Icahn offers CIT Group $6 billion loan
NEW YORK (AP) -- In another
sign that CIT Group Inc. is struggling to restructure its debt, billionaire
investor Carl Icahn offered the lender a $6 billion lifeline.
In a letter Monday to CIT's
board of directors, Icahn said he would give the company the loan to replace a
debt restructuring plan CIT has asked bondholders to approve.
Icahn, who is a CIT
bondholder, said in his letter the $6 billion loan would save the company $150
million in fees. He also criticized the board for pushing an exchange offer
that he said unfairly favors large bondholders at the expense of smaller
investors and that also undervalues the company.
Bernanke urges US to cut
budget deficit
WASHINGTON (AP) -- Federal
Reserve Chairman Ben Bernanke called Monday for the United States to whittle
down its record-high budget deficits and for countries like China to get their
consumers to spend more.
Bernanke said those moves
would help reduce "global imbalances" -- uneven trade and investment
flows among countries that contributed to the financial crisis.
The Fed chief's remarks to a
Fed conference in Santa Barbara, Calif., came after the government said Friday
that the U.S. budget deficit hit a $1.42 trillion deficit for the 2009 budget
year that ended Sept. 30. The previous year's deficit was $459 billion.
Stocks rise as earnings
reports top expectations
NEW YORK (AP) -- Investors
are seeing the kind of earnings numbers that make them feel confident about
stocks.
The stock market stepped to
new highs for the year Monday after a handful of earnings reports bolstered
hopes that the economy is coming back sooner than many analysts had thought.
That is helping some
investors move past a bout of nerves about whether expectations for the economy
are stretched too far. The Dow Jones industrial average rose 96 points to
10,092.19, while the Standard & Poor's 500 index rose but ended just shy of
1,100, having topped that level during the day.
Industrial equipment maker
Eaton Corp. said it was seeing improvement in key markets and raised its
full-year profit forecast. Newspaper publisher Gannett Co. managed to post a
profit despite a sharp fall in revenue.
Hasbro 3Q profit rises 8.8
pct on cost-cutting
NEW YORK (AP) -- Sales of
toys tied to the "G.I. Joe" and "Transformers" movies and
cost-cutting drove a third-quarter profit increase for Hasbro. But perhaps more
significant are early signs of a pickup in toy sales in recent weeks as the
crucial holiday season approaches.
Other strong sellers in the
third quarter included Littlest Pet Shop, Play-Doh and Tonka. But overall sales
fell 2 percent during the quarter, or up 1 percent excluding the effect of the
stronger dollar.
Hasbro said North American
sales reflect stronger sales of toys for boys, but revenue was weighed down by
weakness in girls, preschool and games and puzzles. In part, weakness in the
girls division is due to discontinuing some higher-priced items, like Kota the
Triceratops, a robotic dinosaur, which retailed for about $249.
IPhone helps Apple profit
rise 47 pct; stock leaps
SEATTLE (AP) -- Apple Inc.
said its net income rose 47 percent in the most recent quarter as more people
bought Mac computers and gave in to the iPhone craze. The results, released
Monday, sent Apple shares surging 7 percent in extended trading to an all-time
high.
Apple unveiled a faster
iPhone in June and cut the price of the previous generation of the phone to
$99. That boosted iPhone sales from July through September to 7.4 million
devices, half a million more than last year.
Apple weathered the economic
meltdown better than other computer companies, giving it a running start when
PC sales grew in the quarter. Apple had also updated its Mac operating system
and refreshed its Macbook Pro line. Apple sold 3.1 million Macs, a 19 percent
rise from the same period a year ago.
Government unveils new
mortgage help for states
WASHINGTON (AP) -- The Obama
administration on Monday unveiled a new program to support state and local
housing finance agencies. The plan will help the agencies finance mortgages for
first-time homebuyers and develop rental housing.
