AP Business Highlights

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On Wednesday April 21, 2010, 6:01 pm EDT

Gas in the tank: GM repays $8.1B in gov't loans

WASHINGTON (AP) -- Fallen giant General Motors Co. accelerated toward recovery Wednesday, announcing the repayment of $8.1 billion in U.S. and Canadian government loans five years ahead of schedule.

The Obama administration crowed about the "turnaround" at GM and fellow bailout recipient Chrysler LLC, saying the government's unpopular rescue of Detroit's automakers is paying off.

Much of the improvement comes from GM slashing its debt load and work force as part of its bankruptcy reorganization last year. But the automaker is a long way from regaining its old blue-chip status: It's still losing money -- $3.4 billion in last year's fourth quarter alone.

Stocks muddled as glow from Apple results fades

NEW YORK (AP) -- The stock market stalled Wednesday after the glow of strong results at Apple Inc. and a few other companies faded.

The Dow Jones industrial average rose about 8 points to 11,124.92, while broader indexes were mixed.

Technology and industrial shares drew buyers after Apple Inc. and Boeing Co. delivered results that topped expectations. Health care stocks lagged on concerns that new health care laws will hurt the industry's profits. Financial stocks also fell after traders speculated on the fallout from a potential overhaul of government regulations.

The good news on earnings wasn't enough to give the market much of a lift. Analysts caution that investors are starting to become accustomed to better earnings so even stellar numbers might not inject energy into stocks.

Banks trade their way to profit; loan losses ease

NEW YORK (AP) -- The nation's big banks have found the key to success while they wait for the economy to recover: aggressive trading of investments including bonds, currencies and commodities.

But they may also be heading toward making money on loans again. The big banks that have released earnings over the past week all reported improvements in their consumer loan portfolios.

Banking executives had been conservative about their views on the economy and predicting a peak in losses from failed loans. Now they are saying mortgage and credit card defaults are declining.

AP source: Goldman CEO to testify before Senate

NEW YORK (AP) -- Goldman Sachs Group Inc. CEO Lloyd Blankfein will testify before a Senate panel next week as his company faces civil fraud charges, a person familiar with the matter said Tuesday.

Blankfein will answer questions before the Senate's Permanent Subcommittee on Investigations on Tuesday, according to the person. He spoke on condition of anonymity because the appearance hasn't been publicly announced.

Blankfein is scheduled to discuss Goldman's role in the subprime mortgage crisis but is expected to be questioned on the Securities and Exchange Commission's civil fraud lawsuit filed Friday, the person said.

Chrysler posts $197M loss but cash balance grows

DETROIT (AP) -- Chrysler Group LLC says cost cuts, manufacturing efficiency and disciplined pricing helped the Italian-run automaker slash its net loss to $197 million in the first quarter.

The red ink was far less than the staggering $3.8 billion that Chrysler lost from the time it left bankruptcy protection June 10 through the end of last year, and the company says it is a sign that its turnaround plans are starting to work.

Chrysler, now run by Italy's Fiat Group SpA, said it posted a $143 million operating profit from selling cars and trucks, before interest and taxes.

AMR loses half-billion dollars in 1Q

DALLAS (AP) -- The parent of American Airlines posted a huge first-quarter loss -- a half-billion dollars, more than it lost during the recession a year ago -- and dragged other airline stocks down with it on Wednesday.

American's results showed that airlines are a long way from recovery. Although there are fleeting signs of a slight increase in air travel, and airlines have raised fares and add-on fees, the carriers are now threatened by rising prices for fuel and other expenses.

AMR Corp., the parent of American Airlines, the nation's second-largest airline, said it lost $505 million, or $1.52 per share. That's more than twice as much as bigger Delta Air Lines Inc. lost in the same period.

Former KB Home CEO convicted in backdating trial

LOS ANGELES (AP) -- The former head of construction giant KB Home was convicted Wednesday of four felony counts in a stock option backdating scam.

A federal jury in Los Angeles found Bruce Karatz guilty of two counts of mail fraud, one count of lying to company accountants and one count of making false statements in reports to the Securities and Exchange Commission.

Karatz was acquitted on 16 other counts.

The 64-year-old former CEO showed no emotion as the verdicts were read. He remains free on bond and faces up to 60 years in prison when he is sentenced Sept. 8.

EBay profit up but shares hit by soft forecast

SAN FRANCISCO (AP) -- EBay Inc. said Wednesday its first-quarter profit rose 11 percent as consumers spent more on its main website, but a disappointing forecast for the current quarter pushed the company's shares down sharply in after-hours trading.

EBay said it earned $397.7 million, or 30 cents per share in the first quarter, compared with $357.1 million, or 28 cents per share in the same period of 2009.

Excluding one-time items, the company earned 42 cents per share. Analysts polled by Thomson Reuters expected 41 cents.

Revenue climbed 9 percent to $2.2 billion, matching analyst estimates.

McDonald's value menu entices customers in 1Q

CHICAGO (AP) -- McDonald's Corp.'s strongest month of U.S. sales in nearly a year combined with big gains overseas to boost first-quarter profit more than 11 percent.

The fast-food giant also sees that March momentum spilling into April as it draws more customers with its breakfast value menu and increasingly popular coffee and frappes.

Wednesday's news may point to tentatively better fortunes ahead for the nation's restaurant industry. Even McDonald's, which held up well early in the recession, had been squeezed by consumers cut back on eating out.

Government goes high-tech to redesign $100 bills

WASHINGTON (AP) -- The folks who print America's money have designed a high-tech makeover of the $100 bill complete with disappearing Liberty Bells and magical ribbons.

It's all part of an effort to stay ahead of counterfeiters as copying technology becomes more sophisticated and more dollars flow overseas.

The makeover was unveiled by Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke during a ceremony in the Treasury Department's ornate Cash Room on Wednesday.

By The Associated Press

The Dow rose 7.86, or 0.1 percent, to 11,124.92, its third straight advance. The Dow has risen nine of the past 10 days.

The broader Standard & Poor's 500 index slipped 1.23, or 0.1 percent, to 1,205.94. The Nasdaq composite index rose 4.30, or 0.2 percent, to 2,504.61.

Benchmark crude for June delivery gave up 17 cents to settle at $83.68 a barrel on the New York Mercantile Exchange. In London, Brent crude added 90 cents to settle at $85.70 a barrel on the ICE futures exchange.

In other Nymex trading in May contracts, heating oil rose 2.56 cents to settle at $2.2058 a gallon and gasoline added less than a penny to settle at $2.2827 a gallon. Natural gas lost 2 cents to settle at $3.955 per 1,000 cubic feet.

 

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