Administration extends $700B bailout until October
WASHINGTON (AP) _ The Obama administration has extended the $700 billion financial bailout program until October, setting up a struggle between Democrats who favor using some of the leftover money to help generate jobs and Republicans who say it should be used to shrink soaring budget deficits.
The administration insists the bailout fund is still needed to prevent further turmoil in the banking system. In announcing the decision Wednesday, Treasury Secretary Timothy Geithner said extending the program also will help homeowners struggling to avoid losing homes to foreclosures and small businesses having trouble getting loans.
Stocks climb as investors shrug off debt concerns
NEW YORK (AP) _ Investors set aside some of their concerns about mounting debt levels around the world and looked for bargains after a two-day slide in stocks.
Stocks turned higher late Wednesday after a day of back-and-forth trading. Investors have been cautious about rising government debt levels in Spain, Greece and other countries.
The Dow Jones industrial average rose 51 points to 10,337.05, regaining about half of what it lost a day earlier.
Investors spent much of the day looking for safety following a decision by credit rating agency Standard & Poor's to reduce the outlook on Spain's debt rating.
October wholesale inventories rise unexpectedly
WASHINGTON (AP) _ Businesses unexpectedly added to inventories at the wholesale level in October, breaking a record string of 13 straight declines. It was a hopeful sign that companies will begin restocking depleted store shelves, helping to bolster the fragile economic recovery.
Wholesale inventories rose 0.3 percent in October, the Commerce Department said Wednesday, easily beating economists' expectations of a 0.5 percent decline. Inventories dropped 0.8 percent in September.
Sales at the wholesale level rose 1.2 percent in October, also stronger than the 0.7 percent rise economists expected. It followed a 1.3 percent increase in September and marked the seventh straight month that sales at the wholesale level have risen.
BofA repays $45B in government bailout funds
CHARLOTTE, N.C. (AP) _ Bank of America Corp. said Wednesday it has repaid the entire $45 billion it owed U.S. taxpayers as part of the Troubled Asset Relief Program.
Bank of America, which announced its agreement with the U.S. Treasury to repay TARP last week, funded the repayment through a combination of cash on hand and the sale of $19.29 billion of securities that would convert into common stock. The stock increase remains subject to shareholder approval.
Bank of America was among hundreds of banks that received government support through the government's TARP program. The bank received $25 billion as part of the initial round of investments when the credit crisis peaked last fall. It received an additional $20 billion in January shortly after it acquired Merrill Lynch in what was a heavily scrutinized deal.
UK slaps tax on bankers' bonuses ahead of election
LONDON (AP) _ The British government slapped a one-time tax of 50 percent on fat bank bonuses on Wednesday as it tried to win over recession-weary voters ahead of a looming general election.
But Treasury chief Alistair Darling's plan to exact payback for the crisis that led Britain into its worst recession since World War II faced opposition criticism that it was at best political spin and would do little to raise revenue _ and, at worst, potentially damage London's standing as a financial center.
Darling's overall pre-budget report, in which he acknowledged that the economy will shrink more this year than previously predicted and increased government borrowing forecasts, was also criticised as likely to do little to aid Britain's sluggish economic recovery.
GAO: FDA yet to make safety changes post-Vioxx
WASHINGTON (AP) _ The Food and Drug Administration still hasn't restructured its staff to better monitor drug safety, more than three years after experts recommended key changes in the wake of the Vioxx scandal.
That's according to congressional investigators who found that the FDA has yet to follow through on changes suggested in 2006 to help the agency detect problems with drugs taken by millions of Americans. Those recommendations came after the embarrassing and dangerous episode with Vioxx, a blockbuster pain drug the FDA approved in 1999, only to pull from the market in 2004 after linking it to heart attack and stroke.
House votes to extend $31B in expiring tax breaks
WASHINGTON (AP) _ The House voted Wednesday to extend $31 billion in popular tax breaks, including an income tax deduction for sales and property taxes, to be financed with a tax increase on investment fund managers and a crackdown on international tax cheats.
The 45 tax deductions and credits for businesses and individuals are scheduled to expire at year's end. The House voted 241-181 to extend them for a year. The bill now goes to the Senate, which has rejected the tax increase on investment managers in the past.
The tax breaks include a sales tax deduction that mainly helps people in the nine states without local income taxes, a property tax deduction for people who don't itemize and lucrative credits that help businesses finance research and development.
Oil prices fall on poor demand
NEW YORK (AP) _ Oil prices hit two-month lows Wednesday as government data showed that energy demand continues to slump.
Benchmark crude for January delivery gave up $1.95 to settle at $70.67 a barrel on the New York Mercantile Exchange. Prices dropped as low as $70.13 a barrel earlier in the day.
The Energy Information Administration said the nation's consumption of petroleum products fell to its lowest level since the week of July 10. Demand for gasoline in the U.S. has been hit so hard by the economic downturn, imports are falling away and helping to drive up the amount of unused fuel in storage.
Feds target rating agencies' role in meltdown
WASHINGTON (AP) _ Enforcement officials from the Securities and Exchange Commission and Justice Department said Wednesday that their staffs are targeting the role of Wall Street rating agencies in the financial meltdown.
The three dominant agencies _ Moody's Investors Service, Standard & Poor's and Fitch Ratings _ have been widely criticized for failing to give investors adequate warning of the risks in subprime mortgage securities, whose collapse touched off the financial crisis.
SEC Enforcement Director Robert Khuzami told the Senate Judiciary Committee that his staff is "looking very closely at credit rating agencies" and is "focused on that area."
Delta sees brighter revenue environment ahead
ATLANTA (AP) _ Delta Air Lines Inc. expects the improving revenue environment to continue in the months ahead, though sales of premium seats remain pressured.
Chief Financial Officer Hank Halter told investors at a conference in New York Wednesday that Delta's revenue per available seat mile likely will show growth at some point in the first half of 2010. He said the rate of decline has been slowing.
Analysts are watching airlines' revenue projections carefully as an indicator of when the economic recovery may gain steam.
The world's biggest airline has significantly reduced the amount of debt coming due next year and has minimal capital spending planned.
By The Associated Press
The Dow rose 51.08, or 0.5 percent, to 10,337.05 after falling 104 on Tuesday.
The S&P 500 index rose 4.01, or 0.4 percent, to 1,095.95, while the Nasdaq composite index rose 10.74, or 0.5 percent, to 2,183.73.
Benchmark crude for January delivery gave up $1.95 to settle at $70.67 a barrel on the New York Mercantile Exchange.
In other Nymex trading in January contracts, heating oil lost 8.16 cents to settle at $1.9093 a gallon while gasoline lost 6.73 cents to settle at $1.8573 a gallon. Natural gas gave up 21.6 cents to settle at $4.898 per 1,000 cubic feet.
In London, Brent crude for January delivery fell $2.80 to settle at $72.39 on the ICE Futures exchange.