On Thursday January 13, 2011, 6:11 pm EST
Higher energy and food
costs lift wholesale prices
WASHINGTON (AP) -- A spike
in oil and food costs pushed wholesale prices up last month by the biggest
amount in nearly a year, a trend that could threaten the still-fragile global
economy.
The Producer Price Index,
which measures price changes before they reach consumers, rose 1.1 percent in
December, the Labor Department said Thursday. That was up from a 0.8 percent
rise in November and was the largest increase since January 2010.
Outside the volatile energy
and food categories, so-called core prices rose just 0.2 percent, down from a
0.3 percent rise in November. That lower reading indicates overall inflation
remains tame. For all of 2010, core prices rose just 1.3 percent last year.
That was up from a 0.9 percent increase in 2009 but still historically low.
Still, the rise in
commodity prices is putting pressure on retailers. Most have so far resisted
passing along price increases to consumers in the weak economy.
More people applied for
jobless aid last week
WASHINGTON (AP) -- More
people applied for unemployment benefits last week after retailers shed
temporary holiday employees.
The Labor Department said
Thursday that the number of people seeking benefits jumped by 35,000 to a
seasonally adjusted 445,000 for the week ending Jan. 8. It was the highest
level since late October.
The increase comes after
applications had fallen to their lowest levels in two years over the winter
holidays. Applications usually rise in early January once the holiday season
ends.
Over 1 million Americans
seen losing homes in 2011
NEW YORK (AP) -- The
bleakest year in the foreclosure crisis has only just begun.
Lenders are poised to take
back more homes this year than any other since the U.S. housing meltdown began
in 2006. About 5 million borrowers are at least two months behind on their
mortgages and industry experts say more people will miss payments because of
job losses and also loans that exceed the value of the homes they are living
in.
The blistering pace of
foreclosures this year will top 2010, when a record 1 million homes were lost,
RealtyTrac said Thursday.
One in every 45 U.S.
households received a foreclosure filing last year, a record 2.9 million of
them. That's up 1.67 percent from 2009.
Successful bond auctions
ease euro fears, for now
LONDON (AP) -- Hopes that
European leaders may be about to strengthen measures aimed at dealing with the
government debt crisis contributed to a strong euro rally Thursday as well as
big declines in borrowing costs for financially troubled Portugal and Spain.
The sense that European
Union leaders are ready to respond more quickly to events, following a year of
procrastination and indecision, has been stoked by talk that Germany is now
ready to back an increase in the size and powers of Europe's bailout fund, and
to support a more active role from the European Central Bank.
Pledges of support from
Japan and China have helped too.
No one is saying that the
crisis is over, or that Portugal isn't going to join Greece and Ireland in
needing an expensive bailout, but there has been a change of mood in the
markets over the past few days. It may have to do with signs that Europe's
policymakers have learned from their mistakes -- particularly, the delays over
the Greek crisis in the first half of 2010 -- and are ready to be more
proactive in dealing with the debt problems.
NY judge OKs $7.2B deal
against Madoff beneficiary
NEW YORK (AP) -- A historic
$7.2 billion deal was approved Thursday to settle a lawsuit brought against the
estate of one of the oldest and wealthiest clients of disgraced financier
Bernard Madoff.
U.S. Bankruptcy Judge
Burton Lifland signed off on the deal at the urging of a court-appointed
trustee seeking to recover funds for thousands of investors burned by Madoff's
epic Ponzi scheme.
Lawyers representing a
handful of former Madoff customers opposing the settlement signaled they will
appeal -- a move the judge warned could further harm wiped-out victims waiting
to recover at least a portion of their life savings.
Trustee Irving Picard and
federal authorities reached the settlement last month with the estate of Jeffry
Picower, a businessman and philanthropist who drowned in 2009 after suffering a
heart attack in the swimming pool of his Palm Beach, Fla., mansion. Federal
prosecutors have called the forfeiture the largest in Justice Department
history.
Moody's warns US, Europe
countries on rising costs
Moody's is warning the
U.S., France, Germany and the United Kingdom that they need to better control
the rising costs of pensions and health care subsidies.
In a report issued
Thursday, Moody's Investors Service reiterated its stance that it could
downgrade its outlook of U.S. debt, the first step toward downgrading the debt
from Moody's highest rating of Aaa, which the United States has held since
1917. But the rating agency's top analyst for U.S. debt emphasized that no
downgrade in the debt is looming.
