General Motors files for bankruptcy protection
NEW YORK (AP) -- General
Motors filed for Chapter 11 bankruptcy protection Monday as part of the Obama
administration's plan to shrink the automaker to a sustainable size and give a
majority ownership stake to the federal government.
GM's bankruptcy filing is
the fourth-largest in U.S. history and the largest for an industrial company.
The company said it has $172.81 billion in debt and $82.29 billion in assets.
As it reorganizes, the
fallen icon of American industry will rely on $30 billion of additional
financial assistance from the Treasury Department and $9.5 billion from Canada.
That's on top of about $20 billion in taxpayer money GM already has received in
the form of low-interest loans.
Hopeful signs for economy
emerge in latest data
WASHINGTON (AP) -- Fresh
signs economic data suggested the economy's decline is moderating, but did not
show a rebound.
Construction spending rose
in April, but personal spending was down slightly and personal incomes were
flat. Economists were especially heartened by the report from the Institute for
Supply Management that showed U.S. manufacturing activity shrinking at a slower
pace in May. Reports from Asia and Europe indicated similar improvements in
their manufacturing sectors.
Importantly, an index of new
orders placed with U.S. factories rose to 51.1 in May. It was the first time
this barometer had grown since November 2007, the month before the recession
began.
Stocks rally after positive
economic data
NEW YORK (AP) -- The stock
market began June with a strong rally, thanks to another wave of benign
economic data.
But some investors are
nervous that the month, traditionally a weak one for stocks, may not end as
well.
Traders homed in Monday on
better-than-expected readings on manufacturing, consumer spending and
construction spending. The Dow Jones industrial average and other major indexes
rose more than 2 percent, and the Standard & Poor's 500 index and Nasdaq
composite rose to their highest levels this year.
A trend that had ruffled
investors last week -- falling Treasury prices and surging yields -- resumed
Monday, but the stock market shrugged it off. A spike in long-term Treasury
yields could drive interest rates on consumer loans higher, potentially
threatening an economic recovery.
Judge OKs sale of most
Chrysler assets to Fiat
NEW YORK (AP) -- A federal
bankruptcy judge approved the sale of most of Chrysler LLC's assets to Italy's
Fiat, moving the American automaker a step closer to its goal of a quick exit
from court protection.
But a trio of Indiana state
pension and construction funds filed an appeal, saying that the ruling sets
aside the rights of the company's secured lenders while doling out the
company's assets to others.
Judge Arthur Gonzalez said
in his ruling late Sunday that a speedy sale -- the centerpiece of a
restructuring plan backed by President Barack Obama's automotive task force --
was needed to keep the value of Chrysler from deteriorating and would provide a
better return for the company's stakeholders than if it had chosen to
liquidate.
Culprits in last year's
energy spike reappear
COLUMBUS, Ohio (AP) -- Oil
prices pushed to new highs for the year Monday on a weak dollar and new data
suggesting manufacturing in China has strengthened. Both of those factors
helped send energy prices to record highs last summer.
The national average price
at the pump this weekend rose above $2.50 for the first time since October.
Benchmark crude for July
delivery rose $2.27 to settle at $68.58 a barrel on the New York Mercantile
Exchange, the highest close since early November. Natural gas futures soared 10
percent.
Dow Jones swaps Travelers,
Cisco for Citigroup, GM
NEW YORK (AP) -- The Dow
Jones industrial average is the latest Wall Street institution to be reshaped
by the financial crisis.
The stock market's
best-known barometer is adding Travelers Cos. and Cisco Systems Inc., replacing
Citigroup Inc. and General Motors Corp. The move comes as GM enters bankruptcy
protection, a move that was widely expected.
Dow Jones said Travelers,
the property and casualty insurer and one-time division of Citicorp, would
replace its former parent. Cisco, which makes computer networking gear, is
filling the role left by GM after 83 years as part of the Dow.
Delphi reaches deal to
emerge from Chapter 11
NEW YORK (AP) -- Delphi
Corp. said Monday that it reached a deal to sell some of its assets to a
private-equity firm and emerge from bankruptcy protection.
Parnassus Holdings II LLC,
an affiliate of Platinum Equity, will operate Delphi's businesses both in the
U.S. and abroad with about $3.6 billion in emergence capital and capital
commitments.
In addition, the Troy,
Mich.-based company's former parent, Detroit-based General Motors Corp., will
acquire some of the company's North American plants, including its global
steering business. Other "non-core" plants and assets will be sold
off over time.
Deere names new chief
executive
PITTSBURGH (AP) -- Deere
& Co., the world's largest farm equipment maker, on Monday named Samuel R.
Allen to succeed Robert W. Lane as the company's chief executive.
Allen, 55, becomes only the
ninth chief executive to lead the 172-year-old company known for its
green-and-yellow tractors and harvesting machines. He moves into the job Aug.
1, when Lane, 59, steps down after nine years at the helm.
The Moline, Ill.-based
company has seen its fortunes fall in recent months as the global economic
crisis undermines demand for its products. In May, the company reported a 38
percent drop in second-quarter profit as farmers and other customers cut
spending on tractors, mowers and construction equipment. It also slashed its
profit forecast for the second time this year.
Health industry delivers
savings plan to Obama
WASHINGTON (AP) -- Health
industry officials sought Monday to make good on a $2 trillion savings proposal
announced with great fanfare at the White House, but they came up short by
several hundred billion dollars.
Nevertheless, the officials
claimed success in producing solid proposals in time for a deadline set by
President Barack Obama after a White House photo op May 11 where they promised
to curb their own costs to help his health care agenda.
Obama asked for a progress
report by early June and the five industry groups and one labor union delivered
it on Monday. They sent the White House a letter along with a series of
cost-savings proposals they said could total $1 trillion to $1.7 trillion in
savings over a decade.
Falling dollar, surging
stocks weigh on Treasurys
NEW YORK (AP) -- Long-term
bond yields climbed sharply on Monday as improving sentiment on the economy
sapped demand for government debt.
Several positive reports on
the U.S. economy, higher oil prices and a resurging stock market helped send
Treasury prices back down again, resuming a sell-off that began late last
month.
The yield on the 10-year
Treasury note, a widely used benchmark for home mortgages and other kinds of
loans, jumped to 3.70 percent from 3.46 percent late Friday as its price fell 1
28/32 to 95 8/32. Last Wednesday the yield on the 10-year bond hit a six-month
high of 3.75 percent.
By The Associated Press
The Dow rose 221.11, or 2.6
percent, to 8,721.44. The Standard & Poor's 500 index rose 23.73, or 2.6
percent, to 942.87. The Nasdaq composite index rose 54.35, or 3.1 percent, to
1,828.68.
Benchmark crude for July
delivery rose $2.27 to settle at $68.58 a barrel on the New York Mercantile
Exchange, the highest close since early November.
In other Nymex trading,
gasoline for June delivery rose 2 cents to $1.915 a gallon and heating oil rose
9.89 cents to settle at $1.7765 a gallon. Natural gas for June delivery jumped
41.4 cents to settle at $4.249 per 1,000 cubic feet.
In London, Brent prices rose
$2.45 to settle at $67.97 a barrel on the ICE Futures exchange.