White House threatens to veto Boehner's House plan
WASHINGTON (AP) _ The White House threatened on Tuesday to veto emergency House legislation that aims to avert a threatened national default, a pre-emptive strike issued as Republican Speaker John Boehner labored to line up enough votes in his own party to pass the measure.
Boehner faced criticism from some conservatives in advance of an expected vote on Wednesday.
The bill would raise the debt limit by $1 trillion while making cuts to federal spending of $1.2 trillion _ reductions that conservatives say aren't enough.
The measure also would establish a committee of lawmakers to recommend additional budget savings of $1.8 trillion, which would trigger an additional $1.6 trillion increase in the debt limit.
The White House objects to the requirement for a second vote before the 2012 elections.
Majority Leader Harry Reid said the measure stood no chance of passing the Senate even if it cleared the House. He pronounced it "dead on arrival."
Washington and the nation are staring down an Aug. 2 deadline to raise the debt limit or face national default.
Consumer confidence rises in July
NEW YORK (AP) _ Two years into the recovery, Americans' confidence in the economy continues its rollercoaster ride.
As their short-term outlook on jobs and income eased somewhat amid a mix of optimistic and bad economic news, U.S. consumers' confidence rose slightly to 59.5 in July, according to a survey released Tuesday by a private research group.
That's up from a revised 57.6 in June __ which marked a seven-month low in the measure __ but still well below the reading of 90 that signals a healthy economy on the Conference Board's Consumer Confidence Index. It hasn't approached that level since the recession began in December 2007.
Spring buying gives housing market temporary lift
WASHINGTON (AP) _ Home prices rose for the second straight month in most major U.S. cities and are stabilizing after years of declines. But analysts say the trend in prices hardly signals a rebound for the troubled housing market.
A flurry of spring buyers is helping boost sales. At the same time, millions of foreclosures are in limbo, awaiting the results of a government investigation into improper practices by mortgage lenders. Once that probe is complete, banks will resume seizing homes and prices will likely fall again.
The Standard & Poor's/Case-Shiller home-price index released Tuesday showed that prices rose in May in 16 of the 20 cities tracked.
Boston, Minneapolis and Washington posted the biggest monthly increases. Prices in Detroit, Las Vegas and Tampa, Fla. _ three cities hit hardest by the housing crisis _ fell to their lowest points since the recession began.
New-home sales fell 1 percent in June
WASHINGTON (AP) _ Fewer people bought new homes in June, evidence that the housing market remains weak.
Sales of new homes fell 1 percent last month to an annual rate of 312,000, the Commerce Department said Tuesday. That's less than half the 700,000 that economists say is typical in healthy markets.
Last year was the worst for new-home sales on records dating back a half century. Through the first six months of this year, sales are lagging behind last year's totals.
Housing remains the weakest part of the U.S. economy. High unemployment, larger down payment requirements and tougher lending standards are preventing many people from buying homes. And some potential buyers who can clear those hurdles are holding off, worried that home prices have yet to bottom out.
Soros closing hedge fund to outside investors
BOSTON (AP) _ Billionaire investor George Soros is closing his nearly $26 billion hedge fund to outside investors so that it will be managed solely for the Soros family, according to a letter obtained by The Associated Press on Tuesday.
The letter, sent to investors in the Quantum Endowment Fund, says Soros Fund Management LLC is making the change because of new rules that will expand hedge fund disclosure requirements.
About $750 million of the total $25.5 billion in the fund is invested for outsiders, rather than the family, according to a person familiar with the matter. The person declined to be identified because he was not authorized to disclose details about the private company.
The $750 million is expected to be returned to outside investors by year's end.
McDonald's: Apple slices in every Happy Meal
NEW YORK (AP) _ An apple a day may keep the doctor away. But when you put it in a Happy Meal, it might help keep regulators at bay too.
McDonald's on Tuesday said that it would add apple slices and reduce the portion of French fries in its children's meal boxes beginning this fall, effectively taking away consumers' current choice between either having apples with caramel dip or fries as a Happy Meal side.
The move by McDonald's, which has become a leader in moving from just burgers and fries to more nutritious fare like oatmeal and salads, comes as fast food chains face intense scrutiny from health officials and others who blame the industry for childhood obesity and other health-related problems. Some municipalities, including San Francisco, have even banned fast food restaurants from selling kids' meals with toys.
Ford, Chrysler take second-quarter hit to position for growth
DEARBORN, Mich. (AP) _ Ford's ambitious plans to grow in Asia took a toll on its second-quarter profit, with higher costs to design and sell cars offsetting rising sales.
The company's net income fell 8 percent to $2.4 billion for the April-June period. Ford blamed higher prices for steel and other commodities, but also said that after years of restructuring, the company is strong enough to spend heavily on future growth. Ford spent $400 million more on engineering and advertising new vehicles than it did a year earlier.
Rival Chrysler Group also took a hit, reporting a loss of $370 million in the quarter. Like Ford, Chrysler said the loss was a sign of a healthier balance sheet. Without a $551 million accounting charge for refinancing bailout debts to the U.S. and Canadian governments, Chrysler would have earned $181 million.
UPS sticks with its outlook as second-quarter earnings rise
NEW YORK (AP) _ UPS said on Tuesday that the sluggish U.S. economy will continue to impact its results this year, but it will grow earnings by raising prices and improving volume overseas.
In a conference call with analysts, CEO Scott Davis said the global economy is still recovering at an uneven pace, with strength in China and Europe outpacing other areas. And while fuel prices have come down and production slowdowns in Japan because of the earthquake and tsunami in March appear to be clearing up, high unemployment and weak consumer confidence continue. The continuing debate about the U.S. debt ceiling adds to the uncertainty.
UPS is often viewed as a bellwether of the U.S. economy because it handles shipments for a wide range of businesses, and talk of ongoing weakness in its core domestic market unnerved investors. Shares fell $2.46, or 3.3 percent, to $71.59 Tuesday after losing as much as 6 percent earlier in the session.
Amazon second-quarter profit falls on rising expenses
SAN FRANCISCO (AP) _ Amazon.com Inc.'s second-quarter revenue jumped 51 percent, helped by higher merchandise sales, while its profit fell as the online retailer's operating expenses rose.
The results, issued late Tuesday, easily beat analyst expectations.
For the quarter that ended June 30, revenue rose to $9.91 billion from $6.57 billion last year. The company's electronics and general merchandise revenue rose 69 percent to $5.89 billion, while sales of books, CDs, DVDs and other media rose 27 percent to $3.66 billion.
But the company's net income declined as Amazon's operating expenses rose 54 percent to $9.71 billion.
By The Associated Press(equals)
The Dow Jones industrial average fell 91.50 points, or 0.7 percent, to 12,501.30. The Standard & Poor's 500 index fell 5.49 points, or 0.4 percent, to 1,331.94. The Nasdaq composite fell 2.84, or 0.1 percent, to 2,839.96.
Benchmark West Texas Intermediate crude for September delivery rose 39 cents to settle at $99.59 on the New York Mercantile Exchange. It reached $100.62 earlier in the day. In London, Brent crude gained 34 cents to settle at $118.28 per barrel on the ICE Futures exchange.
In other Nymex contracts for August, heating oil rose less than a cent to settle at $3.1251 a gallon, gasoline gained 1.68 cents to settle at $3.0985 a gallon and natural gas fell 2.4 cents to settle at $4.331 per 1,000 cubic feet.