Fed survey: economy
deteriorated in Jan., Feb.
WASHINGTON (AP) -- After a
dismal start to 2009, business people see more pain ahead, expecting no
improvement in economic conditions till late this year at the earliest.
Their pessimism was evident
in the Federal Reserve's latest snapshot of business activity nationwide. It
showed sharp cutbacks affecting both blue-collar jobs that once churned out
construction equipment and white-collar professionals like business consultants
and accountants.
From factories in
Services sector shrank in
Feb., 5th straight month
WASHINGTON (AP) -- A private
measure of the services sector shrank in February for the fifth straight month
as layoffs mounted, the recession deepened and the outlook for any recovery
this year grew darker.
The Institute for Supply
Management, a Tempe, Ariz.-based trade group of purchasing executives, said
Wednesday that its services index fell to 41.6 last month from 42.9 in January.
The February reading was slightly above economists' expectations.
But any reading above 50
signals growth, while a reading below 50 indicates contraction. The index has
fallen steadily since August as the economy deteriorated, hitting a record low
in November.
Obama administration
launches housing plan
WASHINGTON (AP) -- The Obama
administration kicked off a new program Wednesday that's designed to help up to
9 million borrowers stay in their homes through refinanced mortgages or loans
that are modified to lower monthly payments.
Borrowers, however, are
being advised to be patient in their efforts to get help because mortgage
companies are likely to be flooded with calls.
Government officials,
launching the "Making Home Affordable" program also acknowledge that
the initiatives are only a partial fix for a sweeping problem that has helped
plunge the
Stocks jump after 5 days of
heavy selling
NEW YORK (AP) -- Stocks
broke a five-day losing streak Wednesday as hope spread that China and the U.S.
are taking convincing action to restart their economies.
Prices for key commodities
such as oil and copper also soared, lifting shares of industrial companies like
Alcoa Inc. and Caterpillar Inc.
Wall Street followed the
lead of overseas markets, which rose sharply on optimism over the possible
Chinese economic stimulus plan. The Dow Jones industrial average rose 149.82,
or 2.2 percent, to 6,875.84.
Ford to cut $10B in debt with
cash, equity offer
DEARBORN, Mich. (AP) -- Ford
Motor Co. said Wednesday it will try to eliminate up to $10.4 billion of its
debt by offering debtholders cash and stock as the troubled automaker continues
to restructure amid a severe automotive sales downturn.
The Dearborn-based company
and its financial arm are putting up $2.2 billion in cash and about 500 million
shares of stock to entice holders of bonds and secured-term debt into the swap.
The company said reducing the debt will cut the amount it pays in interest and
put it in better position to compete with General Motors Corp. and Chrysler
LLC.
GM and Chrysler also are
trying to swap debt for equity as a requirement of the $17.4 billion in
government loans they have received. Ford said Wednesday that it still does not
intend to seek government loans.
Obama orders major changes
in federal contracting
WASHINGTON (AP) -- Reversing
Bush policy, President Barack Obama ordered an overhaul of the way the
government hands out contracts Wednesday, promising to curtail no-bid awards
that have led to waste, abuse and corruption investigations.
Obama joined Republican Sen.
John McCain, his presidential campaign rival, and other lawmakers to announce
an executive memorandum that commits his administration to a new set of
marching orders for awarding contracts. Obama said "the days of giving
defense contractors a blank check are over" and said changes could save up
to $40 billion a year.
One area in particular that
is targeted is no-bid contracts, which the administration is seeking to change
so that there will be more competition for government-paid work.
Oil rises above $45 as
inventories fall
Benchmark crude for April
delivery rose $3.73 a barrel to settle at $45.38 on the New York Mercantile
Exchange, its highest close in six weeks. Oil prices shot up as high as $45.76
a barrel earlier in the day.
The Energy Department's
Energy Information Administration said crude inventories dropped by 700,000
barrels, or 0.2 percent, to 350.6 million barrels, for the week ended Feb. 27.
Analysts had expected a boost of 2.2 million barrels, according to a survey by
Platts, the energy information arm of McGraw-Hill Cos.
Supreme Court rejects limits
on drug lawsuits
WASHINGTON (AP) -- The
Supreme Court forcefully rejected calls Wednesday for limiting consumer
lawsuits against drug makers, upholding a $6.7 million jury award to a musician
who lost her arm to gangrene following an injection.
The decision is the second
this term to reject business groups' arguments that federal regulation
effectively pre-empts consumer complaints under state law.
Diana Levine's right arm was
amputated after she was injected with Phenergan, an anti-nausea medicine made
by Wyeth Pharmaceuticals, using a method that brings rapid relief, but with
grievous risks if improperly administered.
In a 6-3 decision, the court
turned away Wyeth's claim that federal approval of Phenergan and its warning
label should have shielded the company from lawsuits like Levine's.
Ex-Gen Re executive gets 1
year in prison
Christopher Garand, 61, was
also fined $150,000 for his role in the case, which authorities say cost AIG
shareholders more than $500 million. He is one of five former executives
convicted in the case.
Federal prosecutors say New
York-based AIG paid Stamford-based Gen Re in a secret deal to take out
reinsurance policies with AIG in 2000 and 2001. They say the scheme propped up
AIG's stock prices and inflated reserves by $500 million with the goal of
quelling criticism by analysts and concerns by investors.
UBS says 47,000 Americans
had accounts
WASHINGTON (AP) -- UBS AG
now says it had about 47,000 accounts held by Americans who didn't pay
UBS official Mark Branson
confirmed the figure of 47,000 accounts as of Sept. 30, at a Senate hearing
exploring the fight over secrecy and alleged tax evasion.
Branson says nearly all the
accounts have been closed.
By The Associated Press
The Dow Jones industrial
average rose 149.82, or 2.2 percent, to 6,875.84.
Broader indexes also rose.
The Standard & Poor's 500 index added 16.54, or 2.4 percent, to 712.87. On
Tuesday, the S&P 500 index fell to its first close below 700 since October
1996.
The Nasdaq composite index
gained 32.73, or 2.5 percent, to 1,353.74. The Russell 2000 index of smaller
companies rose 10.29, or 2.9 percent, to 371.30.
Benchmark crude for April
delivery rose $3.73 a barrel to settle at $45.38 on the New York Mercantile
Exchange.
In other Nymex trading,
gasoline for April delivery rose 6.22 cents to settle at $1.3816 a gallon,
while heating oil gained 3.49 cents to settle at $1.2145 a gallon. Natural gas
for April delivery rose 5.8 cents to settle at $4.340 per 1,000 cubic feet.
In