US manufacturing activity, new orders grow in Aug.
NEW YORK (AP) -- The U.S.
manufacturing sector grew in August for the first time in 19 months, adding to
evidence that the recession is ending.
The better-than-expected
reading Tuesday by the Institute for Supply Management showed the highest
number for its manufacturing index since June 2007. New customer orders jumped
to a level not seen since late 2004.
And in another sign of an
improving economy, a gauge of future U.S. home sales rose more than expected in
July to the highest point in more than two years.
Worries about banks drag
stock market lower
NEW YORK (AP) -- A stock
market ripe for a big pullback succumbed Tuesday, plunging when rumors of a
bank failure revived investors' anxiety about the banking industry and the
economy as a whole.
A batch of economic reports
that just weren't good enough added to the mix as the major indexes all fell
about 2 percent and the Dow Jones industrials slid 185 points to 9,310.60.
Treasury prices, usually the beneficiary of a slide in stocks, ended only
moderately higher.
A break in the market's
rally was widely expected because pressure to sell has been building for some
time. While the major indexes finished August with respectable gains, including
a 3.4 percent rise in the Standard & Poor's 500, trading was erratic and
there was little conviction behind the advances.
Clunkers aid Ford, Toyota
sales; GM, Chrysler fall
DETROIT (AP) -- The Cash for
Clunkers program boosted sales at Ford, Toyota and Honda in August as consumers
snapped up their fuel-efficient offerings, but rivals Chrysler Group LLC and
General Motors Co. withstood another month of falling sales.
The program, which ended on
Aug. 24, drew hordes of buyers into quiet showrooms by offering up to $4,500
toward new, more fuel-efficient cars and trucks. The hefty rebates gave
automakers and dealers a much-needed lift, spurring 690,114 new sales, many of
them during August, at a taxpayer cost of $2.88 billion.
Other automakers are
expected to release U.S. sales figures later Tuesday. Combined, the results are
likely to mark the first year-over-year monthly sales gain since October 2007.
Jobless rates up in fewer
metro areas in July
WASHINGTON (AP) -- In a
sharp improvement, the largest U.S. metropolitan areas were evenly split in
July between those where unemployment rates rose from June and those where
rates fell.
In June, by contrast, 90
percent of the 380 metro areas had seen their jobless rates rise from the
previous month.
Much of the improvement was
due to seasonal factors. They include the hiring of farm workers in many
agricultural states and lower unemployment in college towns after a jump at the
start of summer.
The metro employment
figures, issued Tuesday by the Labor Department, aren't adjusted for such
seasonal changes, so they tend to be volatile from month to month. And many of
the changes in local unemployment rates in July were too small to signal larger
trends.
EBay partially undoes Skype
deal, selling majority
SAN FRANCISCO (AP) -- Rather
than enduring the uncertainty of spinning off the Skype telecommunications
service through a public stock offering, eBay Inc. has found a different way
out: It is selling the majority of Skype for about $2 billion to a group of
private investors.
The deal will help eBay undo
its 2005 acquisition of Skype, a deal that puzzled analysts. Despite Skype's
strong, steady growth, it was hard to see how eBay, which specializes in
running online marketplaces and facilitating Internet payments, needed to own a
service that lets people make free or cheap calls on cell phones and computers.
EBay said Tuesday that it
will trade a 65 percent stake in the business to a group of private investment
funds for $1.9 billion in cash and $125 million to be paid later. EBay will own
the other 35 percent.
Oil prices fall as stock
markets decline
COLUMBUS, Ohio (AP) -- Oil
prices dipped again Tuesday despite new indications that the U.S. manufacturing
and housing industries may be on the mend.
Benchmark crude for October
delivery fell $1.91 to settle at $68.05 a barrel on the New York Mercantile
Exchange.
The contract Monday lost
$2.78 to settle at $69.96, meaning crude has fallen almost 6 percent this week.
