On Tuesday December 28, 2010, 6:08 pm EST
After holiday spree, doubts
about economy linger
NEW YORK (AP) -- Holiday
spending surged this year, but Americans still have their doubts about the
economy.
With unemployment high and
home prices falling in the nation's largest cities, consumer confidence took an
unexpected turn for the worse in December.
The decline followed two
months of rising optimism. Economists say the economic recovery is likely to be
less fitful next year.
Allstate sues Countrywide
over toxic investments
NEW YORK (AP) -- Allstate
Corp. has filed a federal lawsuit against Countrywide Financial Corp. over $700
million in toxic mortgage-backed securities that the insurer bought beginning
in 2005, only to see their value decline rapidly.
The suit, filed Monday in
Manhattan federal court, targets Countrywide, its co-founder and longtime CEO
Angelo Mozilo and other executives, as well as Bank of America Corp., which
bought the mortgage giant in 2008.
Allstate maintains that
beginning in 2003, Countrywide abandoned its underwriting standards and
misrepresented crucial information about the underlying mortgage loans that
made up the securities it sold. The company, then the nation's largest home
loan originator, presented securities backed by the mortgages as safe
investments to Allstate and others by concealing material facts, the suit
alleges.
Charlotte, N.C.-based Bank
of America said it is still reviewing the complaint, "but this
unfortunately appears to be a situation where a sophisticated investor is
looking for someone to blame for a downturn in the economy and losses on an
investment it made." Mozilo's attorney did not immediately respond to a
request for comment.
Alcatel to pay $137M to
settle bribery charges
NEW YORK (AP) --
Alcatel-Lucent SA has agreed to pay more than $137 million to settle charges
brought against it by the federal government.
The Securities and Exchange
Commission accused the Paris-based maker of telecommunications gear of paying
bribes to foreign government officials to illegally win business in Latin
America and Asia.
Alcatel, a top supplier to
U.S. and European phone companies, agreed to pay more than $45 million to
settle the SEC's charges. It will pay an additional $92 million to settle
separate criminal charges announced by the Justice Department.
The SEC's complaint said
Alcatel's bribes went to government officials in Costa Rica, Honduras, Malaysia
and Taiwan between December 2001 and June 2006. Alcatel bought U.S.-based
Lucent Technologies at the end of 2006.
BAGHDAD (AP) -- Iraq's
Kurds said they won't resume oil exports from their self-ruled territory unless
the central government recognizes the contracts they have already signed on
their own with international energy companies.
The Kurds' condition could
foil ambitious Iraqi plans to raise daily oil exports to 2.25 million barrels
in 2011 from the current 1.9 million. Oil revenue accounts for nearly 95
percent of Iraq's budget as the energy-rich nation tries to rebuild the country
after decades of wars and international sanctions.
Since the 2003 U.S.-led
invasion that toppled the regime of Saddam Hussein, the Kurds have sought
greater control over oil in their autonomous region in northern Iraq while
Baghdad has argued that oil is a national resource under the central
government's control.
China shrinks rare earths
export quota
NEW YORK (AP) -- Shares of
North American companies that mine rare earths jumped after China said it will
cut exports of such materials by 11 percent next year.
China is the world's
largest producer of rare earths, which are vital to manufacturing high-tech
products such as cell phones, computer drives and hybrid cars. A drop in
Chinese exports would boost demand for competing companies in the U.S., Canada
and Australia.
Vancouver-based Rare
Element Resources Ltd. added $1.21, or 10.3 percent, to $12.94. Denver-based
Thompson Creek Metals Company Inc. added 72 cents, or 5.5 percent, to $13.94.
Shares of Greenwood Village, Colo.-based Molycorp Inc. surged 11 percent on the
announcement but ended up paring their gains to finish down 6 percent at
$46.18.
China has cut rare earth
exports during the past several years as demand rises at home. It's also
cutting exploration and production out of environmental concerns, according to
a spokesman for China's commerce ministry.
China's dominance in rare
earths had raised concerns that it would increasingly use it as political
leverage against other countries. Earlier this year, Beijing blocked mineral
shipments to Japan amid a dustup over disputed islands.
NY struggles to dig out;
passengers still stranded
NEW YORK (AP) -- Hundreds
of airline passengers were stranded for up to 10 hours on the tarmac at
overworked Kennedy Airport. Ambulances struggled to get patients through
unplowed streets. City buses sat abandoned in the snow.
The Christmas weekend
blizzard proved to be the curse that keeps on giving Tuesday, as confusion and
frustration snowballed in New York and the rest of the country.
Officials warned it could
take until New Year's to rebook all passengers and straighten out the
transportation mess created by the storm, which shut down all three of New
York's major airports for 24 hours and caused a ripple effect across the U.S.
Time Warner Cable customers
may lose TV networks
NEW YORK (AP) -- Time
Warner Cable Inc. customers from Portland, Maine, to Pensacola, Fla., could
lose access to one of their network TV stations because of a contract dispute
with Sinclair Broadcast Group.
The dust-up between
Sinclair and Time Warner is one of a growing number of disputes over the fees
that cable providers pay broadcast stations to include their signals in channel
lineups. The last high-profile dispute that caused a blackout came earlier this
year when Cablevision Systems Corp. customers went without Fox programming for
15 days -- missing two World Series games.
In most cases, however,
cable and broadcast companies have been able to avoid blackouts, even if
negotiations go down the wire.
Obama's economist pick seen
as sign of new agenda
HONOLULU (AP) -- Obama is
expected to announce a replacement for departing National Economic Council
director Lawrence Summers early in the new year, soon after he returns to
Washington from his Hawaiian vacation. The president's choice is being closely
watched for signs of where he wants to take his economic agenda in the second
half of his term, and how he looks to bring down the almost double-digit
unemployment rate.
With the unemployment rate
at 9.8 percent, the private sector struggling to maintain steady growth and the
public ranking the economy as the top concern, Obama's handling of the issue
over the coming months is certain to play a central role in his expected
reelection bid.
By The Associated Press
The Dow industrial average
closed the day higher by 20.51 points, or 0.2 percent, to 11,575.54. It was the
highest close for the index since August 28, 2008.
The Standard and Poor's 500
index was up 0.97, or less than 0.1 percent, to 1,258.51. The
technology-focused Nasdaq composite index lost 4.39, or 0.2 percent, to
2,662.88.
Benchmark crude for
February delivery rose 49 cents to settle at $91.49 per barrel on the New York
Mercantile Exchange.
In other Nymex trading in
January contracts: heating oil added less than a penny to settle at $2.5243 per
gallon; gasoline futures gave up 1.53 cents to settle at $2.4056 per gallon and
natural gas added 10.4 cents to settle at $4.216 per 1,000 cubic feet. In
London, Brent crude added 53 cents to settle at $94.38 on the ICE Futures
exchange.