3 strong economic reports lift recovery hopes
WASHINGTON (AP) -- Hopes for the fledgling economic recovery got
a boost Monday from better-than-expected news on manufacturing, construction
and contracts to buy homes.
The Institute for Supply Management's gauge of manufacturing
activity grew in October at the fastest pace in more than three years. It was
driven by businesses' replenishing of stockpiles, higher demand for American
exports and support from the government's $787 billion stimulus program.
Construction spending rose a bigger-than-expected a 0.8 percent
in September, while the National Association of Realtors said the volume of
signed contracts to buy previously occupied homes rose 6.1 percent in September
to a reading of 110.1. That's the highest level since December 2006. And it's
more than 21 percent above a year ago.
Ford surprises with $1B profit; sees profit in '11
DEARBORN, Mich. (AP) -- Ford, the only Detroit automaker to dodge
direct government aid and bankruptcy court, surprised investors with net income
of nearly $1 billion in the third quarter and forecast a "solidly
profitable" 2011.
The automaker said Monday earnings were fueled by
The latest results signal that Ford's turnaround is on more solid
ground. The company lost more than $14.6 billion last year and hasn't posted a
full-year profit since 2005. While it made a profit in the second quarter, that was mainly due to debt reductions that cut its
interest payments.
Stocks waver, Dow gives up triple-digit gain
Stocks jumped early Monday after strong reports on manufacturing
and housing but were fluctuating by the afternoon. The Dow Jones industrial
average ended up 77 points after being up as much as 146 points.
The market has been volatile in recent days as investors try to
determine whether the bets they've been placing on a rebound in the economy
over the past several months are still sound.
The worry is that the pace of recovery the market has been
counting on may be hard to maintain. The government reported 3.5 percent growth
in third-quarter GDP last week but much of that growth came from government
spending. Likewise many companies are reporting stronger than expected
earnings, but many of those gains came from cost-cutting instead of higher
sales.
Obama: Hiring last to come as economy rebounds
WASHINGTON (AP) -- As the prospect of
double-digit unemployment looms, President Barack Obama on Monday sought to set
expectations for the nation, saying job losses will likely roll on "for
weeks and months to come" because hiring always lags behind in an economic
rebound.
Unemployment hit a 26-year high of 9.8 percent in September. The
next monthly reports come out Friday and could show it topping 10 percent.
Still, the economy is growing again. Reports out Monday show
improvement in manufacturing, construction and contracts to buy homes.
GAO: Full recovery of auto investment unlikely
WASHINGTON (AP) -- Taxpayers are unlikely to recover their full
investment in General Motors or Chrysler, government investigators said Monday
in the latest review to cast doubts that the government will recoup the $80
billion it poured into the two automakers.
The Government Accountability Office concluded that General
Motors Co. and Chrysler Group LLC likely won't be valuable enough for the
Treasury Department to break even on its investment in the two auto companies
that went though bankruptcy earlier this year.
The GAO also revealed that the Obama administration is closely
scrutinizing the finances of GM and Chrysler and has set some requirements on
production even though it has said it will maintain a hands-off approach on the
automakers' daily operations.
Stanley Works agrees to buy Black & Decker
Stanley shareholders will own about 50.5 percent of the combined
company, which will be named named
Boards of directors for each company approved the deal, which
still must receive regulatory and shareholder approval.
FDA won't accept Merck's application for new drug
TRENTON, N.J. (AP) -- U.S. regulators have refused to accept drugmaker Merck & Co.'s application for a new,
combination cholesterol pill that includes rival Pfizer's Lipitor, the world's
top-selling drug.
Merck disclosed the rare move by the Food and Drug Administration
in a regulatory filing Monday.
The company 2 1/2 years ago said it planned to make a dual
cholesterol pill that at the time looked sure to be a blockbuster: a
combination of Pfizer Inc.'s Lipitor -- which generates nearly $13 billion in
annual sales -- and Zetia, a cholesterol pill Merck
sells with Schering-Plough Corp. The two drugmakers
have been partners on cholesterol medicines since 2000 and are about to merge.
CIT Group's biggest hurdle: Keeping customers
The commercial lender's trip through bankruptcy reorganization
may well be speedy given that it's already reached agreements with creditors on
restructuring its debt. But the real test will come from CIT customers, who
could decide to take their business elsewhere.
Just as a bank would fail if all of its depositors tried to get
money out at the same time, CIT wouldn't be able to survive if too many of its
customers close their accounts. Some have already been pulling their business
in recent months as CIT struggled for survival, but it's still too early to
know how many will remain.
Prices at the pump taking a breather
Gasoline's post-summer ascent leveled off over the weekend, just
as consumers begin to decide whether the money they pour into their tanks will
force them to cut back on holiday spending.
Retail gas prices have jumped about 23 cents since the beginning
of October, reaching a new high for the year on Friday.
The average price for a gallon of
regular unleaded fell two-tenths of a cent overnight to $2.691, according to
auto club AAA, Wright Express and Oil Price Information Service.
That's a big change from the fall of 2008, when plummeting prices
offered one of the few breaks for consumers as thousands lost jobs and
businesses shut down. Gas in 2008 dropped from around $3.62 a gallon in the
beginning of October to $2.44 at this time last year.
Humana 3Q profit jumps on government programs
LOUISVILLE, Ky. (AP) -- Health insurer Humana Inc. rode its
strong government business in posting a 65 percent jump in third-quarter profit
Monday, as bulging membership and premiums from Medicare Advantage overcame a
lackluster commercial segment hampered by the weak economy.
Louisville-based Humana said its quarterly revenue rose 8 percent
as enrollment in its Medicare Advantage offerings grew 11 percent from a year
ago.
But the company saw enrollment in its plans sold to employers
fall by 7.6 percent from a year ago, contributing to a pretax loss in its
commercial segment during the three months.
By The Associated Press
The Dow rose 76.71, or 0.8 percent, to 9,789.44, its fourth gain
in 10 days.
The broader Standard & Poor's 500 index rose 6.69, or 0.7
percent, to 1,042.88, and the Nasdaq
composite index rose 4.09, or 0.2 percent, to 2,049.20.
Benchmark crude for December delivery rose
$1.13 to settle at $78.13 on the
In other Nymex trading, heating oil
gained 4.08 cents to settle at $2.046 a gallon. Gasoline for December delivery
gained 3.08 cents to settle at $1.9903 a gallon. Natural gas for December
delivery fell 22.1 cents to settle at $4.824 per 1,000 cubic feet.
In