On Tuesday, however, it
appeared energy prices were rebounding after the Institute for Supply
Management, a trade group of purchasing executives, said its manufacturing
index rose to 52.9 in August. That is the first reading above 50, which
indicates expansion, since January 2008. It's also the highest since June 2007.
New rules coming to fight
pilots' fatigue?
WASHINGTON (AP) -- Crowded
skies and exhausted pilots are a bad mix, the airline industry and pilot unions
agree, but they're struggling over what to do about it.
The airlines want to
schedule some pilots with less-taxing flights -- fewer takeoffs and landings --
but for longer, not shorter, hours in the cockpit. The unions say they won't
agree to more hours for those pilots in exchange for fewer hours for pilots who
fly as many as a half dozen short flights a day or take off at odd times.
That was the main sticking
point in an otherwise harmonious effort over the past month and a half to
rewrite flying-time rules that in many cases are a half-century old and predate
recent scientific findings concerning fatigue. The advisory committee on pilot
fatigue was expected to deliver its recommendations to the Federal Aviation
Administration late Tuesday.
Newspaper publisher Freedom
files for Chapter 11
SAN FRANCISCO (AP) -- The
owner of the Orange County Register in California and dozens of other
newspapers became the latest publisher Tuesday to seek bankruptcy protection,
driven into financial despair by a staggering drop in advertising revenue.
The filing was part of a
prepackaged plan approved by a majority of Freedom's lenders. The consensus on
the proposed restructuring should minimize that haggling that can bog down
bankruptcy proceedings.
In a Chapter 11 petition
made Tuesday in Wilmington, Del., Freedom Communications Inc. listed debts of
more than $1 billion and assets of $500 million to $1 billion. Freedom's debt
includes $770 million owed to a group of banks led by JPMorgan Chase & Co.
American to cut 921 flight
attendants' jobs
DALLAS (AP) -- American
Airlines is cutting 921 flight attendant jobs as it deals with an ongoing
downturn in traffic and lower revenue.
The airline said Tuesday
that the cuts will take effect Oct. 1 and reduce its flight-attendant ranks by
about 6 percent.
American, the second-largest
U.S. airline, said 228 employees will be furloughed -- laid off but with
rehiring rights -- and the company will put 244 more on leave for two months.
Another 449 will take voluntary options such as leave.
Nearly half of the flight
attendants to be furloughed are based at New York's LaGuardia Airport.
The airline said it planned
to cut 1,200 flight attendant jobs but was able to reduce the number by
adjusting staffing requirements for the winter.
Report: Bank of America
offering to repay some aid
CHARLOTTE, N.C. (AP) -- Bank
of America Corp. is looking to pay back some of the billions in federal bailout
aid it has received in an effort to get out from underneath the government's
thumb, according to a published report.
Meanwhile, the government
wants the bank to pay about $500 million to terminate a tentative pact in which
the U.S. agreed to share losses on certain Bank of America assets, The Wall
Street Journal reported late Monday, citing people familiar with the matter.
Paying off those loans could
help ease some of the government scrutiny over Bank of America's operations,
including pay restrictions required of companies that have received federal
aid. But some analysts question if the Charlotte, N.C.-based bank actually has
the means to pay back the money, and whether the government will actually let the
bank do so.
By The Associated Press
The Dow dropped 185.68, or 2
percent, to 9,310.60.
The S&P 500 fell 22.58,
or 2.2 percent, to 998.04, while the Nasdaq composite index fell 40.17, or 2
percent, to 1,968.89.
Benchmark crude for October
delivery fell $1.91 to settle at $68.05 a barrel on the New York Mercantile
Exchange.
In other Nymex trading,
gasoline for October delivery fell by 2.77 cents to settle at $1.7822 a gallon
and heating oil fell 4.96 cents to settle at $1.7589 a gallon. Natural gas shed
15.6 cents to settle at $2.821 per 1,000 cubic feet.
In London, Brent crude fell
$1.92 to settle at $67.73.