Retail sales fall unexpectedly in March
WASHINGTON (AP) -- Retail sales fell unexpectedly in March, delivering a setback to hopes that the economy's steep slide could be bottoming out.
President Barack Obama and Federal Reserve Chairman Ben Bernanke said in separate speeches Tuesday that while other recent economic signs have been hopeful, problems persist and a true recovery will take more time.
The Commerce Department said retail sales slipped 1.1 percent in March. It was the biggest decline in three months and a much weaker showing than the 0.3 percent increase that analysts expected.
Weak retail sales report halts stock market rally
NEW YORK (AP) -- Wall Street shifted into reverse Tuesday after a surprisingly weak retail sales report punctured the market's optimism about the economy.
The poor sales data, combined with a sharp drop in wholesale prices, overshadowed better-than-expected earnings reports from Johnson & Johnson and Goldman Sachs, leading the Dow Jones industrial average down 137.63, or 1.7 percent, to 7,920.18.
Tuesday's selling was orderly and extended a give-and-take pattern the market has followed since halting a steep slide over the first two months of the year.
Goldman CFO still cautious about financial sector
NEW YORK (AP) -- Goldman Sachs Group Inc. said Tuesday it's still cautious about the banking industry's health even as it priced a $5 billion stock offering aimed at helping it repay government bailout money.
In a conference call with investors, Chief Financial Officer David Viniar said there are still "headwinds" in the industry because the value of mortgage-backed securities and other assets are still falling. Viniar's comments came a day after New York-based Goldman announced it earned $1.66 billion, or $3.39 per share, during the first quarter, beating the $1.64 per share forecast of analysts polled by Thomson Reuters.
Obama tempers optimism with reality on economy
WASHINGTON (AP) -- Aiming to assert control over the nation's economic debate, President Barack Obama on Tuesday warned Americans eager for good news that "by no means are we out of the woods" and argued his broad domestic agenda is the path to recovery.
In a speech at Georgetown University, Obama aimed to juggle his recent glass-half-full takes on the economy with a determination to not be stamped as naive in the face lingering problems. He summarized actions his administration has taken to steady the limping economy and coupled that with a fresh overview of his domestic goals.
Intel says PC sales improving; profit beats Street
SAN FRANCISCO (AP) -- Intel Corp.'s first-quarter profit blew past Wall Street's grim forecasts as the chip maker's CEO proclaimed Tuesday that personal computer sales "bottomed out" and have started recovering.
Intel's optimistic comments were especially meaningful because it was the first technology company to report earnings for the first three months of the year. However, Intel didn't give specific revenue guidance since it's not clear whether people are buying more PCs or whether computer makers are just replenishing chip inventories that have been whittled down to low levels.
J&J earnings fall slightly but beat expectations
TRENTON, N.J. (AP) -- Health care products maker Johnson & Johnson said Tuesday its first-quarter profit dipped only slightly, beating Wall Street expectations, despite sales falling worldwide.
The world's most broadly based health care company said the recession cut into consumer products sales but that the biggest drag on revenue was the stronger dollar, which pulled down overall revenue by 6 percent.
The maker of baby shampoo, contraceptives and biotech drugs -- a Dow component that is seen as a bellwether for the overall economy -- posted net income of $3.5 billion, or $1.26 per share. That's down from $3.6 billion in 2008's first quarter.
Ex-Qwest CEO Nacchio reports to prison in Pa.
DENVER (AP) -- Two years after his conviction, former Qwest CEO Joe Nacchio reported to a federal prison in Pennsylvania on Tuesday to start a six-year sentence for insider trading while he appeals his conviction to the Supreme Court.
Nacchio was convicted in 2007 of 19 counts of insider trading. Prosecutors said he sold $52 million worth of stock in 2001 based on nonpublic information that Qwest Communications International Inc. faced trouble meeting its sales targets. He was acquitted on 23 other counts of insider trading.
Yacht executive pleads guilty in UBS tax case
MIAMI (AP) -- The second U.S. citizen charged in a wide-ranging tax probe of Swiss banking giant UBS AG pleaded guilty Tuesday to filing a false tax return to conceal a secret account at the Swiss bank holding more than $3 million.
Robert Moran, president of Fort Lauderdale-based Moran Yacht and Ship, entered the plea in federal court the same day the single charge was unsealed. Moran, who reached a plea deal with prosecutors, faces up to three years in federal prison and $250,000 in fines when sentenced on June 26.
AP source: Chrysler lenders preparing counteroffer
DETROIT (AP) -- Banks and other lenders that hold $6.9 billion in secured Chrysler LLC debt are preparing a counteroffer after they rejected Chrysler and the government's plan to erase the loans for $1 billion, according to a person briefed on the negotiations.
The lenders are likely to ask for more than the initial offer of 15 cents on the dollar, the person said Tuesday. They also are likely to seek equity in the company so they can benefit if Chrysler forges an alliance with Italian automaker Fiat Group SpA and becomes profitable again, said the person, who spoke on condition of anonymity because the talks are private.
Crude oil settle below $50 a barrel
COLUMBUS, Ohio (AP) -- Oil prices settled below $50 a barrel Tuesday, as stock markets lost ground on signs the economic recovery may not be as close as some thought.
The government, meanwhile, said drivers hitting the road this summer will pay far less for gasoline than they did last summer when prices hit a record $4.11 a gallon.
Oil prices have traded near $50 a barrel for the last two weeks after jumping from below $35 in February as investors struggle to gauge the health of a global economy reeling from the longest recession in the U.S. since World War II.
By The Associated Press
The Dow Jones industrial average down 137.63, or 1.7 percent, to 7,920.18.
Broader measures also lost ground after three days of gains. The Standard & Poor's 500 index fell 17.23, or 2 percent, to 841.50, and the Nasdaq composite index fell 27.59, or 1.7 percent, to 1,625.72.
Benchmark crude for May delivery lost 64 cents to settle at $49.41 a barrel on the New York Mercantile Exchange in afternoon trading.
In other Nymex trading, gasoline for May delivery lost 0.56 cent to settle at $1.4576 a gallon and heating oil added 0.43 cent to settle at $1.423 a gallon.
In London, Brent prices fell 18 cents to settle at $51.96 a barrel on the ICE Futures exchange.