Mortgage aid program helping fraction of borrowers
WASHINGTON (AP) -- The
government's $50 billion program to ease the mortgage crisis is helping only a
tiny fraction of struggling homeowners, and a list released Tuesday showed
which lenders are laggards.
As of July, only 9 percent
of eligible borrowers had seen their mortgage payments reduced with modified
loans. And the first monthly progress report showed that 10 lenders had not
changed a single mortgage.
The report indicated that
lenders such as Bank of America Corp. and Wells Fargo and Co. have lagged
behind government expectations. Both banks received billions in federal bailout
money.
Spending inches up in June,
despite income drop
WASHINGTON (AP) -- As
gasoline prices rose, Americans spent more in June than the previous month --
despite falling incomes. For the rest of the year, economists expect falling
wages and rising unemployment to act as a drag on spending.
Consumer spending is closely
watched because it accounts for about 70 percent of total economic activity and
has helped lift the economy out of previous recessions. While analysts expect
the economy to grow in the second half of this year, consumers aren't likely to
lead the way.
Americans boosted their
spending 0.4 percent in June, the Commerce Department said Tuesday, the second
consecutive monthly increase. But adjusting for inflation, spending fell 0.1
percent, following a flat reading in May. Inflation-adjusted spending hasn't
increased since February, the department said.
Personal income, meanwhile,
dropped 1.3 percent in June, the eighth straight decline and steepest fall in
four years.
SEC moving toward banning
flash orders
NEW YORK (AP) -- The
Securities and Exchange Commission is moving toward banning a trading practice
that gives some brokerages a split-second advantage in buying or selling
stocks.
SEC Chairwoman Mary Schapiro
said in a statement Tuesday that the agency is working to create a rule to ban
the trades known as flash orders.
Flash orders give certain
members of exchanges including Nasdaq, Direct Edge and BATS the ability to buy
and sell order information for milliseconds before that information is made
public. High-speed computer software can take advantage of that brief period to
allow those members to get better prices and profits.
Sen. Charles Schumer,
D-N.Y., a critic of the orders, said in a statement that Schapiro personally
assured him the SEC would ban the practice. Last month, Schumer sent a letter
to the SEC urging it to eliminate flash orders and said that if it didn't, he
would write legislation to do so.
Investors nudge rally
forward with small gains
NEW YORK (AP) -- Having
sprinted higher for three weeks, the stock market is taking a break.
Investors made few big moves
Tuesday after stocks rocketed 14 percent in just 16 days. The market closed
with modest gains as many traders held their positions and looked toward the
Labor Department's employment report on Friday.
The Dow Jones industrial
average rose 34 points. On Monday, the blue chips jumped 115 points and the
Standard & Poor's 500 index nosed above 1,000 for the first time in nine
months.
PepsiCo to buy bottlers in
deals totaling $7.8B
MILWAUKEE (AP) -- PepsiCo
Inc. said Tuesday it is buying its two top bottlers for $7.8 billion in a bid
to save money and get new products to market more quickly. The deals were
sealed months after PepsiCo's first offers were rejected and 10 years after
PepsiCo first spun off its largest bottler, Pepsi Bottling Group.
The company spun off its
bottler a decade ago so it could concentrate more on the then-booming soft
drink business. But in the years since, consumers have gravitated toward
healthier options like juices and teas, leaving soft drink sales to slump.
That's why the maker of
Gatorade and Pepsi wants to own Pepsi Bottling again, and along with it,
PepsiAmericas. The world's second-biggest drink maker said the deals will allow
it to respond more quickly to the changing market, because consumers tastes are
changing so fast. Controlling the bottlers means it can do that effectively,
and it also means it can better control costs and more tightly manage its
business.
General Electric to pay $50M
in SEC settlement
WASHINGTON (AP) -- General
Electric Co. will pay a $50 million civil penalty to settle charges by the
Securities and Exchange Commission accusing the conglomerate of improper
accounting in order to make its financial results appear more attractive to
investors.
