FDIC weighs extraordinary steps to shore up fund
WASHINGTON (AP) -- The
Federal Deposit Insurance Corp. is weighing several costly -- and
never-before-used -- options as it struggles to shore up the dwindling fund
that insures bank deposits.
The agency is considering
borrowing billions from healthy banks. Alternatively, it may impose a special
fee on the banking industry.
Each option carries risk:
Drawing money from healthy banks would take dollars out of the private sector,
making that money unavailable for investment in the weak economy. But charging
the whole industry a fee to replenish the fund could push weaker banks toward
failure.
Rebound in commodities
carries stocks higher
NEW YORK (AP) -- A rebound
in commodities drew investors back into the stock market and helped push stocks
to new highs for 2009.
Major stock indicators
rebounded Tuesday from a drop the day earlier to end at their highest levels in
11 months. The Dow Jones industrials rose 51 points to 9,829.87 after falling
41 on Monday.
After soaring 50.1 percent
since hitting a 12-year low in early March, the Dow stands 170 points below the
10,000 mark -- a level the average first crossed in March 1999 and hasn't been
above since October.
Carnival profit falls 20 pct
but beats Wall Street
CHICAGO (AP) -- Cruise
operator Carnival Corp. said increased summer bookings from last-minute getaway
seekers combined with falling fuel costs to help it beat third-quarter profit
forecasts.
But profit still fell from
the same period last year for the owner of the Carnival, Princess and Holland
America cruise lines. For the three months that ended Aug. 31, the Miami-based
company earned $1.07 billion, or $1.33 share. That's down 19.5 percent from
$1.33 billion, or $1.65 per share, in last year's third quarter.
Executives, who boosted the
company's full-year profit forecast, said business was stabilizing after a year
of troubles brought on by the recession and the swine flu.
CarMax 2Q profit soars
RICHMOND, Va. (AP) -- Car
dealership chain CarMax Inc. said Tuesday its fiscal second-quarter profit
surged on higher sales and a one-time gain related to its auto financing
business.
The results topped Wall
Street estimates and its shares jumped nearly 10 percent, briefly rising to a
52-week high.
The Richmond, Va.-based
company that predominantly sells used vehicles said it earned $103 million, or
46 cents per share, for the three months ended Aug. 31, compared with $14
million, or 6 cents per share, a year ago.
The results included a net
gain of 10 cents per share related to its financing division.
Key regulators urge broad
oversight of derivatives
WASHINGTON (AP) -- Two key
regulators on Tuesday urged Congress to go beyond an Obama administration
proposal and impose comprehensive oversight on the sprawling, complex market
for financial derivatives blamed for worsening the credit crisis last fall.
The administration is
seeking to increase the transparency of the $600 trillion global derivatives
market and has proposed that big investment banks that trade derivatives be
subject to requirements for holding capital reserves against risk. In addition,
a new network of clearinghouses would be established to provide transparency
for trades in credit default swaps and other derivatives.
The House Agriculture and
Financial Services committees recently agreed on guidelines for a measure
similar to the administration's proposal. But Commodity Futures Trading
Commission Chairman Gary Gensler has urged lawmakers to tighten the legislation
in several areas.
Oil rebounds as dollar
weakens
NEW YORK (AP) -- Oil prices
bounced back above $71 on Tuesday as the dollar fell to its lowest level
against the euro in more than a year.
Benchmark crude for October
delivery rose $1.84 to settle at $71.55 a barrel on the New York Mercantile
Exchange.
With the October contract
expiring Tuesday, traders focused on the November contract, which added $1.83 a
barrel to settle at $71.76.
The euro hit $1.4821
Tuesday, its highest level since September 2008. Crude is priced in dollars so
it becomes cheaper when the dollar falls. Some investors also use commodities
such as oil and gold as a hedge against inflation and dollar weakness.
General Motors raising
output at 3 factories
DETROIT (AP) -- General
Motors Co. will go to 24-hour operations at factories in Kansas, Michigan and
Indiana to handle an expected increase in demand and to make up for production
lost from a large-scale factory consolidation announced earlier in the year.
The automaker says it will
add third shifts at its Fairfax plant in Kansas City, Kansas, in January. That
will be followed in April by third shifts at factories in Delta Township,
Michigan, near Lansing, and Fort Wayne, Indiana.
About 2,400 production
workers will be recalled as a result of the added shifts.
The Fairfax plant makes the
midsize Chevrolet Malibu, Saturn Aura and Buick LaCrosse, while Delta Township
makes the GMC Acadia and Saturn Outlook large crossover vehicles. The Fort
Wayne factory makes pickup trucks.
Intel CEO: PC sales could
rise in 2009
SAN FRANCISCO (AP) -- The
worldwide personal-computer market is pulling out of its slump quickly and
could defy predictions by growing this year, Intel Corp. CEO Paul Otellini said
Tuesday.
Otellini's comments at a
conference Tuesday were more bullish than many analysts have been. Market
research firms IDC and Gartner have both predicted a year-over-year decline in
PC shipments in 2009, which would be the first such drop since 2001.
The market has been dragged
by a clampdown in corporate spending on new PCs, and some computer companies are
already looking to next year for an upturn. Sales of cheap little
"netbook" computers, used primarily for surfing the Internet, have
been a bright spot, but those machines ring up low profits for PC and chip
makers. Intel is the world's top maker of microprocessors, the
"brains" of PCs.
US home prices rise 0.3
percent in July
WASHINGTON (AP) -- U.S. home
prices rose slightly in July from a month earlier, according to a government
index, further evidence the housing market is stabilizing.
The Federal Housing Finance
Agency said Tuesday prices rose 0.3 percent in July from the prior month, but
June's price increase was revised down to 0.1 percent from 0.5 percent.
The index is still 4.2
percent below last year's levels and 10.5 percent off its peak from April 2007.
It is based on loans owned or guaranteed by mortgage finance companies Fannie
Mae and Freddie Mac.
The index has declined less
than other housing market measurements because it excludes the most expensive
homes and some of the subprime loans that have fallen into foreclosure.
FDA: 'limited' benefit with
tamper-proof OxyContin
WASHINGTON (AP) -- Federal
health officials say a new version of the painkiller OxyContin that is designed
to be harder to abuse offers some improvements over the original pill.
Purdue Pharma LP has touted
the new pill's plastic-like coating, which is designed to make the drug harder
to crush and snort or inject.
Food and Drug Administration
scientists said Tuesday that the drug's resistance to abuse is
"limited," but "may provide an advantage over the currently
available OxyContin."
A panel of advisers to the
FDA said last year that the company needed to do more testing to demonstrate
the drug's tamper resistance.
By The Associated Press
The Dow Jones industrial
average rose 51.01, or 0.5 percent, to 9,829.87.
The broader Standard &
Poor's 500 index gained 7.00, or 0.7 percent, to 1,071.66, while the Nasdaq
composite index rose 8.26, or 0.4 percent, to 2,146.30.
Benchmark crude for October
delivery rose $1.84 to settle at $71.55 a barrel on the New York Mercantile
Exchange, while the November contract added $1.83 a barrel to settle at $71.76.
In other Nymex trading,
gasoline rose 3.02 cents to settle at $1.7816 a gallon and heating oil climbed
6.04 cents to settle at $1.8121. Natural gas added 3.3 cents to settle at
$3.576 per 1,000 cubic feet.
In London, Brent crude rose
$1.84 to settle at $70.53 on the ICE Futures exchange.
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