With bankruptcy looming, a new GM begins to emerge
DETROIT (AP) -- With an
almost certain bankruptcy filing days away, General Motors is beginning its
reinvention, planning to retool one factory to make its smallest vehicles ever
in the U.S. and rid itself of the biggest.
As GM's board began two days
of meetings Friday to make a final decision on the company's fate, GM was also
closing in on a sale of its European Opel unit, and its main union
overwhelmingly approved dramatic labor cost cuts. A deal to sell its rugged but
inefficient Hummer brand also appeared on the horizon.
Meanwhile, the United Auto
Workers union has ratified a package of concessions designed to reduce General
Motors Corp.'s labor costs, completing a key piece of the automaker's massive
restructuring effort.
Chrysler appears hours away
from Fiat sale ruling
NEW YORK (AP) -- Chrysler
LLC could be hours away from a ruling on its plan to sell most of the company
to a group led by Italy's Fiat Group SpA, a big step toward its goal of a
speedy exit from bankruptcy protection.
Closing statements on the
sale began in U.S. Bankruptcy Court Friday afternoon, marking the third day of
hearings on the proposed deal.
Judge Arthur Gonzalez is
expected to approve the sale Friday, but it's likely that attorneys for three
Indiana state pension and construction funds will appeal the decision and
possibly force Chrysler to postpone the deal's closing.
Chrysler claims that any
delay could push Fiat to back out if the deal, since it's set a deadline of
June 15 to wrap up a transaction.
Economy sinks at a 5.7
percent pace in 1Q
WASHINGTON (AP) -- The
economy sank at a 5.7 percent pace in the first quarter as the brute force of
the recession carried over into this year. However, many analysts believe
activity isn't shrinking nearly as much now as the downturn flashes signs of
letting up.
The Commerce Department's
updated reading on gross domestic product, released Friday, showed the
economy's contraction from January to March was slightly less deep than the 6.1
percent annualized decline first estimated last month. But the new reading was
a tad worse than the 5.5 percent annualized drop economists were forecasting.
Stock market soars in
late-day rally
NEW YORK (AP) -- Wall Street
sealed the third month of its spring rally with a huge advance. The fourth month
looks a little less certain.
Stocks shot higher right
before the closing bell Friday after fluctuating on a mix of economic data.
Analysts said the surge was the work of short-sellers who had bet that stocks
would fall and then had to rush to buy when those bets turned out to be wrong.
A jump in commodities
prices, which came on expectations that an improving economy will lift demand
for raw materials, also fed the advance.
The Dow Jones industrial
average rose 96.53, or 1.2 percent, to 8,500.33. The Standard & Poor's 500
index gained 12.31, or 1.4 percent, to 919.14, while the Nasdaq composite index
rose 22.54, or 1.3 percent, to 1,774.33.
Oil, gas prices defy
recession; crude hits $66
COLUMBUS, Ohio (AP) -- Oil
and gasoline prices continued a recession-defying march higher Friday, doubling
in the past six months largely on optimism of a strengthening economy.
The predictions for just how
high oil can reach this year, just like 2008, continue to creep upward just
five months removed from crude priced around $32 per barrel. Benchmark crude
for July delivery rose $1.23 to settle at $66.31 a barrel on the New York
Mercantile Exchange.
The gasoline-pump panic of
2008 has yet to surface, but that's not to say there haven't been some
double-takes. Wholesale gasoline prices, which typically rise during this time
of the year, are up a staggering 140 percent since Christmas Eve.
Gov't allows short-term
loans for tax credit
WASHINGTON (AP) -- Thousands
of first-time homebuyers will be able to get short-term loans so they can
quickly make use of a new $8,000 tax credit to pay for some of the costs of
buying a home.
The Federal Housing
Administration on Friday released details of a plan in which borrowers who use
FHA loans can get advances from lenders that let them effectively receive the
credit in advance, so they don't have to wait to get the money from the
Internal Revenue Service.
Most borrowers will still
have to come up with the FHA's required 3.5 percent down payment, unless they
work through a state or local housing agency or an approved nonprofit. Ten
states have such programs in place, according to the National Council of State
Housing Agencies.
Obama setting up better
security for computers
WASHINGTON (AP) -- America
has failed for too long to protect the security of its computer networks,
President Barack Obama said Friday, announcing he will name a new cyber czar to
press for action.
Surrounded by a slew of
government officials, aides and corporate executives, Obama said the U.S. has
reached a "transformational moment" when computer networks are probed
and attacked millions of times a day.
He said he will soon pick
the person he wants to head a new White House office of cyber security, and that
person will report to the National Security Council and the National Economic
Council -- a nod to his contention that the country's economic prosperity
depends on cybersecurity.
Tiffany's 1Q profit tumbles,
but meets view
NEW YORK (AP) -- Jewelry
retailer Tiffany & Co. said Friday that its first-quarter profit plunged 62
percent as sales tumbled, particularly in the U.S., as consumers continued to
shy away from luxury purchases.
Still, the earnings matched
Wall Street's expectations and the company maintained its profit outlook for
the full year. Tiffany said it cut spending in the first quarter to offset weak
sales by cutting 10 percent of staff -- or 900 people -- and lowering marketing
spending.
Tiffany, like many other
luxury companies, has seen sales soften as consumers cut back on big-ticket,
discretionary purchases amid the recession. Tiffany said sales of items over
$50,000 were particularly weak, and lower-priced silver and gold jewelry
performed better.
Judge approves early motions
in Visteon bankruptcy
WILMINGTON, Del. (AP) -- A
Delaware bankruptcy judge on Friday approved several first-day motions in the
Chapter 11 bankruptcy case of automobile parts supplier Visteon Corp.
Visteon, the top supplier to
and a former subsidiary of Ford Motor Co., filed for bankruptcy protection on
Thursday, citing declining liquidity, impending debt payments and the economic
turmoil in the automotive industry.
In an effort to protect a
key supplier, Ford has agreed to support debtor-in-possession financing and
take assignment of asset-backed loans under a revolving credit facility.
Euro zone inflation zero in
year to May
LONDON (AP) -- The 16
countries that use the euro saw zero inflation in the year to May, official
figures showed Friday, stoking expectations prices may fall for several months
-- and increasing concern about whether policymakers are doing enough to ward
off a debilitating downward spiral.
The European Union's first
estimate of 0.0 percent inflation was down from the 0.6 percent increase
recorded in April and analysts' forecasts for a 0.2 percent rise.
A more complete picture will
emerge next month when Eurostat publishes its next estimate, though analysts
said the decline in May was likely to have arisen from the continued easing in
both food and energy pressures on a year-on-year basis.
By The Associated Press
The Dow Jones industrial
average rose 96.53, or 1.2 percent, to 8,500.33.
The Standard & Poor's
500 index gained 12.31, or 1.4 percent, to 919.14, while the Nasdaq composite
index rose 22.54, or 1.3 percent, to 1,774.33.
Benchmark crude for July
delivery rose $1.23 to settle at $66.31 a barrel on the New York Mercantile
Exchange.
In other Nymex trading,
gasoline for June delivery rose 2.05 cents to settle at $1.931 a gallon and
heating oil gained 4.05 cents to settle at $1.6419 a gallon. Natural gas for
July delivery fell 12.2 cents to settle at $3.835 per 1,000 cubic feet.
In London, Brent prices rose
$1.13 to settle at $65.52 a barrel on the ICE Futures exchange.