Obama urges major new stimulus, jobs spending
WASHINGTON (AP) _ President Barack Obama called for a major new burst of federal spending Tuesday, perhaps $150 billion or more, aiming to jolt the wobbly economy into a stronger recovery and reduce painfully persistent double-digit unemployment.
Despite Republican criticism concerning record federal deficits, Obama said the U.S. has had to "spend our way out of this recession" with so many people out of work but insisted he was still mindful of a need to confront soaring deficits. More than 7 million Americans have lost their jobs since the recession began two years ago, and the jobless rate stands at 10 percent, statistics Obama called "staggering."
Stock market drops as dollar strengthens
NEW YORK (AP) _ Investors rushed to safety Tuesday as concerns about spiraling debt loads and disappointing corporate reports tarnished hopes for an economic recovery.
Stocks tumbled as investors favored safe-haven assets like the dollar and Treasurys. Most major stock indexes fell 1 percent, including the Dow Jones industrial average, which lost 104 points but ended off the day's lows.
An earnings forecast from 3M Co. and a sales report from McDonald's Corp. disappointed investors. The reports weighed on the Dow and overshadowed an increased profit forecast from FedEx Corp., whose results are seen as a gauge for the health of the economy.
CIT Group to exit bankruptcy protection Thursday
NEW YORK (AP) _ CIT Group Inc., one of the nation's biggest lenders to small and mid-sized businesses, said Tuesday that a judge approved its reorganization plan and it plans to emerge from bankruptcy protection on Thursday.
CIT Group filed for bankruptcy protection on Nov. 1 after it failed to restructure outstanding debt to alleviate a cash crunch. The reorganization plan, which was approved by key bondholders in advance, reduces CIT's total debt by $10.5 billion. It also defers debt maturities for three years.
CIT, based in New York, had continued to operate while working through bankruptcy proceedings.
Reducing and delaying debt repayments gives CIT more time to repair its finances, which were hammered by the collapsing credit markets late last year and rising loan defaults among its customers.
GE Capital outlook improving, losses to continue
WASHINGTON (AP) _ General Electric Co. says profits at its lending arm will start improving by 2011, but first it will have to slog through another year of big losses on loans gone bad in areas like commercial real estate.
The conglomerate told analysts Tuesday that profit is expected to be flat next year, ranging between $2 billion to $2.5 billion, and then rise in 2011. GE is ahead of schedule with plans to shrink the size of GE Capital, which once provided nearly half of the company's overall profits. And GE says credit markets are improving, making it easier and cheaper to borrow money.
But some big problems that have beset GE Capital during the financial crisis and recession, like big losses, are expected to continue to dog the lender next year.
McDonald's sales take hit from US joblessness
CHICAGO (AP) _ The supersized recession that was a boon for business last year caught up further with McDonald's Corp. in November, as high unemployment ate into sales.
While the world's largest burger chain is still faring better than its competitors, who've increasingly been pushing value menus and discounts of their own, the restaurant's fortunes likely won't improve unless the U.S. economy does.
On Tuesday, McDonald's said sales at restaurants open at least a year fell 0.6 percent in the U.S. It was the second consecutive monthly decline for the measure, an important indicator of a restaurant chain's health, and a steeper fall than October's 0.1 percent.
Surveys: Hiring to remain weak early next year
WASHINGTON _ Few employers plan to ramp up hiring early next year, two surveys show _ evidence that the economic recovery isn't likely to create many jobs anytime soon.
That will mean fierce competition for job openings that do exist. Nearly 6.3 unemployed workers, on average, are vying for each opening, government figures released Tuesday show. When the recession began, only 1.7 jobless workers were competing for each opening.
More of America's largest companies will shrink their staffs than will hire in the next six months, according to a quarterly survey from the Business Roundtable, a group of large-company CEOs released Tuesday.
Morgan Stanley names new CFO, other top managers
NEW YORK (AP) _ Morgan Stanley elevated its chief financial officer to a new role as co-chief of investment banking and global securities trading Tuesday as part of a management shake-up ahead of James Gorman's assumption of the CEO role on Jan. 1.
Gorman, who is 51, succeeds John Mack, 65, who will remain as chairman.
Colm Kelleher, who had been chief financial officer, will run Morgan Stanley's institutional securities business along with Paul Taubman, who had been head of investment banking. Kelleher is 52, and Taubman is 48.
With Kelleher moving to a new position, Ruth Porat will take over as chief financial officer. Porat, 52, was previously the global head of Morgan Stanley's financial institutions group.
Airlines' on-time performance falters in October
ATLANTA (AP) _ U.S. airlines did a poorer job getting passengers to their destinations on-time in October compared to the same month a year ago.
The Department of Transportation said Tuesday that the 19 carriers surveyed recorded an overall on-time arrival rate of 77.3 percent in October. That was lower than the 86 percent recorded in October 2008 and below the 86.2 percent recorded in September of this year.
Hawaiian Airlines had the best on-time performance in October, with a 93.4 percent rate, followed by Alaska Airlines at 85.8 percent and JetBlue Airways at 82.9 percent.
Texas Instruments raises 4Q profit, sales targets
DALLAS (AP) _ Texas Instruments Inc. raised its fourth-quarter profit and sales outlook on Tuesday, citing an improving market for chips used in cell phones and other electronic gadgets like hard disk drives and video game consoles.
Dallas-based Texas Instruments now expects to earn between 47 cents and 51 cents per share, up from a prior estimate of 42 cents to 50 cents and above third-quarter earnings of 42 cents per share. In its regular mid-quarter update, the company also lifted its revenue forecast to between $2.90 billion and $3.02 billion from $2.78 billion to $3.02 billion, previously. That would mark sequential growth of 1 percent to 5 percent.
Analysts are expecting the company to earn 47 cents per share on sales of $2.93 billion, according to a Thomson Reuters poll.
Whitacre: GM has found replacement for current CFO
DETROIT (AP) _ General Motors Co. is close to replacing its chief financial officer after finding a candidate to take his job, its CEO said in a Web chat with reporters on Tuesday.
The candidate was not identified during the chat with GM's Chairman and CEO Ed Whitacre Jr. but it was the first time the automaker has publicly acknowledged that the board plans to replace current CFO Ray Young. An announcement is likely in two to three weeks.
Young is the second top executive to be replaced by Whitacre and the new government-appointed board, which took over control of the troubled automaker as it emerged from bankruptcy protection in July. Fritz Henderson, the former CEO, left last week.
By The Associated Press
The Dow ended down 104.14, or 1 percent, to 10,285.97 after being down as much as 140 points.
The broader S&P 500 index fell 11.31, or 1 percent, to 1,091.94, while the Nasdaq composite index fell 16.62, or 0.8 percent, to 2,172.99.
Benchmark crude for January delivery dropped $1.31 to settle at $72.62 a barrel on the New York Mercantile Exchange.
In London, Brent crude for January delivery fell $1.24 to settle at $75.19 a barrel on the ICE Futures exchange.
In other Nymex trading in January contracts, heating oil fell 1.88 cents to settle at $1.9909 a gallon while gasoline gave up 1.6 cents to settle at $1.9246 a gallon. Natural gas rose 14.3 cents to settle at $5.114 per 1,000 cubic feet.