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Stress tests find 10
big banks need $75B more
WASHINGTON (AP) -- The
government's long-awaited "stress-test" results have found that 10 of
the nation's 19 largest banks need a total of about $75 billion in new capital
to withstand losses if the recession worsened.
The Federal Reserve's findings,
released Thursday, show the financial system, like the overall economy, is
healing but not yet healed.
Some of the largest banks
are stable, the tests found. But others need billions more in capital -- a
signal by regulators that the industry is vulnerable but viable. Government
officials have said a stronger banking system is needed for an economic
rebound.
GM draws closer to
bankruptcy in first quarter
DETROIT (AP) -- General
Motors drew closer to bankruptcy Thursday, acknowledging that its revenue fell
by nearly half as car buyers worldwide steered away from showrooms for fear
that the auto giant would not be around to honor its warranties.
The company lost $6 billion
in the first three months of the year. The results were bad enough to bring a warning
from Chief Financial Officer Ray Young, who acknowledged the difficulty of
climbing out of a steep decline even if the company cuts costs.
GM is living on $15.4
billion in federal loans and faces a June 1 government deadline to finish a
restructuring plan or join Chrysler in Chapter 11 bankruptcy reorganization.
The company would prefer to restructure out of court, but even its own
executives say the obstacles are formidable.
New jobless claims plunge,
retail sales improve
WASHINGTON (AP) -- New applications
for jobless benefits plunged to the lowest level in 14 weeks, a possible sign
that the massive wave of layoffs has peaked. Still, the number of unemployed
workers getting benefits climbed to a new record.
Retail results also improved
as discounter Wal-Mart Stores Inc. and other stores reported April sales
figures that beat expectations. Analysts acknowledged the positive economic
signals but cautioned that any recovery will be subdued as long as unemployment
stays high.
The Labor Department reported
Thursday that the number newly laid off workers applying for benefits dropped
to 601,000 last week. That was far better than the rise to 635,000 claims that
economists expected.
Weak Treasury auction sends
stocks lower
NEW YORK (AP) -- Weak demand
at a Treasury bond auction touched off worries in the stock market Thursday
about the government's ability to raise funds to fight the recession.
The government had to pay
greater interest than expected in a sale of 30-year Treasurys. That is
worrisome to traders because it could signal that it will become harder for
Washington to finance its ambitious economic recovery plans.
Investors also pocketed some
gains after strong rally in stocks this week and ahead of the government's
April employment report on Friday. Major stocks market indicators slid more
than 1 percent, including the Dow Jones industrial average which lost 102
points to 8,409.85 .
Consumer credit falls at
fastest pace in 18 years
WASHINGTON (AP) -- Consumer
borrowing plunged in March at the fastest pace in 18 years as Americans put
away their credit cards and hoarded cash amid the worst recession in decades.
The Federal Reserve said
Thursday that consumer borrowing dropped 5.2 percent in March, the biggest
decline since an 8.1 percent fall in December 1990.
In dollar terms, consumer
borrowing plunged by $11.1 billion. That's the largest dollar amount on records
dating to 1943, and more than three times the $3.5 billion drop that economists
expected.
AIG 1st-quarter loss narrows
to $4.35 billion
NEW YORK (AP) -- Battered
insurer American International Group Inc. said Thursday its first-quarter loss
narrowed, and was sharply lower than the record-setting loss it posted a
quarter ago.
The New York-based insurance
giant said it lost $4.35 billion, or $1.98 per share, during the quarter ended
March 31, compared with $7.81 billion, or $3.09 per share, during the same
quarter last year.
AIG lost $61.7 billion
during the fourth quarter -- the most ever in a quarter by a U.S. corporation
-- amid the mushrooming credit crisis and shortly after its near collapse.
Oil prices rally again
despite massive supply
HOUSTON (AP) -- Oil prices
continued to rise Thursday and climbed above $58 a barrel for the first time in
nearly six months as the U.S. economy showed some signs of recovery. Still, oil
analysts continue to search for fundamental reasons as to why energy prices
have risen to current levels.
Upbeat employment and retail
news aside, energy consumption remains anemic and most experts say it will be
some time before there's a rebound, save for an uptick in summer driving.
Benchmark crude for June
delivery rose 37 cents a barrel to settle at $56.71 in trading on the New York
Mercantile Exchange. Earlier in the session, the contract reached a high of
$58.57.
European Central Bank cuts
rates a quarter point
FRANKFURT (AP) -- The
European Central Bank cut interest rates a quarter point to 1 percent Thursday
and said the reduction wasn't necessarily its last, while announcing still more
measures to push money into the 16-country euro zone's financial system and
support its economy.
The Bank of England also
moved to shore up its economy, stepping up efforts to increase the money supply
although it left its rates unchanged at 0.5 percent.
Cablevision posts profit;
explores Garden spinoff
UNDATED (AP) -- Cablevision
Systems Corp. reported a profit for the first quarter Thursday as revenue
climbed 11 percent, due to subscriber growth and the addition of the recently
acquired Long Island-based newspaper Newsday and the Sundance channel.
Cablevision also said it was
exploring the spinoff of one of its most valuable assets, Madison Square
Garden. This group includes the namesake New York City arena, the NBA's New
York Knicks and NHL's New York Rangers as well as Radio City Music Hall.
The move would let investors
buy shares of Madison Square Garden separately from the rest of Cablevision.
Pentagon's requests
increased weapons spending
WASHINGTON (AP) -- The
Pentagon's proposed $534 billion budget calls for more spending on projects
like Lockheed Martin Corp.'s F-35 fighter jet, a naval destroyer built by Bath
Iron Works and Sikorsky's Black Hawk helicopters.
The department wants to
increase spending on procurement by 5.6 percent to $107.4 billion for the
fiscal 2010 budget, which begins Oct. 1. That increase offsets deep cuts on
other defense projects like Lockheed's F-22 fighter jet that were previously
announced by Secretary Robert Gates in April.
By The Associated Press
the Dow fell 102.43, or 1.2
percent, to 8,409.85.
The S&P 500 index fell
12.14, or 1.3 percent, to 907.39, and the Nasdaq composite index fell 42.86, or
2.4 percent, to 1,716.24.
Benchmark crude for June
delivery rose 37 cents a barrel to settle at $56.71 in trading on the New York
Mercantile Exchange.
In London, Brent prices rose
32 cents to settle at $56.47 a barrel on the ICE Futures exchange.
In other Nymex trading,
gasoline for June delivery rose 3.75 cents to settle at $1.6655 a gallon and
heating oil gained 1.4 cents to settle at $1.4852 a gallon. Natural gas for
June delivery rose 9.4 cents to settle at $4.081 per 1,000 cubic feet.