GM eliminating about 1,100 dealer franchises
NEW YORK (AP) -- General
Motors Corp. on Friday told about 1,100 dealers, or nearly 20 percent of its
U.S. network, that they will be fired by the automaker late next year because
their sales are weak.
GM's announcement is more
bad economic news for dealers, communities and businesses still reeling from
Chrysler's similar nationwide dealer cuts a day earlier. Both automakers are
scrambling to reorganize and stay alive in a severe recession that has
devastated sales of cars and trucks.
While GM doesn't own the
dealers, its network is too big, causing dealers to compete with each other and
giving shoppers too much leverage to talk down prices and hurt the company's
future sales.
Prices hold steady as
industrial production dips
WASHINGTON (AP) -- More
evidence emerged Friday that the recession is easing, with output by the
nation's factories, mines and utilities falling at the slowest pace in six
months.
At least one area of the
economy is flat, but that's welcome news. The Labor Department said consumer
prices were level in April after a slight dip the prior month.
The Federal Reserve said
output at factories, mines and utilities fell 0.5 percent last month, after
revised declines of 1.7 percent in March and 1 percent in February. Analysts
had expected a drop of 0.6 percent last month.
Stocks extend week's losses
after 2-month rally
NEW YORK (AP) -- Investors
moved more money out of stocks Friday, further chilling the market's spring
rally.
Stocks extended the week's
losses as traders accustomed to economic news being "less bad" found
little incentive to buy.
The improvement in consumer
sentiment is a good sign, as increased confidence could translate to improved
consumer spending.
But a drop in the price of
oil hit energy companies. Financial stocks also fell as investors worried about
the economic recovery being further out than hoped. the Dow Jones industrial
average fell 62.68, or 0.8 percent, to 8,268.64.
JC Penney 1Q profit slides
on pension expense
NEW YORK (AP) -- J.C. Penney
Co. said Friday that its first-quarter profit tumbled 79 percent because of a
big pension expense, but it narrowly beat analysts' estimates as its expenses
fell and demand remained strong for the Sephora cosmetics and American Living
merchandise it sells.
Looking ahead, the
department store chain said it will miss Wall Street's full-year forecast
because of soft consumer spending and weak mall traffic.
Plano, Texas-based J.C.
Penney earned $25 million, or 11 cents per share, for the quarter that ended
May 2. That compares with $120 million, or 54 cents per share, a year earlier.
May rally for energy prices
stalls
NEW YORK (AP) -- Rapidly
climbing energy prices stalled this week as a steady stream of dismal financial
news suggested that even if the global economy has bottomed out, it will be
some time before demand for crude rebounds.
Benchmark crude for June
delivery dropped $2.28 to settle at $56.34 a barrel on the New York Mercantile
Exchange. Since the start of May, oil prices have jumped by nearly $8 a barrel
as it appeared the worst of the recession was over.
But a string of forecasts
showing a larger drop in world oil consumption sent prices downward to end the
week. The International Energy Agency, the U.S. Energy Information
Administration and the Organization of Petroleum Exporting Countries all
lowered crude demand expectations this week.
FBI probes possible insider
trading by SEC lawyers
WASHINGTON (AP) -- Federal
prosecutors and the FBI have been investigating possible illegal insider
trading by two Securities and Exchange Commission enforcement attorneys who
were in a position to receive sensitive information about agency probes of
public companies.
The SEC's inspector general,
David Kotz, found that the frequent stock trades over a two-year period by the
pair raised suspicions of insider trading. Earlier this year, he referred the
matter to the Fraud and Public Corruption Section of the U.S. attorney's office
in Washington.
DOE chief announces billions
for clean coal
WASHINGTON (AP) -- Energy
Secretary Steven Chu says he will provide $2.4 billion from the economic
recovery package to speed up development of technology to reduce greenhouse gas
emissions from power plants and factories that burn coal.
Chu told a meeting of the
National Coal Council on Friday that it's essential that ways are found to
capture carbon dioxide from coal-burning power plants and industrial sources.
Carbon dioxide from burning fossil fuels is the leading greenhouse gas blamed
for global warming.
Chu said coal will remain an
essential energy source. He said even if coal plants in the United States were
shut down, as some environmentalists want, China and India will not turn their
back on coal.
Euro zone contracted by
massive 2.5 pct in Q1
LONDON (AP) -- The economy
in the 16 countries that use the euro shrank by a massive 2.5 percent in the
first quarter as a global recession sapped the industrial exports that Europe
relies on for growth and jobs.
Germany, the euro zone's
biggest economy, saw output plunge by 3.8 percent as demand for its cars and
factory machinery collapsed -- its biggest economic contraction since at least
1970, when West Germany started to compile records.
The euro zone has now seen
output decline for four consecutive quarters. The first quarter slump is the
biggest since figures began in 1995, but most analysts think the region is in
its worst slump since the end of World War II.
Trade group: Summer air
traffic could fall 6.7 pct
WASHINGTON (AP) -- A trade
group for U.S. airlines says the number of passengers will drop 6.7 percent
this summer because of the recession.
The Air Transport
Association said Friday it expects the number of passengers to drop by 14
million, to 195 million between June 1 and Aug. 31, compared with the same
period last year. It expects domestic travel to drop 7 percent to 171 million
passengers, and international travel to fall 6 percent to 24 million
passengers.
Insurers get preliminary OK
for Treasury funds
LOS ANGELES (AP) -- The
federal government has agreed to extend billions in bailout funds to six major
life insurers, helping them shore up their capital positions in the wake of
major investment losses.
The Hartford Financial
Services Group Inc. said Thursday that it had been notified by the Treasury
Department that it was eligible for $3.4 billion from the Troubled Asset Relief
Program, or TARP. Lincoln National Corp., which goes by the name Lincoln
Financial Group, said it has been initially cleared for a $2.5 billion
injection from TARP's Capital Purchase Program.
By The Associated Press
The Dow Jones industrial
average fell 62.68, or 0.8 percent, to 8,268.64. The broader Standard &
Poor's 500 index fell 10.19, or 1.1 percent, to 882.88, and the Nasdaq
composite index fell 9.07, or 0.5 percent, to 1,680.14.
Benchmark crude for June
delivery dropped $2.28 to settle at $56.34 a barrel on the New York Mercantile
Exchange.
In other Nymex trading,
gasoline for June delivery was down 4.31 cents to settle at $1.6806 a gallon
and heating oil dropped 7.59 cents to settle at $1.4188 a gallon. Natural gas
for June delivery slid 19.4 cents to settle at $4.098 per 1,000 cubic feet.
In London, Brent prices lost
71 cents to settle at $55.98 a barrel on the ICE Futures exchange.