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Slumping crude oil prices drag stock market lower

 

NEW YORK (AP) -- Major stock indexes skidded 2 percent Tuesday as crude fell for the fifth straight day.

Falling oil can help the economy by reducing costs, but investors are looking to the latest slide as an unwelcome prediction that demand for energy and basic materials will remain weak as the recession lingers. The Dow Jones industrial average fell 161 points to 8,163.60, its lowest close since late April.

Trading volume remained light amid a dearth of news about the economy this week and as investors await the beginning of the second-quarter earnings season, which starts Wednesday with Alcoa Inc. but won't pick up speed until next week.

AIG loses big round in lawsuit against Greenberg

NEW YORK (AP) -- American International Group Inc. lost a big round Tuesday in its court battle against former CEO Maurice "Hank" Greenberg.

In an advisory decision, a federal jury in Manhattan found that a private investment firm controlled by Greenberg did not have to reimburse AIG for $4.3 billion in shares taken from a company retirement bonus fund in 2005, shortly after Greenberg was ousted as the insurer's CEO.

U.S. District Judge Jed S. Rakoff said he would issue a ruling in the case by the end of August.

Crude falls below $63 in extended sell-off

NEW YORK (AP) -- Oil prices fell for the fifth straight day Tuesday, with a barrel costing $10 less than it did just one week ago when crude hit a new high for the year.

Benchmark crude for August delivery settled at $62.93 a barrel on the New York Mercantile Exchange, down $1.12.

Oil prices had already begun to slide after peaking last Tuesday, and dismal jobs numbers last week from both the U.S. and Europe have hastened the decline.

Boeing to pay $580M for 787 parts plant in SC

UNDATED (AP) -- Boeing Co. will pay $580 million for a plant that makes large sections of its 787 jetliner, an apparent effort to reign in supplier problems that have led to costly delays of the next-generation aircraft and hurt the company's credibility.

The plant, owned by Vought Aircraft Industries, makes barrel-like sections of the 787's fuselage that fit between its wings and tail and are composed primarily of lightweight materials.

Deliveries of the 787 have been postponed by nearly two years partly because of problems with components made by suppliers and work that suppliers didn't complete. Those hang-ups are expected to cost the airplane maker billions of dollars in added expenses and penalties.

Auto parts maker Lear Corp. files for Chapter 11

NEW YORK (AP) -- Automotive parts supplier Lear Corp. filed for bankruptcy protection on Tuesday after receiving support from lenders and bondholders to reorganize its struggling business.

The move had been expected from the maker of vehicle seats and electronics, which missed an interest payment on its bond debt last week and revealed its intention to seek Chapter 11 bankruptcy protection from its creditors. The Southfield, Mich.-based company made the filing in the U.S. Bankruptcy Court for the Southern District of New York.

It listed $1.27 billion in assets and $4.54 billion in liabilities. Subsidiaries outside the U.S. and Canada are not part of the filings, the company said.

IRS temporarily suspends some small business fines

WASHINGTON (AP) -- The IRS has temporarily stopped collecting penalties from some small businesses that have been hit with big fines for not disclosing the use of questionable tax shelters.

The fines, which can reach $300,000 a year, were an unintended consequence of a 2004 law aimed at big corporations that use the shelters to avoid taxes. Lawmakers asked the Internal Revenue Service last month to suspend collections while they work to change the law.

The IRS agreed to suspend collections through September on cases in which businesses gained less than $200,000 a year from the tax shelters, IRS Commissioner Doug Shulman said in a letter to lawmakers released Tuesday.

Consumer loan delinquencies continue to rise

NEW YORK (AP) -- Consumer loan delinquencies edged up to another record high in the first quarter, according to data released Tuesday by the American Bankers Association.

A continued rise in unemployment has been the main culprit for the continued rise in delinquencies, the trade association said.

The composite delinquency rate among eight types of closed-end installment loans rose to 3.23 percent in the January-March period, according to the ABA's consumer credit delinquency bulletin. That is the highest recorded since the ABA began tracking the rate in the mid 1970s and tops the previous record of 3.22 percent set in the last quarter of 2008.

Conoco says production up in 2Q

HOUSTON (AP) -- ConocoPhillips, the third-largest U.S. oil company, said Tuesday second-quarter production rose by more than 100,000 barrels from a year ago, but lower crude and natural-gas prices and refining margins are expected to hurt results.

The company's shares fell more than 2 percent in early trading, along with all major oil companies. In the past week, the price of crude has dropped more than $10 per barrel.

In an overview of market conditions for the April-June period, the Houston-based company said global output was about 1.86 million barrels of oil equivalent. That's up from 1.75 million barrels in the second quarter of 2008.

German industrial orders rise in May

BERLIN (AP) -- German industrial orders increased by a healthy 4.4 percent in May over the previous month, with demand from outside Europe rising the most strongly, government figures showed Tuesday.

The strong performance followed a minimal 0.1 percent increase in April and adds to other indications that the outlook for Germany's export-dependent economy -- Europe's biggest -- is becoming rosier. Recent surveys have shown rising business and consumer confidence.

The Economy Ministry said orders from within Germany were up 3.9 percent in May, while those from outside the 16-nation euro zone were up 8.2 percent. Orders from Germany's partners in the euro zone rose by a comparatively feeble 1.2 percent.

Pickens calls off massive wind farm in Texas

HOUSTON (AP) -- Plans for the world's largest wind farm in the Texas Panhandle have been scrapped, energy baron T. Boone Pickens said Tuesday, and he's looking for a home for 687 giant wind turbines.

Pickens has already ordered the turbines, which can stand 400 feet tall -- taller than most 30-story buildings.

Pickens' company Mesa Power ordered the turbines from General Electric Co. -- a $2 billion investment -- a little more than a year ago. Pickens said he has leases on about 200,000 acres in Texas that were planned for the project, and he might place some of the turbines there, but he's also looking for smaller wind projects to participate in. He said he's looking at potential sites in the Midwest and Canada.

By The Associated Press

The Dow fell 161.27, or 1.9 percent, to 8,163.60. It was the lowest finish for the blue chips since April 28.

The broader Standard & Poor's 500 index fell 17.69, or 2 percent, to 881.03, its lowest finish since May 1. The Nasdaq composite index lost 41.23, or 2.3 percent, to 1,746.17, the lowest close since May 27.

Benchmark crude for August delivery settled at $62.93 a barrel on the New York Mercantile Exchange, down $1.12.

In other Nymex trading, gasoline for August delivery fell less than a penny to settle at $1.7328 a gallon and heating oil dropped 2.6 cents to settle at $1.6007. Natural gas for August delivery fell 5.8 cents to settle at $3.429 per 1,000 cubic feet.

In London, Brent prices shed $1.12 to settle at $63.23 a barrel on the ICE Futures exchange.

(This version CORRECTS Corrects Dow figure in first item.)

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