Dow jumps 204 to high for year as dollar slumps
NEW YORK (AP) _ The Dow Jones industrial average stormed to its highest level in more than a year Monday as a falling dollar boosted prices for gold, oil and other commodities. Stocks also jumped as investors grew more confident that governments around the world will keep interest rates low to help the global economy.
Energy and materials stocks led the market. The major indexes rose 2 percent and the Dow jumped 200 points for the second time in three days, reaching its highest level in 13 months.
News that the Group of 20 countries will keep economic stimulus measures in place signaled to investors that rates will remain low. With U.S. rates near zero, the G-20 news lessened demand for the dollar.
Kraft's $16.4B Cadbury bid starts takeover tussle
NEW YORK (AP) _ Kraft Foods has gone hostile in its bid to buy Cadbury but didn't sweeten its first bid, drawing an immediate rejection from the British candy maker in what is likely to be a lengthy takeover struggle.
Taking the same offer directly to Cadbury shareholders likely means that Kraft is betting no competing bids will emerge for the maker of Dairy Milk and Creme Eggs. The early gambit also leaves the company room to take the bid higher.
Kraft made the offer, worth about $16.4 billion, just hours before a Monday deadline imposed by Britain's takeover law that required the company to make a formal offer or back off for six months. Kraft now has 28 days to file a prospectus, which will then trigger more deadlines that could last months.
Deadline in Google book deal extended to Friday
NEW YORK (AP) _ Google says it needs until Friday to come up with a new proposal that would give it the digital rights to millions of out-of-print books.
The new timetable approved Monday by a federal judge is the latest twist in a 4-year-old copyright lawsuit over Google's ambitious book-scanning project.
Google thought it had settled the dispute with U.S. authors and publishers more than a year ago. But the agreement still hasn't won court approval because of concerns that the deal would give Google too much control over the digital book market.
When U.S. antitrust regulators raised objections to the agreement in September, Google decided to redo the deal. The revisions were supposed to be filed by the end of Monday _ before Google received the extension.
Fed: GMAC to receive more bailout money
WASHINGTON (AP) _ The Federal Reserve said Monday that GMAC is the only one of 19 stress-tested banks that needs more capital to withstand losses if the economy softens.
GMAC, a crucial player in the U.S. auto industry, has been unable to raise the $11.5 billion regulators said it needed after stress test results were announced in May. The Fed says the finance company is expected to close the gap with more money from the $700 billion financial bailout.
GMAC, already the recipient of $12.5 billion in taxpayer infusions, is negotiating with regulators over how much more it will receive.
Fed says banks eye tighter terms on credit cards
WASHINGTON (AP) _ Banks expect to tighten terms on credit cards in response to a new law that aims to protect consumers from sudden rate hikes, the Federal Reserve said Monday.
A quarterly survey by the Fed found that many banks expect to increase rates, reduce credit limits and raise annual fees for both prime borrowers _ those with sound credit histories _as well as more risky "non-prime" borrowers, who have tarnished credit. Banks also expected to raise minimum credit scores for non-prime borrowers, the Fed said.
Banks already have been pushing through rate increases in anticipation of the new rules. Because of that, the House recently approved legislation to speed up the law's effective date and have the provisions take effect immediately, although prospects are dim for Senate passage.
Energy prices jump even as Gulf storm weakens
Oil prices shot above $80 a barrel Monday as a weakened U.S. dollar created more turbulence in energy markets than a storm heading into the Gulf of Mexico.
Ida had helped push crude prices higher all morning. Normally, the storm's demotion from hurricane to a tropical storm would depress crude prices. But the dollar is the real driver of energy markets at the moment. So, when the euro pushed passed the $1.50 level for the first time this month, oil prices rose even further.
Investors holding euros or other strong currencies can buy more dollar-based crude when the U.S. currency falls, and that has sent prices higher throughout the year.
Weak dollar pushes gold above $1,100 an ounce
NEW YORK (AP) _ Gold prices climbed to another new high Monday as the U.S. dollar sank to a 15-month low.
Gold for December delivery soared as high as $1,111.70 on the New York Mercantile Exchange before settling at $1,101.40 an ounce, up $5.70, or 0.5 percent.
The gains came as the ICE Futures US dollar index, which measures the dollar against other currencies, dropped more than 1 percent to its lowest level since August 2008.
The dollar weakened after finance ministers from the Group of 20 countries pledged over the weekend to maintain their stimulus efforts and keep interest rates low to further a global economic recovery. The G-20 leaders did not address how they might support currencies that have fallen in response to low rates.
Pfizer trimming research plants after buying Wyeth
TRENTON, N.J. (AP) _ Less than a month after buying Wyeth, drug giant Pfizer Inc. has mapped out a new structure for its research and development operations.
The plan, announced Monday, will bring the closure of six of the two companies' 20 research facilities, reorganize and consolidate others, and cut the jobs of up to 2,000 scientists and laboratory technicians.
Pfizer, which is based in New York, solidified its position as the world's biggest drugmaker with its $68 billion purchase of drug and vaccine maker Wyeth on Oct. 15, diversifying overnight by adding Wyeth's biotech drugs and consumer and animal health divisions.
MBIA posts 3Q loss on insurance, investment losses
NEW YORK (AP) _ MBIA Inc. said Monday that it incurred heavier losses in its insurance business than expected, saddling the bond insurer with a third quarter loss after two straight quarters of profits.
The company also said that losses on its coverage of mortgage-related investments were driven by continued weakness in the housing industry.
MBIA said it lost $727.8 million, or $3.50 per share, during the period ended Sept. 30. That compared with a loss of $806.5 million, or $3.42 per share, a year earlier. The narrower loss per share in the third quarter of 2009 is due to fewer shares outstanding in that period.
Electronic Arts posts 2Q net loss, plans layoffs
NEW YORK (AP) _ Electronic Arts plans to cut its work force by 17 percent as it tries to align its business with a transforming video game industry.
The company announced the layoffs of 1,500 people just hours after it said it is paying at least $275 million to buy Playfish Inc., a maker of social online games popular on Facebook, MySpace and the iPhone. The layoffs are expected to save about $100 million a year.
Digital content makes up about 12 percent of EA's revenue. But it's growing, while sales from packaged goods are on the decline.
By The Associated Press
The Dow rose 203.52, or 2 percent, to 10,226.94, its highest finish since Oct. 3, 2008. The index rose as high as 10,228.23, topping its previous 12-month trading high of 10,119.46 set last month.
The broader Standard & Poor's 500 index rose 23.78, or 2.2 percent, to 1,093.08, its sixth straight advance. The Nasdaq composite index rose 41.62, or 2 percent, to 2,154.06.
Benchmark crude for December delivery on Monday rose $2 to settle at $79.43 a barrel on the New York Mercantile Exchange.
In other Nymex trading, heating oil rose 5.9 cents to settle at $2.0627 a gallon. Gasoline for December delivery gained 5.75 cents to settle at $1.9818 a gallon. Natural gas for December delivery rose 7.5 cents to $4.67 per 1,000 cubic feet.
In London, Brent crude for December delivery rose $1.90 to settle at $77.77 on the ICE Futures exchange.