Fed: Consumers trim borrowing by $3.2B in May
WASHINGTON (AP) -- Consumers
trimmed borrowing in May for the fourth straight month as the recession took
another bite out of investments and drove unemployment higher.
Many economists predict that
consumers will stay cautious in the months ahead, boding for a lethargic
recovery if the downturn ends later this year as many expect.
The Federal Reserve said
Wednesday that consumer credit fell at an annual rate of 1.5 percent, or by
$3.2 billion, from April. Economists expected a deeper cut of $9.5 billion.
Alcoa posts 2Q loss of $454M
on weak demand
PITTSBURGH (AP) -- Alcoa
Inc., the largest U.S. aluminum producer, said Wednesday it lost $454 million
during the second quarter, as the global recession continued to dampen demand
and prices for the lightweight metal.
It was Alcoa's third
straight quarterly loss and fresh evidence of slumping orders from key
customers in the aerospace, automotive and construction industries. Aluminum
makers have struggled since last year with sharply lower orders for the metal
used in products ranging from beer cans to jumbo jets.
Anxiety over economic
recovery weighs on stocks
NEW YORK (AP) -- Investors
can't shake their worries that the economy won't be able to lock in a recovery
by the end of the year.
Stocks finished mostly lower
after zigzagging Wednesday as a mixed outlook on the economy from the
International Monetary Fund and falling commodity prices added to a downbeat
mood. The Dow Jones industrials rose 14.81, or 0.2 percent, to 8,178.41.
Another tumble in oil prices
dragged energy shares lower and reflected concerns that demand for resources
will remain weak as the economy struggles. Still, stocks drew some support from
a strong auction of 10-year Treasury notes.
Google's operating system
escalates Microsoft duel
SUN VALLEY, Idaho (AP) --
Google Inc. is hoping to gain greater control over how personal computers work
by developing a free operating system that will attack Microsoft Corp.'s golden
goose -- its long-dominant Windows franchise.
The new operating system
will be based on Google's 9-month-old Web browser, Chrome. Google intends to
rely on help from the community of open-source programmers to develop the
Chrome operating system, which is expected to begin running computers in the
second half of 2010.
White House among targets of
sweeping cyber attack
WASHINGTON (AP) -- The
powerful attack that overwhelmed computers at U.S. and South Korean government
agencies for days was even broader than initially realized, also targeting the
White House, the Pentagon and the New York Stock Exchange.
Other targets of the attack
included the National Security Agency, Homeland Security Department, State
Department, the Nasdaq stock market and The Washington Post, according to an
early analysis of the malicious software used in the attacks. Many of the
organizations appeared to successfully blunt the sustained computer assaults.
IMF expects slow recovery
from global recession
WASHINGTON (AP) -- The
global economy is beginning a sluggish recovery from its worst recession since
World War II, the International Monetary Fund said Wednesday.
The IMF increased its
estimate for global economic growth in 2010 to 2.5 percent, from an April
projection of 1.9 percent. At the same time, it slightly downgraded its
forecast for this year to a contraction of 1.4 percent, from 1.3 percent.
Financial conditions have
improved faster than the IMF expected when it made its previous global forecast
in April, the fund said, largely due to government support for banks and other
financial companies.
Oil prices tumble near $60
as gas supplies surge
NEW YORK (AP) -- Oil prices
neared $60 per barrel Wednesday as the government reported that stockpiles of
unused gasoline soared again.
Retail gas prices have
fallen every day for more than two weeks, and gasoline futures fell more than 9
cents a gallon on Wednesday.
Energy markets are
undergoing an extended sell-off, the longest in 10 months, with new economic
reports dampening optimism about any economic recovery.
In just over one week, oil
prices have fallen more than 18 percent.
G-8 leaders agree on climate
target
L'AQUILA, Italy (AP) --
President Barack Obama joined other leaders of the industrialized world
Wednesday in backing new targets for battling global warming. But the wealthy
nations were unable to persuade leaders of developing countries to commit to
reductions of their own, and their cooperation is critical to avoiding the
worst effects of climate change.
The agreement by the Group
of Eight industrialized nations, meeting in Italy, marks a significant step in
efforts to limit greenhouse gases blamed for the world's rising temperature.
The G-8 previously had not been able to agree on that temperature limit as a
political goal.
Prosecutors seek 145 years
in prison for lawyer
NEW YORK (AP) -- A prominent
lawyer trained at Harvard and Yale universities who admitted defrauding hedge
funds of more than $400 million should be sentenced to 145 years in prison,
prosecutors told a judge Wednesday.
Prosecutors cited the
privileged education and his comfortable upbringing as they urged the maximum
sentence for 59-year-old Marc Dreier. His lawyer, Gerald Shargel, said a
sentence of between 10 and 12 1/2 years in prison was appropriate.
In a letter to the judge
dated Tuesday and filed with the court Wednesday, Dreier said he suffers
"every day from the shame and self-loathing and regret with which I will
always have to live."
Euro zone Q1 contraction
confirmed at 2.5 percent
LONDON (AP) -- Official
figures confirmed that the 16 countries that use the euro saw output shrink by
2.5 percent in the first quarter of 2009 from the previous three-month period
as the global recession sapped the industrial exports that the euro zone relies
on for growth.
Though the final estimate
left the quarterly rate unchanged, the annual decline was greater than
anticipated. Gross domestic product in the euro zone fell by 4.9 percent in the
first quarter compared with the same period in 2008 -- slightly more than the
previous reading of a 4.8 percent contraction.
By The Associated Press
The Dow Jones industrials
rose 14.81, or 0.2 percent, to 8,178.41.
The broader Standard &
Poor's 500 index fell 1.47, or 0.2 percent, to 879.56 and the Nasdaq composite
index rose 1.00, or 0.1 percent, to 1,747.17. Both the Dow and S&P 500 hit
levels not seen since May 1.
The Russell 2000 index of
smaller companies fell 4.57, or 1 percent, to 479.68.
Benchmark crude for August
delivery fell more than 4 percent, or $2.79, to settle at $60.14 a barrel on
the New York Mercantile Exchange.
Retail gasoline prices
dropped again overnight, the 16th straight day, to a new national average of
$2.593 per gallon.
In other Nymex trading,
gasoline for August delivery slid by 9.9 cents to settle at $1.6333 a gallon
and heating oil lost about 6.3 cents to settle at $1.5379. Natural gas for
August delivery fell 7.6 cents to settle at $3.353 per 1,000 cubic feet.
In London, Brent prices shed
$2.80 to settle at $60.43 a barrel on the ICE Futures exchange.