AP
Business
Highlights
Tuesday
February 17, 6:59 pm ET
Obama signs huge stimulus, readies
foreclosure aid
DENVER (AP) -- Racing to reverse the country's economic spiral,
President Barack Obama signed a mammoth stimulus package into law Tuesday and
readied a $50 billion rescue plan for Wednesday announcement to help legions of
homeowners who are facing foreclosure.
Obama focused on the $787 billion stimulus plan, an ambitious
package of federal spending and tax cuts designed to revive the economy and
save millions of jobs. Most wage-earners will soon see the first paycheck
evidence of tax breaks that will total $400 for individuals and $800 for
couples.
The stimulus package was a huge victory for Obama less than one
month into his presidency. But he struck a sober tone and lowered expectations
for an immediate turnaround in the severe recession that is well into its
second year.
GM, Chrysler seek more govt aid, to cut
more jobs
General Motors on Tuesday said it could need up to $30 billion
from the Treasury Department to keep operating. Included in that amount is
$13.4 billion the company has already received. Previously, GM had said it
could need as much as $18 billion.
General Motors Corp. and Chrysler LLC said Tuesday they'll need
billions more in government loans than they predicted just two months ago.
GM's survival plan also calls for the cutting of a total of
47,000 jobs and the closing of five more
Meanwhile, the United Auto Workers union
said it has reached a tentative agreement with Chrysler, GM and Ford Motor Co.
on modifications to existing labor contracts.
Stocks drop on worries about economy, automakers
The problems that slammed stocks last year -- ailing banks,
foundering automakers, tumbling home prices and cash-strapped consumers --
haven't let up. Instead, the issues have festered, and are threatening to push
As Obama signed his $787 billion stimulus bill and automakers
scrambled to come up with restructuring plans, the Dow Jones industrial average
closed down 297.81 points, or 3.79 percent, at 7,552.60 -- just 31-hundredths
of a point above its post-meltdown Nov. 20 close of 7,552.29, which was its
lowest close in five-and-a-half years.
SEC charges
Two months after Bernard Madoff was
accused of running the largest investment fraud in history, Securities and
Exchange Commission officials raided the offices of Stanford, a Texas
billionaire, and froze the assets of three companies he controls, saying he
perpetrated an $8 billion investment fraud.
Stanford was accused in civil charges of lying about the safety
of investments he sold as "certificates of deposit" and promised
unrealistically high rates of return. Regulators also said he faked historical
data about other investments which he then used to lure in more investors for
the CD products.
The fraud's operations allegedly reached as far as the tiny
Caribbean
Wal-Mart reports better-than-expected 4Q earnings
NEW YORK (AP) -- Wal-Mart Stores Inc. said it's still pulling
shoppers away from its main rivals and enjoying a rise in customer traffic as
the world's largest retailer released better-than-expected fourth-quarter
earnings Tuesday.
Shares of Wal-Mart rose more nearly 4 percent while the Dow Jones
Industrials dropped more than 3 percent as investors grew more wary about the
government's stimulus plan.
Still, Wal-Mart is hardly immune from economic pressures. It
issued a cautious earnings outlook as it feels the pinch from the stronger
dollar in its important international business, a trend officials said could
hurt profits over the next three quarters.
Largest banks that received aid cut lending
WASHINGTON (AP) -- The 20 largest banks
that received government rescue funds slightly reduced their lending to
consumers and businesses in the last three months of 2008, the government said
Tuesday.
The Treasury Department said the banks reduced their mortgage and
business loans by a median of 1 percent each, while credit card lending rose by
a median of 2 percent. The median is the point halfway between the banks that
lent the most and those that lent the least.
The department's report is the latest sign that the bailout has
done little to increase bank lending. A quarterly survey by the Federal Reserve
earlier this month found that nearly 60 percent of banks said they had
tightened lending standards on credit card and other consumer loans in the
previous three months.
Many lawmakers have blasted the banks for not lending more in the
wake of the $700 billion financial rescue program approved by Congress last
October.
Trump casinos file for bankruptcy a third time
Trump Entertainment Resorts made the filing in U.S. Bankruptcy
Court in Camden, N.J., four days after the real estate mogul whose name remains
on the company and its three seaside gambling resorts resigned as chairman of
its board.
Trump was frustrated that bond holders and their allies on the
board rebuffed his offer to buy the company and take it private.
Markets, euro sink on eastern Europe
warning
WARSAW, Poland (AP) -- The deepening financial
crisis in eastern Europe sent stocks and currencies sinking across the
continent Tuesday, as fears escalated that troubles in former communist
countries could wallop western Europe's already-stressed banking system.
Markets sagged after ratings agency Moody's said faltering
economic conditions in eastern Europe would hit the local subsidiaries of major
Western banks and potentially hurt their corporate parents, primarily in
Austria, Italy, France, Belgium, Germany and Sweden.
Stocks and currencies sank across
NEW YORK (AP) -- Facing a likely bankruptcy, Sirius XM Radio Inc.
found a savior in Liberty Media Corp., which will lend $530 million to the
satellite radio provider and block a bid for control that had been waged by a
rival both companies share: Dish Network Corp. CEO Charlie Ergen.
Sirius had warned it could file for bankruptcy as early as
Tuesday if it could not successfully negotiate with its debt holders.
Sirius XM Radio has 20 million subscribers who use the service to
listen to sports, music and talk, including Howard Stern's show, which Sirius
landed with a five-year, $500 million contract that could have been terminated
in a bankruptcy.
The company found itself on the brink as credit markets dried up
and auto sales plunged -- a critical factor for Sirius because many new
subscribers buy the service in package offers with cars and trucks.
Oil slips below $35 as global markets tumble
HOUSTON (AP) -- A new batch of lousy
economic news dragged oil prices down nearly 7 percent Tuesday, as signs from
across the globe pointed to a prolonged and painful recession.
Light, sweet crude for March delivery fell $2.58 to settle at
$34.93 a barrel on the
A number of other commodities fell hard too as people sought less
volatile investments.
For the first time in three weeks, retail gasoline prices fell.
Prices at the pump slipped 0.5 cents to $1.960 a gallon,
according to auto club AAA, the Oil Price Information Service and Wright
Express. Prices are still about 12 cents higher than a month ago but remain
$1.054 lower than one year ago at this time.
By The Associated Press
The Dow Jones industrial average closed down 297.81 points, or 3.79
percent, at 7,552.60 -- just 31-hundredths of a point above its post-meltdown
Nov. 20 close of 7,552.29, which was its lowest close in five-and-a-half years.
The Dow came within 102 points of the five-year trading low of 7,449.37.
The Standard & Poor's 500, index which fell 37.67, or 4.56
percent, to 789.17 Tuesday, came with 48 points of its 11-year low of 741.02.
The Nasdaq
composite index fell 63.70, or 4.15 percent, to close at 1,470.66 Tuesday.
Light, sweet crude for March delivery fell $2.58 to settle at
$34.93 a barrel on the
In other Nymex trading, gasoline
futures tumbled 9.45 cents to settle at $1.1118 a gallon. Heating oil fell
11.36 cents to settle at $1.1864 a gallon, while natural gas for March delivery
slipped 24.9 cents to settle at $4.203 per 1,000 cubic feet.
In