Business Highlights
Tuesday July 29, 7:13 pm ET

Americans look for ray of hope in economic gloom

NEW YORK (AP) -- A private research group says that Americans remain the most pessimistic about the economy since the tail end of the last prolonged recession 16 years ago.

But economists warn that the slight uptick, which reverses a six-month slide since January, is likely to be only temporary and doesn't signal the beginning of a rally.

The Conference Board said Tuesday that its Consumer Confidence Index stands at 51.9 for July -- about half of what it was a year ago and still the lowest since the index registered 54.6 in October 1992, when the economy was coming out of a recession.

But the reading was slightly higher than the revised 51.0 level for June and a bit better than the 50 economists expected. Still, economists were cautious.

Home prices drop by record 15.8 pct. in May

NEW YORK (AP) -- Home prices tumbled by the steepest rate ever in May, according to a closely watched housing index released Tuesday, as the housing slump deepened nationwide.

The Standard & Poor's/Case-Shiller 20-city index dropped by 15.8 percent in May compared with a year ago, a record decline since its inception in 2000. The 10-city index plunged 16.9 percent, its biggest decline in its 21-year history.

No city in the Case-Shiller 20-city index saw price gains in May, the second straight month that's happened. The monthly indices have not recorded an overall home price increase in any month since August 2006.

Oil hits 7-week low on demand worries, dollar gain

NEW YORK (AP) -- Oil prices tumbled more than $2 a barrel Tuesday, finishing at their lowest level in seven weeks as a stronger dollar and beliefs that record prices are eroding the world's thirst for energy sparked another dramatic sell-off.

The drop -- which surpassed $4 a barrel at one point during the day -- was a throwback to oil's nosedive over the past two weeks and outweighed supply concerns touched off by a militant attack Monday on two Nigerian crude pipelines. It was oil's seventh decline in the last 10 sessions.

Light, sweet crude for September delivery fell $2.54 to settle at $122.19 on the New York Mercantile Exchange. It was the lowest settlement price for a front-month contract since June 10. Earlier, prices fell to $120.42, also the lowest level since June 10. Oil has now fallen more than $25 from its trading high of $147.27, reached July 11.

Stocks soar after another drop in oil prices

NEW YORK (AP) -- Wall Street shot higher Tuesday, gaining back the previous session's sharp losses and then some, after a drop in oil prices and a rise in consumer confidence gave investors some hope for a letup in Americans' financial woes.

The prospect of lower energy costs for U.S. consumers, along with a modest uptick in the Conference Board's July index of consumer confidence, came as welcome news. Consumer spending accounts for more than two-thirds of U.S. economic activity.

A stock bounce was hardly unexpected, though, after the Dow lost nearly 240 points Monday on worries about the sagging financial sector. The Dow gained 266.48, or 2.39 percent, to 11,397.56 Tuesday.

Trade talks failure deals blow to global economy

GENEVA (AP) -- After coming tantalizingly close to a historic trade deal, World Trade Organization talks collapsed Tuesday in a dismaying blow to seven years of efforts to open up the global economy.

Once promised as a recipe for lifting millions of people out of poverty, the end to nine days of high-level talks left no new trade openings for farmers and manufacturers, no global economic boost and no grand deal for Third World development.

While the talks have struggled before, this failure was perhaps the most devastating. Faced with global unrest from rising food prices, credit problems from shaky financial markets and the threat of economic downturn, negotiators hoped that a deal this week to open farm and industrial markets would go some way to alleviating these problems.

Starbucks to cut 1,000 non-store jobs by July 29

NEW YORK (AP) -- Starbucks Corp., which already plans to shut 600 stores, said Tuesday it is also cutting almost 1,000 non-store jobs as part of its bid to re-energize the brand and boost its profit by cutting costs.

In a letter to all employees, Chief Executive Howard Schultz said the gourmet coffee chain is reducing the number of positions and partners across the country.

The jobs being cut are in addition to the layoffs from the store closures. Starbucks has said it will shut down 600 underperforming locations, the first 50 of which are being closed this month.

