Wednesday February 18, 2009, 6:47 pm EST
Obama throws $75 billion lifeline to homeowners
MESA, Ariz. (AP) -- President Barack Obama threw a $75 billion
lifeline to millions of Americans on the brink of foreclosure Wednesday,
declaring an urgent need for drastic action -- not only to save their homes but
to keep the housing crisis "from wreaking even greater havoc" on the
broader national economy.
The lending plan, a full $25 billion bigger than the
administration had been suggesting, aims to prevent as many as 9 million
homeowners from being evicted and to stabilize housing markets that are at the
center of the ever-worsening U.S. recession.
Government support pledged to mortgage giants Fannie Mae and
Freddie Mac is being doubled as well, to $400 billion, as part of an effort to
encourage them to refinance loans that are "under water" -- those in
which homes' market values have sunk below the amount the owners still owe.
Fed downgrades economic forecast for this year
WASHINGTON (AP) -- The Federal Reserve on Wednesday sharply
downgraded its projections for the country's economic performance this year,
predicting the economy will actually shrink and unemployment will rise higher.
Under the new projections, the unemployment rate will rise to
between 8.5 and 8.8 percent this year. The old forecasts, issued in
mid-November, predicted the jobless rate would rise to between 7.1 and 7.6
percent.
Many private economists believe the jobless rate -- currently at
7.6 percent, the highest in more than 16 years -- will hit at least 9 percent
by early next year even with the $787 billion stimulus package signed into law
Tuesday by President Barack Obama.
The Fed also believes the economy will contract this year between
0.5 and 1.3 percent. The old forecast said the economy could shrink by 0.2
percent or expand by 1.1 percent.
Industrial production, housing starts plunge
WASHINGTON (AP) -- Big industry production throttled back in
January due partly to auto shutdowns, and housing construction tumbled to a
record low, weaker-than-expected performances that show the country caught in a
worsening economic tailspin.
The Federal Reserve reported Wednesday that production at the
nation's factories, mines and utilities fell 1.8 percent last month. Many
economists expected a 1.5 percent decline. It marked the third straight month
where production was cut back and December's performance was even weaker than
initially reported, plunging 2.4 percent.
Another report from the Commerce Department said construction of
new homes and apartments plummeted 16.8 percent in January from the previous month,
to a seasonally adjusted annual rate of 466,000 units, a record low. Analysts
expected a pace of 530,000 housing units.
Builders are slashing home construction as skyrocketing home
foreclosures dump more empty properties on an already glutted market.
Applications for building permits, a barometer of future
activity, also sank to a record low pace of 521,000 units in January, a 4.8
percent drop from the prior month.
UBS to pay $780M, open secret Swiss bank records
WASHINGTON (AP) -- Banking giant UBS has agreed to pay $780
million and turn over once-secret Swiss banking records to settle allegations
it conspired to defraud the
As part of the deal struck in federal court in
In doing so, federal authorities have struck a big crack in
UBS will pay $780 million in fines, penalties, interest and
restitution for conspiring to create sham accounts to hide the assets of
Stocks end little changed on worries about economy
Wall Street ended with only modest changes after a steep sell-off
Tuesday on worries about the global economy and banks in
Investors reacted coolly to a $75 billion mortgage relief plan
President Barack Obama introduced on Wednesday, which would provide incentives
to mortgage lenders to help borrowers reduce their payments.
Plunging home values are at the center of the 14-month-old
recession, which has been one of the most severe in decades. The announcement
came a day after Obama signed into law a $787 billion economic stimulus plan.
Depositors turned away from Stanford banks
ST. JOHN'S, Antigua (AP) -- Panicky depositors were turned away
from Stanford International Bank and some of its Latin American affiliates
Wednesday, unable to withdraw their money after U.S. regulators accused Texas
financier R. Allen Stanford of perpetrating an $8 billion fraud against his
companies' investors.
Some customers arrived in Antigua by private jet and were driven
up the lushly landscaped driveway of the bank's headquarters, only to be told
that all assets have been frozen pending an investigation by Antiguan banking
regulators.
Banking regulators and politicians around the region are
scrambling to contain the damage after the
Specifically, U.S. regulators accused Stanford, two other
executives and three of their companies of luring investors with promises of
"improbable and unsubstantiated" high returns on certificates of
deposit and other investments. They asked a federal judge to freeze all three
companies'
HP profit slumps 13 pct on weak PC and ink sales
SAN FRANCISCO (AP) -- Hewlett-Packard
Co.'s quarterly profit dropped 13 percent, and sales ticked up just 1 percent,
as even the technology company's cash-cow printer ink business was hobbled by
the recession.
The world's top seller of personal computers also cut its 2009
guidance, but it was still in line with Wall Street's expectations.
HP shares fell $1.08, or 3.2 percent, to $33 in extended trading,
after closing down 26 cents during the regular trading session, before the Palo
Alto, Calif.-based company reported its earnings.
Crippled technology spending slammed all but one of HP's major business lines, including PCs and servers. Only HP's services division, which bulked up with its $13.9
billion acquisition of Electronic Data Systems, saw an increase.
FORT LAUDERDALE, Fla. (AP) -- Philip Morris was ordered by a jury
to pay $8 million in damages to the widow of a smoker who died of lung cancer
in a case that could set a standard for some 8,000 similar Florida lawsuits.
The six jurors deliberated over two days before returning the
award for Elaine Hess, 63, whose husband Stuart Hess died in 1997 at age 55
after decades as a chain smoker.
The award amounts to $3 million in compensatory damages and $5
million in punitive damages against Richmond, Va.-based Philip Morris
The Hess case was the first to go to trial since the
Goodyear cutting nearly 5,000 jobs after 4Q loss
CLEVELAND (AP) -- Goodyear Tire & Rubber Co., the biggest
U.S. tire maker, said Wednesday it plans to cut nearly 5,000 jobs this year
after a sharp drop in sales led to a loss of $330 million in the fourth
quarter.
The Akron-based company said demand for new tires is weak as auto
sales slump and the market for replacement tires is also down because people
are driving less.
The job cuts equal almost 7 percent of the company's work force
and follow the elimination of about 4,000 jobs in the second half of last year.
Goodyear's loss in the three months ended Dec. 31 amount to $1.37
per share, compared with a profit of $52 million, or 23 cents per share, a year
earlier.
By The Associated Press
The Dow Jones industrial average edged
up 3.03, or less than 0.1 percent, to 7,555.63.
For a second day, the blue chips managed to finish just above their November
closing low.
Broader stock indicators slipped. The Standard & Poor's 500
index fell 0.75, or 0.1 percent, to 788.42, and the Nasdaq composite index fell 2.69, or 0.2 percent, to
1,467.97.
Light, sweet crude for March delivery fell 31 cents to settle at
$34.62 a barrel on the
Benchmark crude for April delivery fell $1.13 to settle at
$37.41.
In other Nymex trading, gasoline
futures slipped 5.66 cents to settle at $1.0652 a gallon. Heating oil fell 4
cents to settle at $1.1469 a gallon, while natural gas for March delivery slid
about a penny to settle at $4.203 per 1,000 cubic feet.
In