Is the market recovering? Reports from NY, Washington, London and more
By APThursday, June 4, 2009
Business Highlights
Fed moves closer to new action to help economy
WASHINGTON (AP) — The Federal Reserve, meeting for the last time before an election that hinges on the weak economy, edged closer Tuesday to jumping in to help and suggested it’s more worried about prices falling than rising.
The central bank gathered as new figures showed some improvement in home construction. But those same figures showed the pace of building would have to double to contribute much to job growth, underscoring the dire state of the housing market.
The Fed announced no new steps. It signaled that for now it will stand back and see whether the economy can heal on its own.
But a change in its policy language, which is examined with precision by the financial world, showed it was moving closer to acting.
Homebuilding industry years away from recovery
WASHINGTON (AP) — The homebuilding industry is years away from recovering from the excesses of the housing boom.
Home construction did rise 10.5 percent in August, to a seasonally adjusted annual rate of 598,000, the Commerce Department said Tuesday. The results, however, were boosted by a 32 percent jump in apartment and condominium construction, a volatile part of the market.
Construction of single-family homes, which represented about 73 percent of the market in August, grew only about 4 percent from a month earlier. While overall housing starts are up 25 percent from their bottom in April 2009, they are still 74 percent below their peak in January 2006.
Retail gasoline prices headed downward in most places at the beginning of one of the country’s busiest travel weeks, with more than 33 million people expected to hit the road for the Thanksgiving holiday.
Americans are remaining closer to home because of anxiety about the economy and demand for gasoline is weaker now than it was last year at this time.
NEW YORK (AP) — Stocks got a brief bump following word that the Federal Reserve is ready to do more to help the economy, but ended mostly lower Tuesday after the central bank disappointed some investors by not taking any bold new actions.
Treasury prices rallied as investors saw the Fed’s announcement as a signal that more bond purchases were on the way.
The Fed said it is concerned that inflation is below levels consistent with a healthy economy and indicated that it is ready to provide “additional accommodation” to support the recovery. That would mean more purchases of Treasurys or other kinds of debt, which would keep interest rates low and hopefully encourage borrowing.
Twitter hack opens popups, causes havoc
NEW YORK (AP) — A new way to cause mischief quickly spread through short-messaging service Twitter on Tuesday morning before the site could fix the problem, as mysterious “tweets” of blocked-out text propagated themselves and caused popup windows to open.
Shortly before 10 a.m. Eastern time, (1400 GMT), Twitter said on its “safety” feed on the site that the attack had been shut down. It also said it does not believe that any user information was compromised, rather, the “vast majority” of the breaches were pranks or promotions.
The hack had been extra nefarious because the tweets activated without being clicked on — it was enough for Web surfers to move their mouse cursors over them. But it only affected visitors to Twitter.com. Various third-party programs used to send and read tweets, such as Tweetdeck, were unaffected.
Unemployment rises in 27 states last month
WASHINGTON (AP) — More than half of U.S. states saw their unemployment rates rise in August, the largest number in six months, as hiring weakened across the country.
The jobless rate increased in 27 states last month, the Labor Department said Tuesday. It fell in 13 and was unchanged in 10 states and Washington, D.C. That’s worse than the previous month, when the rate increased in only 14 states and fell in 18. It’s also the most states to see an increase since February.
Abbott plans 3,000 job cuts tied to Solvay deal
NORTH CHICAGO, Ill. (AP) — Abbott Laboratories said Tuesday it will eliminate 3,000 jobs and take almost $1.3 billion in charges over the next two years as it integrates its Solvay pharmaceuticals business.
The company said it expects $810 million to $970 million in restructuring costs and $310 million in integration costs. The charges include severance costs, write-down and depreciation costs, and expenses related to the end of some research and development programs and the transfer of other programs.
Abbott, which employs a total of almost 90,000 people, said it will cut jobs in manufacturing, commercial operations, research and development, and staff functions. Most of the jobs that will be eliminated are based in Europe, and almost all of them are part of Solvay’s operations.
Top economic adviser to leave White House
WASHINGTON (AP) — The White House says President Barack Obama’s top economic adviser plans to leave the administration at the end of the year.
Cadbury is already the target of a $16.4 billion hostile bid from Kraft Foods that it has dismissed as “derisory.”
Summers departure comes amid a sluggish economic recovery that has seen unemployment hover near 10 percent. He would be the third high-level member of the Obama economic team to leave this year, following the resignations of budget director Peter Orszag and Christina Romer, head of the Council of Economic Advisers.
Irish sell $2B in bonds as eurozone debt fears ebb
DUBLIN (AP) — Ireland sold €1.5 billion ($2 billion) in government bonds Tuesday in a closely watched test of whether international investors would keep buying Irish treasuries despite the country’s deficit, the biggest in debt-burdened Europe.
Analysts called the auction a success, noting it attracted bids 5.1 times the amount of bonds on offer. Together with solid bond auctions in Spain and Greece, the sale offered markets reassurance for the moment that Ireland and other indebted countries were getting some relief from short-term market pressures.
But analysts cautioned that Ireland had to pay higher-than-expected interest rates compared to previous bond auctions, reflecting investors’ fear of an eventual Irish default. And the higher rates could be an additional financial burden in coming years.
Adobe 3Q net income soars as revenue climbs
NEW YORK (AP) — Software maker Adobe Systems Inc. said Tuesday its fiscal third-quarter net income soared, boosted by higher revenue in all its business segments. But Adobe’s shares dropped sharply in extended trading after its revenue outlook disappointed Wall Street.
San Jose, Calif.-based Adobe, known for Photoshop software and the Flash technology behind online games and video websites, earned $230.1 million, or 44 cents per share, in the three months that ended Sept. 3. That’s an increase of 69 percent from $136 million, or 26 cents per share, in the same period a year ago.
NEW YORK (AP) — Consumers got more serious about paying down their credit card debt this summer, a time when delinquencies usually to go up.
| By The Associated Press |
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The Dow Jones industrial average rose 7.41, or 0.1 percent, to close at 10,761.03. It’s still up 7.5 percent for September, an unusually large gain for a month that is historically weak for stocks.
The Standard & Poor’s 500 index slipped 2.94, or 0.3 percent, to 1,139.77, while the Nasdaq composite fell 6.48, also 0.3 percent, to 2,349.35.
The S&P is still up 8.6 percent for the month, the Nasdaq 11.1 percent.
Benchmark oil lost $1.34 to settle at $73.52 a barrel on the last trading day for the October contract on the New York Mercantile Exchange. Many traders moved to the November contract, where the price fell $1.22 to settle at $74.97 a barrel.
In other Nymex trading in October energy contracts, heating oil fell 1.95 cents to settle at $2.1199 a gallon, gasoline lost 3 cents to settle at $1.9196 a gallon and natural gas gained 9.7 cents to settle at $3.919 per 1,000 cubic feet.
In London, Brent crude fell 94 cents to settle at $78.42 a barrel on the ICE Futures exchange
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