AP Business Highlights

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On Wednesday April 7, 2010, 6:09 pm EDT

Consumer borrowing falls $11.5 billion in February

WASHINGTON (AP) -- Consumer borrowing fell again in February, reflecting weakness in credit cards and auto loans. Analysts said the sharp reduction showed that the weak economy is still making consumers hesitant to take on more debt.

The Federal Reserve said Wednesday that borrowing declined by $11.5 billion in February, surprisingly weaker than the small $500 million gain that economists had expected. The February decline was the 12th decrease in the past 13 months as consumers slash borrowing in the face of a deep economic recession and high unemployment.

Stock slide punctures 2-month streak of gains

NEW YORK (AP) -- A late-day slide broke the stock market's recent calm Wednesday after concerns grew that shares are overheated.

A mix of concerns including a drop in consumer borrowing and a slide in oil prices hit a market that analysts said has been looking tired. The Dow Jones industrial average fell 72 points to 10,897.52 after repeated attempts this week to cross the psychological threshold of 11,000, a level it hasn't seen in 18 months.

The Dow fell by more than 100 points during trading for the first time since Feb. 25.

Bernanke: Housing, jobs biggest economic hurdles

WASHINGTON (AP) -- Problems in the housing market and high unemployment are the biggest economic challenges the nation faces, Federal Reserve Chairman Ben Bernanke said Wednesday.

After suffering through the worst recession since the 1930s, the economy seems to have stabilized and is growing again, Bernanke said. But he warned of rising foreclosures and problems with the job market.

Record-low interest rates should help foster the recovery, the Fed chief said in remarks to business people in Dallas. But economic growth won't be robust enough to quickly drive down the jobless rate, he indicated.

GM ready to repay govt loan, sees chance of profit

DETROIT (AP) -- General Motors Co., steadily returning to health after its near-collapse in 2009, said Tuesday it plans to pay off its government loans by June -- five years ahead of schedule -- and could report a profit as early as this year.

GM said it lost $3.4 billion in the fourth quarter of 2009 on revenues of $32.3 billion. But things are on the upswing. Sales and production have increased and GM has gained U.S. market share since the start of the year. The automaker will try to maintain that momentum while facing a stiff challenge from a revitalized Ford Motor Co.

For the period from July 10, when GM emerged from bankruptcy protection after shedding billions in debt, through Dec. 31, GM lost $4.3 billion on revenues of $57.5 billion. But much of that loss was for one-time items, including a $2.6 billion payment to the United Auto Workers union for retiree health care.

Monsanto sees 2nd-qtr profit fall 19 percent

KANSAS CITY, Mo. (AP) -- When Monsanto said three years ago it would double its annual profit by 2012, the company was making a bold bet on its future -- selling biotech seeds rather than old-line chemicals.

Now, the company's past is catching up with it. And the future of biotech seed is looking tougher than imagined.

On Wednesday, Chief Executive Hugh Grant said for the first time Wednesday that Monsanto won't likely hit its 2012 goal. The reason is twofold. Unexpected losses in the herbicide division are dragging down the rest of the company, and farmers don't seem willing to pay a premium price for next-generation biotech seeds.

More CEOs see job increases than losses

NEW YORK (AP) -- For the first time in two years, more CEOs expect to be adding jobs than cutting jobs.

A survey released Wednesday by the Business Roundtable, an association of CEOs of big U.S. companies, says 29 percent of chief executives expect to increase corporate payrolls over the next six months, while 21 percent predict that their work forces will shrink. Half see no change in jobs.

That's the first time since the first quarter of 2008 that more CEOs have expected to increase jobs rather than shrink them. In the fourth quarter of 2009, only 19 percent expected their payrolls would grow, while 31 percent predicted a declining work force and half expected jobs to hold steady.

Jobless rates drop or hold steady in most areas

WASHINGTON (AP) -- Unemployment rates fell or remained unchanged in two-thirds of the 372 largest U.S. metro areas in February. The news adds to evidence that the job market is improving.

The Labor Department's report offers a brighter picture compared with the previous two months, when the jobless rate rose in most areas.

Unemployment fell in 189 metro areas in February. That compares with only three in January, though the report that month was distorted by an annual data revision. The rate fell in only 41 metro areas in December.

SEC seeks tighter rules on asset-backed securities

WASHINGTON (AP) -- Federal regulators proposed new, stricter rules Wednesday for asset-backed securities, the bundles of loans that helped spark the market's collapse in 2008 and nearly brought down the financial system.

The Securities and Exchange Commission voted 5-0 to propose that Wall Street firms that package and sell asset-backed securities be required in most cases to hold at least 5 percent of the packaged loans -- mortgages, credit cards, auto loans -- on their own books.

With some "skin in the game" in the form of exposure to risk, the thinking goes, the firms would be more careful to ensure that borrowers are properly screened.

Oil settles lower as report shows ample supplies

Oil prices eased back Wednesday on a report showing crude inventories grew more than expected last week and that supplies of gasoline were still well above average.

Benchmark crude for May delivery fell 96 cents to settle at $85.88 a barrel on the New York Mercantile Exchange. The contract rose 22 cents to settle at $86.84 on Tuesday after hitting an 18-month high of $87.09 a barrel.

Oil might be due for a break. Crude prices have jumped from $69 in early February on signs that the global economy is gaining strength and demand for gasoline and diesel fuel will rise.

Denali projects Alaska gas pipeline cost at $35B

JUNEAU, Alaska (AP) -- A massive endeavor to move natural gas from Alaska's North Slope to North American markets will cost an estimated $35 billion, according to a plan unveiled Wednesday, potentially setting the stage for a high-stakes showdown with a competing pipeline project and the state.

Details of the Denali project, a joint effort of ConocoPhillips and BP PLC, were released in a filing with the Federal Energy Regulatory Commission.

Denali proposes a pipeline of more than 1,700 miles, with delivery points along the way to help meet gas needs in Alaska and Canada. It bills the project, which includes a gas treatment plant on the harsh North Slope, as "one of the largest private investments in the history of North America."

By The Associated Press

The Dow fell 72.47, or 0.7 percent, to 10,897.52.

The Standard & Poor's 500 index fell 6.99, or 0.6 percent, to 1,182.45, while the Nasdaq composite index fell 5.65, or 0.2 percent, to 2,431.16.

Benchmark crude for May delivery fell 96 cents to settle at $85.88 a barrel on the New York Mercantile Exchange. The contract rose 22 cents to settle at $86.84 on Tuesday after hitting an 18-month high of $87.09 a barrel.

In other Nymex trading in May contracts, heating oil lost 2.44 cents to settle at $2.2439 a gallon, and gasoline gave up 3.36 cents to settle at $2.3147 a gallon. Natural gas fell 7.7 cents to settle at $4.019 per 1,000 cubic feet.

In London, Brent crude dropped 56 cents to settle at $85.59 on the ICE futures exchange.

 

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