On Monday January 3, 2011, 6:06 pm EST
Stocks start 2011 with a
big lift
NEW YORK (AP) -- Stocks
started 2011 with a big lift on Monday, and that could be a promising sign for
the rest of the year.
According to the Stock
Trader's Almanac, a gain in the Standard and Poor's 500 stock index over the
first five days of January has led to annual gains nearly 90 percent of the
time.
Signs that the economy is
improving pushed stock indexes higher on the first trading day of the year.
Manufacturing activity and construction spending both rose more than analysts
were predicting.
The Institute of Supply
Management's index of manufacturing activity rose in December for the 17th
straight month. Separately, the Commerce Department said construction spending
rose 0.4 percent in November.
The gains were broad. All
10 company groups that make up the S&P index rose. Financial companies led
the way with a 2.3 percent jump.
BofA settles home loan
buyback claims
CHARLOTTE, N.C. (AP) --
Bank of America Corp. is settling some buyback claims on bad home loans sold to
Fannie Mae and Freddie Mac as it attempts to separate itself further from one
of the of the housing downturn's biggest headaches.
The nation's largest bank
also said Monday that the Federal Reserve has confirmed it no longer has any
obligations under the government's Troubled Asset Relief Program, as it made
good on a promise to increase equity by $3 billion.
Bank of America's deal with
Fannie Mae and Freddie Mac are linked to Countrywide Financial Corp.
residential mortgage loans. The Charlotte, N.C.-based bank purchased
Countrywide in July 2008. But Calabasas, Calif.-based Countrywide spiraled
downward during the financial crisis when it became clear many of its borrowers
wouldn't be able to repay mortgages that had required no proof of income or
down payment, and contained adjustable rates that quickly made monthly payments
unaffordable.
Report: Facebook nets $500
million investment
NEW YORK (AP) -- A reported
investment by Goldman Sachs and a Russian investor of $500 million in Facebook
is a further sign that the social networking behemoth is becoming a powerful
force even outside tech circles, even as the company tries to push off going
public as long as possible.
The investment implies that
the company is worth $50 billion, according to the report -- more than twice
the market valuation of Yahoo Inc., though still well below its famous Silicon
Valley rival, Google Inc.
The New York Times reported
the investment over the weekend, citing anonymous people involved with the
deal. Facebook and Goldman Sachs declined to comment Monday.
Russian investor Digital
Sky Technologies already has a small stake in Facebook, but the investment from
Goldman Sachs is a sign of just how big the Palo Alto, Calif.-based startup has
become in the nearly seven years since it was born in CEO Mark Zuckerberg's
Harvard dorm room.
Factories grow for 17th
straight month in Dec.
WASHINGTON (AP) -- Manufacturers
produced more goods and booked more orders last month, leading to the fastest
growth in factory activity since May.
The Institute for Supply
Management said Monday that its index of manufacturing activity rose to 57 in
December from 56.6 in the previous month. Any reading over 50 indicates growth.
The latest is well above the recession's low of 32.5, hit in December 2008. But
it's below the reading of 60.4 in April, the highest level since June 2004.
The report shows that
manufacturers carried considerable momentum into the new year. Automakers,
computer and electronics companies, and industrial machinery firms showed
particular strength, the Tempe, Ariz.-based ISM said.
A separate report Monday
showed that construction spending rose 0.4 percent in November, the third
straight monthly increase. Builders began work on more homes and the government
boosted its investment in construction projects to lift spending to $810.2
billion, the Commerce Department said. Still, that's only 2.3 percent above
August's figure, which was the lowest level in a decade.
Motorola to officially
split into 2 companies
NEW YORK (AP) -- Motorola
Inc.'s formal split into two companies on Tuesday will mark the final step in
the yearslong breakup of a consumer electronics industry pioneer.
Motorola began selling car
radios in the 1930s and expanded into TVs in the '40s and cell phones in the
'80s. The company has become increasingly diverse, and the breakup that began
in 2008 is motivated by a desire to present two simple businesses to investors
rather than one complicated one.
Motorola is splitting its
consumer-oriented side, which makes cell phone and cable set-top boxes, from
the professional business of selling police radios and barcode scanners to
government agencies and large companies. The new companies will be called
Motorola Mobility and Motorola Solutions.
The two companies will
begin trading on the New York Stock Exchange Tuesday, allowing new investors to
buy shares.
Fiat CEO: 51 percent of
Chrysler possible in 2011
MILAN (AP) -- Italy's Fiat
is edging closer to becoming a global car maker. It has split off its farm
equipment and truck business to focus on automobiles, and says it could take
control of Chrysler this year.
The transformation at Fiat
comes as Chrysler boosts sales, introduces new cars and prepares to take its
stock public again after last year's bankruptcy.
The split with Fiat
Industrial -- which includes CNH agriculture and construction vehicles and
Iveco trucks -- is a key step toward achieving Marchionne's goal of creating a
global automotive player with Chrysler to build 6 million cars a year by 2014.
Fiat took a 20 percent
share in Chrysler LLC in 2009, gaining effective control after Chrysler emerged
from bankruptcy. In exchange, Chrysler got small-car and clean-engine
technology and Fiat's management know-how.
House Republicans schedule
health care repeal vote
WASHINGTON (AP) --
Republican leaders in the new House say they'll hold a vote next week to repeal
President Barack Obama's health care overhaul.
The announcement of the
Jan. 12 vote by the No. 2 House Republican, Virginia Rep. Eric Cantor, sets the
stage for a showdown with the Democratic-led Senate.
Senate Majority Leader
Harry Reid of Nevada said earlier Monday that Democrats in that chamber will
block any attempt to repeal the landmark legislation extending coverage to more
than 30 million uninsured people.
Interior allows some
suspended drilling to resume
WASHINGTON (AP) -- Thirteen
companies whose deepwater drilling activities were suspended last year may be
able to resume drilling without detailed environmental reviews, the Obama
administration said Monday.
The companies -- they
include Chevron USA Inc. and Shell Offshore Inc. -- will be allowed to resume
work at previously drilled wells, as long as they meet new policies and
regulations, officials said. The decision is a victory for the drilling
companies, which in the past had routinely won broad waivers from rules
requiring detailed environmental studies. After the disastrous BP spill in April,
the Obama administration pledged it would require companies to complete
environmental reviews before being allowed to drill for oil.
By The Associated Press
The Dow Jones industrial
average rose 93.24 points, or 0.8 percent, to close at 11,670.75.
The S&P 500 gained
14.23, or 1.1 percent, to 1,271.87. The Nasdaq rose 38.65, or 1.5 percent, to
2,691.52.
Small companies, which are
considered riskier investments, surged. The Russell 2000, which tracks the
performance of smaller stocks, jumped 1.9 percent. That's nearly twice as big
as the gain posted by the Dow, which tracks large companies.
Benchmark oil for February
delivery rose as high as $92.66 a barrel, $1.28 above Friday's settlement
price, in trading on the New York Mercantile Exchange. It gave up most of those
gains to settle 17 cents higher at $91.55 on Monday. The last time oil settled
above $92 a barrel was on Oct. 3, 2008, when it reached $93.88.
In other Nymex trading in
February contracts, heating oil gained 1.04 cents to settle at $2.5528 a gallon,
gasoline fell 0.3 cent to settle at $2.4273 per gallon and natural gas gained
24.5 cents to settle at $4.650 per 1,000 cubic feet.
In London, Brent crude rose
9 cents to settle at $94.84 a barrel on the ICE Futures exchange.