Chrysler files for Chapter 11 bankruptcy
WASHINGTON (AP) -- Chrysler
filed for bankruptcy protection Thursday and announced it will temporarily halt
most of its vehicle production while it completes a deal with Italian carmaker
Fiat designed to revive its tattered fortunes.
The Obama administration
said it had long hoped to stave off bankruptcy for the nation's third-largest
automaker, but it became clear that a holdout group of creditors wouldn't budge
on proposals to reduce Chrysler's $6.9 billion in secured debt. Clearing those
debts was a needed step for Chrysler to restructure by a government-imposed
Thursday deadline.
Stocks end mixed after
Chrysler bankruptcy news
NEW YORK (AP) -- The Dow
Jones industrial average gave up early gains and ended about 17 points lower at
8,168.12 on Thursday after President Barack Obama confirmed that Chrysler LLC
will be going through a bankruptcy reorganization.
The announcement was not
surprising to investors, though, and the Dow still capped the month of April
with a robust gain of 7.4 percent.
Wall Street has been growing
more confident that the nation's economy, while not yet healthy, is nearing a
bottom. The Dow is already up 25 percent from its 12-year low in early March.
That optimism was stoked by calming words about the economy from the Federal
Reserve on Wednesday, and a government report Thursday showing a decline in
last week's jobless claims.
Consumer spending dip shows
economy still fragile
WASHINGTON (AP) -- Americans
spent less than expected in March, pulling back after a burst of buying in the
first two months of the year. The reversal was tied to a
larger-than-anticipated decline in income and is a stark reminder of a fragile
economy trying to rise out of a deep recession.
The Commerce Department data
released Thursday highlighted one of the big wild cards for the economy:
consumers' appetite to spend in the months ahead.
Meanwhile, the Labor
Department reported that new applications for unemployment insurance fell to a
seasonally adjusted 631,000, from 645,000. Economists had expected a small increase.
Dismal start in the oil
patch; Exxon still spends
HOUSTON (AP) -- The oil
industry is off to a dismal start this year, with Exxon Mobil and Marathon Oil
on Thursday becoming the latest majors to report first-quarter profits plunging
by half and more.
Only last year, as crude
prices soared well into the triple-digits, Exxon in particular was setting
itself apart by shattering corporate profit records. Now, because of the steep
drop in oil and gas prices, the industry is trying to adjust to a global recession
that has crushed energy demand.
GM bondholders seek to take
majority stake
NEW YORK (AP) -- General
Motors Corp. bondholders want a majority stake in the restructured automaker in
exchange for forgiving their claim to $27 billion of GM debt, a committee
representing the bondholders said Thursday.
The bondholders'
counterproposal follows a much less generous offer from GM on Monday. GM is
working furiously to reorganize and shrink its teetering debt load before a
government-imposed restructuring deadline a month away.
The committee said under its
proposal GM's bondholders would take a 58 percent stake in a reorganized
automaker. That would leave a union-run health care trust with a 41 percent
stake and current equity holders with 1 percent.
Dow Chemical 1Q profit
tumbles 97 percent
NEW YORK (AP) -- Dow
Chemical posted a 97 percent drop in first-quarter profit on Thursday as big
commercial clients and consumers cut back heavily on spending, though results
easily beat Wall Street expectations.
Because Dow's chemicals are
used in such a wide variety of products, from toys to automobiles, the global
economic downturn has hit the company especially hard.
The company earned $24
million, or 3 cents per share, compared with $941 million, or 99 cents per
share, a year earlier.
With Lewis out as BofA
chair, is CEO job at risk?
CHARLOTTE, N.C. (AP) -- Now
that he's lost his title as Bank of America's chairman, Ken Lewis has to
convince angry shareholders he should keep his job as CEO.
Lewis couldn't escape
investors' fury about his decision to buy Merrill Lynch & Co., although he
says he was pressured by the government to go forward with the deal.
Shareholders voted to strip Lewis of his chairman's job Wednesday and continued
to press a day later for his complete removal, leaving many people wondering
how long he can hold on as chief executive of the largest U.S. bank.
Credit card legislation
nearing success
WASHINGTON (AP) --
Responding to a wave of populist anger, the House moved toward passage of a
consumer protection bill to rein in credit card practices and eliminate sudden
interest rate increases and late fees that have entangled millions of
consumers.
Similar legislation is
before the Senate, where prospects also appear promising. The Obama
administration has been pushing for passage of the legislation, which would
bring unprecedented new rules for the industry that consumer advocates and some
Democrats have unsuccessfully sought for years.
Senate defeats Obama-backed,
anti-foreclosure bill
WASHINGTON (AP) -- The
Democratic-controlled Senate on Thursday defeated a plan to spare hundreds of
thousands of homeowners from foreclosure through bankruptcy, a bill President
Barack Obama embraced but did little to see it through.
A dozen Democrats joined
Republicans in the 45-51 vote to scuttle the bill, which Obama had said was
important to saving the economy and promised to push through Congress. But
facing stiff opposition from banks, Obama did little to pressure lawmakers who
worried it would encourage bankruptcy filings and spike interest rates.
Kodak posts wider 1Q loss,
suspends dividend
ROCHESTER, N.Y. (AP) --
Eastman Kodak Co. scrapped its dividend and trimmed the salaries of top
executives Thursday, blaming the global economic downturn for a wider
first-quarter loss and sliding sales of digital cameras and other photography
products. Its stock fell 15 percent.
The photography pioneer said
it lost $353 million, or $1.32 a share, in the January-March quarter, compared
with a loss of $115 million, or 40 cents a share, a year earlier.
By The Associated Press
The Dow fell 17.61 points,
or 0.2 percent, at 8,168.12, after rallying 121 points in early trading.
Broader stock indicators
were mixed. The Standard & Poor's 500 index fell 0.83, or 0.1 percent, to
872.81, while the Nasdaq composite index rose 5.36, or 0.3 percent, to
1,717.30.
The Russell 2000 index of
smaller companies fell 3.91, or 0.8 percent, to 487.56.
Benchmark crude for June
delivery ticked up 15 cents to settle at $51.12 a barrel on the New York
Mercantile Exchange. In London, Brent prices rose 2 cents to settle at $50.80 a
barrel on the ICE Futures exchange.
In other Nymex trading,
gasoline for May delivery rose by 2.58 cents to settle at $1.4742 a gallon
while heating oil dropped 1.44 cents to settle at $1.3147 a gallon. Natural gas
for June delivery fell 3 cents to settle at $3.373 per 1,000 cubic feet.