AP
Business
Highlights
Tuesday
July 8, 6:26 pm ET
Stocks rise on decline in oil, Bernanke
talk
NEW YORK (AP) -- Wall Street finished sharply higher Tuesday as
oil prices dropped for the second straight day and investors were encouraged by
the possibility of more help for the ailing financial system. The Dow Jones
industrials gained more than 150 points, and all the major indexes were up more
than 1 percent.
Crude prices tumbled $5.33 to settle at $136.04 a barrel on the
Speeches by Federal Reserve Chairman Ben Bernanke, Treasury
Secretary Henry Paulson and JPMorgan Chase & Co. Chief Executive Jamie Dimon gave the market some reassurance about the financial
sector. Investors have been concerned this week about the health of
government-backed lenders Fannie Mae and Freddie Mac; the two companies' troubles
helped send prices lower on Monday, but they also helped lead the rebound
Tuesday.
The market was relieved to hear Bernanke say in a speech the
central bank might extend its lending efforts to investment banks; the Fed
began allowing the big companies to borrow after the near-collapse of Bear
Stearns Cos. earlier this year. At the Federal Deposit Insurance Corp.'s forum
on mortgage lending, where Bernanke spoke, Dimon said
"the future is very, very bright," but that "I do think we have
some very serious issues to face."
Fed plans new rules to protect future homebuyers
WASHINGTON (AP) -- The Federal Reserve will issue new rules next
week aimed at protecting future homebuyers from dubious lending practices, its
most sweeping response to a housing crisis that has propelled foreclosures to
record highs.
Fed Chairman Ben Bernanke spoke of the much-awaited rules in a
broader speech Tuesday about the challenges confronting policymakers in trying
to stabilize a shaky
To prevent a repeat of the current mortgage mess, Bernanke said
the Fed will adopt rules cracking down on a range of shady lending practices
that has burned many of the nation's riskiest "subprime" borrowers --
those with spotty credit or low incomes -- who were hardest hit by the housing
and credit debacles.
The plan, which will be voted on at a Fed board meeting Monday,
would apply to new loans made by thousands of lenders of all types, including
banks and brokers.
Pending home sales fall 4.7 percent
WASHINGTON (AP) -- A measurement of pending home sales fell to
the third-lowest reading on record in May as the housing market's recovery continued
to prove elusive.
The National Association of Realtors' seasonally adjusted index
of pending sales for existing homes fell 4.7 percent to 84.7 from an upwardly
revised April reading of 88.9. The index was 14 percent below year-ago levels.
"The overall decline in contract signings suggests we are
not out of the woods by any means," NAR Chief Economist Lawrence Yun said in a statement.
Home sales are considered pending when the seller has accepted an
offer, but the deal has not yet closed. Typically there is a one- to two-month
lag before a sale is completed.
Wall Street economists surveyed by Thomson/IFR had predicted the
index would come in at 87. The index, which sunk to a record low of 83 in
March, stood at 98.5 in May 2007. A reading of 100 is equal to the average
level of sales activity in 2001, when the index started.
Pending sales fell around the
Oil extends slide into 2nd day, losing over $5
Light, sweet crude for August delivery fell $5.33 to settle at
$136.04, after earlier slumping as low as $135.14. The decline followed a $3.92
slide on Monday, bringing oil's two-day drop to more than $9.
The market's bearish turn this week erases, at least for the time
being, the effect of a rally that pushed prices past $145 in a string of
record-setting sessions before the Fourth of July.
Analysts attributed much of the recent sell-off to profit-taking,
saying traders were cashing in on the previous week's gains. A stronger dollar
also helped keep prices lower by discouraging investors from pumping more money
into commodities.
Anheuser-Busch calls InBev takeover bid
illegal
ST. LOUIS (AP) -- Anheuser-Busch claims that Belgian brewer InBev's unsolicited takeover bid isn't just bad for the
bottom line, but is an "illegal scheme" that threatens to defraud
Anheuser-Busch shareholders if a federal judge doesn't step in.
Anheuser-Busch Cos. made the claim in a lawsuit filed late
Monday, just hours after InBev SA filed its own
motion seeking to oust Anheuser-Busch's board of directors. The lawsuit, filed
in
The suit says InBev doesn't have the
solid financing to underwrite the deal, as the company claims, and that it has
not disclosed that it operates a brewery in
Siemens cutting 17K jobs worldwide to cut costs
FRANKFURT, Germany (AP) -- Industrial conglomerate Siemens AG
said Tuesday it will cut 16,750 jobs, or 4.2 percent of its global work force,
to streamline operations and slice nearly $2 billion in costs in the face of a
slowing economy.
The Munich-based maker of products ranging from light bulbs and
medical equipment to high-speed trains and power turbines said the cuts would
include 12,600 administrative jobs as well as another 4,150 positions involving
restructuring projects at its various units. The company has a worldwide work
force of approximately 400,000 people.
Siemens said it will consolidate its businesses from the current
1,800 separate legal entities to fewer than 1,000 and take its 70 regional companies
and transform them into 20 regional clusters.
Siemens said the cuts were being made in an effort to reduce
total costs by 1.2 billion euros ($1.8 billion) by
2010.
Alcoa's 2Q profit sinks 24 percent on higher costs
PITTSBURGH (AP) -- Aluminum producer Alcoa Inc. said its
second-quarter earnings fell nearly 24 percent as higher prices failed to
offset raw material and facility outage costs.
The Pittsburgh-based company earned $546 million, or 66 cents per
share, for the quarter that ended June 30, compared with $715 million, or 81
cents per share, during the same period a year earlier.
Quarterly revenue dropped about 6 percent to $7.6 billion.
Results beat Wall Street estimates. Analysts, on average,
expected profit of 64 cents per share on revenue of $7.36 billion.
From bull semen to bras,
WASHINGTON (AP) -- Nuclear weapons? No way. But there are plenty
of items on
Other surprising shipments during the Bush administration: fur
clothing, sculptures, perfume, musical instruments and military apparel.
Despite increasingly tough rhetoric toward
By The Associated Press
The Dow rose 152.25, or 1.36 percent, to 11,383.21, after moving
in and out of positive territory. It was the biggest gain for the blue chips
since June 13.
Broader stock indicators rose as well. The S&P 500 rose
21.39, or 1.71 percent, to 1,273.70, while the Nasdaq composite index rose 51.10, or 2.28 percent,
to 2,294.42.
Light, sweet crude for August delivery fell $5.33 to settle at
$136.04, after earlier slumping as low as $135.14. The decline followed a $3.92
slide on Monday, bringing oil's two-day drop to more than $9.
In other Nymex trade, heating oil fell
by 14.94 cents to settle at $3.8202 a gallon and gasoline futures sank by about
12 cents to end at $3.3631 a gallon. Natural gas futures dropped 60.9 cents to
settle at $12.368 per 1,000 cubic feet.
August Brent crude also lost heavily, dropping $5.44 to settle at
$136.43 barrel on the ICE Futures exchange in