Auto sales slump persists as consumers stay scared
General Motors' sales tumbled 53 percent from a year earlier,
while Ford's
The slide casts further doubt on the financial viability of GM
and Chrysler, which need to sell cars and generate critical cash to supplement
the $17.4 billion in government loans that are keeping them in business.
Wall Street shows modest losses a day after tumble
Stocks extended their losses to a fifth straight day Tuesday as
investors wrestled with the reality that the economy is still far from
recovery.
The selling in the erratic session pushed the
Standard & Poor's 500 index to its first close below 700 since Oct.
28, 1996. The Dow fell 37.27, or 0.6 percent, to 6,726.02,
its lowest close since April 21, 1997. The index is now down more than
52 percent from its record of 14,164.53 set in October 2007.
Obama suggests buying stocks, defends econ plan
WASHINGTON (AP) -- Trying to pump up the nation's confidence,
President Barack Obama said Tuesday that Wall Street has been hammered so hard
that "buying stocks is a potentially good deal," and he dispatched
top aides to Capitol Hill to defend his plans for pulling the economy out of
its deep recession.
After being accused for weeks of being too negative about the
economy, Obama recently has shifted to a more positive tone. He and his aides
still say recovery won't come quickly, but they are becoming more aggressive in
declaring that the government's efforts will work.
Fed launches $200B program to spur consumer loans
WASHINGTON (AP) -- The government launched a much-awaited program
Tuesday to spur lending for autos, education, credit cards and other consumer
loans by providing up to $200 billion in financing to investors to buy up the
debt.
If the program succeeds, it should help bust through the credit
clogs in place since last year and make it easier for Americans to finance
large and small purchases at lower rates, Federal Reserve Chairman Ben Bernanke
told Congress.
Created by the Fed and the Treasury Department, the program has
the potential to generate up to $1 trillion of lending for businesses and
households, the government said. It will be expanded to include commercial real
estate, though that won't be part of the initial rollout.
Pending home sales fell 7.7 pct to new low in Jan.
WASHINGTON (AP) -- The number of homebuyers who agreed to
purchase an existing home sank to a new low in January as economic woes turned
them away from the staggering housing market, the National Association of
Realtors said Tuesday.
The group's seasonally adjusted index of pending sales contracts
fell 7.7 percent to 80.4 in January from a downwardly revised December reading
of 87.1.
January's reading was far worse than the 85.1 economists
expected, according to Thomson Reuters, and came in below the previous record
low of 83.1 in November.
Citigroup to lower some mortgage payments
NEW YORK (AP) -- Struggling bank Citigroup Inc. said Tuesday that
it will lower mortgage payments for some homeowners to an average of $500 a
month for three months as part of a new program to help the unemployed.
The struggling bank makes the move as President Barack Obama
looks to lenders to adjust the way loans are handled.
Citigroup's new mortgage efforts also come on the heels of the
latest attempt to bail out the company, which includes the U.S. government's exchange
of up to $25 billion in emergency bailout money given to Citigroup for as much
as a 36 percent equity stake in the company. The deal between the Treasury
Department and Citigroup represents the third rescue attempt for the bank in
the past five months.
Blockbuster hires law firm to handle refinancing
DALLAS (AP) -- Blockbuster has hired the law firm of Kirkland
& Ellis to help rescue the struggling video store chain from a financial
bind.
The Dallas-based company said Tuesday it is bringing in the firm
to help arrange enough financing to keep Blockbuster afloat amid a deepening
recession that has already waylaid several major retailers.
Blockbuster doesn't intend to file for bankruptcy protection,
spokeswoman Karen Raskopf said. Earlier reports that the
7,500-store chain had hired Kirkland & Ellis to explore a bankruptcy filing
caused Blockbuster shares to plummet 74 cents Tuesday to close at just 22
cents.
GM buys
DETROIT (AP) -- Delphi Corp. said
Tuesday it has agreed to sell its global steering business back to former
parent General Motors Corp. as part of its plan to raise cash and shed noncore
businesses in hopes of eventually emerging from bankruptcy protection.
Terms of the deal for the Saginaw, Mich.-based business, which
makes critical parts for the troubled Detroit-based automaker, were not
disclosed. In connection with the agreement, GM agreed to increase its credit
commitments to
Madoff
agrees to give up property, art, tickets
Prosecutors requested the hearing Tuesday so Madoff
can appear in court with his lawyer, Ira Sorkin,
because they believe the attorney may have conflicts of interest in the case. Sorkin also represents Madoff's
wife and several others in relation to the Madoff case.
The attorney said there was no conflict of interest and the issue
can be completely resolved if Madoff tells the judge
Wednesday that he has no problem with Sorkin
representing him.
By The Associated Press
The Dow fell 37.27, or 0.6 percent, to 6,726.02.
Broader stock indicators also fell. The S&P 500 index slid
4.49, or 0.6 percent, to 696.33. The Nasdaq
composite index fell a modest 1.84, or 0.1 percent, to 1,321.01.
The Russell 2000 index of smaller companies fell 6.79, or 1.9
percent, to 361.01.
Benchmark crude for April delivery rose
$1.50 to settle at $41.65 a barrel on the
In other Nymex trading, gasoline for
April delivery rose 3.32 cents to settle at $1.3194 a gallon, while heating oil
gained 2.84 cents to settle at $1.1796 a gallon. Natural gas for April delivery
rose 13 cents to settle at $4.282 per 1,000 cubic feet.