Bernanke: Too early to declare lasting recovery
WASHINGTON (AP) _ Federal Reserve Chairman Ben Bernanke warned Monday that it's too soon to know whether the economic recovery will last and again pledged to hold rates at record-low levels for an "extended period."
The Fed chief's speech to the Economic Club of Washington made clear he thinks the economy will struggle even as it recovers from the recession. He said the economy confronts "formidable headwinds" _ including a weak job market, cautious consumers and tight credit.
The central bank has leeway to keep rates low because inflation is under control and is expected to stay tame because of the economy's weakness. Some private forecasters even fear that the recovery could fizzle late next year as the government stimulus fades.
Early stock gains from Bernanke comments evaporate
NEW YORK (AP) _ Even the prospect of interest rates staying low couldn't keep buyers in the stock market.
Stocks ended little changed Monday, having given back a brief afternoon gain that followed comments from Federal Reserve Chairman Ben Bernanke.
Bernanke's remarks sent the dollar down because low rates make a currency less attractive, and that gave stocks a boost since a lower dollar can add to profits for U.S. companies that do business overseas. The market's gains evaporated later, however, as the dollar pared its losses.
Many traders have closed their books on the year and are wondering whether incremental improvements in the economy will be able to support more stock market gains next year.
Consumer borrowing falls for 9th straight month
WASHINGTON (AP) _ Americans borrowed less for a record ninth straight month in October, another sign that consumer spending will remain weak, making it harder for the economy to mount a sustained rebound.
Consumer credit fell at an annual rate of $3.51 billion in October, the Federal Reserve said Monday. Economists expected a $9.3 billion decline.
Demand for revolving credit, the category that includes credit cards, fell 9.3 percent, while borrowing in the category that includes auto loans rose at an annual rate of 2.6 percent.
Americans are borrowing less as they try to replenish depleted investments. Many are finding it hard to get credit as banks, hit by the worst financial crisis since the 1930s, have tightened lending standards.
Historic EPA finding: Greenhouse gases harm humans
WASHINGTON (AP) _ The Obama administration took a major step Monday toward imposing the first federal limits on climate-changing pollution from cars, power plants and factories, declaring there was compelling scientific evidence that global warming from manmade greenhouse gases endangers Americans' health.
The announcement by the Environmental Protection Agency was clearly timed to build momentum toward an agreement at the international conference on climate change that opened Monday in Copenhagen, Denmark. It signaled the administration was prepared to push ahead for significant controls in the U.S. if Congress doesn't act first on its own.
The EPA finding clears the way for rules that eventually could force the sale of more fuel-efficient vehicles and require plants to install costly new equipment or shift to other forms of energy.
SEC accuses 3 ex-New Century execs of fraud
WASHINGTON (AP) _ Federal regulators on Monday accused three former top executives of collapsed mortgage lender New Century Financial Corp. of fraud, saying they misled investors as the company's subprime loan business was failing in 2006.
In a case stemming from the mortgage market meltdown, the Securities and Exchange Commission filed a lawsuit seeking injunctions, and unspecified civil fines and restitution against New Century's former CEO and co-founder Brad Morrice, former chief financial officer Patti Dodge and former controller David Kenneally.
The SEC also wants the three barred from serving as officers or directors of any public company and reimbursement of their bonuses or stock option awards.
Obama eyes 'selective' use of bailout dollars
WASHINGTON (AP) _ President Barack Obama said Monday the massive federal bailout program for financial institutions has turned out to be much less costly than expected and there may be ways to redirect some of the money toward creating new jobs.
Speaking in the Oval Office, Obama declined to say directly whether he would seek to redirect some of the repaid money from the $700 billion Troubled Asset Relief Program to jobs programs. He did say he would address the topic in an economic speech on Tuesday.
The president said the key question is determining whether the bailout money could be put toward selective job creation that meets the original intent of the law. He cited as an example directing bailout money to help small businesses get lending.
GM plans to invest $700M in Michigan for Volt
DETROIT (AP) _ General Motors Co. said Monday it will spend $700 million at eight Michigan facilities to get its new rechargeable electric car road-ready _ a technological and economic boost for its home state.
GM officials detailed their investment plans for the Chevrolet Volt on the floor of its assembly plant that straddles the border between Detroit and tiny Hamtramck. The plant, which will begin mass producing the Volt in late 2010, is getting a $336 million upgrade that includes new machinery and other equipment.
The state of Michigan last year approved $135.2 million in tax incentives for the sites.
Supreme Court weighs validity of anti-fraud law
WASHINGTON (AP) _ The Supreme Court cast doubt Monday on the validity of part of the anti-fraud law enacted in response to Enron and other corporate scandals early this decade.
The court heard arguments in a case over the composition of the board that was created to tighten oversight of internal controls and outside auditors following accounting scandals at Enron Corp., WorldCom Inc., Tyco International Ltd. and other corporations.
A small Nevada accounting firm and an anti-tax group brought the challenge to the 2002 Sarbanes-Oxley law, arguing that the board created by the law violates the Constitution's separation of powers mandate because the president cannot appoint or remove its members.
CF Industries sweetens takeover bid for Terra
DEERFIELD, Ill. (AP) _ CF Industries Holdings Inc. has sweetened its hostile takeover offer for rival fertilizer maker Terra Industries Inc. by 12 percent to $4.6 billion, boosting the cash portion of its bid.
Terra, which has been fighting off CF's buyout attempts since the start of the year, said Monday it expects to consider the revised proposal at a board meeting later in the week.
CF said it is offering to pay $36.75 in cash _ including the $7.50 per share special dividend declared by Terra _ plus 0.1034 of a CF common share for each Terra share. Its previous bid included $32 a share in cash.
Dubai World looks to sell assets in quest for cash
DUBAI, United Arab Emirates (AP) _ Dubai World, the cash-strapped conglomerate at the center of Dubai's debt crisis, appears set for an unaccustomed period of retrenchment after the emirate's top finance official said Monday the company may need to change course and unload assets as it struggles to pay back lenders.
What eventually gets sold remains uncertain. Clearer is the city-state's position that the government itself won't be responsible for Dubai World's debts, renewing questions about its backing of other state-run companies.
The comments appeared to cement concerns that Dubai was washing its hands of debts racked up by companies it created and backed during the city-state's frenetic boom years earlier this decade.
By The Associated Press
The Dow Jones industrial average rose 1.21, or less than 0.1 percent, to 10,390.11 after being up 54 points and down 29 points.
The broader Standard & Poor's 500 index fell 2.73, or 0.3 percent, to 1,103.25. It's up 22.1 percent for the year. The Nasdaq composite index fell 4.74, or 0.2 percent, to 2,189.61.
Benchmark crude for January delivery fell 2 percent, or $1.54, to settle at $73.93 on the New York Mercantile Exchange, the lowest level in about two months.
In other Nymex trading in January contracts, heating oil fell 1.71 cents to settle at $2.0097 and gasoline slipped 3.44 cents to settle at $1.9406. Natural gas jumped 38.5 cents to settle at $4.971 per 1,000 cubic feet.
In London, Brent crude for January delivery lost $1.09 to settle at $77.53 on the ICE Futures exchange.