1st quarter wiped out $1.3 trillion for Americans
WASHINGTON (AP) -- American
households lost $1.33 trillion of their wealth in the first three months of the
year as the recession took a bite out of stock portfolios and dragged down home
prices.
The Federal Reserve reported
Thursday that household net worth fell to $50.38 trillion in the January-March
quarter, the lowest level since the third quarter of 2004. The first-quarter
figure marked a decline of 2.6 percent, or $1.33 trillion, from the final
quarter of 2008.
Net worth represents total
assets such as homes and checking accounts, minus liabilities like mortgages
and credit card debt.
The damage to wealth in the
first quarter came from the sinking stock market. The value of Americans' stock
holdings dropped 5.8 percent from the final quarter of last year.
CEO: Government pushed bank
to buy Merrill Lynch
WASHINGTON (AP) -- House
lawmakers on Thursday accused federal regulators of a gross misuse of power in
orchestrating a "shotgun wedding" between Bank of America Corp. and
Merrill Lynch & Co. that cost U.S. taxpayers $20 billion.
They also took aim at Bank
of America Chief Executive Officer Kenneth Lewis, questioning whether he played
dumb last fall as Merrill's financial losses mounted and threatened not to go
through with the merger to squeeze money from the government.
In his testimony, Lewis said
publicly for the first time that his job was threatened after he expressed
second thoughts about the merger. Lewis said then-Treasury Secretary Hank Paulson
and federal regulators made clear that if the bank reneged on its promise they
would force his ouster and that of board members at the bank.
Better data, strong 30-year
auction lift stocks
NEW YORK (AP) -- The Dow
Jones industrial average tacked on a modest 32 points Thursday after being up
as much as 139, and the Standard & Poor's 500 index edged up to reach its
highest level since November.
Investors welcomed a drop in
jobless claims, growth in retail sales and better-than-expected demand at a government
debt auction. But traders also seemed mindful of how far the market has come in
its three-month rally.
The stock market has at
times run low on fresh evidence of economic recovery that could push the rally
further. The data out Thursday helped but weren't enough to keep the pace of
buying strong through the end of trading.
Weak job market may crimp
spending, slow recovery
WASHINGTON (AP) -- The
number of people receiving unemployment benefits has set another record, a
development likely to weigh on consumer spending and slow the economy's
recovery.
While retail sales rose in
May, the increase resulted largely from a spike in gasoline prices and higher
auto sales, according to a report from the Commerce Department. Overall, the
retail report Thursday showed consumers remain reluctant to spend, economists
said.
The number of people
continuing to claim benefits exceeded 6.8 million in the week ending May 30,
the Labor Department said Thursday. That was the 19th straight weekly record,
after a drop last week was revised to an increase.
No smoking: Historic vote
could bring new limits
WASHINGTON (AP) -- The
Senate struck a historic blow against smoking in America Thursday, voting
overwhelmingly to give regulators new power to limit nicotine in the cigarettes
that kill nearly a half-million people a year, to drastically curtail ads that
glorify tobacco and to ban flavored products aimed at spreading the habit to
young people.
President Barack Obama, who
has spoken of his own struggle to quit smoking, said he was eager to sign the
legislation, and the House planned a vote for Friday.
Cigarette foes said the
measure would not only cut deaths but reduce the $100 billion in annual health
care costs linked to tobacco.
Fierce opposition by the
industry and tobacco-state lawmakers had prevented passage for years.
Oil prices near $73 as
energy rally continues
NEW YORK (AP) -- Oil prices
hit an eight-month high as the dollar fell and a series of reports suggested
that consumers and business may be more willing and able to spend money on
energy.
Benchmark crude for July
delivery rose $1.35 to settle at $72.68 on the New York Mercantile Exchange.
Prices hit $73.23 at one point.
Crude prices rose sharply in
the morning after the federal government announced a drop in first-time jobless
claims last week. Another report said retail sales grew in May for the first
time in three months, in part because of spiking gasoline prices.
