Fed says gov't ready to save stress-tested banks
WASHINGTON (AP) -- The
Federal Reserve on Friday said the government is prepared to rescue any of the
banks that underwent "stress tests" and were deemed vulnerable if the
recession worsened sharply.
The Fed, in outlining the
tests' methodology, said the 19 companies that hold one-half of the loans in
the U.S. banking system won't be allowed to fail -- even if they fared poorly
on the stress tests.
The Fed reinforced its view
that major financial firms are "too big to fail," and the government
must do whatever is necessary to save them, said former Fed examiner Mark
Williams.
Wall Street finds little
stress in 'stress tests'
NEW YORK (AP) -- Investors
set aside some of their worries about banks and the economy Friday after the
government unveiled its methods for testing the health of banks.
The Federal Reserve report
was light on details, but didn't bring any bad news. Investors were also
pleased about quarterly results from Ford Motor Co., American Express Co. and
Microsoft Corp.
Those developments cleared the
way for a 119-point gain in the Dow Jones industrial average to 8,076.29,
leaving it down slightly for the week.
Ford posts $1.4 billion 1Q
loss, uses less cash
DEARBORN, Mich. (AP) -- Ford
Motor Co. reported a first-quarter loss of $1.4 billion Friday and said it
depleted less of its cash, emphasizing that it doesn't expect to seek any of
the government assistance that is keeping the rest of the Detroit Three alive.
The nation's second-largest
automaker said it spent $3.7 billion more than it took in during the first
three months of the year, far less than the $7.2 billion it spent in the fourth
quarter of 2008.
Chief Financial Officer
Lewis Booth said the company is confident that it will slow the drain on its
cash even further this year, and he said Ford will make it through 2009 without
needing government aid. He would not speculate, however, about 2010.
Treasury lends $2 billion
more to General Motors
WASHINGTON (AP) -- Taxpayers
invested another $2 billion in General Motors Corp. this week as the struggling
auto giant continued efforts to restructure and avoid bankruptcy court.
The Treasury Department said
Friday it lent the additional money to GM on Wednesday to provide working
capital. The loan pushes the total amount of GM's government aid to $15.4
billion after the company said it would need more money in the second quarter
to stay afloat.
AP sources: Chrysler could
still avoid bankruptcy
DETROIT (AP) -- With a
government-imposed deadline for massive restructuring less than a week away,
Chrysler LLC and Treasury Department officials are still holding out hope that
they can reach deals to keep the troubled automaker out of bankruptcy court,
two people briefed on the talks said Friday.
Chrysler Vice Chairman Jim
Press told dealers on a conference call that no bankruptcy filing is pending,
and that negotiations are progressing toward reaching deals before the Thursday
deadline, according to a dealer who listened to the call. The dealer requested
anonymity because the call was private.
Durable goods, new home
sales better than expected
WASHINGTON (AP) -- Demand
for big-ticket manufactured goods and new home sales both were better than
expected in March, raising hopes that the long slides in manufacturing and
housing are slowly coming to an end.
The Commerce Department said
Friday that orders for durable goods dropped 0.8 percent last month, about half
the 1.5 percent decline that economists expected. A rise in orders for
commercial and military aircraft helped cushion weakness elsewhere.
New home sales fell 0.6
percent last month to a seasonally adjusted annual rate of 356,000 from an
upwardly revised February rate of 358,000, the department said.
Honeywell 1Q falls 38
percent
WASHINGTON (AP) -- Honeywell
International Inc.'s quarterly profit dropped 38 percent as battered aircraft
and automakers pulled back spending on the company's turbo chargers and jet
electronics. Honeywell also cut its profit forecast, saying it underestimated
the severity of the economic downturn.
Honeywell has warned that
2009 would be difficult, but the latest results show that it's especially
vulnerable in areas hardest hit by the economic slowdown, which has gutted
sales of cars, dampened air travel and paralyzed construction.
3M 1st-quarter profit slips
48 pct
WASHINGTON (AP) -- 3M Co.'s
quarterly profit dropped 48 percent as the global economic slowdown hurt its
sales in everything from health care to office supplies, prompting the company
to lower its 2009 outlook again.
Weak demand by U.S.
customers hurt sales of LCD screen coatings, office supplies, steel coatings
and other products made the Maplewood, Minn.-based manufacturer.
3M, known for its Post-it
notes and Scotch tape, reported net income of $518 million, or 74 cents per
share, for the three-month period ended March 31. That fell from $988 million,
or $1.38 per share, a year earlier.
Madoff investors ordered to
return false profits
NEW YORK (AP) -- The trustee
trying to unravel Bernard Madoff's massive Ponzi scheme is threatening legal
action to recover $735 million from investors who unwittingly made money off
the swindle.
For decades, Madoff paid out
steady profits to his clients, telling them the money had been earned in the
stock market. The gains, though, were fictitious, and Madoff pleaded guilty
last month to stealing funds from some investors to pay bogus profits to
others.
Schlumberger 1Q tumbles 30
pct as drilling drops
HOUSTON (AP) -- Schlumberger
Ltd. said Friday its first-quarter earnings tumbled about 30 percent as oil and
natural gas companies cut back on exploration and drilling, and it also
forecast sluggish oil-patch activity for at least the rest of this year.
Profits, however, exceeded
Wall Street expectations and Schlumberger shares jumped nearly 7 percent.
The world's largest oilfield
services company said net income in the January-to-March period fell to $938.5
million, or 78 cents per share, versus $1.34 billion, or $1.09 per share, a
year earlier.
By The Associated Press
The Dow rose 119.23, or 1.5
percent, to 8,076.29, after rising by as many as 170 points.
Broader market measures also
advanced. The Standard & Poor's 500 index rose 14.31, or 1.7 percent, to
866.23, and the Nasdaq composite index rose 42.08, or 2.6 percent, to 1,694.29.
Benchmark crude for June
delivery jumped $1.93 to settle at $51.55 a barrel on the New York Mercantile
Exchange. In London, Brent prices rose $1.56 to settle at $51.67 a barrel on
the ICE Futures exchange.
In other Nymex trading,
gasoline for May delivery increased 4.76 cents to settle at $1.442 a gallon.
Heating oil also rose 5.04 cents to settle at $1.3683 a gallon.