Flat incomes, weak consumer spending raise concern
WASHINGTON (AP) -- Flat
incomes suggest more weakness ahead in consumer spending, reinforcing concerns
about a ho-hum holiday shopping season and a sluggish economic recovery.
The Commerce Department
reported that personal incomes were stagnant in September while the
all-important wage and salary category dropped 0.2 percent, as unemployment
rose.
Consumer spending -- which
accounts for 70 percent of total economic activity -- dropped 0.5 percent, the
first decline in five months and the biggest since December.
Stocks swoon as worries
about the economy return
NEW YORK (AP) -- Grim
signals about consumer spending ripped through the markets Friday, sending
stocks tumbling as investors raced for safe havens.
The Standard & Poor's
500 index and the Nasdaq composite index ended with losses for October,
breaking a streak of seven straight months of gains. The Dow Jones industrial
average tumbled 250 points, erasing a 200-point gain Thursday and ending the
month flat.
Drops in key barometers of
the health of consumers -- what they're spending, what they're earning and how
they're feeling -- fanned worries that an economic recovery celebrated by the
market only a day earlier won't last.
CIT Group receives $1
billion loan from Icahn
NEW YORK (AP) -- Commercial lender
CIT Group Inc. said Friday that billionaire investor and bondholder Carl Icahn
agreed to support the company's restructuring plan amid reports CIT may soon
file for bankruptcy protection.
Icahn also agreed to provide
CIT with a $1 billion line of credit.
Icahn has been an outspoken
critic in recent weeks of New York-based CIT Group's plan to restructure its
debt in an effort to avoid collapse. CIT, one of the largest lenders to small
and midsize businesses, has been trying to reduce its near-term debt burden by
$5.7 billion.
Retail gas prices highest in
a year
Retail gasoline prices
chugged higher Friday to a new peak for the year, forcing consumers to dig
deeper into already-thin wallets to pay for fuel.
At the same time, natural
gas prices also were moving up again and have now climbed 16 percent in the
past two months -- just in time for furnace season to kick in.
The worst part: Supplies of
oil and gas are plentiful. In fact, storage points for gas are so jammed,
producers are running out of places to put it and crude supplies are well above
average levels. Gasoline prices are now up 17 straight days after climbing 0.4
cents overnight to $2.695 a gallon, according to auto club AAA, Wright Express
and Oil Price Information Services. That is the highest price since Oct. 26,
2008.
Crop prices rise 7.7 percent
amid soggy harvest
ST. LOUIS (AP) -- Crop
prices jumped nearly 8 percent in October as rainy weather delayed harvests
across the Midwest.
Farmers are still getting
paid much less for their crops compared with a year ago, when global food
shortages pushed grain prices to record highs. But the farm prices of corn,
wheat and milk jumped this month, according to a report Friday from the
Agriculture Department.
Corn prices rose 29 cents to
$3.54 a bushel, and wheat prices jumped 8 cents to $4.56 a bushel. Soybeans
dropped a penny to $9.74 a bushel.
Wholesale milk prices jumped
7.1 percent in October to $1.19 per gallon. That's a big increase for dairy
farmers who have struggled with low prices over the last year, but it's still
down 22 percent from October 2008.
Prosecutors: Madoff
accountant to enter plea
NEW YORK (AP) -- Disgraced
financier Bernard Madoff's longtime auditor is expected to plead guilty next
week in a cooperation deal, federal prosecutors told a judge Friday.
Prosecutors said in a letter
to U.S. District Judge Alvin K. Hellerstein that accountant David Friehling was
expected to plead guilty at a conference on Tuesday.
In the letter, signed by
Assistant U.S. Attorney Lisa A. Baroni, prosecutors said they wanted to notify
the court so that it could provide notice to victims of Madoff's
multi-billion-dollar fraud that the plea hearing will take place.
Everything must go! Lehman
Bros. art auctioned off
PHILADELPHIA (AP) -- Even in
these trying financial times, you're not going to see many
going-out-of-business sales like this one.
On Sunday, hundreds of works
from the art collection of failed banking giant Lehman Brothers will go on the
auction block at Freeman's auction house in Philadelphia.
The 200-plus pieces of
modern and contemporary art up for bid once lined the corridors and graced the
board rooms of Lehman's offices in New York, Boston and Wilmington, Del.
Highlights of Sunday's sale include prints by Claes Oldenburg, David Hockney,
Robert Indiana, Frank Stella and Roy Lichtenstein.
15 states sue Amgen alleging
kickback scheme
NEW YORK (AP) --
Biotechnology behemoth Amgen Inc. is being sued by 15 states alleging the
company gave kickbacks to medical providers to help boost sales of the anemia
drug Aranesp.
The New York Attorney
General's office says it and 15 states allege the Thousand Oaks, Calif.,
company encouraged medical providers to bill third parties, including Medicaid,
for Aranesp, which was available to them at no cost. The lawsuit also alleges
that Amgen conspired to offer kickbacks, including nonexistent consultancy
deals and weekend retreats, to boost prescriptions of Aranesp.
Sales of the drug have been
slipping for more than a year because of increased safety concerns and stricter
safety warnings.
OSHA fines BP a record $87M
for Texas refinery fix
WASHINGTON (AP) -- The
Occupational Safety and Health Administration on Friday imposed a record $87
million fine against oil giant BP PLC for failing to correct safety hazards
after a 2005 explosion killed 15 workers at its Texas City refinery.
The fine -- the largest in
OSHA's history -- comes after a 6-month inspection revealed hundreds of
violations of a 2005 settlement agreement to repair hazards at the refinery.
BP officials formally
contested the fine, saying they believed the company had fully complied with
the settlement agreement.
OSHA said the company also
committed hundreds of new violations at the nation's third largest refinery by failing
to follow industry controls on pressure relief safety systems and other
precautions.
Chevron 3Q profit slumps 51
percent; production up
NEW YORK (AP) -- Chevron
said Friday it pumped its way through a weak third quarter, producing more oil
as prices recovered from a severe plunge earlier in the year.
The nation's second-largest
oil and gas producer boosted revenues by increasing oil production by 11
percent. Its average sale price for crude and natural gas liquids over the past
three months was $62 per barrel which is better than the previous quarter, but
well below the $103 it fetched during the same period last year.
Higher crude prices can help
and hurt integrated companies like Chevron. Their oil rigs can make more money
by selling it to others, but their refineries also must use the more expensive
oil, and that tightens profit margins.
By The Associated Press
The Dow fell 249.85, or 2.5
percent, to 9,712.73. It ended October with a meager gain of 0.005 percent.
The broader Standard &
Poor's 500 index fell 29.92, or 2.8 percent, to 1,036.19, and the Nasdaq
composite index dropped 52.44, or 2.5 percent, to 2,045.11.
Benchmark crude for December
delivery fell $2.87 to settle at $77 a barrel on the New York Mercantile
Exchange. The contract rose $2.41 to settle at $79.87 on Thursday and has
traded near $80 a barrel all week.
Natural gas fell 1.7 cents
to settle at $5.045 per 1,000 cubic feet.
In other Nymex trading,
heating oil fell 7.31 cents to settle at $1.9811 a gallon. Gasoline for
November delivery fell 7.6 cents to settle at $1.9432 a gallon.
In London, Brent crude for
December delivery fell $2.84 to settle at $75.20 on the ICE Futures exchange.