GM says bondholder panel supports sweetened offer
DETROIT (AP) -- General
Motors Corp. said Thursday a committee of bondholders has agreed to a sweetened
deal proposed by the U.S. government to erase the automaker's unsecured debt in
exchange for company stock.
The news came in a
regulatory filing that spells out the Obama administration's game plan for what
it hopes will be a speedy Chapter 11 bankruptcy reorganization that will leave
GM with a much smaller debt load and the U.S. government as the dominant shareholder.
A person familiar with GM's
plans said it was "probable" that the company would file for
bankruptcy protection on Monday. The person didn't want to be identified
because the plans were still under discussion with the U.S. and Canadian
governments.
Foreclosure woes mount for
those with good credit
NEW YORK (AP) -- A record 12
percent of homeowners with a mortgage are behind on their payments or in
foreclosure as the housing crisis spreads to borrowers with good credit. And
the wave of foreclosures isn't expected to crest until the end of next year,
the Mortgage Bankers Association said Thursday.
The foreclosure rate on
prime fixed-rate loans doubled in the last year, and now represents the largest
share of new foreclosures. Nearly 6 percent of fixed-rate mortgages to
borrowers with good credit were past due or in foreclosure.
At the same time, almost
half of all adjustable-rate loans made to borrowers with shaky credit were past
due or in foreclosure.
Stocks jump on relief over
gov't debt auction
NEW YORK (AP) -- Investors
are finding fresh reasons to bet on an economic rebound.
Stocks jumped Thursday as
gains in commodities like oil signaled that traders expect a strengthening
economy will demand more energy.
Ample demand at an auction
for Treasury debt also eased fears that the government would have to pay higher
interest rates to entice buyers. Higher rates on long-term bonds would also
drive up borrowing costs for consumers buying cars and homes, which in turn
could endanger an economic recovery.
Major stock indicators rose
more than 1 percent, including the Dow Jones industrial average, which gained
almost 104 points to 8,403.80.
Initial jobless claims drop
unexpectedly
WASHINGTON (AP) -- The tally
of newly laid-off people requesting jobless benefits fell last week, the
government said Thursday, a sign that companies are cutting fewer workers.
But the number of people
continuing to receive unemployment benefits rose to 6.78 million -- the largest
total on records dating back to 1967 and the 17th straight record week. The
figures for continuing claims lag behind initial claims by one week.
The Labor Department said
the number of initial claims for unemployment insurance dropped to a seasonally
adjusted 623,000, from a revised figure of 636,000 in the previous week. It was
below analysts' estimates of 635,000.
Chrysler's CEO sees sale to
Fiat closing Friday
NEW YORK (AP) -- Chrysler
Chief Executive Robert Nardelli said he expects the sale of the bulk of
Chrysler's assets to a group headed by Italy's Fiat Group SpA to close Friday,
assuming the judge overseeing the automaker's bankruptcy case approves the
deal.
Nardelli testified in court
Thursday that he expects the required U.S. regulatory approvals for the sale to
be in place by Friday and international approvals to follow shortly thereafter.
But it's likely that if U.S.
Judge Arthur Gonzalez does approve the deal, attorneys representing three
Indiana state pension and construction funds, which hold Chrysler debt and are
aggressively opposing the sale, will appeal the decision and force the company
to postpone the closing. Fiat could back out if the deal doesn't wrap up by
June 15.
Time Warner to spin off AOL,
ending ill-fated deal
NEW YORK (AP) -- When AOL
flashed $147 billion in stock puffed up by the dot-com boom, Time Warner, one
of the world's biggest media companies, fell into its arms in 2001. They
swooned over their combination of Internet access and traditional media.
But before long, reality
intruded. People were saying the marriage wouldn't last. Finally, after years
of denial, Time Warner filed for the corporate world's version of a divorce
Thursday. It said it will spin out AOL as a separate company and get on with
its life as a movie, TV and publishing conglomerate.
Target shareholders reject
Ackman's board nominees
WAUKESHA, Wis. (AP) --
Target Corp. shareholders rejected a hedge fund's bid to enlarge the company's
board and infuse the board with new blood, according to preliminary totals from
the vote at their annual meeting.
Activist shareholder William
Ackman had sparred with Target for months in a contentious campaign to add five
of his own picks -- including himself -- to the Minneapolis-based retailer's
board of directors, replacing four incumbents.
The cheap-chic discount
retailer's stock price has stumbled and its same-store sales slid as shoppers
focus on basics during the recession.
Banks cut Fed borrowing,
investment cos. draw none
WASHINGTON (AP) -- Banks
have reduced borrowing from the Federal Reserve's emergency lending program,
while investment firms took a pass for the second week in a row, a sign that
some credit stresses may be easing.
The Fed, in a report issued
Thursday, said commercial banks averaged $38.153 billion in daily borrowing
over the week that ended Wednesday. That was down slightly from $38.155 billion
in the week ending May 20.
Investment firms didn't draw
any loans over the past week from the Fed program. In the prior week the firms
also took a pass on the emergency loans, something that hadn't happened since early
September. Firms drew just $482 million in the week that ended May 13.
OPEC oil cartel keeps output
steady
VIENNA (AP) -- OPEC oil
ministers on Thursday avoided the temptation to cut crude production and
trample on the seedlings of economic recovery. Instead, they bet on prices
floating higher as the recession eases and demand for oil picks up.
With the world oversupplied
with oil, Thursday's meeting of the 12-nation oil producing cartel could have
opted to tighten the spigots -- an option it has often exercised to raise
prices in past times of anemic demand.
An OPEC statement announcing
the decision to keep production quotas at present levels noted that worldwide
oil inventories at the end of last month were at a 20-year high.
P&G projects cautious outlook
amid recession
CINCINNATI (AP) -- Procter
& Gamble Co. leaders expect another tough year for sales of consumer
products, while saying Thursday they have aggressive plans to build up their
market share against competitors during the recession.
The maker of Tide detergent,
Gillette shavers and other familiar household brands offered a cautious outlook
to analysts in New York on Thursday, projecting earnings per share in a range
of $3.65 to $3.80 for the fiscal year that begins July 1. The company says that
would represent growth at a rate of roughly zero to 4 percent compared with its
estimates for the current year.
By The Associated Press
The Dow rose 103.78, or 1.3
percent, to 8,403.80. The S&P 500 index rose 13.77, or 1.5 percent, to
906.83, and the Nasdaq composite index advanced 20.71, or 1.2 percent, to
1,751.79.
Benchmark crude for July
delivery added $1.63 to settle at $65.08 a barrel on the New York Mercantile
Exchange.
In London, Brent prices
gained $1.89 to settle at $64.39 a barrel on the ICE Futures exchange.
In other Nymex trading,
gasoline for June delivery rose 1.88 cents to settle at $1.9105 a gallon and
heating oil added 3.97 cents to settle at $1.6014 a gallon. Natural gas for
July delivery rose up 31.9 cents to settle at $3.957 per 1,000 cubic feet.