AP Business Highlights

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On Monday January 4, 2010, 6:00 pm

Tax preparers to face new regulation, IRS scrutiny

WASHINGTON (AP) -- The IRS plans to require tax preparers to pass a test and register with the government to better police a largely unregulated industry used by most taxpayers.

The Internal Revenue Service says there could be more than a million people offering tax preparation services. Most offer sound advice, IRS Commissioner Doug Shulman says, but many don't and the agency knows little about them.

The new regulations, announced Monday, won't be in effect for the current filing season -- individual tax returns are due April 15. But Shulman said tax preparers will be held to higher standards in future years as the IRS steps up its oversight to help reduce fraud and errors.

Manufacturing report bolsters hopes for recovery

WASHINGTON (AP) -- An unexpectedly strong report on manufacturing activity Monday bolstered confidence that the nation's factories will help sustain an economic recovery.

The report by a private trade group signals that industrial production is likely to keep expanding in coming months, economists said. That could lead, in turn, to increased hiring and job creation.

The Institute for Supply Management, a trade group of purchasing executives, said its manufacturing index read 55.9 in December after 53.6 in November. A reading above 50 indicates growth.

It was the fifth straight month of expansion and the highest reading for the index since April 2006.

Stock rally at start of 2010 augurs well -- maybe

NEW YORK (AP) -- If the stock market holds to a pattern it has followed for most of the past 40 years, 2010 could be a big year for investors.

Since 1973, a big advance on the first trading day of January has been a strong sign stocks will post robust gains for the rest of the year.

On Monday, upbeat news about manufacturing lifted the Dow Jones industrial average 155 points, or 1.5 percent. The Standard & Poor's 500 index rose 17 points, or 1.6 percent.

When the S&P 500 has gained more than 1 percent on the first day of trading, the index has ended the year higher 86 percent of the time, according to Schaeffer's Investment Research.

AP: 2009 bankruptcies total 1.4 million, up 32 pct

RALEIGH, N.C. (AP) -- U.S. consumers and businesses are filing for bankruptcy at a pace that made 2009 the seventh-worst year on record, with more than 1.4 million petitions submitted, an Associated Press tally showed Monday.

The AP gathered data from the nation's 90 bankruptcy districts and found 1.43 million filings, an increase of 32 percent from 2008. There were 116,000 recorded bankruptcies in December, up 22 percent from the same month a year before.

While experts believe some of the increase is due to a natural recovery as consumers and attorneys become accustomed to a recent overhaul of bankruptcy laws, the numbers indicate clear correlations to recession-weary regions. Arizona saw the fastest increase, a jump of 77 percent from the year before, followed by Wyoming (60 percent), Nevada (59 percent) and California (58 percent).

Year kicks off with jumping energy prices

NEW YORK (AP) -- Oil started the new year Monday trading above $81 a barrel, almost double what it fetched at the beginning of 2009 even though the U.S. is using much less.

Prices, which have been propped up by a weak dollar, will get even more support as winter weather chills the country. The U.S. may be using less crude, but China and other developing nations are using more to fuel their burgeoning manufacturing industries, and that can push prices higher in the U.S. as well.

Gasoline, heating oil and other fuels are already heading higher and may continue to do so as the market tests how much people are willing to pay for energy, analysts said.

Novartis looks to buy out Alcon for $38.5 bln

GENEVA (AP) -- Drug maker Novartis AG made a bid to become a leading player in the growing global market for eye-care products Monday with an announcement that it plans to take over Alcon Inc. by paying $38.5 billion for the 77 percent stake it does not already own.

Novartis will buy Nestle SA's 52 percent stake for $28 billion in cash before carrying out a merger with Alcon that would give it control of the remaining 23 percent held by minority shareholders.

The Basel-based drug maker had already purchased 25 percent of Alcon from Nestle in April 2008 for $11 billion, with the option of buying the food and drinks company's remaining stake at a later date.

Total latest to make a play for US natural gas

The race for the country's natural gas riches grew more crowded Monday with the announcement that France's Total SA would spend $2.25 billion to gain new access to deep fields in Texas.

Total's deal with Chesapeake Energy Corp. comes just three weeks after Exxon Mobil Corp. said it will buy XTO Energy Inc., another prolific natural gas company, in a $31 billion all-stock deal.

Estimates of total U.S. gas reserves have risen so sharply in just two years, thanks to improvements in technology developed in the U.S., they have caught the eye of major integrated oil companies that until recently had left unconventional natural gas plays in the U.S. to smaller producers.

And Total, like Exxon, promised to take what it learns in the U.S. to natural gas fields across the globe.

Northrop Grumman to move corporate office to DC

LOS ANGELES (AP) -- Defense contractor Northrop Grumman Corp. said Monday it's moving its corporate office from Los Angeles to the Washington, D.C., area to be closer to key government customers.

The company said it expects to make the move by 2011.

Northrop said it was looking for a location in the Washington area, including the Maryland and Virginia suburbs. It plans to pick a site by this spring and open the office in summer 2011.

The corporate office will house only 300 of Northrop's 120,000 employees worldwide but give it a symbolic and physical tie to the nation's capital. Other defense contractors are located near Washington, including Lockheed Martin Corp., which is based in the suburb of Bethesda, Md.

$24 billion lawsuit filed against Credit Suisse

BOISE, Idaho (AP) -- Property owners at four struggling and bankrupt resorts in Idaho, Montana, Nevada and the Bahamas have filed a $24 billion federal lawsuit against Credit Suisse Group, saying the banking giant gave predatory loans to the resorts' investors as part of a scheme to take over the properties.

Property owners at Idaho's Tamarack Resort, the Yellowstone Club in Montana, Nevada's Lake Las Vegas resort and the Ginn Sur Mer Resort in the Bahamas contend that Credit Suisse set up a branch in the Cayman Islands to skirt U.S. federal bank regulations and appraised the resorts at artificially inflated values as part of a plan to foreclose.

A spokesman for the Switzerland-based bank, Duncan King, said the lawsuit is without merit and the company will fight the claims.

The lawsuit, filed in Boise's U.S. District Court on Sunday, seeks class-action status.

By The Associated Press

The Dow Jones industrials rose 155.91, or 1.5 percent, to 10,583.96. The Standard & Poor's 500 index rose 17.89, or 1.6 percent, to 1,132.99, while the Nasdaq composite index rose 39.27, or 1.7 percent, to 2,308.42.

Benchmark crude for February delivery climbed $2.15 to settle at $81.51 a barrel on the New York Mercantile Exchange. The price reached as high as $81.68, and it could overtake the 2009 high of $82 a barrel this week if the government reports a large drop in supply.

Natural gas also jumped nearly 6 percent, adding 31.2 cents to settle at $5.884 per 1,000 cubic feet.

In other Nymex trading in February contracts, heating oil rose 7.49 cents to settle at $2.1905 a gallon and gasoline gained 5.15 cents to settle at $2.1044 a gallon.

In London, Brent crude for February delivery added $2.19 to settle at $80.12 a barrel on the ICE Futures exchange.

 

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