On Tuesday August 17, 2010, 5:58 pm EDT
Factories aid bumpy
recovery, housing still weak
WASHINGTON (AP) -- New
government data offered a mixed picture of the economic recovery Tuesday, as
U.S. manufacturing activity grew in July at the fastest pace in nearly a year
while the outlook for the housing market remained dim.
Auto plants stayed open
when they normally close for summer renovations and businesses replaced
worn-out equipment. That helped boost factory output 1.1 percent -- the biggest
increase since August 2009.
Overall output at the
nation's factories, mines and utilities rose 1.0 percent last month, the
Federal Reserve reported. That followed a decline of 0.1 percent in June, the
first drop in more than a year.
Some stores finding deep
discounts aren't enough
NEW YORK (AP) -- Quarterly
financial results from retailers including Home Depot and Abercrombie &
Fitch showed that profits are rising because retailers are cutting costs and
keeping their inventories lean.
But with the economy
slowing once again and consumer confidence falling, they expect less out of the
rest of the year, and they already have to push harder to get shoppers to buy.
Walmart hopes basics like
underwear and socks will bring in financially strapped shoppers. It's also
stocking smaller packages for the days leading up to when customers receive
their government assistance checks, and need to stretch their last few dollars.
Stocks rise on earnings,
economic reports
NEW YORK (AP) -- Investors
regained some enthusiasm for stocks Tuesday, sending prices sharply higher
after reports showed a slight improvement in the housing market and a big jump
in industrial production.
Investors were also
encouraged by earnings from Home Depot Inc. and Wal-Mart Stores Inc. that were
better than expected. The Dow Jones industrial average rose 103 points. All the
major stock indexes were up more than 1 percent. Interest rates rose as
investors moved out of the bond market and back into stocks.
The Dow rose almost 180
points before falling back to its closing level. About four stocks rose for one
that fell on the New York Stock Exchange where volume came to a light 4.05
billion shares, up from 3.15 billion Monday.
Banking execs say gov't
needs to back mortgages
WASHINGTON (AP) -- The call
from business for less government has a notable exception: the mortgage market.
The Obama administration
invited banking executives Tuesday to offer advice on changing the government's
role in backing the mortgage market. While they disagreed on the exact level of
support needed, the group overwhelmingly advocated the government should
maintain a large role in the $11 trillion market.
If the government pulled
out, executives said, millions of Americans wouldn't be able to convince banks
to take the risk of giving them home loans. Ending government support could
lead to a spike in mortgage rates. That could deter many from buying homes, and
banks, mortgage lenders and Realtors would lose money over time.
Wholesale prices rise on
higher food costs
WASHINGTON (AP) --
Wholesale prices rose last month for the first time since March on higher costs
for food, autos, pickup trucks and pharmaceuticals.
Still, the increases were
modest and show that the weak economy isn't spurring significant price rises.
The Labor Department said
Tuesday that the Producer Price Index, which measures price changes before they
reach the consumer, rose by 0.2 percent in July, after three months of
declines. The rise matched Wall Street economists' forecasts, according to a
survey by Thomson Reuters.
Potash calls Billiton bid
'grossly inadequate'
ST. LOUIS (AP) -- A global
race to snap up fertilizer companies accelerated Tuesday, when fertilizer
producer Potash Corp. of Saskatchewan Inc. rejected a buyout offer worth $38.49
billion, calling it "grossly inadequate."
The unsolicited takeover
bid from BHP Billiton Ltd. raises the ante for agribusiness firms trying to
lock in ownership of fertilizer supplies before an expected rebound in crop
production. Fertilizer prices skyrocketed during the food shortage of 2008, and
companies like BHP think history could repeat itself as consumers start
spending more on food.
Eli Lilly halts development
of Alzheimer's drug
INDIANAPOLIS (AP) -- Eli
Lilly and Co. has stopped developing a potential Alzheimer's disease treatment
at a time when the drugmaker is searching wide and far for new drugs to fill a
large revenue hole that will form starting next year.
The Indianapolis company
said Tuesday preliminary results from late-stage studies of semagacestat showed
it did not slow the progression of Alzheimer's, and patients taking the drug
actually fared worse than those on a placebo.
Despite the setback, Lilly
Chairman and CEO John Lechleiter said the company remains committed to
developing new drugs while competitors make large-scale acquisitions.
Reynolds Group puts up
$4.4B for Hefty bag maker
NEW YORK (AP) -- Reynolds
Group, part of the global packaging business owned by New Zealand's richest
man, said Tuesday it will pay about $4.4 billion for Hefty bag maker Pactiv.
Including debt, the
acquisition is valued at around $6 billion. It's the latest and biggest in a
string of deals that has built Reynolds parent company Rank Group Ltd. into a
worldwide packaging empire under owner Graeme Hart.
Reynolds Group Holdings
Ltd., a Chicago-based subsidiary, is offering Pactiv shareholders $33.25 per
share in cash. That's a premium of about 8 percent over Pactiv's closing share
price of $30.92 on Monday. But it's 39 percent higher than the closing price
May 14, the last trading day before reports of a potential deal began to
emerge.
JetBlue brings back 'All
You Can Jet' passes
NEW YORK (AP) -- JetBlue is
bringing back its popular All-You-Can-Jet pass, which allows anyone to travel
to an unlimited number of cities over a one-month period.
It's a chance for the
airline to fill empty seats during what is traditionally the slowest time of
the year and hopefully, for JetBlue, to create the same wide-ranging social
buzz it generated last year when it launched the promotion for the first time.
And for consumers with
wanderlust, stamina, $700, or better yet, a combination of all three, it's a
continual ticket to any destination in the U.S. and Caribbean for 30 days.
By The Associated Press
The Dow Jones industrial
average rose 103.84, or 1 percent, to 10,405.85.
The Standard & Poor's
500 index rose 13.16, or 1.2 percent, to 1,092.54, while the Nasdaq composite
index rose 27.57, or 1.3 percent, to 2,209.44.
Benchmark crude rose 53
cents to settle at $75.77 a barrel on the New York Mercantile Exchange.
In other Nymex trading in
September contracts, heating oil added 3.71 cents to settle at $2.0259 a gallon
and gasoline rose 2.89 cents to settle at $1.9532 a gallon. Natural gas gained
by 3.9 cents to settle at $4.267 per 1,000 cubic feet on the Nymex.
In London, Brent crude was
up $1.30 to settle at $77.46 a barrel on the ICE Futures exchange.