US incomes fall for first time in nearly 2 years
WASHINGTON (AP) _ Americans earned less last month, the first decline in nearly two years. With less income, consumers could cut back on spending and weaken an already-fragile economy.
Consumers spent more in August, but their pace slowed from the previous month. Most of the increase went to pay higher prices for food and gas. When adjusted for inflation, spending was flat.
Many people tapped their savings to cover the steeper costs. The savings rate fell last month to its lowest level since December 2009.
The decline in income offered "more evidence that households are in quite a bind," said Paul Dales, senior U.S. economist at Capital Economics.
Consumer spending rose 0.2 percent last month, after growing 0.7 percent in July, the Commerce Department said Friday. Incomes fell 0.1 percent, which was the first decline since October 2009.
A summer many investors would rather forget
NEW YORK (AP) _ It was a stomach-churning summer that most investors would like to forget.
The United States lost its top-of-the-line credit rating for the first time. The financial system of Europe seemed ready to collapse. Money managers sifted through data for signs that the economy was about to slide into a new recession.
In the financial markets, the result was the most volatile three months since the depths of the credit crisis in 2008 and 2009. Investors had a hair trigger: On four straight days in early August, the Dow Jones industrial average swung more than 400 points.
As much as investors might like to put the summer of swings behind them, analysts say they should brace for more.
Even if the next corporate earnings season, in October, shows that companies are still making money, it may not be enough to calm the markets until the bigger questions about Europe are answered.
Europe's debt problems are "going to continue to overshadow everything else in the market until we have a resolution," said Stephen Auth, chief investment officer at Federated Investors.
SEC report cites flaws at credit rating agencies
WASHINGTON (AP) _ U.S. securities regulators say their first annual review of the nation's credit rating agencies finds the companies aren't doing enough to protect their own financial integrity.
The Securities and Exchange Commission report released Friday was mandated by the sweeping financial industry reforms passed last year.
Regulators examined 10 credit rating agencies, including the three largest: Standard & Poor's, Moody's and Fitch.
The report didn't specifically identify which of the credit rating agencies suffered the most troubling weaknesses.
But it chastised the 10 agencies for a series of problems, including inadequate controls over employee conflicts of interest. Regulators also found the companies sometimes didn't even follow their own procedures.
Bank of America website problems continue
NEW YORK (AP) _ Bank of America's homepage and online banking service were experiencing problems Friday, a day after the company said it would start charging a $5 monthly fee for customers who make debit card purchases.
A message on the bank's homepage said that page was temporarily unavailable, despite earlier assurances from the bank that the site had been fully restored.
Some customers who tried to sign onto their accounts were greeted with the message that the site was "operating slower than usual" and that the bank was working to restore service.
AT&T wants Sprint suit over T-Mobile deal quashed
NEW YORK (AP) _ AT&T Inc. on Friday asked a court to eject rival Sprint Nextel Corp. from the process that looks at whether AT&T should be allowed to buy T-Mobile USA.
Sprint, the nation's third-largest cellphone company, and a smaller phone company, C Spire Wireless (known as Cellular South until last Monday), both want to be parallel participants in the Justice Department's suit against AT&T's acquisition on antitrust grounds. Participating would give them a chance to affect the proceedings, even if the Justice Department is the most important objector to the deal.
AT&T filed a motion Friday to have the complaints by the two phone companies dismissed, saying Sprint and C Spire are speaking in their own interests, not the public's.
Sprint said AT&T's motion is without merit, and it will respond next week.
Eurozone inflation jumps to 3 percent in September
FRANKFURT, Germany (AP) _ Inflation jumped to a startling 3.0 percent in September in the 17 countries that use the euro, a surprise increase that makes it less likely the European Central Bank will cut interest rates next week to head off a possible recession.
The rate reported Friday from the European Union's statistics agency was the highest since October 2008 and represented a big increase from August's 2.5 percent. The scale of the rise was unexpected.
The ECB, the chief monetary authority for the euro countries, has come under pressure to cut interest rates soon to ward off mounting signs of recession in the eurozone economy, is slowing because of a waning global recovery and ongoing concerns surrounding Europe's debt crisis.
Full Tilt Poker: French tycoon Tapie agreed to buy
LAS VEGAS (AP) _ Troubled online gambling operator Full Tilt Poker said Friday that French business tycoon Bernard Tapie has agreed to buy the company and its assets despite its legal troubles in the United States and the revocation of its gambling license.
Full Tilt said in a news release that Tapie _ a former government minister, sports tycoon and actor _ has agreed to the sale on condition that the company settle its legal troubles favorably. Company executives are facing federal charges of money laundering and fraud to run a gambling business in defiance of a 2006 law that prohibits online poker operations in the U.S.
The site attributed its announcement to Laurent Tapie, managing director of Groupe Bernard Tapie. Laurent Tapie said the group signed an exclusive agreement with Full Tilt's board for the sale, according to the statement.
Vanguard expands index approach at select funds
BOSTON (AP) _ Vanguard on Friday announced strategic and management changes at six of its mutual funds.
Five mutual funds will begin to exclusively employ a low-cost index investing approach, rather than relying partly on professional managers to guide investment selection.
In addition, Vanguard is replacing an outside manager at another fund in favor of a multi-manager approach.
Vanguard is the nation's largest mutual fund company, with $1.6 trillion in U.S. fund assets in its lineup of more than 170 funds.
SEC watchdog finds no merit to Cuban's claims
WASHINGTON (AP) _ A watchdog report says Dallas Mavericks owner Mark Cuban has no grounds to claim that Securities and Exchange Commission attorneys engaged in misconduct in an insider trading case against him.
The SEC's inspector general's office says in a report issued Friday there wasn't enough evidence to support Cuban's claims. They include allegations that agency attorneys notified him of possible civil charges before their investigation was complete.
The SEC filed charges against him in November 2008, accusing him of avoiding a $750,000 loss in 2004 by selling shares of Internet search company Mamma.com after receiving confidential information about a private stock offering.
Cuban has fought the SEC charges and sued the commission in May 2009. Last September, a federal appeals court revived the SEC's lawsuit against the billionaire.
By The Associated Press(equals)
The Dow Jones industrial average dropped 240.60 points, or 2.2 percent, to 10,913.38. The broader S&P 500 index shed 28.98, or 2.5 percent, to 1,131.42. The Nasdaq composite index fell 65.36, or 2.6 percent, to 2,415.40.
Benchmark crude dropped $2.94, or 3.6 percent, to end the day at $79.20 per barrel in New York. Brent crude, used to price many international kinds of oil, lost $1.19 to finish at $102.76 in London.
In other energy trading, heating oil fell 4.73 cents to finish at $2.7793 per gallon and gasoline futures dropped 2.05 cents to end at $2.5381 per gallon. Natural gas lost 8.1 cents to end the day at $3.666 per 1,000 cubic feet.