Will central banks rescue US, European economies?
WASHINGTON (AP) — The world's top central bankers have said they're willing to rescue the economies of Europe and the United States. This week we'll find out if they are ready to act.
The Federal Reserve wraps up its two-day policy meeting Wednesday. Chairman Ben Bernanke has pledged to act if unemployment stays high. The European Central Bank meets Thursday — a week after ECB President Mario Draghi vowed to "do whatever it takes" to save the European common currency, the euro.
Investors are hoping the Fed and ECB will announce plans to flood markets with cash through large-scale bond purchases. But economists caution that the hopes might be dashed. The Fed might not be in a hurry to act. And investors might be expecting more of Draghi than he can deliver.
Electricity grids fail across half of India
NEW DELHI (AP) — Electric crematoria were snuffed out with bodies inside, New Delhi's Metro shut down and hundreds of coal miners were trapped underground for a time after three Indian electric grids collapsed Tuesday, cutting power to 620 million people in the world's biggest blackout.
While Indians were furious and embarrassed, many took the crisis in stride, inured by the constant — though far less widespread — outages triggered by the huge electricity deficit stymieing the development of the country.
Hospitals, factories and the airports switched automatically to their diesel generators during the hours-long cut across half of India. Many homes relied on backup systems powered by truck batteries. And hundreds of millions of India's poorest had no electricity to lose.
GM's ads aren't getting the job done
DETROIT (AP) — General Motors' ads just aren't getting the job done.
Ever since the company left bankruptcy three years ago, the ads haven't boosted sales much. The company's biggest campaign, "Chevy Runs Deep," has failed to generate buzz. And now, GM has forced out its star marketing chief just as it launches two key vehicles.
The lackluster ads and loss of marketing head Joel Ewanick raise doubts about GM's ability to improve sales longer term. Experts say that even though it's making better cars and trucks, advertising has failed to get the message across. Despite spending upwards of $4 billion a year on marketing, GM hasn't been able to dent the perception that other brands are better.
Gas hits $3.50 a gallon after 5 percent jump in July
Gasoline is at $3.50 per gallon for the first time this summer after a sharp run-up in July.
The price of gas gained 17 cents per gallon, or 5.1 percent this month. It was the first monthly increase since March. The nationwide average was last at $3.50 per gallon on June 19.
Drivers had enjoyed a long stretch of declining prices at the pump as oil fell from more than $100 per barrel in March to below $78 by late June. The average price at the pump fell by 60 cents per gallon in about three months. But oil rose 13 percent from its June low on renewed concerns of supply disruptions in the Middle East and the usual increase in demand in the warmer months. Oil ended July at $88.05 per barrel.
US consumer spending flat, income up 0.5 percent
WASHINGTON (AP) — Americans spent no more in June than they did in May, even though their income grew at the fastest pace in three months.
The lack of growth in spending follows a decline in the previous month, suggesting consumers are staying cautious with their money as they economy weakens.
Income rose 0.5 percent, the Commerce Department said in its June report on consumer spending and income. That was the biggest gain since March and was driven by a 0.5 percent increase in wages, the largest component of income. After taxes and adjusting for inflation, income grew 0.3 percent.
Home prices rose in all major US cities in May
WASHINGTON (AP) — Home prices rose in May from April in every city tracked by a leading index, a sign that increasing sales and tight inventories are supporting a modest housing recovery.
The Standard & Poor's/Case-Shiller home price index released Tuesday showed increases in all of the 20 cities tracked. And a measure of national prices rose 2.2 percent from April to May, the second increase after seven months of flat or declining readings.
Chicago, Atlanta and San Francisco posted the biggest monthly increases. Detroit, San Diego and Charlotte, N.C., posted the smallest gains.
Government bars Fannie-Freddie from reducing principal
WASHINGTON (AP) — A federal regulator is standing by its decision to bar Fannie Mae and Freddie Mac from reducing principal for borrowers at risk of foreclosure, resisting pressure from the Obama administration.
The Federal Housing Finance Agency announced the decision Tuesday after months of considering the option.
The agency's acting director, Edward DeMarco, has long opposed allowing Fannie and Freddie to offer principal reduction.
DeMarco said an extensive analysis by the FHFA found the potential benefit was too small compared with the costs and risks. The risks include as many as 19,000 borrowers strategically defaulting on their loans, according to the analysis.
BP posts Q2 loss as output, oil prices fall
LONDON (AP) — BP on Tuesday reported a loss of $1.4 billion for the second quarter due to lower prices and production and as it wrote down the value of some assets, including shale gas in the U.S.
BP PLC said its net loss, which was bigger than the market consensus, compared with a net profit of $5.7 billion a year earlier. Revenue was down 9 percent at $95 billion. The company also made an additional provision of $847 million for the Gulf of Mexico oil rig disaster and cleanup, taking the total provision to just over $38 billion.
UBS 2Q hit by Facebook IPO loss
GENEVA (AP) — Shares in UBS plunged after the Swiss banking giant posted a worse-than-expected 58 percent fall in second-quarter profits Tuesday due to losses from the Facebook stock listing and a downturn at its investment banking division.
Switzerland's largest bank said the drop in profits to 425 million francs ($434.16 million) from 1.02 billion Swiss francs ($1.2 billion) a year earlier reflects "challenging conditions marked by increased volatility and greater client caution."
The Zurich-based bank missed analysts' estimates for more than 1 billion francs in profit, and its shares fell nearly 6 percent on Tuesday.
Pfizer 2Q net income rises 25 percent on lower costs
Pfizer Inc. posted a 25 percent jump in second-quarter net income Tuesday due to aggressive cost cutting and lower restructuring and other charges, shaking off the expected plunge in revenue from generic competition to its cholesterol fighter Lipitor, the world's top-selling drug.
The world's biggest drugmaker easily beat analysts' expectations, and its shares hit a new 52-week high.
The maker of Viagra and painkiller Celebrex said net income was $3.25 billion, or 43 cents per share, up from $2.61 billion, or 33 cents per share a year ago.
By The Associated Press(equals)
The Dow Jones industrial average lost 64.33 points to close at 13,008.68. The Standard & Poor's 500 edged down 5.98 points to 1,379.32, and the Nasdaq composite lost 6.32 points to 2,939.52.
Benchmark U.S. crude fell $1.72, or about 2 percent, to end the day at $88.06 per barrel in New York, while Brent crude lost $1.28 to finish at $104.92 per barrel in London.
In other futures trading, heating oil lost 3.74 cents to finish at $2.8417 per gallon, while wholesale gasoline lost 4.41 cents to end at $2.7743 per gallon. Natural gas gave up less than a penny to finish at $3.2090 per 1,000 cubic feet.