The agencies have had a hard
time raising money because of the housing crisis and credit crunch. This year,
the agencies have sold about $4 billion in tax-exempt bonds -- one-fourth the
amount in a typical year. That reduction is limiting the number of loans they
can make.
The new program uses
mortgage finance companies Fannie Mae and Freddie Mac to help fix the financing
crunch. The two companies will package mortgages made by the housing agencies
and sell them as bonds to the Treasury Department.
US homebuilder sentiment
index falls in October
LOS ANGELES (AP) -- U.S.
homebuilders are growing less optimistic about their fortunes as a temporary
tax credit for first-time homebuyers that boosted home sales this year nears
its end.
The National Association of
Home Builders said Monday this month's housing market index, which tracks
industry confidence, slipped by one point to 18, the first dip since June when
the reading fell to 15.
Builders also are feeling
less positive about the likelihood of sales between now and the next six months
and said home-shopper foot traffic has softened since September.
IBM puts executive on leave
after charges
SAN FRANCISCO (AP) -- IBM
Corp. put a top executive on leave Monday after he was charged in an insider
trading scandal for allegedly leaking secrets about IBM's earnings and
financial dealings with corporate partners.
The company said Robert
Moffat, a senior vice president and cost-cutting maven who was considered a
possible candidate to succeed CEO Sam Palmisano, no longer serves as an officer
of the company.
A woman who answered the
phone at Moffat's home in Connecticut said he would not comment. Kerry
Lawrence, an attorney representing Moffat, said the government hasn't accused
Moffat of profiting from the alleged scheme.
Rodney Adkins, who has been
senior vice president in charge of development and manufacturing, was tapped to
assume Moffat's position on an acting basis. That gives him oversight over
IBM's mainframes and computer servers.
Merck starts revealing
payments to doctor-speakers
TRENTON, N.J. (AP) -- Merck
& Co. paid doctors and nurses a total of $3.7 million this summer to give
talks to colleagues about the drugmaker's products and other health topics,
Merck disclosed Monday.
Amid growing criticism of
industry influence over which treatments doctors choose for their patients, the
company posted a database on its Web site listing speaking fees paid to 1,078
doctors, researchers, nurses and other health professionals. It covers July
through September, and Merck -- the second major drugmaker to disclose payments
to doctors -- plans to update it regularly.
The 1,078 speakers gave a
total of 2,493 talks and were paid $1,548 on average. The top earner got
$22,693, and dozens of doctors received more than $10,000.
Texas Instruments 3Q profit,
sales decline
NEW YORK (AP) -- Texas
Instruments' third-quarter profit and sales Monday inched past the improved
expectations the chip maker gave last month, and its largest division, which
makes analog chips used in digital music players and other gadgets, saw 20
percent growth for the second quarter in a row.
The Dallas company also
forecast results above Wall Street expectations.
Texas Instruments' results
come amid signs in the technology industry that a recovery may be on its way.
Earlier Monday, Gartner Inc. said technology spending is expected to return to
growth in 2010 after a dismal 2009. Even so, the market will not recover to
2008 revenue levels before 2012, according to Gartner.
By The Associated Press
The Dow rose 96.28, or 1
percent, to 10,092.19. The broader S&P 500 index rose 10.23, or 0.9
percent, to 1,097.91. For both indexes, it was the highest close since Oct. 3
last year.
The Nasdaq composite index
rose 19.52, or 0.9 percent, to 2,176.32.
Benchmark crude for November
delivery rose $1.08 to settle at $79.61 on the New York Mercantile Exchange.
In other Nymex trading,
heating oil rose 2.25 cents to settle at $2.0522 a gallon and gasoline for
November delivery was essentially flat, closing at $1.9872 a gallon. Natural
gas for November delivery rose 5.2 cents to settle at $4.835 per 1,000 cubic
feet.
In London, Brent crude for
December delivery rose 78 cents to settle at $77.77 on the ICE Futures
exchange.