Underwater mortgages rise as home prices fall
WASHINGTON (AP) _ The number of Americans who owe more on their mortgages than their homes are worth rose at the end of last year, preventing many people from selling their homes in an already weak housing market.
About 11.1 million households, or 23.1 percent of all mortgaged homes, were underwater in the October-December quarter, according to report released Tuesday by housing data firm CoreLogic. That's up from 22.5 percent, or 10.8 million households, in the July-September quarter.
The number of underwater mortgages had fallen in the previous three quarters. But that was mostly because more homes had fallen into foreclosure.
Underwater mortgages typically rise when home prices fall. Home prices in December hit their lowest point since the housing bust in 11 of 20 major U.S. metro areas. In a healthy housing market, about 5 percent of homeowners are underwater.
Roughly two-thirds of homeowners in Nevada with a mortgage had negative home equity, the worst in the country. Arizona, Florida, Michigan and California were next, with up to 50 percent of homeowners with mortgages in those states underwater.
Oklahoma had the smallest percentage of underwater homeowners in the October-December quarter, at 5.8 percent. Only nine states recorded percentages less than 10 percent.
European growth helps McDonald's February results
OAK BROOK, Ill. (AP) _ McDonald's says higher global demand, especially in Europe, boosted sales in February.
Revenue at company-owned and franchised restaurants open at least 13 months grew 3.9 percent, more slowly than January's 5.3 percent. McDonald's Corp.'s stock fell 88 cents in midday trading to $75.41.
The monthly sales figure is a snapshot of the dollar value of food sales at all McDonald's restaurants. McDonald's corporate revenue, reported quarterly, includes only revenue at company-owned stores plus fees and rents paid by franchisees.
The sales metric is considered a key indicator of a restaurant chain's performance because it excludes the effects of locations that open or close during the year.
Icahn returns investors' money. A 'sell' signal?
NEW YORK (AP) _ On the eve of the bull market's second anniversary, billionaire investor Carl Icahn had an unsettling message for his investors: Take your money back.
Icahn told investors in his hedge funds that he didn't want to be responsible to them for "another possible market crisis," especially given the rapid increases over the past two years. Stocks have nearly doubled since hitting 12-year lows on March 9, 2009.
Icahn, who has built a fortune from taking stakes in well-known companies and then pressing for changes, also said he was concerned about the economic outlook and political tensions in the Middle East. Icahn's targets over the years have included Yahoo Inc., RJR Nabisco and Revlon.
Outside investors make up just 25 percent, or $1.76 billion, of the $7 billion in assets Icahn oversees. Despite losses in 2008, the funds have had returns of 106.9 percent since their inception in 2004. In the first two months of the year the funds have returned 8.7 percent.
Not everyone believes Icahn is returning his investors' money because he's bearish about the markets.
Jack Ablin, chief investment officer at Harris Private Bank, said Icahn is likely trying to avoid regulatory scrutiny. Under new laws, hedge funds have to register with the Securities and Exchange Commission and allow the agency to inspect them.
Warner Bros. to offer movie rentals on Facebook
NEW YORK (AP) _ Movie rentals are coming to Facebook. Warner Bros. says it is testing a service that will offer select movies for purchase or rental through the public pages of these movies on the world's largest online social network.
Starting Tuesday, Facebook users who visit the official page of "Batman: The Dark Night" will be able to click a "watch" icon and pay 30 Facebook credits, or $3, to watch the movie. The movie is streamed through a Facebook application.
Renters will have access to a movie for 48 hours and can replay it as many times as they like. Warner Bros. said it will add other movies in coming months but did not say what those would be.
Energy Dept. boosts outlook for oil and gas prices
NEW YORK (AP) _ Pump prices will average $3.70 per gallon this spring and summer with a barrel of oil averaging $102 this year, the U.S. Department of Energy said Tuesday.
Conflict in the Middle East and fighting in Libya prompted government analysts to raise expectations for gasoline prices by 50 cents a gallon for the peak driving season in the Energy Information Administration's monthly Short-Term Energy Outlook. The EIA boosted its per-barrel oil estimate by $9 for the year.
EIA sees pump prices peaking at $3.75 a gallon in June. But its report says there is "significant uncertainty surrounding the forecast" and pump prices could spike above $4 this summer, which would threaten the all-time high of $4.11 a gallon reached in July 2008.
On Tuesday the national average for a gallon of regular hit $3.52, according to AAA, Oil Price Information Service and Wright Express. That's 40 cents higher than a month ago and 76 cents above a year ago.
Greece raises $2.3 billion after rating cut
ATHENS, Greece (AP) _ Greece raised 1.625 billion euros ($2.28 billion) in an auction of treasury bills Tuesday, though the higher interest rate it has to pay showed investor unease a day after the country's credit rating was downgraded sharply.
