Fed sees hopeful signs but downgrades `09 forecast
WASHINGTON (AP) -- The Federal Reserve
expects the economy to improve in coming months, even as policymakers
downgraded their outlook for all of 2009 and said the unemployment rate could
approach 10 percent.
Fed Chairman Ben Bernanke and his colleagues continue to believe
that business sales and factory production will begin to recover gradually
during the second half of this year as President Barack Obama's stimulus
package and the Fed's aggressive efforts to lift the country out of recession
take hold. They also pointed to signs that the recession's grip was easing in
the current quarter, according to documents released Wednesday.
Stocks close lower after Fed reduces 2009 outlook
Stocks had been fluctuating throughout much of the afternoon
Wednesday as rising commodity prices drove energy and material stocks higher,
while bank stocks gave up early gains.
The Dow Jones industrials fell 52.81, or 0.6 percent, to
8,422.04. The blue chips had been up as much as 117 points in early trading. The
Standard & Poor's 500 index slipped 4.66, or 0.5 percent, to 903.47, and
the Nasdaq composite index
fell 6.70, or 0.4 percent, to 1,727.84.
Geithner
hopeful, cautious over financial system
WASHINGTON (AP) -- Declaring that the financial system was
"starting to heal," Treasury Secretary Timothy Geithner
said Wednesday that major banks had raised $56 billion since stress tests
showed several in need of more capital -- a sign of emerging investor
confidence.
Geithner
also said a public private program announced in March to rid institutions of
their worst assets would be in place by July.
The hopeful assessment was laden with caution, however. Geithner pointedly warned the committee that he would not
discuss an "exit strategy" for the government's $700 billion
intervention in major private sector institutions.
Big changes in store for US credit cardholders
WASHINGTON (AP) -- Every American with a credit card will see
sweeping changes in the market, with limits on sudden hikes in interest rates
that drive consumers deeper into debt. Even cardholders who pay off their
balance each month may face new annual fees or lose out on lucrative rewards
programs.
Congress wrapped up the legislation Wednesday and sent it to
President Barack Obama, who plans to sign it on Friday.
The bill will revolutionize the market by restricting when and how a card
company can raise an individual's interest rate, who can receive a card and how
much time people are given to pay their bill.
Target posts 13 percent drop in 1st-quarter profit
NEW YORK (AP) -- Target Corp. defended its board of directors on
Wednesday while touting initiatives like expanding its grocery offerings and relaunching its store brand of basics in an attempt to
satisfy its critics and reverse sagging sales.
The discounter saw first-quarter earnings fall 13 percent. Though
that beat Wall Street expectations, Target is still vulnerable to pressure from
key shareholder William Ackman, who is fighting to
change the board. The company said Wall Street profit expectations for the
current quarter "seem achievable," but it will be a challenge given
the poor economy.
Target earned $522 million, or 69 cents per share, for the three
months ended May 2, down from $602 million, or 74 cents per share, a year
earlier. That topped the 60 cents per share analysts expected, and Target
shares rose 3.6 percent, or $1.50, to $43.44.
Chrysler exec says sales OK despite bankruptcy
DETROIT (AP) -- Chrysler LLC's Chapter
11 filing so far doesn't appear to be affecting May sales, a top executive said
Wednesday.
Early sales data shows Chrysler is on pace to sell 60,000 to
70,000 vehicles to individuals this month, better than expected considering its
April 30 bankruptcy filing, Executive Vice President for Sales and Marketing
Steven Landry said in an interview Wednesday.
Also Wednesday, Chrysler announced that former Borden Chemical
and Duracell Chairman C. Robert Kidder will become chairman of the new company
once it acquires old Chrysler's assets and joins with Fiat.
Kidder will succeed Robert Nardelli,
who will step down when Chrysler emerges from Chapter 11 bankruptcy protection.
Crude hits six-month high before holiday weekend
NEW YORK (AP) -- Oil prices hit a six-month high Wednesday,
climbing above $62 a barrel after a government report showed a drop in U.S. oil
supplies for the second straight week.
Benchmark crude for July delivery rose
$1.94 to settle at $62.04 a barrel on the
In
Crude stockpiles dropped by 2.1 million barrels for the week
ended May 15, according to Energy Department's Energy Information Administration.
Gasoline inventories dropped by 4.3 million barrels.
Air France-KLM, Delta tie-up to reap $12B annually
UNDATED (AP) -- Delta Air Lines Inc., Air France and KLM signed a
deal Wednesday to combine two separate joint venture agreements into one to
create a trans-Atlantic powerhouse that's expected to generate $12 billion in
annual revenue, provide better travel options for customers and more closely
align the carriers' operations without a formal merger.
Passengers get more nonstop flights between major cities in the
The airlines aren't merging, and no subsidiary will be created,
but airline consultant Darryl Jenkins said the equal sharing of revenue and
costs regardless of who is flying the plane means the carriers will essentially
act as one airline on certain routes.
TOKYO (AP) -- Japan's economy shrank at a record 15.2 percent
annual pace in the first quarter, dragged down by plunging exports, thinner
factory output and wary shoppers.
But within the details emerged new hope. Economists said the
worst is over for the world's second-largest economy. Many predicted it would
grow in the April-June period amid aggressive stimulus steps by the government
and signs that companies are boosting production.
Government data released Wednesday confirmed what many had been
dreading yet expecting. The drop in gross domestic product was the steepest since
Deere 2Q profit tumbles 38 percent
PITTSBURGH (AP) -- Deere & Co. on Wednesday posted a 38
percent drop in second-quarter profit as farmers and other customers cut
spending on tractors, mowers and construction equipment. The world's largest
farm equipment maker slashed its profit forecast for the second time this year.
Despite the poor outlook, shares rose as investors seemed pleased
with the company's cost cutting and hopes for increased farm spending.
By The Associated Press
The Dow Jones industrials fell 52.81, or 0.6 percent, to
8,422.04.
The Standard & Poor's 500 index slipped 4.66, or 0.5 percent,
to 903.47, and the Nasdaq
composite index fell 6.70, or 0.4 percent, to 1,727.84.
Benchmark crude for July delivery rose
$1.94 to settle at $62.04 a barrel on the
In
In other Nymex trading, gasoline for
June delivery fell less than a penny to settle at $1.8095 a gallon and heating
oil rose 5.45 cents to settle at $1.5411 a gallon. Natural gas for June
delivery added 6.8 cents to settle at $4.098 per 1,000 cubic feet.