Worsening Greek debt crisis sinks stocks, euro
NEW YORK (AP) _ Unrest in Greece rattled global financial markets Wednesday. Stocks fell the most since June 1 as investors piled into lower-risk assets like the dollar and U.S. government bonds.
A report on manufacturing in the New York area also came in far below forecasts. That reignited fears that factory production, one of the few bright spots in the U.S. economy, may be weaker than many economists had believed.
Thousands of people gathered on the streets of Athens to protest government cutbacks required by international lenders. Demonstrators hurled rocks at riot police, who responded with tear gas. Greece's prime minister said he would name a new Cabinet after talks to form a new government with opposition parties failed.
As bank fees escalate, prepaid cards go mainstream
Rising fees have chased millions of people away from banks and into prepaid debit cards.
In just a handful of years, prepaid cards have become the fastest growing payment method in the U.S. Just this week, American Express became the first mainstream financial company to offer a prepaid card.
But the cards have problems of their own. Complex fee schedules. Few of the consumer protections afforded to bank and credit card customers. No ability to build credit history.
Consumer advocates are raising concerns and demanding more oversight and at least one state is investigating prepaid card issuers.
Inflation slows in May as gas prices fall
WASHINGTON (AP) _ Falling energy prices cooled overall inflation in May, offering some relief to consumers who have been coping for months with high gas prices.
Overall consumer prices rose 0.2 percent, the smallest increase in six months, the Labor Department said. It was the first drop in energy costs in nearly a year.
Still, Americans paid more for cars, clothing and hotel rooms in May. That drove the so-called "core" consumer prices, which exclude volatile food and energy, up by the most in nearly three years.
Pandora gains point to healthy Internet IPO future
Internet radio station Pandora Media's IPO struck the right chord with investors Wednesday despite the static in the overall stock market.
Pandora's stock surged by as much 63 percent in their market debut before pulling back later in the session. The shares closed at $17.42, up 9 percent increase from Pandora's initial public offering price of $16 and a nearly six-fold increase from what Pandora's own board thought the stock was worth just six months ago.
The performance shows the recent market slump hasn't dampened the enthusiasm investors have for new stock offerings from rapidly growing Internet services.
Airlines see profitable summer ahead of iffy fall
DALLAS (AP) _ This promises to be a moneymaking summer for the airlines, with planes full of passengers paying higher fares than a year ago. But there could be a fall chill in the air.
Leisure travelers say they're cutting back on travel, and airlines are planning to reduce flights once summer ends. Some are already offering sales to fill their planes when vacation season is over.
J&J cutting back on stents, expects $500M charge
TRENTON, N.J. (AP) _ Johnson & Johnson, which pioneered drug-coated stents for heart patients, is ceding the territory to rivals whose newer, better products have been squeezing its market share for years.
Amid intensifying competition and declining total stent sales, the health care giant said Wednesday its Cordis business will get out of heart stents and instead will focus on areas such as diagnostics and stents for blood vessels outside the heart.
At the same time, J&J will cut hundreds of jobs, shutter two factories and take a charge of $500 million to $600 million in the current quarter as it restructures Cordis.
Greek riots, political chaos hammer markets
ATHENS, Greece (AP) _ Greece's prime minister, struggling to ensure Parliamentary approval for a crucial austerity bill, said Wednesday he would reshuffle his Cabinet and seek a vote of confidence for his new government after coalition talks with opposition parties failed.
The negotiations collapsed as rioters clashed with police in the streets of Athens during a general strike and renewed fears of default rattled global markets.
Prime Minister George Papandreou has been struggling to contain an internal party revolt over a new austerity package that is the main condition for continued funding from a euro110 billion ($155 billion) international bailout. Without continued funding from the rescue loans, Greece will default on its massive debts _ which would unsettle the global economy and undermine the future of the eurozone.
Oil rally that began with Libya ends with Europe
The financial crisis in Europe is sending oil prices back to where they were four months ago.
Oil prices fell more than 4 percent Wednesday on worries that a financial crisis in Greece could spread, with European banks getting burned if the country defaults on its debt. That sent the dollar surging against the euro, another negative for oil. And the Europe news comes on the heels of recent U.S. economic weakness and signs of declining demand for oil and gasoline.
Late credit card payments hit pre-recession level
NEW YORK (AP) _ Late payments on credit cards dropped to rates seen before the Great Recession, and defaults are also heading close to normal levels, reports from the nation's top six card issuers say.
A series of regulatory filings on Wednesday show that problem payments for most of the biggest card issuers were down to rates seen before the economic downturn. Most of the banks also reported multiyear lows for defaults, and with late payments dropping, those numbers should continue to improve through the next few months.
American Express Co. had the lowest rate of late payments and defaults. Bank of America, the nation's largest card issuer, had the highest rates.
Ford executive preps Wall Street for lower profits
A top Ford Motor Co. executive said Wednesday that the company's second-quarter pretax profits could fall below the first quarter because of rising raw materials and factory production costs.
Vice President and Controller Robert Shanks also said Ford expects pretax profits to be lower in the second half of the year compared with the first half, and he said the guidance is consistent with what the company said when it released first-quarter earnings in April.
Falling slightly below the first quarter isn't all that bad. Ford reported pretax income of $2.8 billion, or 62 cents per share, and its net income of $2.6 billion after taxes was its best quarterly performance in 13 years.
By The Associated Press
The Dow Jones industrial average fell 178.84 points, or 1.5 percent, to close at 11,897.27. The drop erased all of its 123-point gain from Tuesday and put the average on track for a seventh straight week of losses. All 30 companies in the Dow dropped.
The S&P 500 index fell 22.45, or 1.7 percent, to 1,265.42. The Nasdaq fell 47.26, or 1.8 percent, to 2,631.46.
Benchmark West Texas Intermediate crude plunged $4.56, or 4.6 percent, on Wednesday to settle at $94.81 per barrel on the New York Mercantile Exchange. That's the lowest level since late February, when a rebellion in Libya closed off that country's oil exports. Brent crude, which is used to price many international oil varieties, dropped $6.34, or 5.3 percent, to settle at $113.01 per barrel on the ICE Futures exchange.
In other Nymex trading for July contracts, heating oil fell 14.1 cents, or 4.5 percent, to settle at $2.9848 per gallon and gasoline futures lost 14.11 cents, or 4.6 percent, to settle at $2.9235 per gallon. Natural gas fell less than a penny to settle at $4.577 per 1,000 cubic feet.