On Monday March 7, 2011, 6:18 pm EST
Car-buying fuels increase
in consumer borrowing
WASHINGTON (AP) --
Consumers borrowed more in January to purchase new cars but were once again
frugal with their credit cards, offering a mixed sign of their confidence in
the economy.
Borrowing rose 2.5 percent,
or by $5 billion, the Federal Reserve said Monday. It was the fourth
consecutive monthly gain and it increased total consumer debt to $2.41
trillion.
Strong car sales drove the
increase. The category that includes auto loans rose 6.9 percent.
But credit card debt fell
6.4 percent in January -- the 28th decline in 29 months -- to the lowest level
since September 2004. Americans had increased their use of plastic in December
for the first time since the financial crisis. But they cut back the following
month, even though a Social Security tax cut is giving most households an extra
$1,000 to 2,000 this year.
Consumer debt is 0.7
percent above a three-year low hit in September. It is 6.6 percent below the
peak hit in July 2008.
Analysts are predicting
that consumers will borrow more in the months ahead, responding to the
strengthening economy, a brighter outlook for jobs and the tax cut. But they
said the increases will likely be gradual.
Oil settles above $105 a
barrel, gas above $3.50
NEW YORK (AP) -- Oil prices
continued to set new post-recession highs Monday as forces loyal to Moammar
Gadhafi pounded rebels near a key oil port in Libya. It's unclear how long the
country's oil exports will be cut off, and traders prepared for a worst-case
scenario in which world supplies would be under pressure for months.
Benchmark West Texas
Intermediate crude for April delivery gained $1.02 to settle at $105.44 per
barrel on the New York Mercantile Exchange. The price almost hit $107 per
barrel earlier in electronic trading, the highest level since Sept. 26, 2008.
The rise in oil is driving
U.S. gasoline prices to levels that weren't expected for at least another
month. Pump prices have jumped an average of 39 cents per gallon since the
Libyan uprising began in mid-February, forcing motorists to pay an additional
$146 million per day for the same amount of fuel. The national average hit
$3.509 per gallon on Monday, according to AAA, Wright Express and Oil Price
Information Service.
Libya, which sits on the
largest oil reserves in Africa, has been engulfed in a four-week rebellion as
militants try to oust Gadhafi after 41 years in power. Officials in the country
say oil fields continue to operate, but daily exports of 1.5 million barrels
could be cut off for some time
Honda, Toyota and Chrysler
issue recalls
WASHINGTON (AP) -- Honda
recalled more than 35,000 Civic hybrids in the United States on Monday to fix a
problem with the electrical system that could cause the headlights to turn off
or the engine to stall.
Separately, Toyota recalled
about 22,000 SUVs and trucks to address faulty tire pressure monitoring systems
and Chrysler recalled about 20,000 Jeep Wranglers over steering issues.
Honda Motor Co. told the
government its recall would cover 2006-2007 model year Civic hybrids. The
company said the voltage converter that relays power from the motor assist
system to the vehicle's electrical components could fail.
Honda has received seven
reports of stalling engines and 82 warranty claims connected to the problem.
Dealers will replace the voltage converter at no charge.
Toyota Motor Corp.'s recall
includes some versions of the 2008-2011 Toyota FJ Cruiser, Land Cruiser,
Sequoia, Tacoma and Tundra.
The systems that monitor
the vehicles' tire pressure did not comply with federal safety standards.
Toyota said the systems didn't illuminate on the dashboard at the minimum
activation pressure and needed to be recalibrated.
Western Digital pulls away
with hard drive deal
SAN FRANCISCO (AP) --
Western Digital Corp. is trying to pull further away in its neck-and-neck race
with Seagate Technology PLC to be the world's biggest maker of hard drives.
Western Digital announced
Monday that it's paying $4.3 billion in cash and stock to acquire Hitachi
Global Storage Technologies.
The deal is one of the
largest in an industry that's been consolidating for decades, and gives the
combined companies about half of the worldwide hard drive market. Seagate owns
less than a third of that market.
A hard drive is a key
data-storage technology for computers, and in picking up the Hitachi business,
Western Digital is picking off one of the last key players. It's also giving
itself a foothold in the market for drives that go into servers and
corporate-level storage arrays. That's been a weakness for a company mostly
known for selling hard drives that go into consumer PCs.
Western Digital is the No.
1 hard drive maker, just ahead of Seagate in terms of units sold. Hitachi is
No. 3.
Moody's downgrades Greece's
debt rating again
LONDON (AP) -- Moody's
Investor Services has downgraded Greece's debt rating even further below junk
status amid worries that the bailed-out euro country will end up having to
restructure its massive debts.
