Stocks on long losing streak as economy weakens
The stock market is on its longest losing streak since the financial meltdown of 2008, confronted almost every day by fresh evidence that the economy is in serious trouble again.
The Dow Jones industrials declined nearly 266 points Tuesday, their worst day in more than two months, and closed below 12,000 for the first time since June 24. It was the eighth consecutive daily drop for the Dow and seventh for the Standard & Poor's 500 index, in both cases the longest losing streak since October 2008.
Investors sold all day after a report that the economy, which is barely growing and straining to produce jobs, is getting almost no help from consumer spending. Americans saved more in June and spent less for the first time in almost two years.
Debt is a done deal, but peace truce already fades
WASHINGTON (AP) _ With scant time to spare, President Barack Obama signed legislation Tuesday to avoid an unprecedented national default that he said would have devastated the U.S. economy. But the truce with Republicans that defused the crisis seemed to be fading already.
The compromise deal to persuade GOP lawmakers to raise the federal debt limit _ U.S. borrowing was to collide with it at midnight _ will cut federal spending by $2.1 trillion or more over the next decade. But Obama immediately challenged Republicans to accept higher taxes on the wealthy in a second round of deficit cuts this fall. They adamantly refused to accept that idea during the past months' dispute.
A stern-faced Obama said at the White House that action to raise the debt limit had been essential but more _ and different _ steps were badly needed.
Americans cut spending for first time in 20 months
WASHINGTON (AP) _ Americans cut their spending in June for the first time in nearly two years after seeing their incomes grow by the smallest amount in nine months. The latest data offered a troubling sign for an economy that is adding few jobs and barely growing.
Consumer spending dropped 0.2 percent in June, the Commerce Department said Tuesday. It was the first decline since September 2009.
Some of the decline was the result of food and energy prices moderating after sharp increases earlier this year. Still, consumers cut back on big-ticket items, such as cars and appliances, which help drive growth.
Incomes rose 0.1 percent, the smallest gain since September. Many people are also pocketing more of their paychecks. The personal savings rate rose to 5.4 percent of after-tax incomes, the highest level since August 2010.
Europe wary of creation of `mega exchange'
BRUSSELS (AP) _ In the U.S., the planned takeover of NYSE Euronext by Germany's Deutsche Boerse made waves because it means ceding the storied trading floor on 11 Wall Street to foreign control.
But in Europe, tradition has almost no role to play in reviews of the deal. Regulators are focused instead on how to handle a new company that would be the world's largest exchange and control vast but rather obscure parts of the financial system.
The deal is shining a spotlight on the sector's transforming business model. Big exchanges are no longer just the venues for trading stocks and bonds, but have turned into one-stop conglomerates that clear and settle trades in derivatives, source and sell their own data and license the use of coveted indexes like DAX or Stoxx
US auto industry uneasy after weak July sales
DETROIT (AP) _ Auto sales rose only slightly in July, adding to the industry's concerns that Americans are pulling back on car buying.
With the economy weak, popular cars in short supply and dealers offering very few discounts, carmakers endured a third straight month of disappointing sales. And it's raising doubts about whether sales can grow for the rest of the year.
Just over 1 million new cars and trucks were sold in the month, up 1 percent from last July and flat with June.
Sales started strong this year but have slowed as the economy's growth faltered and Japan's earthquake left Toyota and Honda dealers short of popular models sold in the U.S.
Pfizer 2Q net up 5 pct. on lower charges, taxes
Generic competition cut deeper into drugmaker Pfizer Inc.'s sales in the second quarter _ with the U.S. patent expiration for its cholesterol fighter Lipitor, the world's top-selling drug, just five months away.
The world's biggest drugmaker eked out a 5 percent profit increase, thanks to lower taxes and reduced restructuring charges from its 2009 purchase of Wyeth. But its underlying profit, excluding one-time items, declined 4 percent from a year ago, to $4.73 billion, or 60 cents a share. Analysts surveyed by FactSet were expecting 59 cents.
Pfizer shares dropped nearly 5 percent.
FAA shutdown to continue as Congress leaves
WASHINGTON (AP) _ A partisan stalemate that has partially shut down the Federal Aviation Administration will continue into September, stopping airport construction projects and depriving federal coffers of potentially more than $1 billion in uncollected ticket taxes, after congressional attempts to reach deal fell through on Tuesday.
The FAA's operating authority expired on July 23, as well as the authority of airlines to collect about $30 million a day in ticket taxes, meaning the government will be unable to collect an estimated $1.2 billion in taxes if the shutdown continues until lawmakers return to work next month.
Nearly 4,000 FAA employees have been laid off and stop work orders issues for more than 200 construction projects.
Air traffic controllers have remained on the job, and Transportation Secretary Ray LaHood has vowed that safety won't be compromised and travelers won't be inconvenienced.
Toyota ekes out quarterly profit, raises forecast
TOKYO (AP) _ Toyota eked out a 1.1 billion yen ($14 million) quarterly profit and raised its annual earnings forecast Tuesday as it mounts a comeback from the devastation of the earthquake and tsunami in northeastern Japan.
Still, April-June profit for Toyota Motor Corp. was a fraction of the 190.4 billion yen it earned a year earlier. Quarterly sales crashed 29 percent to 3.44 trillion yen because Toyota made far fewer cars after the March 11 disasters destroyed parts suppliers in the country's industrial northeast.
Toyota cited how auto sales had held up in Asian nations in raising earnings and sales forecast for the fiscal year through March 2012.
But that's unlikely to be enough to avert losing its crown as the world's biggest automaker by vehicle sales to General Motors Co.
Coach net income rises 4 percent in 4Q
NEW YORK (AP) _ Coach Inc. said Tuesday that its fourth-quarter net income rose 4 percent, helped by people buying more expensive handbags in North America.
Results beat expectations, but investors were expecting even better results, and shares dropped more than 6 percent.
Coach's results show that the luxury sector continues to recover more quickly than other parts of the retail industry, which is wrestling with consumer fears about unemployment and stagnant home prices.
Google strikes deal to acquire daily deal service
SAN FRANCISCO (AP) _ Google Inc.'s latest deal aims to help people find the best daily deals on the Web.
In its latest acquisition of talent and technology, Google has bought Dealmap. It's a 15-month-old startup that compiles discount offers from local merchants scattered in markets across the nation.
Google is trying to become a bigger player in the rapidly growing specialty of distributing daily bargains from local merchants around the country. Groupon and LivingSocial have emerged as early leaders, but hundreds of competitors are now vying for a share. Google, as the owner of the Internet's most popular search engine and most lucrative ad network, looms as one of the most imposing entrants.
By The Associated Press(equals)
The Standard & Poor's 500 closed down 33 points, or 2.6 percent, to 1,254. The Dow Jones industrial average lost 266, or 2.2 percent, to 11,867. The Nasdaq fell 75, or 2.8 percent, to 2,669.
Benchmark West Texas Intermediate crude for September delivery lost $1.10 to settle at $93.79 per barrel on the New York Mercantile Exchange. Brent crude, which is used to price many international oil varieties, fell 35 cents to settle at $116.46 per barrel on the ICE Futures exchange in London.
In other Nymex trading for September contracts, heating oil fell less than a penny to settle at $3.0916 per gallon and gasoline futures lost 1.67 cents to settle at $3.0373 per gallon. Natural gas gave up 3.3 cents to settle at $4.155 per 1,000 cubic feet.