Productivity gains in 2Q due mainly to cost cuts
WASHINGTON (AP) -- U.S.
companies managed to boost their workers' productivity and their own profits in
the spring mainly by slashing costs and capping their employees' pay.
That was clear from revised
government figures released Wednesday that provided further evidence that a
tentative economic recovery has begun, while also reinforcing nagging concerns.
Productivity -- the amount
of output per hour of work -- rose at an annual rate of 6.6 percent in the
April-June quarter, the Labor Department said. That's the largest advance since
the summer of 2003. And it's slightly better than the 6.4 percent productivity
increase the government had estimated last month.
US: agency mishandled Madoff
probes
WASHINGTON (AP) -- The
watchdog of the Securities and Exchange Commission has found the agency
consistently mishandled its five investigations of Bernard Madoff's business,
despite ample complaints over 16 years about the multibillion-dollar fraud.
But SEC inspector general
David Kotz's report found no evidence of any improper ties between agency
officials and Madoff.
Despite speculation that
senior SEC officials may have tried to influence the probes, a summary of
Kotz's 450-page report released Wednesday also found no evidence of that.
Stocks fade as traders worry
about unemployment
NEW YORK (AP) -- The stock
market extended its slide as investors worried that a weak job market will trip
up a recovery in the economy.
Stocks posted modest losses
Wednesday, a day after tumbling on fears about banks and concerns that a
six-month rally of more than 50 percent has left the stock market overheated.
The Dow Jones industrial average lost another 30 points after skidding 186
points Tuesday.
The Dow fell 29.93, or 0.3
percent, to 9,280.67, pushing its four-day slide to 300 points, or 3.1 percent.
The index crossed between gains and losses 108 times as it traded in the second
tightest point range this year.
Pfizer to pay record $2.3B
penalty over promotions
WASHINGTON (AP) -- Federal
prosecutors hit Pfizer Inc. with a record-breaking $2.3 billion in fines
Wednesday and called the world's largest drug maker a repeating corporate cheat
for illegal drug promotions that plied doctors with free golf, massages, and
resort junkets.
Announcing the penalty as a
warning to all drug manufacturers, Justice Department officials said the
overall settlement is the largest ever paid by a drug company for alleged
violations of federal drug rules, and the $1.2 billion criminal fine is the
largest ever in any U.S. criminal case. The total includes $1 billion in civil
penalties and a $100 million criminal forfeiture.
Authorities called Pfizer a
repeat offender, noting it is the company's fourth such settlement of
government charges in the last decade. The allegations surround the marketing
of 13 different drugs, including big sellers such as Viagra, Zoloft, and
Lipitor.
Massive oil field tapped
with deepest well
NEW YORK (AP) -- Nearly
seven miles below the Gulf of Mexico, BP has tapped a massive pocket of crude
after digging the deepest oil well in the world.
The Tiber Prospect is
expected to rank among the country's largest petroleum discoveries, potentially
producing as much crude in a day from a single well as half of Alaska's famous
North Slope.
BP's discovery comes as the
entire industry sweeps the ocean floor in search of petroleum deposits.
Deep-water operations are considered to be the last frontier for pristine oil
deposits, and they come with the benefit of being free of state-owned oil
companies.
Fed minutes: officials saw
recession's end in Aug.
WASHINGTON (AP) -- With the
U.S. economy on the mend, Federal Reserve policymakers last month felt
comfortable slowing the pace of one of its economic revival programs and not
changing any others, according to documents released Wednesday.
Minutes of the central
bank's closed door deliberations, held Aug. 11-12, also showed Fed Chairman Ben
Bernanke and his colleagues striking a much more hopeful note about the
economy's prospects compared with an assessment made in late June. Many Fed officials
saw "smaller downside risks," the documents stated.
Fed officials expected the
pace of the recovery to "pick up" in 2010, but there was a range of
views -- and considerable uncertainty -- about the likely strength of the
upturn because of concerns about how consumers will behave.
Southwest adds charge to
board sooner
DALLAS (AP) -- Your bags
still fly for free on Southwest Airlines, but if you want a better chance at a
window or aisle seat it's going to cost $10 each way.
Southwest announced
Wednesday that customers can pay extra to reserve a spot in the boarding line
right behind elite fliers and ahead of families and other travelers. Unlike
other airlines, Southwest doesn't offer assigned seats.
The new offering comes after
Southwest introduced new fees for minors traveling alone and for bringing a
small pet on board. Southwest still doesn't charge to check the first two bags,
but experts and regular passengers are starting to wonder if that's next.
Southwest, like other
airlines, is desperately looking for revenue to offset a slump in traffic,
especially among business travelers who usually pay higher fares for
last-minute or refundable tickets.
Oil prices flat as driving
season closes out
UNDATED (AP) -- Oil prices
didn't budge Wednesday despite an Energy Department report showing a drop in
crude and gasoline supplies.
Benchmark crude for October
delivery closed where it began at $68.05 a barrel on the New York Mercantile
Exchange. The contract lost $1.91 on Tuesday.
Oil and gasoline storage
levels are still much greater than usual right now, partly because it has been
a dismal travel season. It's one of the biggest reasons why you won't pay a lot
to fill your tank if you travel this Labor Day.
The average price for a
gallon of regular gasoline fell a half penny overnight to $2.602, according to
auto club AAA, Wright Express and Oil Price Information Service. That's about 5
cents more than a month ago, but about $1.08 less than at this time last year.
Hovnanian 3rd-quarter loss
narrows
UNDATED (AP) -- Hovnanian
Enterprises Inc. says it narrowed its fiscal third-quarter loss as the
homebuilder slashed costs and saw a pickup in signed contracts for new homes.
The results released
Wednesday echo a trend in improving sales for many homebuilders, although other
such as the Red Bank, N.J.-based Hovnanian struggle to get back in the black.
Hovnanian lost $168.9
million, or $2.16 a share, in the three months ended July 31. That compares
with a loss of $202.5 million, or $2.67 a share, in the year-earlier period.
Revenue dropped by 45
percent to $387.1 million. Analysts surveyed by Thomson Reuters had expected a
loss of $1.52 a share on revenue of about $392.2 million.
Industry group proposes
replacing Fannie, Freddie
WASHINGTON (AP) -- A
mortgage industry group wants Fannie Mae and Freddie Mac replaced with private
companies that would be able to issue mortgage bonds formally backed by the
federal government.
The Mortgage Bankers
Association's proposal, released Wednesday, offers a detailed plan for how to
restructure the U.S. mortgage market, which has been torn apart by the housing
bust.
The Obama administration
doesn't expect to announce its plans for the two companies until early next
year. It has listed several options, including merging them into a federal agency,
shutting them down, or have their bad mortgage assets split into a new
government-backed company.
By The Associated Press
The Dow fell 29.93, or 0.3
percent, to 9,280.67.
The S&P 500 index fell
3.29, or 0.3 percent, to 994.75, while the Nasdaq composite index fell 1.82, or
0.1 percent, to 1,967.07.
Benchmark crude for October
delivery closed where it began at $68.05 a barrel on the New York Mercantile
Exchange.
In other Nymex trading,
gasoline for October delivery gained 2.64 cents to settle tat $1.8086 a gallon
and heating oil lost less than a penny to settle at $1.7505 a gallon. Natural
gas fell 10.6 cents to settle at $2.715 per 1,000 cubic feet.
In London, Brent crude fell
7 cents to settle at $67.66.