The SEC said Tuesday that GE
violated U.S. securities laws four times between 2002 and 2003 when accounting
for items like commercial paper funding and the sale of train locomotives and
aircraft engine spare parts. The SEC said the changes helped GE maintain a
string of earnings that beat Wall Street expectations each quarter from 1995
through 2004.
The Fairfield, Conn.-based
GE doesn't admit or deny the allegations, but said in a statement that it
corrected its financial statements during SEC filings made between 2005 and
2008. GE said two of the violations outlined by the SEC were intentional, but
that the other two were negligent errors by company officials.
FDA: Arthritis drugs pose
cancer risk to children
WASHINGTON (AP) -- Federal
regulators on Tuesday added stronger warnings to a group of best-selling drugs
used to treat arthritis and other inflammatory diseases, saying they can
increase the risk of cancer in children and adolescents.
After more than a year of
review, Food and Drug Administration scientists said the drugs appear to
increase the risk of cancer after they are used beyond 2 1/2 years. The agency
studied several dozen reports of cancer in children taking the drugs, some of
which were fatal. Half of the cases were lymphomas, a cancer that attacks the
immune system.
The drugs are known as tumor
necrosis factor blockers and work by neutralizing a protein that, when
overproduced, causes inflammation and damage to bones, cartilage and other
tissue. The drugs are prescribed to children with rheumatoid arthritis,
inflammatory bowel disorder and Crohn's disease.
Airlines June delays worst
of the year
NEW YORK (AP) -- U.S.
airlines in June turned in their worst on-time performance since December, the
Department of Transportation said Tuesday.
The airlines had a combined
on-time arrival rate of 76.1 percent compared with 80.5 percent in May. But the
carriers had fewer delayed flights this June than in the same month a year ago.
The on-time rate in December was 65.3 percent.
The most frequent reasons
for flight delays included airport congestion, equipment problems and weather.
June was a bad month for
severe weather across the nation. The National Weather Service recorded more
than 6,400 incidents involving hail and high winds, almost twice the number
reported in May.
Hawaiian Airlines had the
best on-time performance in June, while Comair -- a subsidiary of Delta Air
Lines Inc. -- had the worst.
Kraft Foods 2Q profit up 11
percent
MILWAUKEE (AP) -- Kraft
Foods Inc. said Tuesday its second-quarter profit rose 11 percent even though
its revenue slipped as the dollar's strength weighed down international sales.
The earnings beat analyst
expectations, and the company boosted its profit guidance for fiscal 2009.
The maker of Velveeta, Oreo
cookies, Maxwell House coffee and other brands said after the market closed
that it earned $827 million, or 56 cents per share, in the three-month period
that ended in June. That compares with earnings of $745 million, or 49 cents
per share, a year earlier.
The Northfield, Ill.-based
company said its revenue fell 5.9 percent to $10.16 billion, below analysts'
predictions of $10.37 billion. The drag of foreign currency exchanges hurt
results by 8.1 percentage points, the company said.
By The Associated Press
The Dow Jones industrial
average rose 33.63, or 0.4 percent, to 9,320.19. The S&P 500 index rose
3.02, or 0.3 percent, to 1,005.65, while the Nasdaq composite index rose 2.70,
or 0.1 percent, to 2,011.31. The gains left stocks at new highs for the year.
Benchmark crude for
September delivery fell 16 cents to settle at $71.42 a barrel on the New York
Mercantile Exchange. Crude prices had risen for four straight days before
Tuesday. A barrel of crude cost around $64 a month ago.
In other Nymex trading,
gasoline for September delivery lost 1.26 cents to settle at $2.0567 a gallon
and heating oil rose 3.01 cents to settle at $1.9014 a gallon. Natural gas for
September delivery fell 3 cents to settle at $4.001 per 1,000 cubic feet.
In London, Brent prices
added 73 cents to settle at $74.28 a barrel on the ICE Futures exchange.