Administration calls for financial system overhaul
WASHINGTON (AP) -- The Obama
administration wants to overhaul the country's financial rule book by giving
the Federal Reserve increased powers but, bowing to critics in Congress, is
backing away from proposals to consolidate various regulatory agencies.
The administration's
overhaul plan would make the Fed a systemic risk regulator to oversee large
institutions whose failure could threaten the stability of the entire system.
It also will create a council of regulators with broad coordination
responsibility across the financial system, administration officials said.
The administration also will
offer a stronger framework for investor protection, including increased
oversight of consumer products ranging from credit cards to annuities,
officials said.
Stocks tumble as stronger
dollar hits commodities
NEW YORK (AP) -- Bad
economic news and doubts about the market's ability to rally dealt stocks a
huge setback.
The Dow Jones industrials
fell 187 points Monday, their biggest drop since April 20. All the major market
indexes fell more than 2 percent.
Trading volume was light,
suggesting an absence of buyers rather than a flood of sellers rushing to dump
stocks, but the pullback nonetheless was another sign that the market's spring
rally has stalled.
Gas prices rise for 48th day
as oil sells off
COLUMBUS, Ohio (AP) -- Gas
prices rose Monday for the 48th straight day, matching a record going back to
at least the 1970s, with prices now up nearly two-thirds since the beginning of
the year even as demand from motorists remains weak.
Yet the oil prices that
influence what you pay at the pump are taking a breather from a three-month
rally, with benchmark crude for July delivery falling $1.42 to settle at $70.62
a barrel on the New York Mercantile Exchange. Crude prices have fallen nearly 3
percent over the past two trading days.
The good news for consumers
is that gasoline prices may be peaking in the next couple of days.
Foreign demand for US
financial assets falls
WASHINGTON (AP) -- Foreign
demand for long-term U.S. financial assets fell in April as both China and
Japan trimmed their holdings of Treasury securities.
The Treasury Department said
Monday that net purchases of stocks, notes and bonds obtained by foreigners
fell to $11.2 billion in April, from $55.4 billion in March.
China, the largest holder of
U.S. Treasury securities, trimmed their holdings to $763.5 billion in April,
from $767.9 billion in March. Japan, the second largest holder of Treasury
securities, reduced their holdings to $685.9 billion, from $686.7 billion a
month earlier.
AIG says former top exec
plundered retirement plan
NEW YORK (AP) -- The former
top executive of American International Group Inc. plundered an AIG retirement
program of billions of dollars because he was angry at being forced out of the
company, a lawyer for AIG told jurors Monday at the start of a civil trial.
Attorney Theodore Wells told
the jury in Manhattan that former AIG Chief Executive Officer Maurice
"Hank" Greenberg improperly took $4.3 billion in stock from the
company in 2005, after he was ousted by the company amid investigations of
accounting irregularities.
Wells said said that
Greenberg, within weeks of being forced out in mid-2005 after a 35-year career
building AIG from a small company into the world's largest insurance provider,
gave the go-ahead for tens of millions of shares to be sold from a trust fund.
The fund was set up to provide incentive bonuses to a select group of AIG
management and highly compensated employees that they would receive upon their
retirement.
Exxon ordered to pay $507.5M
for 1989 Alaska spill
SAN FRANCISCO (AP) -- Exxon
Mobil Corp. has been ordered to pay $507.5 million in punitive damages to Alaska
natives, fishermen, business owners and others harmed by the massive 1989 oil
spill off Alaska.
The ruling by 9th U.S.
Circuit Court of Appeals in San Francisco on Monday affirms the figure set by
the U.S. Supreme Court last year. It also awards interest payments at 5.9
percent to plaintiffs from the date of the original judgment in 1996.
Plaintiffs originally were
awarded $5 billion, but that amount was cut in subsequent appeals by Irving,
Texas-based Exxon.
Boeing shut out of orders
race at Paris Air Show
LE BOURGET, France (AP) --
Boeing didn't score a single jet order and its competitor Airbus didn't fare
that much better on Monday's opening day of the Paris Air Show.
Worries about the
unexplained crash of Air France Flight 447 hung in the air as airlines and
planemakers gathered at the 100th anniversary of the world's first and largest
air show.
Pouring rain at the Le
Bourget air field, combined with plunging revenue, layoffs and unprecedented
losses in the industry, set the stage for a modest gathering.
While defiant Boeing Co.
executives said the overall prospects were robust, the Chicago-based aviation
giant reported no new orders Monday. Airbus announced just one, from Qatar
Airways, for 24 jets from the A320 family worth $1.9 billion.
Government, automaker aid
keeps parts makers alive
DETROIT (AP) -- Government
aid and timely payments by General Motors, Ford and Chrysler have held off the
predicted collapse of the nation's auto parts supply base, but industry
officials say more bankruptcies are coming as the effects of Detroit's
temporary factory closures continue to ripple through the economy.
Hundreds of companies large
and small across the country ship parts to Detroit Three factories as well as
those of foreign automakers with U.S. plants. Some supply parts to others that
make larger components, creating a chain of companies.
While there have been about
20 supplier bankruptcies so far this year, most suppliers have managed to hang
on despite Chrysler Group LLC and General Motors Corp. entering bankruptcy
protection and shuttering their factories for weeks to keep inventory under
control.
Treasury: lending by bailout
banks fell in April
WASHINGTON (AP) -- The value
of loans held by the 21 largest institutions getting support from the
government's $700 billion bailout fund fell in April, the fifth decline in six
months.
The Treasury Department's
monthly report of lending activity on Monday showed that average loan balances
at the 21 institutions totaled $4.34 trillion in April, down 0.8 percent from
March.
The administration says the
declines in recent months would have been even more severe without the
government support.
Extended Stay Hotels LLC
files for Chapter 11
NEW YORK (AP) -- Extended
Stay Hotels LLC filed for Chapter 11 bankruptcy protection on Monday, citing
massive debt stemming from its 2007 acquisition by the Lightstone Group and a
sharp drop in business travel due to the recession.
The Spartanburg, S.C.-based
company, which is privately held, owns more than 680 hotels in the U.S. and
Canada catering to long-term business travelers.
In June 2007, just as the
hotel market peaked, the Lightstone Group, one of the country's largest private
real estate investors, bought Extended Stay from private equity firm Blackstone
Group LP. Lightstone financed the purchase with about $7.4 billion in loans.
By last summer, hotel
occupancy was softening, and it declined sharply after September. Led by a drop
in corporate travel, that decline has accelerated as businesses have cut their
staffs and their spending.
By The Associated Press
The Dow Jones industrial
average fell 187.13, or 2.1 percent, to close at 8,612.13 after falling as much
as 221 earlier in the session. The broader Standard & Poor's 500 index fell
22.49, or 2.4 percent, to 923.72, and the Nasdaq composite index fell 42.42, or
2.3 percent, to 1,816.38.
Benchmark crude for July
delivery fell $1.42 to settle at $70.62 a barrel on the New York Mercantile
Exchange. Crude prices have fallen nearly 3 percent over the past two trading
days after a three-month rally.
In other Nymex trading,
gasoline for July delivery rose less than a penny to settle at $2.053 a gallon
and heating oil fell 2.2 cents to settle at $1.8156. Natural gas for July
delivery jumped 32.5 cents to settle at $4.182 per 1,000 cubic feet.
In London, Brent prices fell
$1.48 to settle at $69.44 a barrel on the ICE Futures exchange.