Stocks end higher after biggest slide
in a year
NEW YORK (AP) -- Stocks ended sharply
higher a day after posting their biggest drops in more than a year.
Trading was volatile Friday and there
are still worries about how Europe is handling its debt crisis. Analysts said a
bounce back after the slide Thursday wasn't surprising.
The Dow Jones industrial average rose
125 points after falling below 10,000 in morning trading.
The volatility comes after major
indexes entered "correction" mode, having dropped more than 10
percent from their 2010 highs set last month. The gains Friday pulled the Dow
back out of correction territory and left it down 9 percent from its peak.
EU nations back tougher sanctions to
combat debt
BRUSSELS (AP) -- European Union finance
ministers backed tougher sanctions to prevent them running up too much debt in
the hopes of winning back market confidence and getting a handle on the debt
crisis that is threatening the euro.
The European Union's president Herman
Van Rompuy said the talks Friday showed that "it was very clear that there
was a broad consensus on the principle of having sanctions" -- both
financial and political.
Current limits on debt and deficits are
backed up on paper by heavy fines, which have never been imposed -- effectively
allowing Greece and others to ignore them and build up massive debt.
GM's European restructuring may not go
far enough
BERLIN (AP) -- While the rest of
General Motors Co. rose to its financial feet in the first quarter, the auto
giant's European unit continued to struggle with high costs and a declining
market.
On Friday CEO Ed Whitacre got the last
big piece of his plan to resurrect GM -- a $1.25 billion restructuring deal
with its European union, designed to stop Adam Opel GmbH from being a drain on
GM profits.
The cuts, though, may not go deep
enough for Opel to thrive in a competitive European market.
Toyota recalls 3,800 Lexus cars for
steering fix
NEW YORK (AP) -- Toyota Motor Corp.
said Friday it is recalling about 3,800 Lexus LS sedans in the U.S. to fix a
problem with the vehicle's steering system following a similar recall in Japan.
The company said the recall affects
some 2009 and 2010 LS 460 and LS 600h sedans. The recall is designed to fix a
problem in which the steering wheel becomes off-center after a specific driving
maneuver. The problem should not occur during normal driving, the company said.
Toyota earlier Friday recalled 4,500 of
the same models in Japan to address the steering issue. The recall affects
roughly 2,750 vehicles elsewhere around the world.
Jobless rates drop in 34 states and DC
WASHINGTON (AP) -- Unemployment rates
fell in a majority of states last month as improved economic conditions spurred
hiring.
The Labor Department said Friday that
34 states and the District of Columbia reported their jobless rates fell in
April. Six states reported higher rates, while 10 saw unemployment hold steady.
That marked an improvement from March
when 16 states and D.C. reported declines in unemployment, 22 saw increases,
and 12 had no change, according to revised figures.
South Carolina's rate fell to 11.6
percent in April, from 12.2 percent in March, marking the largest monthly drop
of any state.
Chrysler adds 1,100 jobs at Detroit
Jeep plant
DETROIT (AP) -- Chrysler Group LLC gave
a big boost to the battered Michigan economy Friday when it announced plans to
add about 1,100 workers to help build the new Jeep Grand Cherokee.
The company made the announcement at a
Detroit factory as it celebrated the start of Grand Cherokee production.
Chrysler said it expects strong sales of the new sport utility vehicle, which
is due in showrooms next month.
Almost all the workers will be new
hires, which Chrysler can pay about $14 per hour, about half the hourly rate
received by current workers represented by the United Auto Workers union. The
workers will staff a second shift at the factory, called the Jefferson North
Assembly Plant, starting July 19.
Lower bailout estimate assumes higher
stock prices
WASHINGTON (AP) -- The Treasury
Department indicated Friday it expects taxpayers will lose billions less from
the financial bailouts than earlier estimated. The problem is, its revised
forecast assumes Treasury's shares of bailed-out companies are gaining value
despite this week's plunge in stock prices.
Treasury predicts the bailouts will
cost taxpayers $105.4 billion, according to a letter to lawmakers from
Assistant Secretary Herb Allison. That's down $11.4 billion from a February
projection by the Obama administration.
Most of the expected cost savings
depend on Treasury's ability to profit once it sells its stakes in Citigroup
Inc., General Motors and Chrysler, Allison wrote. Treasury received those
investments in exchange for pumping billions into the companies to rescue them.
Abbott buys unit of Piramal Healthcare
for $3.7B
MUMBAI, India (AP) -- Abbott
Laboratories has agreed to buy the domestic healthcare business of India's
Piramal Healthcare Ltd., a leading branded generics company, for $3.72 billion,
the companies said Friday.
The deal is part of Abbott's drive to
establish itself as a leading emerging market pharmaceutical player and
reflects the growing global importance of generics as well as the rise of India's
consumer market for drugs.
Abbott, based in North Chicago, Ill.,
will pay $2.12 billion up front, plus $400 million annually for four years.
The deal will vault Abbott past market
leaders Cipla and Ranbaxy to number one in India's fast growing market, with a
7 percent market share.
Financier invests in Borders, becomes
chairman
NEW YORK (AP) -- Book seller Borders
Group Inc. hopes to redefine itself with a new $25 investment from financier
Bennett LeBow, who will become its chairman and biggest shareholder.
In an era of deep discounts on printed
books and growing consumer appetite for electronic ones, the struggling company
will use the infusion it announced Friday to strengthen its balance sheet and
invest in its online business.
Borders, the nation's No. 2 traditional
book seller behind Barnes & Noble Inc., has cut staff and other costs and
closed stores as it faces increasing competition from discounters and online
sellers such as Amazon.com Inc.
Johnson Controls offers $1.25B for
Visteon unit
Johnson Controls Inc. has offered $1.25
billion for the automotive interiors and electronics business at Visteon Corp.,
saying the acquisition would expand its presence in China.
Visteon, however, was skeptical of the
bid, saying that it was vague and missing important details. The auto parts
company also suggested that Johnson Controls, a direct competitor, might be
using the offer as a way to drag out Visteon's Chapter 11 bankruptcy
reorganization.
Johnson Controls, which builds car
interiors, batteries and other components, said Friday it sent a letter to
Visteon expressing interest in the acquisition.
By The Associated Press
The Dow Jones industrial average rose
125 points to 10,193.39 after falling below 10,000 in morning trading.
The broader Standard & Poor's 500
index rose 16.10, or 1.5 percent, to 1,087.69. The Nasdaq composite index rose
25.03, or 1.1 percent, to 2,229.04.
Benchmark crude lost 76 cents to settle
at $70.04 on the New York Mercantile Exchange.
In other Nymex trading in June
contracts, heating oil lost 0.52 cent to settle at $1.8967 a gallon, and
gasoline gave up 0.33 cent to settle at $1.9612 a gallon. Natural gas fell 7.1
cents to settle at $4.035 per 1,000 cubic feet.
In London, the Brent crude fell 16
cents to settle at $71.68 on the ICE futures exchange.