Stocks extend losses to 2nd day; Dow tumbles 186
NEW YORK (AP) -- Investors dumped stocks for a second day Tuesday, prolonging a
break from a huge four-week rally as the market girds itself for potentially
grim earnings reports.
Major market barometers all
fell more than 2 percent, including the Dow Jones industrial average, which
lost 186 points to 7,789.56. Trading volume was low, which can amplify swings
in the market.
The selling hit a wide range
of industries, from financials to energy, in an otherwise quiet day during a
holiday-shortened week. The markets will be closed for Good Friday.
Consumer borrowing dips more
than expected in Feb.
WASHINGTON (AP) -- Consumer
borrowing plunged more than expected in February as Americans cut back their
use of credit cards by a record amount.
The Federal Reserve said
Tuesday that consumer borrowing dropped at an annual rate of $7.48 billion in
February, or 3.5 percent, from January. Wall Street economists expected
borrowing to slide by only $1 billion, according to a survey by Thomson
Reuters.
The decline was led by a
record drop in borrowing on credit cards, which fell at an annual rate of $7.8
billion, or 9.7 percent. That is the sharpest drop in dollar terms since
federal records began in 1968, and the steepest percentage fall since 1978.
Alcoa reports $497M loss in
1Q on lower prices
PITTSBURGH (AP) -- Alcoa
Inc., the largest U.S. aluminum producer, said Tuesday it lost $497 million
during the first quarter, as the global economic crisis continued to erode
prices and demand for the lightweight metal.
The loss was Alcoa's second
in the past two consecutive quarters and underscored the deterioration of aluminum-intensive
industries such as autos and construction. Orders for the metal, used in
everything from cars and airplanes to windows and soda cans, began sliding last
fall as the world economy weakened.
Stockpiles grew, prices
plunged and aluminum makers started scaling back production worldwide. Analysts
say plants are losing money, but that prices may recover modestly this summer.
Goldman Sachs CEO calls for
new pay standards
WASHINGTON (AP) -- The chief
executive of Goldman Sachs Group Inc. on Tuesday called for new standards on
how Wall Street executives are compensated and new regulation of large hedge
funds and private equity funds.
Lloyd Blankfein, who
received compensation valued at nearly $43 million last year, said lessons from
the financial crisis include the need to "apply basic standards to how we
compensate people in our industry."
He suggested a handful of
guidelines, including only junior employees being paid mostly in cash and that
the percentage of pay awarded as company stock increase significantly along
with a worker's total compensation.
Tentative deal to sell a
Madoff trading division
NEW YORK (AP) -- A Manhattan
bankruptcy judge approved a plan Tuesday that, barring any sweetened
last-minute offers, would allow a Boston firm to take over a securities-trading
operation owned by disgraced financier Bernard Madoff.
A court-appointed trustee
overseeing the liquidation of Bernard L. Madoff Investment Securities had
announced last month that Castor Pollux Securities wanted to buy the former Nasdaq
chairman's legitimate market-making business.
Castor Pollux agreed to pay
$500,000 at closing and then up to $15 million in revenues from trades through
2012 -- a total representing a fraction of what Madoff once estimated his
business was worth.
CEOs see more layoffs;
decline in spending, sales
NEW YORK (AP) -- In a sign
of the deep pessimism gripping corporate America, an index tracking the outlook
of chief executives of some of the country's biggest companies dropped to its
lowest level since the survey began in 2002.
The Business Roundtable
index of CEOs' six-month forecast fell to -5 in March from 16.5 in November. An
index reading of 50 or lower is consistent with economic contraction, while a
reading of 50 or higher is consistent with expansion.
All the indicators declined
broadly from the CEOs' forecast in November. However, some small signs of hope
have emerged since the survey was taken between March 16-27, said Harold
McGraw, chairman of the Business Roundtable and CEO of the McGraw-Hill Cos.
Changes to Apple's iTunes
prices take effect
SEATTLE (AP) -- The era of
one-price-fits-all-songs on iTunes came to an end Tuesday as Apple Inc., the
Internet's dominant digital music retailer, began selling some of its
most-downloaded songs for $1.29 apiece.
Apple said in January that
it would end its practice of selling all individual songs for 99 cents each and
begin offering three tiers: 69 cents, 99 cents and $1.29.
Recording companies pick the
prices, much as they did for CDs sold in stores and online. Apple also did away
with copy-protection technology known as digital-rights management, or DRM,
allowing customers to play more songs on devices other than Apple's own iPods.
Oil below $50, as stocks
fall and earnings loom
SIOUX FALLS, S.D. (AP) --
Oil prices settled below $50 a barrel Tuesday as the energy markets tumbled
with the stock markets amid growing doubts about corporate earnings and global
energy demand.
Benchmark crude for May
delivery fell $1.90 to settle at $49.15 a barrel on the New York Mercantile
Exchange.
Oil prices have latched onto
equities in recent weeks, and both have risen on hopes that the worst of the
recession is over. Oil prices jumped from below $35 in February to above $54
last month as economic optimism trumped concerns of poor demand and oversupply
because of the recession.
Southwest Airlines to offer
service to LaGuardia
NEW YORK (AP) -- Southwest
Airlines Co. said Tuesday that it will set up shop at New York's LaGuardia
Airport in June, the carrier's first entry into the major market.
The move not only helps
Southwest push into one of the country's busiest airports, but it also taps
into budget-conscious travelers' desire for low-cost fares during the
recession.
The Dallas-based company
will have eight daily nonstop flights -- five between LaGuardia and Chicago
Midway and three between LaGuardia and Baltimore/Washington International
Thurgood Marshall Airport.
Canada offers further help
for auto industry
TORONTO (AP) -- The Canadian
government on Tuesday said it will provide additional help to the country's
auto industry but warned that Canadians need to be prepared for the possibility
that General Motors Corp. and Chrysler LL. could file for bankruptcy
protection.
Industry Minister Tony
Clement said $700 million Canadian ($565 million) will be provided to help
auto-parts suppliers.
Canada will also help
consumers by backstopping auto warranties in the event that a carmaker files
for bankruptcy. That backstop of warranties matches what the U.S. has done.
By The Associated Press
The Dow dropped 186.29, or
2.3 percent, to 7,789.56. The Standard & Poor's 500 index fell 19.93, or
2.4 percent, to 815.55, while the Nasdaq composite index fell 45.10, or 2.8
percent, to 1,561.61.
Benchmark crude for May
delivery fell $1.90 to settle at $49.15 a barrel on the New York Mercantile
Exchange.
In other Nymex trading,
gasoline for May delivery fell 1.51 cents to settle at $1.4604 a gallon.
Heating oil lost 2.88 cents to settle at $1.3903 a gallon. Natural gas for May
delivery also slipped, down 17 cents to settle at $3.562 per 1,000 cubic feet.
Earlier, natural gas hit a new low of $3.554 per 1,000 cubic feet.
In London, Brent prices fell
$1.02 to settle at $51.22 a barrel on the ICE Futures exchange.