of the central Plains and Corn Belt.

"There are no soaking rains in sight, nothing to relieve the drought," said World Weather Inc meteorologist Andy Karst. "There will be some light rains today through Friday in the eastern Midwest."

Iowa and Illinois, which produce about a third of U.S. corn and soybeans, continued to swelter on Wednesday in temperatures at or above 100 degrees (37.8 degrees Celsius) with little to no rain forecast.

Corn prices have jumped more than 50 percent in the last month as the crop wilted in many locations during its key growth stage of pollination.

Corn for September delivery at the Chicago Board of Trade closed at $7.95 a bushel, near last summer's record high of $7.99-3/4. Soybeans for August delivery closed at $16.85-1/2, a new record high.

"Now, it's soybeans' turn. The next two weeks will be critical for them. There is a chance for catastrophic problems in soybeans," said grains analyst Don Roose of Commodities in Des Moines, Iowa

"The summer of 2012 is on pace to finish third hottest on the list of 62 summers since 1950," said Steven Root, a meteorologist with WeatherBank Inc. "But it is still in the running for number two or one."

In many parts of the country, power grids were under pressure from demand on air conditioning but most were holding up. In New York City, Consolidated Edison reduced its power voltage in some Manhattan neighborhoods, resulting in brownouts.

Low water levels in many lakes and rivers were hampering transportation, with hydroelectric plants tapping water in locations like Arkansas and the Army Corps of Engineers issuing warnings to consumers about water levels.

Water usage for lawns and recreation continued to see restrictions in many areas of the country.

In crop areas, farmers saw further headaches from plant diseases like fungus and crop pests like spider mites on soybeans or rootworms or Japanese beetles in corn that appear in hot weather.

But one silver lining in many areas from weeks of drought was a pleasant surprise: fewer mosquitoes, which lack moist breeding places. "I can live with that part of the drought," said Scott Trout as he left a playground in Westwood, Kansas, with his wife and two children.