Bennigan's files for bankruptcy protection

NEW YORK (AP) -- Restaurant chains Bennigan's and Steak & Ale have filed for Chapter 7 bankruptcy protection and stores owned by its parent company will shut their doors.

The companies owned by privately held Metromedia Restaurant Group of Plano, Texas, filed for bankruptcy protection Tuesday in the Eastern District of Texas, less than two months after Metromedia said it was not preparing to do so. Metromedia Restaurant Group is a part of Metromedia Co., owned by billionaire John Kluge, that has interests in entertainment, radio stations and medical equipment.

In a Chapter 7 filing, a company seeks to liquidate its assets and shut down.

Coal buyout fever is on; Cominco makes $14B deal

CHARLESTON, W.Va. (AP) -- A global consolidation of the coal industry is shifting into overdrive.

Mining giant Teck Cominco said Tuesday it will buy up all of the Fording Canadian Coal Trust for close to $14 billion in cash and stock. The deal is just the latest in a growing string of giant acquisitions centered on coking coal, a key raw material for certain steel mills.

Coking coal prices have gained more than 50 percent since April 1 to $250 a ton or more, driven by tight supplies and demand from China, India, Russia, Europe and Brazil. When combined with the soaring cost of scrap metal, iron ore and other raw materials, mining interests such as Teck Cominco and international steel companies have begun snapping up coal producers in the U.S. and overseas.

Siemens seeks damages from 11 ex-execs

BERLIN (AP) -- Siemens AG said Tuesday it plans to sue two former CEOs and nine other ex-executives for alleged supervisory failings in a corruption scandal that has cost the company millions in fines and damaged its reputation.

Siemens' supervisory board decided to seek damages from former chief executive Heinrich von Pierer and his successor, Klaus Kleinfeld, now the chief executive of U.S.-based Alcoa Inc., and others, the industrial conglomerate said in a statement.

It did not specify how much money it would demand.

Alcatel-Lucent chairman and CEO to quit

PARIS (AP) -- Both the chairman and chief executive of French telecommunications giant Alcatel-Lucent will resign later this year, the company said Tuesday, as stagnant demand from operators and the weak dollar continued to undermine the promises of their two-year-old combination.

The announcement of the departures of Chairman Serge Tchuruk and Chief Executive Patricia Russo came as the world's largest fixed and mobile telecom gear maker reported its sixth consecutive quarter of losses.

Tchuruk will step down Oct. 1, and Russo will resign "no later than the end of the year," the company said in a statement, adding that the search for replacements is to begin immediately.

US Steel 2Q profit more than doubles

PITTSBURGH (AP) -- United States Steel Corp. said Tuesday that its second-quarter profit more than doubled and it expects continued robust growth in the third quarter because of surging demand and higher prices.

The Pittsburgh-based steel producer also raised its quarterly dividend 20 percent, and the company's shares shot up more than 14 percent.

Substantial price increases across U.S. Steel's three business segments -- flat-rolled, European operations and tubular -- outpaced increases in the cost of raw materials, the company said. Shipments also reached record levels, with mills operating at high output rates in North America and Europe.

By The Associated Press

The Dow gained 266.48, or 2.39 percent, to 11,397.56.

Broader stock indicators also climbed. The Standard & Poor's 500 index rose 28.83, or 2.34 percent, to 1,263.20, and the Nasdaq composite index rose 55.40, or 2.45 percent, to 2,319.62.

Light, sweet crude for September delivery fell $2.54 to settle at $122.19 on the New York Mercantile Exchange.

In other Nymex trading, heating oil futures fell 8.98 cents to settle at $3.4722 a gallon while gasoline prices fell 6.23 cents to settle at $3.0077 a gallon. Natural gas futures rose 5.4 cents to settle at $9.217 per 1,000 cubic feet after trading lower most of the day.

In London, September Brent crude lost $3.07 to $122.77 a barrel on the ICE Futures exchange.