Friday morning headlines

More gains for stocks: First day of the new quarter picks up where the last day of the previous one left off. Dow is up over 100 points.

Manufacturing looks better: The widely followed ISM index shows a faster rate of expansion in June, confirming earlier reports of accelerated factory activity for the month. (Bloomberg)

Consumer sentiment worsens: Despite falling gas prices, expectations remain gloomy, according to the Thomson Reuters/University of Michigan survey. June index stood at 71.5, down from 74.3 the month before. (Reuters)

Krugman worries about debt ceiling: The NYT columnist isn't at all sure that reasoned minds will prevail:

Many commentators remain complacent about the debt ceiling; the very gravity of the consequences if the ceiling isn't raised, they say, ensures that in the end politicians will do what must be done. But this complacency misses two important facts about the situation: the extremism of the modern G.O.P., and the urgent need for President Obama to draw a line in the sand against further extortion.

Sales and vehicle taxes head down: Good news for car buyers: Starting today, the state sales tax falls a percentage point, to 7.25 percent. The tax was raised in 2009 because of California's budget problems. Also, the annual vehicle license charge drops by 43 percent. From the LAT:

At Goudy Honda in Alhambra, General Sales Manager Michael DeVille has been designing an advertising campaign around the tax-cut buzz, planning to promote the incentive online and in newspapers. And every salesman has been charged with telling every customer about it. "It's going to go real nice with the Fourth of July," DeVille said.

Big drop in gas prices: Just in time for the holiday weekend: An average gallon of regular in the L.A. area is $3.817 per gallon, down almost 8 cents from last week, according to the Auto Club. Prices are 50 cents below their peak in early May.

Parking ticket favors revealed: The city's Gold Card program apparently helped the relatives of local officials get their fines dismissed, the LAT reported. After a public outcry, the program has ended.

Among those whose complaints were funneled through the Gold Card Desk, known to few outside of City Hall, was a former top aide to City Controller Wendy Greuel, who succeeded in getting his mother's citation dropped. It was Greuel who cast a harsh public spotlight on the ticket review operation in a May audit, saying she had never heard of the service or used it. However, records and interviews show that the Gold Card Desk handled a complaint by Greuel's former press deputy Ben Golombek. He had argued to transportation officials that his mother was unfairly ticketed by an overly aggressive parking enforcement officer. The citation was quickly ordered to be dropped by the head of the city's parking enforcement division. Golombek, who now works for a state lawmaker, declined to comment.

Lead bidder for Borders: Arizona public equity firm Najafi Cos. is offering $215.1 million for the bankrupt book chain, plus the assumption of $220 million in debt. Other parties will be able to make higher offers. Borders would be forced to liquidate if it can't find a buyer. (Bloomberg)

Selig to be deposed: Lawyers for Dodger owner Frank McCourt want to ask the baseball commissioner about his investigation into the team's finances and why he approved the franchise's financial structure in the first place. (LAT)

CalWORKS takes huge hit: The state's "welfare to work" program will see monthly grants slashed by 8 percent to their lowest level in more than 20 years. From the Sacramento Bee:

The new budget reduces the lifetime limit on CalWORKs cash assistance for adults from five years to four, and cuts funding for employment services and child care. Advocates also are lamenting the suspension of the Cal Learn program, which offers aid to pregnant and parenting teens in an effort to keep them in school. Welfare officials said the cuts will make it more difficult to accomplish the CalWORKs mission of offering temporary cash aid, job training and other help to lift people from public assistance to independence. Some 1.5 million Californians get CalWORKs benefits.

Starting today, insurance rate hikes: The increases mostly affect plans that are offered through small businesses. Depending on plan and carrier, hikes will average from 3 percent to more than 17 percent. (Sacramento Bee)