Gas prices are following
crude upward, even though most energy experts can find no solid basis for
either.
AP source: GM nearing deal
to sell Saab unit
DETROIT (AP) -- General
Motors Corp. is nearing a deal to sell its Saab unit, but nothing has been
finalized, a person briefed on the negotiations said Thursday.
The news came as Swedish
broadcaster SVT reported that Swedish luxury sports car maker Koenigsegg
Automotive AB and Norwegian investors are planning to buy Saab.
The person would not
identify the final bidders for Saab but said news could come
"shortly," perhaps as early as Friday.
Airline passengers could get
a 1-2-3 punch
ATLANTA (AP) -- Corporate
travel and ticket sales of premium seats are down. Overall demand is weak. And
fuel prices are rising -- again. The one-two-three punch could be bad news for
consumers this fall, as airlines face pressure to raise fares or cut more
capacity to cover their costs.
Executives at several
airlines, including Delta, Southwest, US Airways, Continental and American,
gave bleak outlooks Thursday during an investor conference in New York, and
there was little talk from anyone of a near-term rebound. AirTran offered a
bright spot amid the industry woes.
The rise in unemployment and
hits Americans have taken to the value of their homes, coupled with the
meltdown in the financial markets, has caused a significant slowdown in air
travel. Airlines also have lost business from the swine flu, which has caused
some people to cancel travel plans to Mexico.
Foreclosures fall 6 percent
in May from April
WASHINGTON (AP) -- The
number of U.S. households on the verge of losing their homes dipped in May from
April, and the annual increase was the smallest in three years.
But as layoffs, rather than
risky mortgages, become the main reason that borrowers default on their home
loans, foreclosures likely will remain elevated this year and into 2010. Many
economists expect unemployment, now at 9.4 percent nationwide, to rise as high
as 10 percent, and some project it will exceed the post-World War II record of
10.8 percent.
Foreclosure filings fell 6
percent in May from April, according to RealtyTrac Inc. More than 321,000
households received at least one foreclosure-related notice last month -- 18
percent more than a year earlier -- but the smallest annual gain since June
2006.
Yahoo names new CFO, fills
void left by shake-up
SUNNYVALE, Calif. (AP) --
Yahoo Inc. has lured a chief financial officer away from one of its Silicon
Valley neighbors, filling a key piece of the new management team that's vying
to end the Internet company's three-year stretch of mostly declining profits.
The Sunnyvale-based company
said Thursday that it plucked Tim Morse from Altera Corp., a San Jose-based
chip maker. Morse became Altera's CFO in 2007 after spending 15 years working
for General Electric Co. in various jobs.
Morse's hiring ends Yahoo's
3 1/2-month search to replace its current CFO Blake Jorgensen, who announced
his plans to leave a few weeks after the company hired Carol Bartz its new
chief executive.
By The Associated Press
The Dow Jones industrials
rose 31.90, or 0.4 percent, to 8,770.92. The S&P 500 rose 5.74, or 0.6
percent, to 944.89, just above its close on June 2 and its highest point since
Nov. 5. The Nasdaq Composite index rose 9.29, or 0.5 percent, to 1,862.37, its
best level since Oct. 6.
Benchmark crude for July
delivery rose $1.35 to settle at $72.68 on the New York Mercantile Exchange.
Prices hit $73.23 at one point.
In London, Brent prices
added 99 cents to settle at $71.79 a barrel on the ICE Futures exchange.
In other Nymex trading,
gasoline for July delivery rose 4.96 cents to settle at $2.0649 a gallon, and
heating oil added 2.08 cents to settle at $1.8534 a gallon. Natural gas for
July delivery rose 22.5 cents to settle at $3.933 per 1,000 cubic feet.
(This version CORRECTS item
on tobacco legislation, deleting reference to minor differences to be worked
out with House.)