Weak home building a drag on economic recovery
WASHINGTON _ The budding economic recovery isn't getting much help from the home-building industry, which normally creates jobs and drives growth when a recession ends.
Uncertainty over whether a homebuyer tax credit would be extended weighed down construction last month _ a sign of how much the fledgling recovery depends on government support.
Home building unexpectedly plunged to its lowest point since April, the Commerce Department said Wednesday. The figures show that builders fear there aren't enough buyers to soak up the glut of unsold homes already on the market _ a supply magnified by record-high foreclosures.
Stock market falls as home construction slows
NEW YORK (AP) _ Stocks drifted lower Wednesday after an unexpected drop in home construction and disappointing forecasts from technology companies added to worries about the economic recovery.
The modest drop came a day after major stock indicators closed at 13-month highs. The Dow Jones industrial average slipped 11 points after having risen over nine of the past 11 days. Analysts say the market has been due for a break after the fast ascent.
The day's economic news provided investors more reason for caution. Meanwhile, technology shares fell after BMO Capital Markets said Blackberry maker Research in Motion Ltd. faces increased competition as consumers opt for less expensive phones.
Hershey, Ferrero considering rival bid for Cadbury
HARRISBURG, Pa. (AP) _ Hershey, hoping to expand its overseas presence, has lined up a potential partner as the most recognizable name in American chocolate considers starting a bidding war for British candy maker Cadbury PLC.
Italian candymaker Ferrero International SA could give The Hershey Co. the financial firepower to top a $16.4 billion hostile bid by Kraft Foods Inc.
Hershey and Ferrero said Wednesday they are considering a possible offer for Cadbury.
Cadbury said it will consider any serious offer that delivers full value for the company. That would mean more than Kraft's bid, announced Nov. 9, which it dismissed as "derisory." Now that Kraft may have competition, analysts say the price for Cadbury is likely to go higher.
Lawmakers seek Fed audit after critical AIG report
WASHINGTON (AP) _ A group of House Democrats are stepping up demands for greater transparency from the Federal Reserve after reports that the Fed mishandled the bailout of insurance giant American International Group Inc.
The group, led by Rep. Elijah Cummings, D-Md., wants a congressional review of the Federal Reserve system. They want to allow congressional audits of the Fed as part of financial rules being debated by the House Financial Services and Senate Banking committees, according to a letter Wednesday to the committees' chairmen.
Details on which banks benefited from AIG's bailout never would have become known without demands from Congress, and a recent report shows flaws in the Fed's structure as a regulator, the lawmakers wrote.
Aetna cutting more than 1,000 jobs by 1st quarter
INDIANAPOLIS (AP) _ Health insurer Aetna said Wednesday it will cut 625 jobs immediately, or nearly 2 percent of its staff, and will make a similar number of cuts by the end of the 2010 first quarter due to the lagging economy and the potential impact of health care reform.
Hartford, Conn.-based Aetna trimmed 977 jobs last December and currently has about 35,500 people. Several other large insurers, including Indianapolis-based WellPoint Inc. and Philadelphia-based Cigna Corp., also have announced cuts.
Health insurers have faced growing financial pressure in the past few quarters as corporate job cuts have trimmed the number of people covered by employer-sponsored health insurance. Many insurers project enrollment losses will continue into 2010 as the unemployment rate is projected to keep rising.
FDA panel backs Pfizer's enhanced vaccine for kids
BETHESDA, Md. (AP) _ Federal health experts said Wednesday an updated version of Pfizer's best-selling anti-infection vaccine is safe and effective for infants and toddlers, despite company studies that failed to meet certain goals.
The Food and Drug Administration's panel of vaccine experts voted 10-1 in favor of Pfizer's Prevnar 13 to protect against pneumococcal disease.
While the FDA is not required to follow the group's advice, its recommendation moves the company closer to expanding the use of a treatment that racked up more than $2.7 billion in sales last year as the world's top-selling vaccine.
The FDA is expected to make its approval decision by Dec. 30.
Delta, SkyTeam offer $1 billion to Japan Airlines
TOKYO (AP) _ Delta Air Lines and its alliance partners said Wednesday they are making a billion dollar offer to lure loss-making Japan Airlines from its affiliation with American Airlines.
Delta is "by far the strongest partner for Japan Airlines," company president Edward Bastian told reporters in Tokyo, escalating the tug-of-war for a minority stake in Japan's flagship carrier.
The offer from Delta and the SkyTeam alliance includes a $500 million capital investment, $300 million in short-term revenue guarantees, and $200 million in asset-backed financing for the airline, known as JAL.
SkyTeam would also cover the entire cost for Japan's flagship carrier to transfer from American's oneworld alliance, estimated by Delta to total $20 million.
Wells Fargo agrees to buy back $1.4B in securities
SAN FRANCISCO (AP) _ Wells Fargo & Co. on Wednesday agreed to repay customers about $1.4 billion to settle a lawsuit and regulatory investigations alleging the company improperly marketed risky investments as safe.
California Attorney General Jerry Brown sued the San Francisco-based bank last year and the North American Securities Administrators Association launched an inquiry of the bank's subsidiaries over sales of so-called auction-rate securities. The investments resemble corporate debt, except that the rate of interest they pay is frequently reset at auctions.
A number of companies, charities and individual investors were told the securities were as safe as cash. But the $330 billion market collapsed in February 2008, and investors' accounts were frozen.
Fortinet shares soar on first day of trading
NEW YORK (AP) _ Shares of Fortinet Inc. rose sharply in the company's first day of trading on the Nasdaq, another sign that the recently moribund IPO market is coming back to life.
The network security provider priced its initial public offering of 12.5 million shares at $12.50 each, above the expected range of $9 to $11 apiece. Investors bid shares up $4.12, or 33 percent, to close at $16.62 in trading Wednesday.
Fortinet's IPO on Wednesday _ one of seven so far this month, according to Renaissance Capital _ raised about $156.3 million in total. There was just one IPO in the entire fourth quarter of 2008 after the market seized up during the financial crisis.
American Express to buy Revolution Money for $300M
BOSTON (AP) _ American Express Co. is buying Revolution Money for about $300 million to keep up with trends in electronic payments, where new security features and online transaction options are shaking up traditional models.
Wednesday's deal pairs American Express, a credit card provider tracing its roots to 1850, with a four-year-old startup.
Revolution Money offers payments authorized at checkout counters with a PIN number, with about 1 million merchants participating in the service. To reduce potential for identity theft, Revolution Cards have no name, signature or account number.
By The Associated Press
The Dow fell 11.11, or 0.1 percent, to 10,426.31.
The broader S&P 500 index slipped 0.52, or 0.1 percent, to 1,109.80, while the technology-heavy Nasdaq composite index fell 10.64, or 0.5 percent, to 2,193.14.
Benchmark crude for December delivery added 44 cents Wednesday to settle at $79.58 a barrel on the New York Mercantile Exchange.
In other Nymex trading, heating oil lost less than a penny to settle at $2.0486 a gallon. Gasoline for December delivery added less than a penny to settle at $2.0114 a gallon. Natural gas for December delivery gave up 27.6 cents to settle at $4.254 per 1,000 cubic feet.
In London, Brent crude for December delivery added 50 cents to settle at $79.47 on the ICE Futures exchange.