AP
Business Highlights
Monday March 23, 6:21 pm ET

Administration moves against bad bank assets

WASHINGTON (AP) -- The Obama administration aimed squarely at the crisis clogging the nation's credit system Monday with a plan to take over up to $1 trillion in sour mortgage securities with the help of private investors. For once, Wall Street cheered.

The announcement, closely stage-managed throughout the day, filled in crucial blanks in the administration's financial rescue package and formed what President Barack Obama called "one more critical element in our recovery."

The coordinated effort by the Treasury Department, the Federal Reserve and the Federal Deposit Insurance Corp. relies on a mix of government and private money -- mostly from institutional investors such as hedge funds -- to help banks rid their balance sheets of real-estate related securities that are now extremely difficult to value.

February existing home sales rise by 5.1 percent

WASHINGTON (AP) -- Sales of previously occupied homes jumped unexpectedly in February by the largest amount in nearly six years as first-time buyers took advantage of deep discounts on foreclosures and other distressed properties.

Economists said sales, while still at levels not seen since 1997, may finally be coming back to life after declining sharply following the stock market plunge last autumn.

The National Association of Realtors said Monday that sales of existing homes grew 5.1 percent to an annual rate of 4.72 million last month. It is the largest monthly sales jump since July 2003, with first-time buyers accounting for about half of all transactions.

Stocks surge on bank plan, rise in home sales

NEW YORK (AP) -- Wall Street got the news it wanted on the economy's biggest problems -- banks and housing -- and celebrated by hurtling the Dow Jones industrials up nearly 500 points to 7,775.86.

Investors added rocket fuel Monday to a two-week-old advance, cheering the government's plan to help banks remove bad assets from their books and also welcoming a report showing a surprising increase in home sales. Major stock indicators surged more than 6 percent, including the Dow, which had its biggest percentage gain since October.

Canadian oil giants join in $15.5 billion deal

TORONTO (AP) -- Suncor Energy Inc. will acquire Petro-Canada for $15.5 billion, uniting two of Canada's biggest oil companies as the nation's energy industry retrenches.

If the deal announced Monday is approved, it would create the largest oil company in Canada with a market capitalization of about $38 billion.

That's much smaller than global heavyweights such as Exxon Mobil and ConocoPhillips, which boast market capitalizations of $326.6 billion and $55.97 billion respectively, but the company would have some of the same benefits of scale.

The companies said they could save $244 million in operating costs and $812 million in capital efficiencies each year.

Walgreen 2Q profit down 7 percent on restructuring

NEW YORK (AP) -- Drugstore operator Walgreen Co.'s profit fell 7 percent in the fiscal second quarter because of restructuring costs as cash-strapped shoppers cut discretionary purchases even as retail prescriptions grew.

The stronger-than-expected report Monday sent Walgreen shares climbing $2.51, or 10.3 percent, to $28.60 in heavy trading during the afternoon.

The Deerfield, Ill., company says it earned $640 million, or 65 cents per share. That compares with $686 million, or 69 cents per share, a year ago. That includes restructuring expenses of $93 million, or 6 cents per share. Sales grew 7 percent, to $16.48 billion from $15.39 billion.

Tiffany 4Q profit sinks, still beats view

NEW YORK (AP) -- Shoppers who were cautious about splurging on high-priced jewelry led Tiffany & Co. to report Monday that fourth-quarter profit tumbled more than 75 percent.

Enough people bought lower-priced items, though, that its earnings beat analysts' forecasts. Its shares rose 12 percent.

Tiffany said it believes its sales were hurt by the discounts offered by other jewelers and high end competitors. Although competition among jewelers remains intense, Tiffany still plans to maintain its prices to protect its cachet -- symbolized by its famous blue box.

JPMorgan will repay gov't before buying jets

NEW YORK (AP) -- JPMorgan Chase & Co. said Monday it has no plans to purchase new jets or renovate an aircraft hangar until after it has paid off money it received as part of the government's bank investment program last fall.

JPMorgan disclosed the plans amid published reports that it was moving ahead with plans to buy new jets and renovate a hangar where it houses its fleet.

JPMorgan was one of hundreds of banks that received money last fall as part of the government's plan, known as the Troubled Asset Relief Program, to bolster bank's balance sheets. The New York-based bank, considered one of the strongest banks amid the ongoing credit crisis, received $25 billion as part of the program.

Trustee lawyer says Madoff assets reach $1B mark

NEW YORK (AP) -- A lawyer for the trustee seeking to locate disgraced financier Bernard Madoff's assets for investors says more than $1 billion has been found.

Attorney David Sheehan says $75 million located in an account in Gibraltar raises the amount being pursued past the $1 billion mark.

Sheehan spoke after a civil court hearing Monday in which the trustee was seeking the power of attorney over Madoff's international operation.

Oil trades around $54 on stock market rally

HOUSTON (AP) -- Oil prices briefly topped $54 a barrel Monday, getting a boost from stock investors who seemed hopeful a new plan to resolve the nation's banking crisis would spur economic growth. Better-than-expected housing news helped too.

Benchmark crude for May delivery rose $1.73 to settle at $53.80 a barrel on the New York Mercantile Exchange, continuing its upward momentum. Prices climbed as high as $54.05.

On Friday, oil ended the week above $50 a barrel for the first time this year, and prices have risen more than 30 percent this month.

WTO: World trade to fall 9 pct, worst since WWII

GENEVA (AP) -- Global trade will shrink by 9 percent this year in the most devastating collapse since World War II, the World Trade Organization said Monday.

The WTO said commerce in rich countries would fall furthest, by about 10 percent. But poorer nations may suffer the most because they are more dependent on exports for growth.

Trade has grown unabated since 1982.

By The Associated Press

The Dow rose 497.48, or 6.8 percent, to 7,775.86.

Broader stock indicators also surged. The Standard & Poor's 500 index rose 54.38, or 7.1 percent, to 822.92, crossing the psychological milepost of 800. The Nasdaq composite index rose 98.50, or 6.8 percent, to 1,555.77.

The Russell 2000 index of smaller companies rose 33.61, or 8.4 percent, to 433.

Benchmark crude for May delivery rose $1.73 to settle at $53.80 a barrel on the New York Mercantile Exchange.

In other Nymex trading, gasoline for April delivery rose 3.1 cents to settle at $1.4881 a gallon, while heating oil added 8.73 cents to settle at $1.4707 a gallon. Natural gas for April delivery rose 6.7 cents to settle at $4.294 per 1,000 cubic feet.