In return for selling the 26-week bills, Greece had to pay an interest rate of 4.75 percent, the Public Debt Management Agency said. The rate was up from the 4.64 percent it had to pay in a similar auction last month, but lower than the 4.90 percent demanded in January.
Though investors wanted a higher rate in return for their cash, the Greek government still managed to raise more than the original offer of 1.25 billion euros. Demand was relatively healthy, with the auction 3.59 times oversubscribed.
Tuesday's sale came after Moody's slashed the debt-ridden country's junk rating by three notches to B1, prompting a furious riposte from the Greek government.
Greece began short-dated treasury bill sales last September to maintain a presence in the market after its debt crisis sent interest rates for longer-term money soaring, effectively blocking the country from the bond market.
Ford CEO Mulally gets $56.5M in stock award
DEARBORN, Mich. (AP) _ Ford Motor Co.'s top two executives received nearly $100 million worth of stock for their performance during 2009 and 2010, years in which the company's profits and stock price surged.
The awards, disclosed in regulatory filings late Monday, are considered excessive by some Ford assembly line workers. But Wall Street may not see it that way. Ford's stock price rose 3 percent on Tuesday.
CEO Alan Mulally, credited with propelling the company from staggering losses a few years ago to profits of $2.7 billion in 2009 and $6.6 billion last year, received stock valued at $56.5 million before taxes.
The man who hired Mulally, Executive Chairman Bill Ford Jr., got stock worth $42.4 million, according to paperwork filed with the U.S. Securities and Exchange Commission.
Salaries and other compensation were not listed and will be revealed later this year.
The Dearborn, Michigan, company was in financial peril late in 2006 when Bill Ford removed himself as CEO and hired Mulally away from Boeing Co. Ford Motor Co. lost $12.6 billion that year.
Under Mulally, the company mortgaged assets including its blue oval logo to borrow more than $23 billion, allowing it to weather the recession. It avoided filing for bankruptcy or following General Motors Co. and Chrysler Group LLC in taking government aid.
Tropicana raising prices on orange juice
Tropicana says it will increase the price of some of its juices by 4 to 8 percent to cope with higher costs tied to the impact of cold weather on citrus crops in Florida.
The juice maker, which is owned by PepsiCo Inc., is the largest purchaser of Florida fruit and juice.
The company said Tuesday that it is coping with two extreme freezes, the coldest December on record and a smaller-than-expected crop for second year in a row.
A report released this week by the U.S. Department of Agriculture this week shows that orange production is down in Florida but the full impact of the recent cold weather won't be known until June.
Starbucks' new logo debuts on cups, cafes
SEATTLE (AP) _ Starbucks customers saw something new Tuesday when they sipped their coffee.
The Seattle-based company rolled out its new words-free logo Tuesday on all its cups. Signs also changed at a handful of stores, and the new logo will show up on more storefronts in the future.
The Associated Press first reported in January that Starbucks was updating its logo and would introduce it this month in conjunction with its 40-year anniversary.
Starbucks on Tuesday also introduced a number of new coffee flavors and baked goods as part of the anniversary celebration. In addition, Starbucks said Tuesday it plans to roll out its Via instant coffee in China starting in April, according to a report in the Wall Street Journal.
P&G's air freshener Febreze hits $1B in revenue
CINCINNATI (AP) _ The Procter & Gamble Co. says Febreze air fresheners have joined its billion-dollar brand club.
Spokesman Lee Bansil said Tuesday that Febreze revenue over the past 12 months hit $1 billion.
That gives P&G 24 brands that bring in revenue of $1 billion or more. The company has sold off two others _ Folgers coffee and Actonel osteoporosis treatment _ in the past three years.
Febreze officials have said sales held up during the recession as people spent more time at home, giving them more reason to care about how their homes smelled.
By The Associated Press
The Dow Jones industrial average gained 124.35 points, or 1 percent, to 12,214.38. The S&P 500 rose 11.69, or 0.9 percent, to 1,321.82.
Energy companies were the only group in the S&P index to fall, losing 0.6 percent.
The Nasdaq composite rose 20.14, or 0.7 percent, to 2,765.77.
The benchmark in the U.S., West Texas Intermediate crude for April delivery, fell 42 cents to settle at $105.02 per barrel. Brent crude dropped $1.98 to settle at $113.06 per barrel on the ICE Futures exchange in London.
In other Nymex trading for April contracts, heating oil lost 5.5 cents to settle at $3.011 per gallon and gasoline futures gave up 5.7 cents to settle at $2.947 per gallon. Natural gas lost 6.3 cents to settle at $3.864 per 1,000 cubic feet.