Bank of America will eliminate 30,000 jobs
NEW YORK (AP) _ Bank of America is slashing 30,000 jobs as part of an effort to reverse a crisis of confidence among investors. It's the largest single job reduction by a U.S. company this year.
What CEO Brian Moynihan is trying to do is nothing less than save the nation's largest bank. Investors have cut the bank's market value by half this year. The bank is facing huge liabilities over soured mortgage investments and concerns over whether it has enough capital to withstand more financial shocks.
The cuts, which affect Bank of America's consumer businesses, represent 10 percent of the Charlotte, N.C., bank's work force. The bank said it hopes the cuts and other measures will result in $5 billion in annual savings by 2014. The bank has already cut 6,000 jobs this year. The bank also said it would look for cost savings at its other businesses in a six-month review that will begin next month.
Fear of Greek default hurts markets in US, Europe
LONDON (AP) _ Fear that Greece will default on its debt, perhaps triggering a financial chain reaction that will cause another global recession, hurt European stocks Monday and sent American stocks lower for a time.
The market tension came after a German politician suggested Greek finances are so bad the nation might have to leave the coalition of 17 countries that use the euro as their common currency.
In addition, the German economy minister published an op-ed arguing that an "orderly bankruptcy" of Greece must be an option. Greece has been relying on international bailouts to keep it solvent.
Germany's opinion on the Greek crisis is taken seriously because Germany has the strongest economy in Europe. A spokesman for Chancellor Angela Merkel played down both suggestions, but financial markets were spooked anyway.
Student loan default rates jump
The number of borrowers defaulting on federal student loans has jumped sharply, the latest indication that rising college tuition costs, low graduation rates and poor job prospects are getting more and more students over their heads in debt.
The national two-year cohort default rate rose to 8.8 percent last year, from 7 percent in fiscal 2008, according to figures released Monday by the Department of Education.
Driving the overall increase was an especially sharp increase among students who borrow from the government to attend for-profit colleges.
OPEC cuts oil demand forecast on growth concerns
CAIRO (AP) _ OPEC sharply revised down its forecast for world oil demand for this year and expected consumption would remain weak in 2012, citing on Monday waning economic growth in key industrialized nations and a weak U.S. driving season.
The 12-nation group that supplies about a third of the world's crude oil slashed its global oil demand forecast by 150,000 barrels per day for 2011 and by 40,000 barrels per day for 2012, saying "turbulence in world economic recovery has resulted in considerable uncertainty for demand growth next year."
It also lowered its estimate for crude produced by OPEC nations by about 100,000 barrels per day in 2011.
Smaller corn surplus could push food prices higher
NEW YORK (AP) _ Food prices could rise next year because an unseasonably hot summer likely damaged much of this year's corn crop.
The U.S. Department of Agriculture estimated Monday that a surplus of 672 million bushels of corn will be left over at the end of next summer. The estimated surplus is down from last month's forecast and well below levels that are considered healthy.
This spring, farmers planted the second-largest crop since World War II. But high temperatures stunted the plants.
Central bankers see slowdown but no recession
BASEL, Switzerland (AP) _ The world's leading central bankers said Monday that while the global economy is slowing they do not expect it to enter recession, but stand ready to provide liquidity support to banks in need.
The recoveries in major developed economies are grinding to a halt, raising fears among investors of another recession unless governments and central banks provide new stimulus.
Economists cut growth forecasts for 2011 and 2012
WASHINGTON (AP) _ Confronted with an economy that has decidedly underperformed this year, economists are scaling back their growth forecasts for 2011 and next year.
In their latest forecast, top economists with the National Association for Business Economics predict that the economy will grow 1.7 percent this year _ down from the group's May prediction of 2.8 percent expansion. For 2012, the group is forecasting growth of 2.3 percent, compared with a May forecast of 3.2 percent growth.
The new survey, released Monday, is in line with the outlook of other economists who have marked down growth prospects to reflect an economy that has struggled this year to deal with a spike in gasoline prices, production disruptions stemming from Japan's earthquake, a flare-up of Europe's debt problems and a prolonged debate over America's debt ceiling.
Fired Yahoo CEO backs down, resigns from board
SAN FRANCISCO (AP) _ Carol Bartz has resigned from the Yahoo board of directors that she blasted for firing her as the company's CEO last week.
The resignation reversed a defiant stance that Bartz took in a fiery interview published on Fortune magazine's website on Sept. 8. Bartz said, at the time, that she intended to retain her seat on Yahoo's board even though she considered her fellow directors to be "doofuses."
Bartz, who is 63, resigned from the board Sept. 9, according to an email from board spokesman Charles Sipkins. Yahoo Inc. had previously said that Bartz was obligated to resign after her ouster as CEO.
Yahoo, which is based in Sunnyvale, Calif., has nine members left on its board.
McGraw-Hill sets plan to split into 2 companies
NEW YORK (AP) _ McGraw-Hill Cos. will split into two public companies with one focused on education and the other centered on markets, featuring the Standard & Poor's unit.
The decision, which has been expected, follows a yearlong review of the company's business. Investors have pushed the New York company to boost the company's stock price, which has dropped by more than 40 percent since 2006.
The company's S&P ratings agency has been under fire for its recent downgrade of U.S. debt, as well as several bad calls it made leading up to the financial crisis and economic meltdown that began in 2008. The unit's president stepped down last month.
By The Associated Press(equals)
The Dow Jones industrial average rose 68.99 points, or 0.6 percent, to close at 11,061.12. The S&P 500 index rose 8.04, or 0.7 percent, to 1,162.27. The tech-heavy Nasdaq composite index rose 27.10 points, or 1.1 percent, to 2,495.09.
Brent crude, which is used to price many international oil varieties, fell 52 cents to end at $112.25 a barrel in London. In the U.S., benchmark West Texas Intermediate crude rose 95 cents to finish at $88.19 per barrel in New York.
In other commodities trading, heating oil lost 3.83 cents to end at $2.9475 per gallon while gasoline futures fell 3.28 cents to $2.7382 per gallon. Natural gas fell 3 cents to finish at $3.885 per 1,000 cubic feet.