Stock market has biggest drop this year
NEW YORK (AP) — A steep fall in commodity prices helped push down the stock market on Monday for its worst day this year, as worries about the global economy resurfaced.
The Dow Jones industrial average dropped 265 points, its biggest loss in five months.
The first trigger came from China. News that the world's second-largest economy slowed unexpectedly pummeled oil, copper and other commodities. In the stock market, companies that produce oil and mine for metals fared the worst. A slowdown in China, a huge importer of basic materials like copper, could limit profits at those companies.
The shine comes off the gold market
NEW YORK (AP) — The shine has come off the gold market.
The price of gold logged its biggest one-day decline in more than 30 years on Monday, tumbling $140.30 dollars, or 9 percent, to $1,361. Gold has been gradually falling since hitting a peak of $1,900 in August 2011. On Monday the sell-off turned into a rout.
Gold had climbed every year since 2001, as investors bought the precious metal as protection against inflation and as a so-called safe haven. Gold hit its peak as lawmakers wrangled over raising the debt ceiling in the summer of 2011 and threatened to push the U.S. into default.
Dish Network offering to buy Sprint in $25.5 billion deal
NEW YORK (AP) — Dish Network Corp. is trying to snag U.S. wireless carrier Sprint Nextel from a Japanese suitor. Dish offered $25.5 billion in cash and stock on Monday for Sprint, which Dish says beats an offer from Japan's Softbank Corp.
If the Dish deal goes through, it would create a unique combination of pay-TV and wireless operator. Dish hopes to lure customers with the promise of TV service that can go with them, out of the house and on their phones. It has already broken ranks with the pay-TV industry by providing a set-top box that can send recorded shows to iPads.
J.C. Penney job No. 1: Calming vendors
NEW YORK (AP) — As J.C. Penney Co. burns through its cash after a disastrous turnaround plan and taps almost half of its credit line, the struggling department store chain must calm investors and restore confidence among several hundred suppliers whose constant flow of merchandise must continue if the retailer is to survive.
Penney announced Monday that it will draw $850 million from its $1.85 billion revolving credit line to pay for replenishing inventory particularly for its overhauled home area. Some analysts say the move shows that the Plano, Texas-based company is burning through cash faster than expected. Penney is also looking for alternative sources of funding.
It comes at a critical time. Penney is wrapping up back-to-school orders and starting to order goods for the critical holiday shopping season at the end of the year. Normally retailers order goods well in advance but don't pay for them until about 30 to 60 days until after goods are shipped. If vendors start demanding to be paid in advance, stores face a cash crunch.
GM, Ford to collaborate on new transmissions
DETROIT (AP) — General Motors and Ford are putting aside their longstanding rivalry to work together to develop a new generation of fuel-efficient automatic transmissions.
The companies said Monday that their engineers will jointly design nine- and 10-speed transmissions that will go into many of new cars and trucks.
When transmissions have more gears, engines don't have to work as hard. That saves fuel. As long as the shifting is smooth, most drivers probably don't give much thought to their transmissions.
China's economic growth slows in first quarter
BEIJING (AP) — China's economic growth slowed unexpectedly in the first three months of the year, fueling concern about the strength of its economy.
The world's second-largest economy grew by 7.7 percent over a year earlier, down from the previous quarter's 7.9 percent, the government reported Monday. That fell short of many private-sector forecasts for growth to accelerate slightly to 8 percent.
A recovery still is under way but is "really very soft — very slow and gradual," said Societe Generale economist Wei Yao.
Rising costs weigh on US homebuilder confidence
U.S. homebuilders are concerned that limited land and rising costs for building materials and labor will slow sales in the short term.
Still, their outlook for sales over the next six months climbed to the highest level in more than six years — suggesting the obstacles could be temporary.
The National Association of Home Builders/Wells Fargo builder sentiment index released Monday fell this month to 42 from 44 in March. It was the third decline since January. Measures of customer traffic and current sales conditions both declined from March's reading.
Citigroup execs sound a cautious note
NEW YORK (AP) — Citigroup on Monday announced strong first-quarter results, but executives were more cautious than celebratory.
Though they didn't declare victory, they appeared to have reason to. Citigroup's investment bank advised more companies on mergers and acquisitions. Its retail bank wrote more mortgages, and the company set aside less money for bad loans. Quarterly profit rose 17 percent to $4 billion while revenue climbed 3 percent. The results beat expectations and the bank's stock ended slightly higher amid a broader market sell-off.
CEO Mike Corbat said that Europe's debt problems and slowing growth in parts of Asia can still rattle investors. New regulations, low interest rates and legal and other costs from the financial crisis will weigh on the bank's earnings.
Patenting genes: Justices tackle big health issue
WASHINGTON (AP) — The Supreme Court seemed concerned Monday about the idea of companies patenting human genes in a case that could profoundly reshape the multibillion-dollar biomedical industry and U.S. research in the fight against diseases like breast and ovarian cancer.
Justices argued not only about snipping DNA strands but also about chewing the leaves of Amazonian jungle plants, the shape of baseball bats and the ingredients of chocolate chip cookies as they tried to figure out whether companies deserve government protection — and profits — for their work with human genes.
The ability to claim control of genetic information that is found inside every human being could hang on the nine justices' decision later this summer, a ruling that could affect the intersection of science and the law for years to come.
Thermo Fisher to buy Life Technologies for $13.6 billion
Thermo Fisher Scientific Inc. plans to pay about $13.6 billion for Life Technologies Corp. in a deal that will position the scientific instrument maker to benefit from the expected growth of personalized medicine, which uses genetic analysis to tailor treatments to patients.
The Waltham, Mass., company said Monday that it agreed to pay $76 in cash for each share of Life Technologies, which is based in Carlsbad, Calif.
Life Technologies offers more than 50,000 products and delves into genetic analysis and engineering, stem cell therapies and chemicals used in forensics and food safety. Its next-generation DNA sequencing, currently used in research labs, is designed to sequence human genomes in one day for $1,000, which is faster and cheaper than previous forms of analysis.
By The Associated Press(equals)
The Dow Jones industrial average dropped 265.86 points to close at 14,599.20, a drop of 1.8 percent. The Standard & Poor's 500 index slumped 36.49 points to 1,552.36, a loss of 2.3 percent. The Nasdaq composite fell 78.46 points, or 2.4 percent, to 3,216.49.
West Texas Intermediate, the benchmark crude in the U.S., dropped $2.58, or 2.8 percent, to finish at $88.71 a barrel on the New York Mercantile Exchange. Brent crude, which is used to price oil used by many U.S. refiners to make gasoline, fell $2.41 to end at $100.63 a barrel on the ICE Futures exchange in London.
Wholesale gasoline fell 4 cents to finish at $2.76 a gallon. Heating oil dropped 4 cents to end at $2.83 a gallon. Natural gas fell 9 cents to finish at $4.14 per 1,000 cubic feet.