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WASHINGTON (AP) -- Consumer prices shot up in June by the largest
amount in 11 months, reflecting the biggest jump in gasoline prices in nearly
five years, the Labor Department said.
The 0.7 percent jump was seen as a temporary blip, however.
Inflation is not expected to be a problem any time soon given a severe
recession which is keeping a lid on wage pressures.
Meanwhile, the Federal Reserve reported Wednesday that industrial
production fell 0.4 percent in June as the recession crimped output for a wide
range of manufactured goods. The decline was not as severe as the 1.4 percent
plunge in May.
Fed: unemployment will top 10 percent this year
WASHINGTON (AP) -- The Federal Reserve expects the economy this
year will sink at a slower pace than it previously thought.
However, it still predicted that unemployment will top 10 percent
and remain high for the next few years, according to a new forecast released
Wednesday.
The Fed now predicts the economy will shrink between 1 and 1.5
percent this year, an improvement from its old forecast issued in May. At that
time, the Fed projected the economy would contract between 1.3 and 2 percent.
Strong results at Intel pull stocks sharply higher
NEW YORK (AP) -- Investors are finally getting the news they've
been craving.
Stocks surged Wednesday for the second time in three days as
investors pounced on more evidence that the economy might not be as sickly as
some had feared.
Major stock indicators jumped about 3 percent as strong earnings
and an upbeat forecast from Intel Corp. and a more favorable take on the
economy from the Federal Reserve pulled investors into the stock market.
Government will not give lender CIT 2nd bailout
WASHINGTON (AP) -- The Obama administration denied emergency aid
to CIT Group Inc., a struggling commercial lender on the brink of bankruptcy.
After days of round-the-clock talks with regulators about a
possible government bailout, CIT late Wednesday said those negotiations had
ceased. The company said its management and directors were "evaluating
alternatives."
With its assets deteriorating and dangerously little cash on
hand, the news left CIT with few options outside of bankruptcy. A filing could
come as early as Wednesday night, analysts said.
CIT is one of the nation's largest lenders to small and mid-size
businesses. The company has warned that its failure could imperil about a
million corporate borrowers, including retailers, restaurants and airlines.
US treasury chief reaches out to Gulf emirates
ABU DHABI, United Arab Emirates (AP) -- U.S. Treasury Secretary
Timothy Geithner sought to further bolster support from Gulf Arab nations
Wednesday, telling allies in the United Arab Emirates that Washington is
committed to keeping the dollar strong and promoting sustainable growth as the
world pulls out of recession.
Geithner's visit to the Emirates capital Abu Dhabi came on the
second leg of a two-day trip to the Middle East, where he is seeking to
convince Arab leaders on the Obama administration's efforts to fix the U.S.
economy. His schedule included closed-door talks both with policy makers and
some of the country's powerful sovereign wealth funds.
FTC, 23 states act to stop sham loan consultants
LOS ANGELES (AP) -- Prosecutors nationwide filed 189 legal
actions Wednesday against loan modification consultants accused of bilking
homeowners who are desperate to make their mortgage payments more affordable.
The lawsuits and cease-and-desist orders announced by Federal
Trade Commission Chairman Jon Leibowitz and California Attorney General Edmund
G. Brown were part of a nationwide sweep of alleged sham consultants by the
federal agency and officials in 18 states.
Leibowitz used the announcement to put scam artists on notice and
urged homeowners to protect themselves from being exploited.
Merck and Schering-Plough settle investigation
NEW YORK (AP) -- Drugmakers Merck & Co. and Schering-Plough
Corp. said Wednesday they will pay $5.4 million to settle a multistate
investigation that the companies delayed the release of test results casting
doubt on the effectiveness of two blockbuster cholesterol drugs.
The companies settled with attorneys general from 35 states and
the District of Columbia.
The investigation centered on allegations the companies kept
quiet the results from an unfavorable study, violating consumer protection
laws.
Merck and Schering-Plough will pay back the costs of the
investigation, but don't have to make other payments or admit wrongdoing or
liability.
American Airlines parent AMR posts 2Q loss
DALLAS (AP) -- American Airlines parent AMR Corp. lost more money
in the second quarter as fewer people got on its planes and those who did paid
lower fares than a year ago.
AMR's revenue plunged 21 percent from the same period in 2008,
swamping the savings that American reaped from cheaper jet fuel prices.
Still, American raised more money from extra fees on baggage and
other items, and the financial results weren't as bad as Wall Street had
feared.
Paulson defends his response to economic crisis
WASHINGTON (AP) -- Former Treasury Secretary Henry Paulson on Wednesday
defended his response to the economic crisis last year as an imperfect, but
necessary rescue that spared the U.S. financial market from total collapse.
While losses have been staggering, Americans' suffering would
have been far worse than it is now had the government not intervened, he will
tell the House Oversight and Government Reform Committee during a hearing
Thursday.
Paulson's defense came as Congress began an independent
bipartisan probe into the government's handling of the crisis. Democrat Phil
Angelides and Republican Bill Thomas, both politicians from California, were
appointed to lead the effort.
Wal-Mart to create eco-ratings for products
NEW YORK (AP) -- Wal-Mart Stores Inc., the world's largest
retailer, plans to demand that all its suppliers measure the environmental cost
of making their products so Wal-Mart can calculate and post an eco-rating for
each item.
The ambitious program, to be announced Thursday, is likely to
spur companies to redesign products from electronics to jeans, but it presents
still more costs to contain as they pinch pennies to tackle the recession.
Shoppers won't see green ratings on products for several years,
according to a researcher involved in developing the index Wal-Mart will apply.
By The Associated Press
The Dow Jones industrial average jumped 256.72, or 3.1 percent,
to 8,616.21, its third straight gain and biggest one-day leap since March 23.
The Standard & Poor's 500 index rose 26.84, or 3 percent, to
932.68, while the technology-heavy Nasdaq composite index gained 63.17, or 3.5
percent, to 1,862.90.
Benchmark crude for August delivery added $2.02 to settle at
$61.54 a barrel on the New York Mercantile Exchange. In London, Brent prices
rose $2.23 to settle at $63.09 a barrel on the ICE Futures exchange.
In other Nymex trading, gasoline for August delivery jumped by
6.15 cents to settle at $1.7081 a gallon and heating oil added 7.02 cents to
settle at $1.5821 a gallon. Natural gas for August delivery fell by 14.6 cents
to settle at $3.283 per 1,000 cubic feet.