Economic growth seen slowing by year's end
WASHINGTON (AP) -- The
unfolding economic recovery will probably lose some momentum in the final three
months of the year as rising unemployment and still hard-to-get credit weigh on
consumers.
The economy will grow at a
pace of around 2.5 percent in the just-started October-December quarter,
according to projections made by analysts at Wells Fargo, IHS Global Insight
and Moody's Economy.com. If accurate, that would mark a slowing from the
projected growth of at least 3 percent that many economists think occurred in
the just-ended third quarter.
The economy shrank at a rate
of 0.7 percent in the April-June period, the Commerce Department said
Wednesday.
Surprise slide in
manufacturing sends stocks lower
NEW YORK (AP) -- The stock
market has ended a strong third quarter with trading that reflected investors'
mixed emotions about the economy.
The major indexes closed
slightly lower after zigzagging through the day. Prices got a lift from the
government's latest reading on the gross domestic product, then plunged on news
of a surprise drop in Midwestern manufacturing.
The Dow Jones industrial
average ended down 30 points at 9,712.28 as investors remained uneasy about
economic data and shifted bets as the dollar strengthened. The drop shaved only
a modest amount from the Dow's 15 percent gain for the July-September period,
its strongest quarter in 11 years.
GM to shut down Saturn after
Penske walks away
DETROIT (AP) -- General
Motors Co. said Wednesday it would shut down its Saturn brand after an
agreement with Penske Automotive Group Inc. to acquire it fell apart.
Penske, citing concerns of
whether it could continue to supply vehicles after a manufacturing contract
with GM ran out, ended talks with GM Wednesday to acquire the brand.
GM CEO Fritz Henderson said
in statement that Saturn and its dealership network will be phased out.
In a statement, the
Bloomfield Hills, Michigan-based auto retailer says an agreement with another
manufacturer to continue producing Saturn vehicles after GM stopped making them
fell through, leading Penske to terminate talks with GM.
Jobless rates drop in most
metro areas in August
WASHINGTON (AP) -- The
August unemployment rate fell in about 60 percent of metropolitan areas from
the previous month, as layoffs ease nationwide.
The jobless rate dropped in
232 of 380 metro areas, according to an Associated Press analysis of Labor
Department data released Wednesday.
That's an improvement from
July, when metro areas were split between those with rising and falling
joblessness. It's also much better than in June, when the unemployment rate
rose in about 90 percent of metro areas.
But in many cases the
declines are due to large numbers of people dropping out of the labor force.
Economists say that usually indicates unemployed workers are becoming
discouraged and giving up on their job searches.
Bank of America CEO Lewis
leaving by year's end
NEW YORK (AP) -- Bank of
America Corp. says its embattled CEO Ken Lewis will retire from the bank by the
end of the year.
The bank has issued a
statement Wednesday saying Lewis would also leave the board of the bank.
Lewis and Bank of America
have been the targets of intense criticism since the bank agreed to buy Merrill
Lynch & Co. at the height of the financial crisis last year. Since the deal
closed Jan. 1, it was learned that Merrill, with the knowledge of Bank of
America executives, gave billions of dollars in bonuses to employees even as it
asked for more bailout money from the government.
Fed official: Fed is
developing new exit tools
WASHINGTON (AP) -- The
Federal Reserve is developing some new tools for reeling in the extraordinary
support it is provided to the U.S. economy, Fed Vice Chairman Donald Kohn said
Wednesday.
However, Kohn and Federal
Reserve Bank of Atlanta President Dennis Lockhart said they see no need to rush
to boost interest rates because there are still risks to the unfolding
recovery.
Kohn repeated the Fed's
renewed pledge from last week that the central bank will keep rates at a record
low near zero for an "extended period."
Many economists predict that
will be through the rest of this year and into part of next year.
Crude settles above $70 on
supply data
NEW YORK (AP) -- Oil prices
climbed more than 5 percent, surpassing $70 a barrel Wednesday after a
government report said the United States' gasoline stockpiles dropped
unexpectedly and demand increased from last year.
Benchmark crude for November
delivery added $3.90 to settle at $70.61 a barrel on the New York Mercantile
Exchange. Brent crude rose $3.58 to settle at $69.07 a barrel on the ICE
Futures exchange in London.
The Energy Information
Administration put U.S. gasoline stockpiles at 211.5 million barrels last week,
a drop of 0.8 percent from the prior week. It also said demand for gasoline
over the four weeks ended Sept. 25 was 5.4 percent higher than last year.
Lawmaker proposes major
change for rating agencies
WASHINGTON (AP) -- A key
U.S. lawmaker wants to make credit rating agencies -- which have been
criticized for failing to give investors adequate warning of the risks in
subprime mortgage securities -- responsible for each other's assessments by
holding them collectively liable for inaccuracies.
Pennsylvania Democrat Paul
Kanjorski's new draft bill includes a plan meant to address what critics
contend is the crux of the current system's problem: companies that issue
securities -- as opposed to investors -- pay the agencies for ratings of those
securities.
Homeowners in financial
trouble often redefault
WASHINGTON (AP) -- Lenders
are ramping up efforts to avoid home foreclosures, but a report by bank
regulators says more than half of borrowers who get help fall behind again.
More than 50 percent of
homeowners with loans modified in the first half of last year had missed at
least two months of payments a year later, the federal Office of the
Comptroller of the Currency and the Office of Thrift Supervision said
Wednesday.
But the results were better
among those who saw their payments drop substantially.
About one in three borrowers
whose monthly payments were reduced by 20 percent or more had fallen behind
again within a year. That compares with more than 60 percent for borrowers
whose loan payments were left unchanged or increased.
CEO Perez to stay at Kodak
through 2013
ROCHESTER, N.Y. (AP) --
Eastman Kodak Co.'s chairman and chief executive, Antonio Perez, has agreed to
remain at the helm through 2013, the photography products maker said Wednesday.
Perez, a native of Spain who
turns 64 in November, ran Hewlett-Packard Co.'s digital printing operations
before moving to Kodak in 2003 and succeeding Dan Carp as CEO in June 2005.
Kodak said its board amended
Perez's employment deal to reinforce a mutual intent that he remain in charge
at least through Dec. 31, 2013. The agreement doesn't have an expiration date
but includes terms scheduled to expire in December 2010.
By The Associated Press
The Dow ended down 29.92, or
0.3 percent, at 9,712.28 after falling as much as 134 points.
The broader S&P 500
index fell 3.53, or 0.3 percent, to 1,057.08. The Nasdaq composite index fell
1.62, or 0.1 percent, to 2,122.42. It rose 15.7 percent for the quarter. The
Russell 2000 index of smaller companies fell 6.17, or 1 percent, to 604.28.
Benchmark crude for November
delivery added $3.90 to settle at $70.61 a barrel on the New York Mercantile
Exchange.
Brent crude rose $3.58 to
settle at $69.07 a barrel on the ICE Futures exchange in London.
In other Nymex trading,
gasoline for October delivery rose 9.78 cents to settle at $1.7259 a gallon,
and heating oil advanced 9.54 cents to settle at $1.796 a gallon. Natural gas
gave up 3.4 cents to settle at $4.841 per 1,000 cubic feet.