AP Business Highlights

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On Tuesday February 23, 2010, 5:56 pm EST

Toyota: Recalls won't totally fix gas pedal issues

WASHINGTON (AP) -- The president of Toyota's U.S. operations acknowledged to skeptical lawmakers on Tuesday that the company's recalls of millions of its cars may "not totally" solve the problem of sudden and dangerous acceleration.

Toyota's James Lentz told a congressional panel that the company would be "vigilant" in looking for potential causes. However, he repeated his company's position that unexpected acceleration in some of the company's most popular cars and trucks was caused by one of two problems -- misplaced floor mats and sticking accelerator pedals.

He insisted electronic systems connected to the gas pedal and fuel line did not contribute to the problem, drawing sharp criticism from lawmakers who said such a possibility should be further explored -- and from a tearful woman driver who could not stop her runaway Lexus.

Flagging confidence intensifies economic fears

NEW YORK (AP) -- Americans' confidence in the economy has suffered a sudden relapse, dimming hopes that they will start spending -- and spurring job growth -- any time soon.

The Consumer Confidence Index figures released Tuesday were much worse than analysts had expected and showed that Americans are morose about the job market and their economic prospects. That bodes ill for the sort of uptick in consumer spending that normally powers job growth, and could raise pressure on the Obama administration and Congress to create jobs themselves.

The index fell almost 11 points to 46 in February, down from a revised 56.5 in January and the lowest level since a 40.8 reading in April 2009. It erased three consecutive months of improvement, according to the Conference Board, the research group that releases the monthly index.

Stocks retreat after disappointing consumer report

NEW YORK (AP) -- The stock market fell sharply Tuesday after a surprising drop in consumer confidence reminded investors of the fragility of the economic recovery.

The Dow Jones industrials fell 100 points to 10,292.41 after being up around 19 before the Conference Board released its index. Interest rates also fell in the bond market as investors moved money out of stocks and into the safety of Treasurys.

The confidence numbers came as investors were already rethinking the more optimistic assessment they had of the economy last week. Stocks had rallied for four straight days on upbeat earnings news, including some from retailers, and on improving housing and manufacturing numbers.

Retailers profits rise, but customers hold back

CHICAGO (AP) -- A fleet of the nation's biggest merchants reported mostly better fourth-quarter profits Tuesday.

The improvements at Target, Sears and Macy's are mostly a results of stocking holiday shelves cautiously and managing markdowns.

But the rosier results mask a tough reality. To keep up that momentum retailers need shoppers to spend more.

Merchants may have to keep waiting if Tuesday's surprisingly steep drop in consumer confidence figures offers any insight. That likely means that shoppers will remain cautious until the nation's economy and job outlook is rosier.

While they wait, retailers are trying everything they can to make their stores and their products more inviting and appealing to customers.

Home prices rise 0.3 percent in December

MIAMI (AP) -- Home prices edged up in December, the seventh straight monthly gain and another sign the housing market continues its bumpy recovery.

Prices aren't anywhere near the zenith of the housing boom -- they are down 30 percent from the peak in May 2006 -- and there are worries that the recovery may not last. But prices have been steadily increasing from month to month, climbing almost 4 percent off the bottom in May.

The Standard & Poor's/Case-Shiller 20-city home price index released Tuesday rose 0.3 percent from November to December, to a seasonally adjusted reading of 145.87. The index was off about 3 percent from December last year, nearly matching analysts' estimates.

Banks report small profit but 'problem' list jumps

WASHINGTON (AP) -- The number of U.S. banks considered troubled jumped to more than 700 last quarter even as the industry squeezed out a small profit in a recovering economy.

Loan losses and bank failures are likely to continue to haunt the industry as regional banks succumb to soured commercial real estate loans.

The snapshot for October-December 2009 issued Tuesday by the Federal Deposit Insurance Corp. offered a tale of two banking sectors. On the one hand, big banks have been gradually recovering, many of them with help from federal bailout money. On the other, small and mid-sized institutions continue to suffer distress that will likely persist in the coming years.

Report: Wall Streeters got $20B in bonuses in 2009

ALBANY, N.Y. (AP) -- Employees at Wall Street financial firms collected more than $20 billion in bonuses in 2009, the year after taxpayers bailed out the financial sector amid the economic meltdown, New York state Comptroller Thomas DiNapoli said Tuesday. The payouts were about 17 percent higher than the previous year's bonuses.

Total compensation at the largest securities firms grew beyond that figure and profits could surpass what he calls an unprecedented $55 billion last year, DiNapoli said. That's nearly three times Wall Street's record increase, a rate of growth that is boosted in part by the record losses in 2008 of nearly $43 billion, the Democrat said.

Oil rally fizzles, drops below $80 a barrel

NEW YORK (AP) -- Energy prices sank Tuesday after job worries sent a monthly measurement of consumer confidence sharply lower.

Benchmark crude for April delivery lost $1.45 to settle at $78.86 a barrel on the New York Mercantile Exchange. In London, Brent crude fell $1.36 to settle at $77.25 a barrel on the ICE futures exchange.

Oil prices had been rising for more than two weeks as a steady drumbeat of reports suggested that manufacturing, home building and other pillars of the American economy were improving. But the U.S. continues to struggle with high unemployment, and a slump in consumer confidence may lead to another summer in which Americans cut back on travel.

Home Depot moves to a 4th-quarter profit

NEW YORK (AP) -- Improving sales of paint, flooring and plumbing show home owners are making a cautious return to basic do-it-yourself and home decor projects, Home Depot Inc. said Tuesday.

Cost-cutting and stronger sales drove its fiscal fourth-quarter profit higher, the largest U.S. home-improvement retailer said Tuesday.

Home Depot also boosted its quarterly dividend for the first time since 2006 and gave a 2010 profit forecast above analyst expectations. Shares briefly touched a 52-week high.

Consumers cut back on home-improvement projects during the recession and housing slump, and Home Depot has responded to weak sales by scaling back store openings and cutting jobs.

New clients and drug prices lift Medco 4Q profit

NEW YORK (AP) -- Pharmacy benefits manager Medco Health Solutions Inc. said Tuesday its profit climbed 24 percent in the fourth quarter on rising revenue due to higher prices for brand-name drugs and winning new clients.

The results narrowly topped analysts' expectations and Medco reaffirmed its earnings outlook for 2010. But Wall Street was concerned about the company's first-quarter outlook.

The Franklin Lakes, N.J., company said profit rose to $341.5 million, or 70 cents per share, in the three months ended Dec. 26, up from $274.4 million, or 54 cents per share, a year ago. Revenue rose 18 percent to $15.25 billion from $12.96 billion a year ago. At the company's Accredo specialty pharmacy business, revenue jumped 18 percent to $2.46 billion.

By The Associated Press

The Dow fell 100.97, or 1 percent, to 10,292.41.

The Standard & Poor's 500 index dropped 13.41, or 1.2 percent, to 1,094.60, while the Nasdaq composite index fell 28.59, or 1.3 percent, to 2,213.44.

Benchmark crude for April delivery lost $1.45 to settle at $78.86 a barrel on the New York Mercantile Exchange. In London, Brent crude fell $1.36 to settle at $77.25 a barrel on the ICE futures exchange.

In other Nymex trading in March contracts, heating oil fell 4.65 cents to settle at $2.0323 a gallon, while gasoline lost 5.02 cents to settle at $2.0656 a gallon. Natural gas dropped 11.7 cents to settle at $4.778 per 1,000 cubic feet.

 

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