Economy's small drop in 2Q hints recession ending
WASHINGTON (AP) -- Further
evidence the recession is ending came in a report Thursday confirming that the
economy shrank at an annual rate of just 1 percent in the spring.
Many analysts say growth
likely returned in the current quarter. Smaller dips in consumer spending and
other areas during the April-June period led some economists to raise their
forecasts for the July-September quarter.
But with unemployment aid
claims stubbornly high, Americans may benefit little from a recovery if jobs
remain scarce and spending stays too low to fuel a strong rebound.
Stock market reverses early
losses, plods higher
NEW YORK (AP) -- The stock
market's rally plodded along Thursday, sustained by sharp gains in financial
and industrial shares.
Major indexes overcame early
losses and finished slightly higher, including the Dow Jones industrial
average, which added 37 points to set a fresh 2009 high at 9,580.63. The Dow
has risen for eight straight days, its longest winning streak since April 2007.
Trading lacked enthusiasm,
however, as it has over the past week, with many investors shying away from
making greater commitments to stocks.
Boeing sets new test flight
date for delayed 787
UNDATED (AP) -- Boeing says
its 787 aircraft will be ready for its first test flight by the end of this
year and its initial delivery in the last three months of 2010, sending its
shares higher as it gives some clarity to a program that has been delayed five
times already.
Boeing originally scheduled
the 787's first test flight for the fall of 2007. But production problems have
forced the company to postpone trial flights of the next-generation passenger
jet. The first delivery to Japan's All Nippon Airways Co. is now more than two
years behind its original schedule.
After so many false starts,
airline customers and some Wall Street analysts have become more skeptical of
Boeing's timetable for the 787, built with lightweight carbon composite parts
for fuel efficiency.
Awash in natural gas, prices
hit new 7-year lows
NEW YORK (AP) -- Natural gas
prices slumped to their lowest level in seven years Thursday after the
government reported that salt caverns, aquifers and other underground areas
where it is stored are filling up.
Levels of natural gas have
been building because power-intense industries like manufacturing have cut back
severely on production.
Natural gas tumbled 6.7
cents to settle at $2.843 per 1,000 cubic feet. The price dropped as low as
$2.692 per 1,000 cubic feet earlier in the day, a price not seen since Aug. 7,
2002. The contract is scheduled to end Thursday, however, and most of the
trading already has switched to the October contract that gave up 4.6 cents to
trade at $3.248.
Meanwhile, crude and
gasoline futures were tugged higher as equities markets rose and the dollar
fell among other major currencies.
Bank insurance fund down 20
percent in 2Q
WASHINGTON (AP) -- The
agency that guarantees bank deposits said Thursday there are no immediate plans
to borrow money from the government to bolster its insurance fund, which has
shrunk under the weight of collapsing banks.
The fund fell 20 percent to
$10.4 billion in the second quarter as U.S. banks overall lost $3.7 billion,
the Federal Deposit Insurance Corp. said. That's the fund's lowest point since
1992 at the height of the savings-and-loan crisis. Some analysts have warned
that the fund could fall below zero by year's end.
The FDIC estimates bank
failures will cost the fund around $70 billion through 2013. Eighty-one banks
have failed so far this year, and hundreds more are expected to fall in coming
years largely because of souring loans for commercial real estate.
Plea deal reveals new
details about swindle case
HOUSTON (AP) -- The former
finance chief for jailed Texas financier R. Allen Stanford said his boss
created a business empire where blood oaths were taken to secure loyalty,
bribes were paid from a secret Swiss bank account and investor profits were
more fiction than financial genius.
New details about how
Stanford allegedly bilked investors out of $7 billion were made public Thursday
after James M. Davis, Stanford's former chief financial officer, became the
first person to plead guilty in the case.