Moody's outlook would only
be dropped if Washington takes no action at all to trim spending or raise taxes
over the long term, said Steven Hess, Moody's lead analyst for the United
States debt rating.
Moody's first said it was
considering an outlook downgrade in December, after President Obama signed a
tax cut and economic stimulus bill. Hess said in a report then that the bill
would add more debt than it would generate revenue, unless other measures were
taken to offset the effects.
Moody's noted Thursday that
the U.S. and Britain have had the steepest increases in government debt. The
U.S. launched a $600 billion Treasury-bond buying program recently in an effort
to stimulate the economy. Moody's said, however, that all four countries still
have balance sheets that are compatible with their triple-A ratings, despite
pricey government programs meant to prevent a return to recession.
GE buying Lineage Power in
$520 million deal
NEW YORK (AP) -- General
Electric Co. announced Thursday it will buy privately held Lineage Power
Holdings Inc. in a deal worth $520 million to tap into the growth in data
centers, electronic devices and telecommunications.
Lineage Power produces
equipment that converts electric power back and forth from alternating current,
or AC, to direct current or DC.
This kind of equipment is
used both inside personal electronic devices like mobile phones and also to
covert electricity from the grid or from generators to power computers inside
data centers, telecommunication antennae and other electric industrial
equipment.
GE said Thursday the market
for power conversion equipment is $20 billion and growing fast.
This is the latest in a
string of acquisitions by GE designed to expand the company's energy business.
In October GE said it planned to buy Dresser Inc., a company that makes small
natural gas-fired turbines, for $3 billion. In December GE offered to buy
Wellstream Holdings PLC, which makes pipes and other equipment for deep-water
oil production, for $1.3 billion.
World Bank: China to drive
Asian growth
BEIJING (AP) -- China's
rapid growth should slow to 8.5 percent this year from 10 percent in 2010 but
the world's second-largest economy will remain the focus of Asia's expansion,
the World Bank said Thursday.
In a report on the global
outlook, the bank said overall growth for developing Asian economies should
ease to 8 percent from last year's 9.3 percent as exports moderate and
governments rein in credit to cool inflation pressures.
China's growth is easing as
Beijing winds down its stimulus and tightens credit to cool inflation and
surging housing prices, the bank said. Still, it said continued strong Chinese
demand for raw materials and components should buoy exports by its Asian
neighbors.
Marathon Oil to spin off
its refining business
HOUSTON (AP) -- Marathon
Oil said Thursday it will split into two companies, separating its business of
exploring for and producing oil from its lower-margin refining operation.
The company says the move
will allow it to be more flexible in operational decisions. Analysts say it's a
good time to divest less profitable businesses as energy markets recover. The
Houston company had considered a spin-off two years ago but shelved it as
prices for oil and gas plummeted in the recession.
Marathon shares surged in
pre-market trading, rising 11 percent, or $4.47, to $45.
The refining company will
be known as Marathon Petroleum Corp. and will be based in Findlay, Ohio. It's
expected to be the nation's fifth-largest refiner with refineries in the
Midwest, Gulf Coast and Southeast.
Marathon Petroleum will
trade on the New York Stock Exchange under the symbol "MPC" starting
on July 1. Marathon Oil Corp. will maintain the company's exploration and
production assets as well as a business that produces oil from oil sands in
Alberta, Canada. .
By The Associated Press
The Dow Jones industrial
average fell 23 points, or 0.2 percent, to 11,731.9. The Standard and Poor's
500 lost 2, or 0.2 percent, to 1,283.76. The Nasdaq composite lost 2, or 0.1
percent, to 2,735.29.
Benchmark oil for February
delivery lost 46 cents to settle at $91.40 a barrel on the Nymex.
Meanwhile, gasoline pump
prices continuing to climb, reaching a national average of nearly $3.10 for a
gallon of regular gasoline, according to AAA, Wright Express and the Oil Price
Information Service. That's about 12 cents more than a month ago and around 34
cents more than a year ago.
In other Nymex contracts
for February delivery, heating oil fell 0.95 to settle at $2.6091 a gallon, and
gasoline futures gave up 1.72 cents to settle at $2.4459 per gallon.
In London, Brent crude fell
28 cents to settle at $97.29 a barrel on the ICE Futures exchange.