Consumer sentiment, home prices show signs of life
WASHINGTON (AP) --
Americans' pessimism about the economy appears to be lifting, with consumer
expectations for the next six months hitting their most positive point since
the recession began.
The improvement stems partly
from the housing market, as a national gauge of home prices on Tuesday posted
its first quarterly increase in three years.
Consumers' expectations for
the economy over the next six months rose to 73.5 from 63.4 in July, the
highest level since December 2007, when the recession began. Meanwhile, the
Standard & Poor's/Case-Shiller's U.S. National Home Price Index rose 1.4
percent in the second quarter from the January-March period, the first
quarterly increase in three years. Home prices, though still down nearly 15
percent from last year, are at levels last seen in early 2003.
Gain in consumer confidence
sends stocks higher
NEW YORK (AP) -- A rebound
in consumer confidence and more healing in the housing industry have put stocks
back on an upward path.
Banks, retailers and
homebuilders were Tuesday's biggest winners, helping to lift the major indexes
about 0.3 percent. Energy and utility stocks fell sharply as oil prices cooled
following a recent surge.
Though investors were
pleased by better-than-expected readings on consumers and housing, trading was
choppy, as it has been over the past week. Despite improving economic data, the
market is still generally cautious.
The Dow rose 30.01, or 0.3
percent, to 9,539.29.
White House, Congress
projects record deficits
WASHINGTON (AP) -- The U.S.
government faces exploding deficits and mounting debt over the next decade,
White House and congressional budget officials projected Tuesday in competing
but similar economic forecasts.
Both the White House Office
of Management and Budget and the nonpartisan Congressional Budget Office
predicted the budget deficit this year would swell to nearly $1.6 trillion, a
record, and far above the then-record 2008 budget deficit of $455 billion.
But while figures released
by the White House foresee a cumulative $9 trillion deficit from 2010-2019, $2
trillion more than the administration estimated in May, congressional budget
analysts put the 10-year figure at a lower $7.14 trillion.
As more banks fail, private
investors gain favor
WASHINGTON (AP) -- With the
toll of bank failures surging, regulators are expected Wednesday to ease rules
they proposed only last month for private investors seeking to buy failed
institutions.
Private equity funds have
been targets of criticism in recent years for their risk-taking and outsized
pay for managers. But the depth of the banking crisis appears to have softened
the Federal Deposit Insurance Corp.'s resistance. In part, that's because fewer
banks are now willing to buy other, ailing institutions.
In July, when bondholders
rescued commercial lender CIT Group Inc., it marked the first time since the
crisis erupted last fall that private investors had saved a big financial firm
without federal aid or oversight.
Obama breaks vacation, keeps
Bernanke at Fed
OAK BLUFFS, Massachusetts (AP)
-- President Barack Obama announced Tuesday he wants to keep Ben Bernanke on as
Fed chairman, saying he shepherded America through the worst economic crisis
since the Great Depression.
Obama made the announcement
while on vacation on the island of Martha's Vineyard off the coast of
Massachusetts after aides said initially that the president intended a
news-free week there. Both he and Bernanke sported the open-collar look.
Bernanke, 55, is credited
with turning the economy away from its deepest and longest recession since the
1930s. Now he faces the challenge of meeting White House expectations to chart
the full economic recovery considered critical to Obama's legacy.
Gov't extends deadline for
clunkers paperwork
WASHINGTON (AP) -- Car
dealers have a few more hours to get reimbursed for their Cash for Clunkers
deals after the government extended the deadline for filing applications for
the $3 billion government incentives into Tuesday evening.
All sales under the program
ended Monday evening. But after already pushing back the deadline to submit
records for the car rebate deals to noon Tuesday, the Transportation Department
said the deadline would be extended to 8 p.m. EDT as the Web site set up to
handle the program was taxed by dealers rushing to submit last minute claims.
Before the extension, all
the paperwork was due to be submitted by Monday night, but an influx of
submissions shut down the government's computer filing system temporarily. That
raised concern among dealers that they wouldn't be repaid for the $3,500 or
$4,500 per vehicle incentives, and prompted them to push for an extension.
GM negotiator, German
officials meet over Opel
BERLIN (AP) -- General
Motors Co. made clear during a meeting with German government representatives
Tuesday that it is still interested in selling the automaker's European Opel
unit, a German official said.
The new GM management board,
reshuffled after the company filed for bankruptcy protection earlier this year,
will require more information before it can make a decision, the official said,
speaking on condition of anonymity given the sensitivity of the talks.
Group Vice President John
Smith attended Tuesday's meeting with the German government's "Opel Task
Force," made up of federal and state officials.
Oil touches $75, then
tumbles on deficit numbers
HOUSTON (AP) -- Oil prices
fell more than 3 percent Tuesday after a new report from Washington projected a
cumulative $7 trillion U.S. deficit for the next decade.
Prices initially swung
higher, briefly touching $75 per barrel for the first time in 10 months on new
signals that consumers are feeling a little better about the economy.
Yet lingering questions
about when and how fast any recovery might occur led to some volatile markets
Tuesday.
Benchmark crude for October
delivery fell $2.32 to settle at $72.02 a barrel in trading on the New York
Mercantile Exchange.
Sony plans a Kindle rival
with wireless downloads
NEW YORK (AP) -- Sony Corp.
plans to offer an e-book reader with the ability to wirelessly download books,
injecting more competition in a small but fast-growing market by adopting a key
feature of the rival Kindle from Amazon.com.
Sony's $399 Reader Daily
Edition will go on sale by December, Sony executives said Tuesday at an event
at the New York Public Library. The device has a 7-inch (17.5-centimeter) touch
screen and will be able to get books, daily newspapers and other reading
material over AT&T Inc.'s cellular network.
Sony has sold e-book reading
devices with "electronic ink" displays in the United States since
2006, but has seen most of the attention stolen by Amazon.com Inc., which
launched the Kindle with similar e-ink technology a year later. The latest
version of the Kindle -- which is not controlled by touching the screen --
costs $299 and uses Sprint Nextel Corp.'s wireless network for downloads.
Burger King 4Q profit rises
despite sales drop
CHICAGO (AP) -- Burger King
Holdings Inc. said its fiscal fourth-quarter profit rose, even though revenue
fell for the first time since the company became public in 2006 because diners
visited the fast-food chain less often and spent less when they did.
Despite the 2.4 percent
decline in revenue for the April-through-June period, the nation's No. 2 burger
chain still managed to top Wall Street profit estimates thanks to its
cost-cutting efforts in the United States, the company said Tuesday. That sent
shares up more than 10 percent before falling back later in the session.
For the three months that
ended June 30, Burger King earned $58.9 million, or 43 cents per share. That
compares with a profit of $50.6 million, or 37 cents per share, in the same
period a year earlier.
By The Associated Press
The Dow rose 30.01, or 0.3
percent, to 9,539.29.
The Standard & Poor's
500 index rose 2.43, or 0.2 percent, to 1,028.00, while the Nasdaq composite
index rose 6.25, or 0.3 percent, to 2,024.23.
Benchmark crude for October
delivery fell $2.32 to settle at $72.02 a barrel in trading on the New York
Mercantile Exchange.
In other Nymex trading,
gasoline for September delivery fell 4.21 cents to settle at $2.007 a gallon
and heating oil fell 6.75 cents to settle at $1.8559 a gallon. Natural gas fell
4.1 cents to settle at $2.882 per 1,000 cubic feet.
In London, Brent crude fell
$2.44 to settle at $71.82.