Central banks move to stabilize financial system
FRANKFURT, Germany (AP) _ The central banks of the wealthiest countries, trying to prevent a debt crisis in Europe from exploding into a global panic, swept in Wednesday to shore up the world financial system by making it easier for banks to borrow U.S. dollars.
Stock markets around the world roared their approval. The Dow Jones industrial average rose almost 500 points, its best day in two and a half years. Stocks climbed 5 percent in Germany and more than 4 percent in France.
The action appeared to be the most extraordinary coordinated effort by the central banks since they cut interest rates together in October 2008, at the depth of the financial crisis.
While it should ease borrowing for banks, it does little to solve the underlying problem of mountains of government debt in Europe, leaving markets still waiting for a permanent fix. European leaders gather next week for a summit on the debt crisis.
Move by central banks exhilarates Wall Street
A move by the world's central banks to lower the cost of borrowing exhilarated investors Wednesday, sending the Dow Jones industrial average soaring 490 points and easing fears of a global credit crisis similar to the one that followed the 2008 collapse of Lehman Brothers.
It was the Dow's biggest gain since March 2009.
Large U.S. banks were among the top performers, with their shares jumping as much as 7 percent. Markets in Europe surged, too, with Germany's DAX index climbing 5 percent.
Europe defers major debt decisions for 10 days
BRUSSELS (AP) _ European finance ministers deferred action on the outlines of a plan to shore up the euro Wednesday, delaying the big decisions until their bosses meet next week.
Meetings Tuesday and Wednesday yielded nothing concrete about what will emerge when EU leaders meet Dec. 9. There's growing speculation that Europe is readying a plan to tie the 17 countries that use the euro closer together with stricter budgetary rules. That, analysts said, could allow the European Central Bank to take a more central role in the crisis _ seen as crucial to solving the debt crisis that's already seen three countries bailed out.
Markets appear to be giving Europe the benefit of the doubt, especially after the world's leading central banks said jointly they would make it easier for banks to get hold of the dollars they need.
Home market being held back by wary first-timers
WASHINGTON (AP) _ This should be a great time to buy a first home. Prices have sunk to 2002 levels. Sellers are waiting anxiously as homes languish on the market. Mortgage rates have never been lower.
Yet the most likely first-time home owners_ young professionals and couples starting families _ won't buy these days. Or they can't. Or they already did, during the housing boom. And their absence helps explain why the housing industry is still depressed.
The obstacles range from higher down payments to heavy debt from credit cards and student loans. Even many of those who could afford to buy no longer see it as a wise investment. Prices have sunk 15 percent in three years.
GOP: Offsetting cuts must cover payroll tax relief
WASHINGTON (AP) _ Republican congressional leaders stressed a willingness Wednesday to extend a Social Security payroll tax cut due to expire at the end of the year, setting up a year-end clash with Democrats over how to pay for a provision at the heart of President Barack Obama's jobs program.
House Speaker John Boehner said flatly that any tax cut extension will be offset by cuts elsewhere in the budget to avoid raising federal deficits. Numerous Republican officials noted that Obama had said the same thing was true of the plan he unveiled in a nationally televised speech to Congress in September.
The events in Congress, coupled with Obama's fresh appeal for renewal of the payroll tax cut while speaking in Scranton, Pa., indicated that leaders in both parties want to seek a compromise less than a week after Congress' high-profile super-committee failed to find common ground on a plan to reduce deficits.
Fed survey: Most areas see slow to moderate growth
WASHINGTON (AP) _ The economy expanded at a slow-to-moderate pace over the past two months in most areas of the country, but overall hiring was weak, according to a Federal Reserve survey released Wednesday.
Modest improvement in all but one of the Fed's 12 banking districts suggests that the economy is growing but barely enough to keep the unemployment rate from rising. And the debt crisis in Europe could slow such growth, especially if that region falls into a recession.
Stronger consumer spending, tourism and manufacturing drove the growth. The one exception was the St. Louis district, where conditions deteriorated.
Hiring was weak in most areas. And businesses in six of the Fed regions said they had a hard time finding qualified workers for those jobs that were open, particularly for highly skilled manufacturing and tech positions.
Berkshire paying $150 million for Omaha newspaper company
OMAHA, Neb. (AP) _ Warren Buffett's Berkshire Hathaway said Wednesday that it is buying the Omaha World-Herald Co. and expanding the firm's newspaper holdings despite Buffett's misgivings about the industry.
Buffett told the World-Herald that Berkshire agreed to pay $150 million cash and assume $50 million in debt to acquire the newspaper he's been reading since he was a child.
The deal must be approved by the Omaha World-Herald's employee owners and other shareholders and also includes daily newspapers that the company owns in Council Bluffs, Iowa, and Grand Island, York, Kearney, North Platte and Scottsbluff in Nebraska.
Buffett did not immediately respond to an interview request Wednesday. Berkshire's chairman and chief executive previously has said he would be unlikely to add to Berkshire's newspaper investments because of the industry's dwindling returns. Berkshire owns the Buffalo News and it has a sizable investment in the Washington Post Co.
Buffett told Berkshire shareholders two years ago that most newspapers face the possibility of unending losses because the industry has lost its essential nature.
Machinists reach tentative deal with Boeing
WASHINGTON (AP) _ A contentious labor dispute between the government and Boeing Co. that spawned a national political fight likely will be settled after the company and the Machinists union announced Wednesday that they'd reached a tentative deal on a new four-year collective bargaining agreement.
It was not immediately clear what, if any, impact the new agreement would have on a Boeing plant in South Carolina, where the company opened a new production line for its 787 airplane.
The National Labor Relations Board filed a lawsuit earlier this year alleging that Boeing violated labor laws by opening the South Carolina line. The agency claimed that Boeing was punishing Washington state workers for past strikes and said the company should return the work to Washington. Boeing has vigorously denied the charges, claiming it opened the South Carolina plant for valid economic reasons.
The agreement would call for a different aircraft _ the 737 Max _ to be built at union facilities in Renton, Wash., said Tom Wroblewski, president of Machinists Union District 751.
Productivity up in summer while labor costs fell
WASHINGTON (AP) _ U.S. workers increased their productivity over the summer by the most in a year and a half but the gain was smaller than initially thought.
A more productive and less-costly workforce can boost corporate profits. But unless companies see more demand, they're unlikely to step up hiring.
Productivity rose at an annual rate of 2.3 percent in the July-September quarter, the Labor Department said. That was slower than the 3.1 percent the government estimated a month ago. Labor costs fell at a 2.5 percent rate, a slightly larger decline than the 2.4 percent drop first estimated.
The downward revision reflected slower economic growth in the third quarter. The government said total output grew at an annual rate of 2 percent, less than the 2.5 percent initially estimated.
By The Associated Press(equals)
The Dow Jones industrial average rose 490 points, or 4.2 percent, to close at 12,045. The Standard & Poor's 500 closed up 52 points, or 4.3 percent, at 1,247. The Nasdaq composite index closed up 105 points, or 4.2 percent, at 2,620.
Benchmark crude rose 57 cents to finish at $100.36 per barrel in New York. Brent crude, used to price many foreign kinds of oil, rose 12 cents to end at $109.98 per barrel in London.
In other energy trading, heating oil was virtually unchanged to end at $3.0214 per gallon, and gasoline futures rose 2.86 cents to finish at $2.5677 per gallon. Natural gas lost 8.3 cents to end at $3.550 per 1,000 cubic feet.