Davis pleaded guilty in
Houston federal court to three counts: conspiracy to commit mail, wire and
securities fraud; mail fraud; and conspiracy to obstruct a Securities and
Exchange Commission investigation. The plea is part of a deal Davis, who has
been helping prosecutors, made with the Justice Department in exchange for a
possible reduced sentence.
Dell profit down 23 pct but
surpasses estimate
SAN FRANCISCO (AP) -- Dell
Inc.'s second-quarter profit was whacked 23 percent as the personal-computer
industry's slump dragged on this summer. The results beat Wall Street's
forecast, however, sending the shares up more than 6 percent.
Dell's results reinforce a
trend outlined in the latest numbers from rival Hewlett-Packard Co., the
world's No. 1 PC seller, and supplier Intel Corp., the biggest computer chip
maker: Consumer demand for PCs is perking up, but spending by corporations is
still weak.
Dell's shipments of consumer
PCs increased 17 percent over last year, while revenue in that category was
down 9 percent to $2.9 billion. Price-cutting explains the discrepancy. PC
makers have been slashing prices to preserve market share. Consumers also have
been favoring little "netbook" laptops that generate lower profit
margins for manufacturers.
Toll Brothers lost $472
million in Q3
UNDATED (AP) -- A huge tax
hit wiped out Toll Brothers' profits for the third fiscal quarter, but the
luxury builder saw housing markets improve in many parts of the country.
Toll posted its first annual
increase in new home contracts since 2005. Its cancellation rate was the lowest
in three years. Better still, the current quarter is off to a good start with
26 percent more buyers putting down deposits than a year ago.
While home sales continue to
be hampered by job losses and tighter mortgage lending standards, recent
housing data and reports from major homebuilders like Toll Brothers Inc.
suggest the worst of the housing market slide may be over. Nationally, new home
sales have risen for four months in a row, and prices have edged up for the
past two months.
Banks trim borrowing from
emergency Fed program
WASHINGTON (AP) -- Banks
reduced their borrowing from a Federal Reserve emergency lending program for
the third straight week, a sign the institutions are having an easier time
getting credit from private markets.
The Fed said Thursday that
commercial banks averaged $30 billion in daily borrowing over the week that
ended Wednesday. That's down from $30.7 billion in the week ended Aug. 19.
Squeezed banks borrow from
the Fed when they have trouble getting the money elsewhere. At the height of
the financial crisis last fall, investors cut banks off and shifted money into
safer Treasury securities. Financial institutions hoarded much of their cash,
rather than lending it to each other or customers. That lockup in lending
worsened the current recession, the deepest since World War II.
Toyota plans to end
production at Calif. plant
WASHINGTON (AP) -- Toyota
Motor Corp. plans to end production in March 2010 at a California joint venture
where it has built vehicles with General Motors, the company said Thursday.
The decision would mean the
shutdown of the sole auto assembly plant on the West Coast if no other carmaker
should emerge to keep it going.
Toyota's board voted early
Thursday to end the company's production contract at the Fremont, Calif.-based
New United Motor Manufacturing Inc., spokeswoman Cindy Knight confirmed.
Toyota had said previously
that it was moving toward liquidating its stake in the California facility
after the plant's fate was thrown into question in June when GM announced it
was withdrawing from the 50-50 joint venture.
By The Associated Press
The Dow rose 37.11, or 0.4
percent, to close at 9,580.63.
The Standard & Poor's
500 index rose 2.86, or 0.3 percent, to 1,030.98, while the Nasdaq composite
index rose 3.30, or 0.2 percent, to 2,027.73.
Benchmark crude for October
delivery added $1.06 to settle at $72.49 a barrel on the New York Mercantile
Exchange.
Natural gas tumbled 6.7
cents to settle at $2.843 per 1,000 cubic feet.
In other Nymex trading,
gasoline for September delivery increased 4.88 cents to settle at $2.0314 a
gallon and heating oil added less than a penny to settle at $1.8592 a gallon.
In London, Brent crude rose 86 cents to settle at $72.51.