467K jobs cut in June; jobless rate at 9.5 percent
WASHINGTON (AP) -- Employers
cut a larger-than-expected 467,000 jobs in June and the unemployment rate
climbed to a 26-year high of 9.5 percent. Workers also saw weekly wages fall,
suggesting Americans will have little appetite to spend and the economy's road
to recovery will be bumpy.
The Labor Department report,
released Thursday, showed that even as the recession flashes signs of easing,
companies likely will want to keep a lid on costs and be wary of hiring until
they feel certain the economy is on solid ground.
Jobless data sends stocks
reeling; Dow loses 223
NEW YORK (AP) -- Major stock
indexes fell more than 2.6 percent after the government said the U.S.
unemployment rate hit a 26-year high. The Dow Jones industrials lost 223.32 to
close at 8,280.74, their lowest level in six weeks.
Trading on the New York
Stock Exchange was extended until 4:15 p.m. Eastern time in order to execute
customer orders impacted by system irregularities, an NYSE spokeswoman said.
As investors sold off stocks
amid fresh concerns about the economy, they moved into the safety of bonds,
pushing Treasury yields lower.
Johnson & Johnson pays
$1B for Elan stake
TRENTON, N.J. (AP) --
Johnson & Johnson, making a big jump into the risky but potentially
lucrative field of Alzheimer's disease, is taking a major stake in Irish
biopharmaceutical company Elan Corp., investing up to $1.5 billion initially.
The two will cooperate to
complete research on two injected drugs to stop progression of the mind-robbing
disease and on a vaccine to prevent the buildup of plaque in the brain that
causes increasing memory loss, confusion, wandering and aggression.
The agreement could
reinvigorate ailing Elan and save the jobs of top executives who face
shareholders at their July 17 annual meeting. It would make J&J a major
player in one of the biggest areas of unmet medical need and -- if further
testing is successful -- bring the treatments to market faster.
Feds seize Madoff penthouse,
wife leaves
NEW YORK (AP) -- Federal
marshals took possession of disgraced financier Bernard Madoff's $7 million
Manhattan penthouse on Thursday in a move that forced his wife to move
elsewhere.
Proceeds from a sale of the
property and its contents could be used to help reimburse those who lost
billions of dollars investing with Madoff before he confessed to running a
Ponzi scheme.
U.S. Marshal Joseph Guccione
said the marshals arrived at the property at noon with a court order permitting
them to take custody of the apartment and to make anyone living there move out.
2 more banks fail as FDIC
seeks stronger rules for sale of failed banks
WASHINGTON (AP) -- Two
Illinois banks were shuttered Thursday as government regulators proposed new
rules for private equity firms seeking to take over failed banks.
Regulators shut down John
Warner Bank of Clinton, Ill., and First State Bank of Winchester in Winchester,
Ill., bringing to 47 the number of U.S. bank failures this year.
Private equity firms seeking
to buy failed banks, meanwhile, would face strict capitalization and disclosure
requirements under government rules proposed Thursday that some regulators
already warn may go too far.
The Federal Deposit
Insurance Corp. is seeking to expand the number of potential buyers for the
growing number of banks it has closed during the financial crisis. With
mounting interest from private equity firms, whose methods and motives aren't
always clear, the FDIC is trying to set requirements to ensure the banks won't fail
again.
Boeing maintains deliveries
in 2nd-quarter
WASHINGTON (AP) -- Boeing
Co. delivered 125 commercial jets in the second quarter, one less than the same
period in 2008.
The aerospace manufacturer
said for the three month-period it delivered 99 of its 737s -- the company's
best-selling jet -- and 21 777s. In the same period last year, Boeing delivered
100 737s and 18 777s.
Other deliveries included
two 747s and three 767s, according to figures posted Thursday on Boeing's Web
site. To date this year, Boeing has delivered 246 planes up from the 241 planes
in the period of 2008.
Boeing has struggled with
slumping orders for its jets as the recessions dampens demand for air travel
and cargo services.
Factory orders rise more
than expected in May
WASHINGTON (AP) -- Orders to
U.S. factories jumped in May by the largest amount in nearly a year, another
sign that the nosedive in manufacturing is nearing an end.
The Commerce Department said
Thursday that total orders rose 1.2 percent in May, better than the 0.8 percent
increase that economists had expected. The April performance was revised
slightly lower to a gain of 0.5 percent, from 0.7 percent.
The May increase was the
best showing since a 2.1 percent rise last June. The back-to-back increases in
April and May were the first consecutive gains in nearly a year.
Oil prices tumble as Europe
and the US shed jobs
NEW YORK (AP) -- Oil prices
tumbled to their lowest level in a month Thursday following the release of
woeful job numbers in Europe and the U.S.
Benchmark crude for August
delivery fell $2.58, nearly 4 percent, to settle at $66.73 a barrel on the New
York Mercantile Exchange.
Crude hit an eight-month
high in midday trading Tuesday, but prices have fallen at the close for five
straight days now.
Nymex is closed Friday for
the July Fourth holiday.
ECB keeps interest rate at 1
pct
LUXEMBOURG (AP) -- The
European Central Bank left its benchmark interest rate unchanged at 1 percent
Thursday, preferring to wait and see if its "spectacular" infusion of
credit into the banking system will loosen lending to consumers and businesses
in the euro zone's struggling economy.
Bank President Jean-Claude
Trichet said the ECB was pleased by the demand for its record euro442 billion
($623 billion) in 12-month credits to banks last week, but wouldn't comment
about what more it might do. The new loan program comes on top of cutting the
bank's main interest rate from 4.25 percent to 1 percent since October.
GM urges quick approval of
sale plan
NEW YORK (AP) -- An attorney
for a trio of bondholders opposed to General Motors' sale plan on Thursday
urged a judge to call the government's bluff and require the automaker to
restructure itself through a more traditional Chapter 11 process instead of
through the quick sale of its assets.
Michael Richman said in his
closing statement that it's doubtful that the government would actually make
good on its threat to cut off funding to the automaker if the sale doesn't go
through by its July 10 deadline. While GM may be powerless to fight the government's
demands, the court can "push back" to protect the interests of all
the company's stakeholders, he said.
By The Associated Press
The Dow Jones industrials
lost 223.32, or 2.6 percent, to 8,280.74.
The Standard & Poor's
500 index fell 26.91, or 2.9 percent, to 896.42 and the Nasdaq composite index
fell 49.20, or 2.7 percent, to 1,796.52.
Benchmark crude for August
delivery fell $2.58, nearly 4 percent, to settle at $66.73 a barrel on the New
York Mercantile Exchange.
In other Nymex trading,
gasoline for August delivery fell 6.82 cents to settle at $1.7908 a gallon and
heating oil lost 6.41 cents to settle at $1.7016 a gallon. Natural gas for
August delivery dropped 18 cents to settle at $3.615 per 1,000 cubic feet.
In London, Brent prices
dropped $2.14 to settle at $66.66 a barrel on the ICE Futures exchange.