The agency said Monday it
is lowering its rating by three notches to B1 from Ba1, citing three main
reasons for the downgrade.
As well as warning of major
implementation risks associated with the government's economic program, Moody's
noted the considerable difficulties Greece has in raising revenues and
highlighted the risk of more onerous conditions when the current bailout
package ends in 2013.
Greece was saved from
effective bankruptcy last May after accepting a 110 billion euros bailout from
partners in the EU and the International Monetary Fund.
Skippy peanut butter
recalled due to salmonella
WASHINGTON (AP) -- The
company that makes Skippy peanut butter is recalling two of its spreads that
may be contaminated with salmonella.
No illnesses have been
linked to the recall of the Skippy reduced fat creamy and reduced fat chunky
brands.
Unilever United States Inc.
did not specify how many jars have been recalled. They are packaged in 16.3 oz.
plastic jars with used-by dates of May 16-21, 2012.
Unilever detected possible salmonella
through its own testing. The recalled jars were distributed to retail outlets
in Arkansas, Connecticut, Delaware, Illinois, Iowa, Maine, Minnesota, Missouri,
Nebraska, New Hampshire, New Jersey, New York, North Dakota, Pennsylvania,
Virginia and Wisconsin, the company said.
Salmonella can cause
serious and sometimes fatal infections in those with weakened immune systems.
Luxury's LVMH gobbles up
Italian jeweler Bulgari
PARIS (AP) -- French
fashion colossus LVMH Moet Hennessy Louis Vuitton is adding another jewel to
its crown: Italy's Bulgari.
The unexpected tie-up
generated new buzz during an already frenzied Paris Fashion Week. And it puts
LVMH, run by France's richest man, in an even better position to woo nouveau
riche consumers in countries like China and Russia who are clambering for
old-world status markers, like Louis Vuitton leather bags and Bulgari's diamond
and emerald encrusted jewelry.
LVMH, the Paris-based holding
company behind luxury Christian Dior gowns, Dom Perignon champagne and Guerlain
perfume, said Monday it has agreed to buy Italian jeweler-to-the-stars Bulgari
SpA in a cash-and-shares deal worth 4.3 billion euros ($6 billion).
LVMH managing director Antonio
Belloni said Bulgari was the biggest acquisition in LVMH's more than 20-year
history of snapping up luxury brands, from Kenzo to Givenchy and Marc Jacobs.
Both companies presented
the deal as a way to quickly bulk up LVMH's luxury watch and jewelry business,
to achieve critical mass and accelerate its growth into hot developing markets.
Southwest joins other US
airlines in raising fares
DALLAS (AP) -- Southwest
Airlines Co. has joined a sweeping increase of $10 in the price of many
domestic round-trip airfares, citing the need to offset high fuel prices.
Southwest's action over the
weekend may have ensured success for a price hike by major airlines that seemed
to be faltering. Southwest carries more U.S. passengers than any airline and
wields great influence over prices.
It's the sixth time
airlines have raised fares already this year. FareCompare.com CEO Rick Seaney
says leisure travelers may now have to pay $260 for a ticket that cost $200
back on Jan. 1.
NEW YORK (AP) -- Internet
phone company Skype says it is launching advertising on its service for the
first time.
The Luxembourg-based
company, which is still 30 percent owned by online auction house eBay Inc.,
also announced Monday its first advertisers: Groupon Inc., Nokia Corp., Comcast
Corp.'s Universal Pictures and Visa Inc.
Skype said its platform,
with 145 million users a month and 29 million at peak times, is attractive for
brands to market their products. The platform will support large-format, rich
interactive ads.
Display ads can also feature
a "Click & Call" button so users can act on impulse. Ads can be
shared on Facebook and Twitter.
Skype said it is partnering
with advertising sales companies such as Meebo in the U.S., Ad2One in the U.K.,
and Stroer Interactive in Germany.
By The Associated Press
The Dow Jones industrial
average fell 79.85 points, or 0.7 percent, to close at 12,090.03.
The Standard & Poor's
500 index fell 11.02 points, or 0.8 percent, to 1,310.13. The Nasdaq fell 39.04
points, or 1.4 percent, to 2,745.63
Benchmark West Texas
Intermediate crude for April delivery gained $1.02 to settle at $105.44 per
barrel on the New York Mercantile Exchange.
In London, Brent crude fell
93 cents to settle at $115.04 per barrel.
In other Nymex trading on
Monday for April contracts, heating oil lost 2.36 cents to settle at $3.0657
per gallon, while gasoline futures lost 4.25 cents to settle at $3.0039 per
gallon. Natural gas rose 11.8 cents to settle at $3.927 per 1,000 cubic feet.