Amex, JPMorgan, Bank of New York Mellon pass tests
WASHINGTON (AP) -- Leaked
results of the government's stress tests of 19 large banks are boosting
investor confidence in the financial sector.
American Express Co.,
JPMorgan Chase & Co. and Bank of New York Mellon Corp. will not be asked to
raise more capital when federal officials announce the test results Thursday
afternoon, but Regions Financial Corp. will need to bolster its reserves,
according to people briefed on the results. The people requested anonymity because
they were not authorized to discuss the results.
Citigroup Inc. will need to
raise about $5 billion, according to a government source who requested
anonymity because he was not authorized to discuss the matter. Earlier news
reports put that number closer to $10 billion.
Gov't sets June 8 deadline
for banks' capital plan
WASHINGTON (AP) -- The
nation's biggest banks that are found to need more capital after government
stress tests will have one month to come up with a plan to raise the additional
resources, federal regulators said Wednesday.
The government said that
after the results of the stress tests are released Thursday, the banks found to
need more capital will have until June 8 to get a plan approved by their
regulators.
The government also set conditions
for how the nation's 19 largest banks will be allowed to exit from the $700
billion bailout program. To qualify, a bank will have to demonstrate that it
can borrow money without the support of an emergency program established by the
Federal Deposit Insurance Corp. last fall at the height of the financial
crisis.
Stocks jump as fears ebb
about bank 'stress tests'
NEW YORK (AP) -- Investors
are feeling more confident about putting their money in banks.
Financial stocks pulled the
market higher Wednesday as media reports trickled out that indicated balance
sheets at the nation's biggest banks might not be as frayed as some traders had
feared.
The word came a day ahead of
the formal release of results from government "stress tests" aimed at
determining which banks need to raise more capital. Investors relieved to have
assembled an initial scorecard scooped up shares of most banks, even those
expected to have to come up with new money.
The Dow Jones industrial
average jumped 100 points in heavy trading volume, while the technology-heavy
Nasdaq composite index posted a more modest gain.
Amazon seeks more paths for
sales with new Kindle
NEW YORK (AP) -- Amazon.com
Inc. hopes a bigger version of its Kindle electronic reading device can be a
hit, even if it's more expensive, and the company is aiming it in part at
college students who are eager to save money on their textbooks.
Since the Kindle debuted in
late 2007, it has jazzed many users and technophiles, but electronic readers
from Amazon and rivals such as Sony Corp. are still in an early stage. Amazon
has not disclosed Kindle sales figures, and the publishing industry has said
e-books account for less than 1 percent of book sales.
Now, by offering the larger,
$489 version of the Kindle DX and the smaller $359 Kindle 2, Amazon will try to
open more avenues for digital versions of books, as well as newspapers and
magazines.
Oil prices jump to high for
the year
SIOUX FALLS, S.D. (AP) --
Oil prices surged to a 2009 high Wednesday after a government report showed
that unused crude being placed in storage slowed a bit last week.
Benchmark crude for June
delivery rose 4.6 percent, or $2.50, to settle at $56.34 a barrel on the New
York Mercantile Exchange. It was the highest close since mid-November.
Demand for energy during the
recession has been decimated, leaving storage facilities more bloated than in
any year since Iraq's invasion of Kuwait in 1990. Prices for crude and gasoline
have plunged as a results.
So government data that in a
normal year might send energy prices falling actually sent them up across the
board Wednesday.
Senate moves toward easing
mortgage terms
WASHINGTON (AP) -- Trying to
curb home foreclosures, the Senate voted on Wednesday to make it easier for
homeowners with risky credit to switch to a lower-cost mortgage backed by the
government.
The bill, passed 91-5, also
would give banks a break by encouraging reduced fees they must pay for the
government to insure deposits.
While both steps put
taxpayer money on the line, lawmakers say the legislation is needed to prevent
the economy from getting worse.
Absent from the measure was
a bankruptcy provision that President Barack Obama had promised to push through
Congress, but backed down amid stiff opposition from banks. The provision would
have allowed bankruptcy judges to lower a person's mortgage payment.
Madoff secretary: His
silence is protecting others
NEW YORK (AP) -- Bernard
Madoff's longtime secretary said Wednesday that she believes the disgraced
financier is not cooperating with authorities in order to protect others, and
that he was a flirtatious boss who frequented massage parlors.
Eleanor Squillari, Madoff's
secretary of more than 20 years, told The Associated Press she thinks her
former boss carefully orchestrated his arrest and that he's protecting others
who might have been involved in his multibillion-dollar scheme by not
cooperating with investigators. She declined to speculate as to whom he might
be protecting.
Chrysler lenders group
releases list of 9 members
NEW YORK (AP) -- The names
of nine dissident Chrysler debt holders were disclosed Wednesday, but a number
of others chose to avoid the spotlight first put on them a week ago when
President Barack Obama publicly chastised them for not supporting his plan for
the automaker.
The nine lenders, which
include previously disclosed members Stairway Capital Management and
OppenheimerFunds Inc., represent just $295 million of Chrysler's total of $6.9
billion of secured debt.
Previously, lawyers for the
group estimated its size at 20 members with about $1 billion in debt.
News Corp. 3Q net profit up
1 percent
LOS ANGELES (AP) -- News
Corp., the media conglomerate controlled by billionaire Rupert Murdoch, said
Wednesday its third-quarter profit grew 1 percent as one-time gains offset big
drops at its television and newspaper businesses.
The New York-based company
also maintained its outlook for the current fiscal year, which ends in June,
saying operating profits will be down 30 percent from the $5.13 billion it
posted in fiscal 2008.
The partial sale of News
Corp.'s stake in digital technology company NDS Group Ltd. resulted in a $1.2
billion profit gain, and tax benefits added another $1.2 billion. The same
quarter a year earlier had an offsetting $1.7 billion gain from trading News'
stake in DirecTV for Liberty Media Corp.'s stake in News plus cash.
Cisco earnings fall 21 pct
but beat expectations
NEW YORK (AP) -- Cisco
Systems Inc. said Wednesday that earnings fell 21 percent in its latest
quarter, but the profit comfortably beat Wall Street expectations amid signs
that the market is stabilizing.
The world's largest maker of
computer networking gear posted a profit of $1.3 billion, or 23 cents per
share, for the fiscal third quarter, which ended April 25. That was down from
$1.8 billion, or 29 cents per share, in the same quarter last year.
By The Associated Press
The Dow Jones industrials
rose 101.63, or 1.2 percent, to 8,512.28. The blue chips closed above the 8,500
mark for the first time since Jan. 9, leaving the Dow down only 3 percent for
2009.
The Standard & Poor's
500 index rose 15.73, or 1.7 percent, to 919.53. The gains pushed the index
higher for the year after a rally on Monday helped erase its losses from 2009.
The Nasdaq rose 4.98, or 0.3
percent, to 1,759.10.
Benchmark crude for June
delivery rose 4.6 percent, or $2.50, to settle at $56.34 a barrel on the New
York Mercantile Exchange. It was the highest close since mid-November.
In other Nymex trading,
gasoline for June delivery rose 5.58 cents to settle at $1.628 a gallon and
heating oil gained about 4.5 cents to settle at $1.4713 a gallon. Natural gas
for June delivery jumped 27.2 cents to settle at $3.887 per 1,000 cubic feet.
In London, Brent prices rose
$2.03 to settle at $56.15 a barrel on the ICE Futures exchange.