On Tuesday
January 5, 2010, 5:59 pm EST
Contracts down: Is housing headed for double-dip?
WASHINGTON (AP) -- The number of people preparing to buy a home
fell sharply in November, an unsettling new sign that the housing market may be
headed for a "double-dip" downturn over the winter.
The figures Tuesday came after a similarly discouraging report
on new home sales, illustrating how heavily the housing market depends right
now on government help.
In October, buyers raced to get contracts signed in time to take
advantage of a tax credit for first-time homeowners that was set to expire. It
has since been extended into spring -- and now prospective buyers are taking
their time. The National Association of Realtors said its seasonally adjusted
index of sales contracts fell 16 percent from October to November, ending nine
months of gains. Economists surveyed by Thomson Reuters had expected only a 2
percent drop.
Big carmakers report 2009 sales declines
DETROIT (AP) -- Big automakers are glad to see the end of 2009,
the worst year for U.S. sales in nearly 30 years.
Detroit's three automakers and the top Japanese manufacturers --
Honda Motor Co. Nissan Motor Co., and Toyota Motor Corp. -- all saw sharp
declines last year, but saw momentum going into 2010.
Last year was brutal for most of the industry as credit froze,
the economy and consumer confidence faltered and unemployment rose. U.S. sales
haven't been so bad since 1982.
Sales of smaller, cheaper vehicles, however, helped drive gains.
Hyundai continued its surge with an 8-percent yearly gain, while its low-cost
Kia brand reported 2009 sales gains of nearly 10 percent and a 44-percent gain
in December.
Mixed economic data, higher dollar press stocks
NEW YORK (AP) -- Investors turned cautious on the second trading
day of the year as a pair of economic reports gave mixed signals about how the
recovery was going.
Major stock indexes ended little changed a day after the Dow
Jones industrials soared more than 150 points on upbeat manufacturing reports
in the U.S. and China. Uncertainty over key reports this week on employment and
the service industry also kept buyers at bay.
The Commerce Department reported that factory orders rose by
more than twice what had been expected in November, reflecting demand in the
steel, computer and chemical industries. Meanwhile, the number of buyers who
agreed to purchase previously occupied homes fell sharply in November, an
indication that sales will fall this winter.
Kraft ups Cadbury bid; Buffett opposes share issue
LONDON (AP) -- Kraft Foods Inc.'s hostile bid for Cadbury PLC
grew more contentious Tuesday as Warren Buffett's Berkshire Hathaway sternly
warned against the deal, even as Kraft sweetened its offer.
Kraft plans to sell its North American frozen pizza business,
whose brands include Tombstone and DiGiorno, to Nestle SA for $3.7 billion. It
plans to use the proceeds to raise the cash share of its bid for British candy
maker Cadbury.
Berkshire Hathaway, Kraft's largest shareholder, said later
Tuesday morning that it voted against Kraft's proposal to issue shares to
finance part of the $16.5 billion bid, saying it was worried it gave Kraft a
"blank check" to raise the bid even higher. Buffett previously has said
Kraft's prior offers were adequate for Cadbury.
Netbooks popularity expected to continue in 2010
Small and inexpensive "netbooks" were some of the most
popular computers in the recession, wooing consumers with their portability and
prices that were often below $400. Now with the economy improving, consumers
will be asked to open their wallets to new styles of computers, including some
costing a bit more.
Among the new offerings being unveiled at this week's
International Consumer Electronics Show in Las Vegas: lightweight, medium-sized
laptops meant as a step above netbooks in price and performance. There also
will be at least one "smartbook" -- a tiny computer that combines
elements of netbooks and so-called smart phones.
Pump prices on pace to top 2009 high by weekend
The cost of filling up the car is rising in the wake of soaring
crude and by this weekend, pump prices will race past the highs for all of
2009.
Tracing the ascension of crude, up 14 percent since
mid-December, energy prices across the board are catching up. On Tuesday,
benchmark crude prices closed higher than they had on any day last year.
