Business Highlights

AP News
Posted: May 31, 2011 6:13 PM
Business Highlights


Home-price index at lowest point since 2006 bust

WASHINGTON (AP) _ Home prices in major areas reached their lowest level since the housing bubble burst in 2006, driven down by foreclosures, a glut of unsold homes and the reluctance or inability of many to buy.

Prices fell from February to March in 18 of the metro areas tracked by the Standard & Poor's/Case-Shiller 20-city index. And prices in a dozen markets reached their lowest points since the housing crisis began.

The damage is spreading to markets that had long withstood the crisis, including Dallas, Denver, Minneapolis and Cleveland. Prices are expected to keep falling until the glut of foreclosed homes is reduced, companies start hiring in force, banks ease lending rules and people start believing it makes sense again to buy a house. In some markets, that could take years.


Now renting: luxe condos built for the global rich

Due to a glut of glitzy condo towers and the need to appease skittish lenders, some developers have found a new use for the gilded, clubby preserves once meant for buyers who could afford the seven-figure price tags.

Developers are renting them out and offering all of the perks normally reserved for the elite. The hand-watered grass roofs and outdoor movie theaters. The heated, valet-attended porte-cocheres. The pet spas offering canine cardio and play dates for your puppy.

And developers have found that renters _reluctant to buy in a still-unsteady market_ are embracing them.


Experts say cellphones are possibly carcinogenic

LONDON (AP) _ A respected international panel of experts says cellphones are possible cancer-causing agents, putting them in the same category as the pesticide DDT, gasoline engine exhaust and coffee.

The classification was issued Tuesday in Lyon, France, by the International Agency for Research on Cancer after a review of dozens of published studies. The agency is an arm of the World Health Organization and its assessment now goes to WHO and national health agencies for possible guidance on cellphone use.

Classifying agents as "possibly carcinogenic" doesn't mean they automatically cause cancer and some experts said the ruling shouldn't change people's cellphone habits.


Consumer confidence falls unexpectedly in May

NEW YORK (AP) _ Americans are losing faith that the economy will keep improving, according to a monthly survey.

The Conference Board's Consumer Confidence Index fell to 60.8 from a revised 66 in April, a sign of the toll that high gas prices, a choppy job outlook and a moribund housing market are taking on people's psyches. Economists had expected an increase to 67. It was the lowest reading since November.

The index is still far from the reading of 90 that indicates a healthy economy. It hasn't approached that level since the recession began in December 2007.


Stocks end a down month on an up note

NEW YORK (AP) _ That screeching sound you heard in May? That was the stock market.

While the month ended with four days of gains in most of the indexes, concerns that high gas prices, tornadoes and flooding in the South, the post-natural disaster slowdown in Japan and a growing debt crisis in Europe sent the Standard and Poor's 500 stock index down 1.4 percent in May. That decline followed a 2.85 percent gain in April, which followed gains that set the fastest pace in the first quarter since 1998. Before this month, stocks were boosted by higher corporate earnings, increased business spending and a global economic expansion.

May was the first down month for the S&P since August 2010.


Energy prices cool off in time for summer

NEW YORK (AP) _ Oil and gasoline prices finally hit the brakes in May

After surging to the highest levels since 2008, oil dropped 10 percent for the month and gasoline slipped nearly 4 percent.

The May slump will ripple through petroleum markets around the world, affecting fuel prices everywhere.

Crude futures dropped early in May as a growing number of industry and government reports showed plentiful supplies and falling demand. The dollar grew stronger against other currencies during the month, and that helped push oil lower as well. Oil is priced in dollars and becomes less attractive to buyers with foreign currency as the dollar gets stronger. But oil prices may climb further soon.


Nokia shares plunge after profit warning

HELSINKI (AP) _ Nokia Corp. warned that its second-quarter sales and margins will be much lower than expected as rivals challenge the world's largest handset maker in both smartphones and low-end devices.

The Finnish company said the lower-than-expected performance made it no longer "appropriate to provide annual targets for 2011."

Nokia has been struggling against tough competition in the top end smartphone market, especially against Apple Inc.'s iPhone, Research in Motion's Blackberry and on the software front against Android. But Nokia has also felt the pinch in China and emerging markets, where numerous phone makers are producing cheaper handsets, including lower-end smartphones and copycat models.


Ashland buying Int'l Specialty Products for $3.2B

COVINGTON, Ky. (AP) _ Ashland Inc. will spend about $3.2 billion to buy International Specialty Products Inc., expanding its presence in high-growth markets including personal care, pharmaceutical and energy.

Ashland is just the latest entity to snap up a high-margin specialty chemical company, following Berkshire Hathaway's $9 billion acquisition of Lubrizol, and Dow Chemical's $15 billion buyout of Rohm & Haas.

The latest deal, expected to close before the end of the fourth quarter, should immediately add to Ashland's earnings per share. The transaction is expected to save Ashland approximately $50 million by the second year after the acquisition's closing by eliminating redundancies and making operations more efficient.


Severity of Europe E. coli outbreak stuns experts

BERLIN (AP) _ The foodborne bacterial outbreak that has hit Germany and other European nations is unlike anything Western experts have seen: 16 dead and more than 1,000 sick, including nearly 400 suffering severe and potentially fatal symptoms. But several days into the health threat, scientists remain unsure what produce _ and what country _ is responsible.

Investigators across Europe were frantically trying to determine the scope of the contamination by an unusual strain of the common E. coli germ _ and where in the long journey from farm to grocery store the contamination occurred. German authorities pointed to a few cucumbers from Spain, but further tests showed that those vegetables, while contaminated, did not cause the outbreak.


Europe locked in 'chaotic' debate over Greece

BRUSSELS (AP) _ European officials are locked in a heated debate over whether _ and how _ to give more aid to debt-ridden Greece just as a much-delayed examination of the country's finances draws to a close.

Experts from the European Union, the European Central Bank and the International Monetary Fund will likely conclude their review of Greece's accounts and austerity program over the next 24 to 48 hours, a European official said Tuesday.

Their report is set to show huge funding gaps in Greece's budget over the next two years, despite 110 billion euros ($157 billion) in rescue loans granted only a year ago. It will also spell out new austerity measures and detail plans to privatize public real estate and corporate assets as the Greek government struggles to hit deficit targets set out in the bailout program.

In parallel to the review carried out in Athens, European governments and financial institutions are wrangling over different proposals that would make potential new loans to the struggling country more secure.


By The Associated Press

The stock market ended higher on signs that Germany might drop its demands for an early rescheduling of Greek bonds, paving the way for a deal that could prevent Greece from defaulting on its debt. The S&P index gained 14.10, or 1.1 percent, to 1,345.20. The Dow Jones industrial average added 128.21, or 1 percent, to 12,569.79. And the Nasdaq composite rose 38.44, or 1.4 percent, to 2,835.30.

Benchmark West Texas Intermediate crude rose $2.11 to settle at $102.70 per barrel on the New York Mercantile Exchange. That's down from a high of $113.93 per barrel at the end of April. In London, Brent crude added $2.05 to settle at $116.73 on the ICE Futures exchange.

Gasoline for June delivery added 1.9 cents to settle at $3.0503 per gallon. July natural gas gained 14.8 cents to $4.666 per 1,000 cubic feet. Heating oil climbed 5.16 cents to settle at $3.053 per gallon.