WASHINGTON (AP) --
Productivity surged in the spring by the largest amount in almost six years
while labor costs plunged at the fastest pace in nine years. The results point
to a recession losing steam, but they do not bode well for the unemployed or
those forced to work shorter weeks who were hoping for more hours.
The Labor Department said
Tuesday that productivity, the amount of output per hour of work, rose at an
annual rate of 6.4 percent in the April-June quarter, while unit labor costs
dropped 5.8 percent. Both results were greater than economists expected.
In a second report, the
Commerce Department said wholesale inventories declined for a record 10th
consecutive month, falling 1.7 percent in June. That was nearly double the 0.9
percent decrease economists had expected.
Stocks fall as traders await
Fed's take on economy
NEW YORK (AP) -- A
recurrence of investors' anxiety about the economy gave Wall Street its biggest
loss in five weeks.
The major indexes fell 1
percent Tuesday as investors worried that the market's steep gains in the past
month could unravel if the economy doesn't show more signs of strengthening.
Warnings about the health of banks and uneasiness ahead of the Federal
Reserve's economic statement Wednesday led investors to dump financial stocks
and wade into defensive areas like consumer staples companies and government
debt.
The Dow Jones industrial
average fell 96.50, or 1 percent, to 9,241.45.
GM says new Volt could get
230 mpg in city driving
WARREN, Michigan (AP) --
General Motors said Tuesday its Chevrolet Volt electric car could get 230 mpg
(98 kilometers per liter) in city driving, making it the first American vehicle
to achieve triple-digit fuel economy if that figure is confirmed by federal
regulators.
But when the four-door
family sedan hits showrooms late next year, its efficiency will come with a
steep sticker price: $40,000. Still, the Volt's fuel efficiency would be four
times more than the popular Toyota Prius hybrid, the most efficient car now sold
in the U.S.
Fed gathers to take
economy's pulse
WASHINGTON (AP) -- With the
economy turning a corner, Federal Reserve policymakers will consider whether
some consumer lending programs intended to ease the recession and stem the
financial crisis should be extended.
Fed Chairman Ben Bernanke
and his colleagues opened a two-day meeting Tuesday afternoon, where they will
sift through economic data and anecdotal information about how businesses and
consumers are faring nationwide. So far, many of those barometers suggest the
worst recession since World War II is ending and that the economy has started
to grow again, or will soon.
Still, the Fed has warned
that recoveries after financial crises tend to be slow.
Citigroup approves $6B in
new lending initiatives
NEW YORK (AP) -- Citigroup
Inc. said Tuesday it approved $6 billion in new lending initiatives during the
second quarter as part of its programs supported by government bailout funds.
The New York-based bank said
it has now approved $50.8 billion in lending programs tied to receiving money
as part of the Troubled Asset Relief Program, or TARP. The program was launched
last fall by the Treasury Department to help stabilize the lending markets at
the peak of the credit crisis.
Citigroup has received $45
billion in TARP money since last October. A portion of that money was recently
converted into a 34 percent ownership stake for the government.
Energy prices slump after
Labor Department report
UNDATED (AP) -- Energy
prices slumped Tuesday on a Labor Department report that suggested consumer
spending, a major economic driver, may be depressed for some time as companies
cut back.
Benchmark crude for
September delivery fell $1.15 to settle at $69.45 a barrel on the New York
Mercantile Exchange. It was the fourth straight day of declines and the first
time this month that the price for crude dipped below $69. Meanwhile, the
national average for retail gas fell for the first time in three weeks.
Oil prices have ended the
week higher for five straight weeks, a period that coincides with earnings
reports from U.S. companies. The results appeared surprisingly healthy, which
gave energy prices a boost on the belief that the recession has loosened its
grip.
Wyeth: FDA delays ruling on
sales of new Prevnar
TRENTON, N.J. (AP) --
Drugmaker Wyeth said Tuesday that U.S approval of a much-anticipated, improved
version of its blockbuster children's vaccine Prevnar has been delayed.
Wyeth had expected a ruling
by Sept. 30 from the Food and Drug Administration on whether it can start selling
Prevnar 13.
The vaccine reduces risk of
infection by 13 strains of pneumococcal disease, which causes many ear
infections and potentially deadly meningitis, pneumonia and blood infections.
That's six more types of the
bacterial disease than are prevented by the current vaccine, Prevnar 7, which
had $2.7 billion in sales last year.
China's trade, factory
output rise amid stimulus
BEIJING (AP) -- China's
exports, retail sales and factory output improved in July, the government said
Tuesday, adding to spreading signs the global economy might be recovering from
its worst downturn since the 1930s.
China's positive data come
after the U.S. jobless rate dipped in July for the first time in 15 months and
Germany's exports and Japanese machinery orders rebounded.
"The general sense is
that the financial crisis has been contained and maybe the world economy can,
if not show a normal recovery, at least start growing again," said
economist David Cohen of Action Economics in Singapore.
Studies: New osteoporosis drug
cuts fracture risk
UNDATED (AP) -- A
first-of-its-kind osteoporosis drug lowers the risk of bone fractures better
than some existing treatments, two studies suggest, and could soon add a more
expensive but easier option to the booming market.
Amgen Inc. will stress that
only two shots of its genetically engineered denosumab, which could be approved
for sale this fall, are needed each year. That's important because many
patients stop taking other drugs due to side effects or frequent dosing.
Wall Street sees denosumab
as a potential blockbuster crucial to Amgen. But with many cheaper, heavily
advertised treatments, doctors view its expected high cost as a drawback.
Ex-Madoff CFO pleads guilty
in court in NYC
NEW YORK (AP) -- The former
chief financial officer for Bernard Madoff pleaded guilty Tuesday to
conspiracy, admitting to helping Madoff carry out a massive fraud that cost
thousands of people billions of dollars by lying to investors and testifying
falsely when it seemed the fraud might be discovered.
"I was loyal to him. I
ended up being loyal to a terrible, terrible fault," Frank DiPascali said
as he pleaded guilty in U.S. District Court in Manhattan to charges including
securities fraud, falsifying records and international money laundering.
The plea to charges which
carry a potential penalty of up to 125 years in prison came with a cooperation
deal that could earn him leniency at sentencing.
By The Associated Press
The Dow Jones industrial
average fell 96.50, or 1 percent, to 9,241.45.
The broader S&P 500
index also had its worst day since July 7, falling 12.75, or 1.3 percent, to
994.35.
The Nasdaq composite index
fell 22.51, or 1.1 percent, to 1,969.73, while the Russell 2000 index of
smaller companies fell 9.75, or 1.7 percent, to 562.12.
Benchmark crude for
September delivery fell $1.15 to settle at $69.45 a barrel on the New York
Mercantile Exchange.
In other Nymex trading,
gasoline for September delivery gained 1.38 cents to settle at $2.9422 a gallon
and heating oil fell 1.59 cents to settle at $1.9117. Natural gas for September
delivery fell 10 cents to settle at $3.541 per 1,000 cubic feet.
In London, Brent prices fell
$1.04 to settle at $72.46 a barrel on the ICE Futures exchange.