Huge surpluses have been falling in recent weeks, contributing
to prices already driven higher by the falling dollar.
Crude prices closed up 26 cents at $$81.77 a barrel Tuesday, the
highest settlement price on the New York Mercantile Exchange since Oct. 9,
2008.
Mesa Air files for Ch. 11 bankruptcy protection
ATLANTA (AP) -- In May, Mesa Air Group Inc. warned it would file
for bankruptcy if Delta Air Lines Inc. succeeded in canceling a flying contract
with the regional carrier that operates flights for major airlines. More than
seven months later, despite blocking the move in court, Mesa filed for Chapter
11 anyway on Tuesday, hoping to shed planes it no longer needs.
Mesa's filing is part of broader problems the airline has been
experiencing with its operations as demand for air travel fell over the last
year due to the economic downturn.
Contract carriers like Mesa have traditionally been able to
maneuver through tough economic times because they have guaranteed revenue
through deals with major airlines for whom they feed passengers and handle
connecting flights. But during the recession, Mesa struggled operationally and
faced friction with key partner Delta.
Iceland's president blocks UK, Dutch compensation
REYKJAVIK, Iceland (AP) -- Iceland's president on Tuesday
blocked a bill to pay Britain and the Netherlands $5.7 billion for losses from
the collapse of one of its banks, potentially undermining the crippled nation's
attempts to repair international relations.
Olafur Ragnar Grimsson vetoed the legislation, which was passed
last month by the country's parliament, after receiving a petition signed by a
quarter of Iceland's population of 320,000.
The narrowly passed legislation would have repaid the British
and Dutch governments for the funds they have already paid out to their
citizens who lost money when Internet bank Icesave collapsed. The bill was
widely viewed as assisting Iceland's entry to the European Union -- talks
formally opened last month -- and aiding its economic recovery by smoothing
international relations.
FDA drug approvals mostly flat in 2009
WASHINGTON (AP) -- New drugs cleared by the Food and Drug
Administration last year kept pace with 2008, suggesting a much-touted push for
drug safety has not slowed down approvals.
The FDA's new leaders did step up early warnings about potential
drug safety issues and citations to companies that violate safety regulations.
Drug approvals inched higher to 26 first-of-a-kind prescription
medicines last year, from 25 in 2008, according to figures from Washington
Analysis, an investment research group. New drugs cleared in 2009 included
Novartis' kidney cancer drug Afinitor and Bausch and Lomb's pink eye medicine
Besivance.
Google confirms plans to sell own mobile phone
MOUNTAIN VIEW, Calif. (AP) -- It's official: Google Inc. will
sell its own mobile phone in an effort to protect its online advertising empire
as people increasingly surf the Web on handsets instead of personal computers.
The phone announced Tuesday had been widely anticipated since
Google handed out the device, called the Nexus One, to its own employees three
weeks ago.
Consumers will be able to buy the Nexus One for $179 if they
commit to a two-year service contract with T-Mobile USA. The phone is going on
sale Tuesday online.
By The Associated Press
The Dow industrials slipped 11.94, or 0.1 percent, to 10,572.02.
The broader Standard & Poor's 500 index rose 3.53, or 0.3
percent, to 1,136.52, its highest close since Oct. 1, 2008. The Nasdaq
composite index edged up 0.29, or less than 0.1 percent, to 2,308.71.
Crude prices closed up 26 cents at $$81.77 a barrel Tuesday, the
highest settlement price on the New York Mercantile Exchange since Oct. 9,
2008.
Heating oil futures settled up less than a cent at $2.1941, well
beyond the highest prices of 2009. Gasoline futures closed more than 2 cents
higher at $2.125, the highest since Oct. 3, 2008.
Also on Nymex, after a meteorologists predicted a thawing out around
the Chicago area by the end of the month, natural gas futures fell 24.7 cents
to settle at $5.639. Natural gas is used more prominently in the Midwest to
heat homes than in the East.
In London, Brent crude for February delivery rose 47 cents to
settle at $80.59 a barrel on the ICE Futures exchange.