Evidence piling up that worst of recession is over
WASHINGTON (AP) -- Evidence
is piling up that the worst part of the recession has ended. But that doesn't
mean the pain is over.
A better-than-expected
unemployment report Friday -- job losses declined to the lowest level in six
months -- capped a week of encouraging news, including firmer home sales, a
revival in consumer spending and fresh optimism about the biggest U.S. banks.
The economy remains
vulnerable to further shocks, and 13.7 million people are unemployed. The
jobless rate rose to 8.9 percent in the new report and still seems headed for a
stinging 10 percent.
Group drops fight against
Chrysler plan
NEW YORK (AP) -- The group
of dissident Chrysler bond holders challenging Chrysler LLC's government-backed
restructuring plans said Friday it is dropping its court fight.
The dissolution of the group
-- at least on an official basis -- clears away the largest obstacle standing
in the way of Chrysler's plans to sell the bulk of its assets to Italy's Fiat
Group SpA and could pave the way for the quick exit from bankruptcy protection
that the automaker and the federal government desire.
Geoffrey Gwin, principal of
the Group G Capital Partners LLC hedge funds, said that after weighing the
obstacles ahead and along with the opposition they had faced before, the
group's five remaining members realized that they couldn't mount an effective
legal challenge.
Fannie Mae seeks $19B in US
aid after 1Q loss
WASHINGTON (AP) -- Fannie
Mae issued a grave warning about its future on Friday, saying it needs $19
billion in additional government aid as job losses grow and risky loans made
during the housing boom go bad at an unnerving pace.
The mortgage finance
company, which already got a $15 billion government bailout in March, warned it
may need even more money and won't be profitable for the foreseeable future.
In a regulatory filing the
company said "there is significant uncertainty as to our long-term
financial sustainability." Even more government aid, it added, "may
not be sufficient to keep us in a solvent condition."
Toyota sees losses deepening
this year
TOKYO (AP) -- Toyota Motor
Corp., battered by plunging global sales, reported its worst annual loss since
its 1937 founding -- and forecast even more red ink in the year ahead.
The world's largest carmaker
said Friday its net loss for the January-March quarter was 765.8 billion yen
($7.7 billion) -- bigger than General Motors reported for the same period.
That brings Toyota's fiscal
year loss to a larger-than-expected 436.94 billion yen ($4.4 billion), a
dramatic reversal from the record profit of 1.72 trillion yen it earned the
previous year.
Stocks surge on relief over
unemployment, banks
NEW YORK (AP) -- Stocks
soared Friday as Wall Street cheered the positive news it had been hoping for:
Job losses slowed in April and big banks don't need as much capital as some had
feared.
All the major indicators
rose more than 1 percent, including the Dow Jones industrial average, which
jumped 165 points to 8,675.65.
Bank shares helped drive the
gains following the release of results from the government's "stress
tests" late Thursday. Energy stocks surged as oil prices jumped on the
improving economic outlook.
BofA CEO Lewis lays out
plans for bank's future
NEW YORK (AP) -- Bank of
America's chief executive Ken Lewis laid out his plans for raising new capital
to meet regulatory requirements after the government said the nation's largest
bank is facing a $33.9 billion shortfall.
In a wide-ranging interview
with CNBC, Lewis also said Friday that the economy is bottoming and that he plans
to remain in charge of the bank through the recovery.
The Charlotte, N.C.-based
bank will raise capital through asset sales, earnings in the upcoming quarters
and raising capital from private investors, Bank of America officials had said
during a conference call Thursday night.
Gas prices on the rise,
crude ends week strong
NEW YORK (AP) -- Oil prices
appeared headed for the strongest week so far this year on better-than-expected
unemployment numbers and what some experts believe may be overly optimistic
expectations about the country's appetite for energy.
Retail gasoline prices,
which had lingered around $2 per for weeks, climbed for the eighth straight
day.
Benchmark crude for June
delivery rose $1.92 to settle at $58.63 a barrel, its top closing price this
year on the New York Mercantile Exchange. In London, Brent prices rose $1.67 to
settle at $58.14 a barrel on the ICE Futures exchange.
Jury acquits W.R. Grace, 3
execs in asbestos case
MISSOULA, Mont. (AP) -- W.R.
Grace & Co. and three former executives were acquitted Friday of federal
charges that they knowingly allowed residents of northwestern Montana town to
be exposed to asbestos from its vermiculite mine.
Jurors received the case
Wednesday, nearly 11 weeks after hearing opening arguments.
An indictment unsealed four
years ago charged that W.R. Grace and several of its one-time executives
knowingly endangered the lives of mine workers and other residents of Libby and
ignored warnings by state agencies to clean up the vermiculite mining
operation.
McDonald's April same-store
sales rise
NEW YORK (AP) -- Sales of
new espresso-based coffee drinks and chicken Snack Wraps helped boost
McDonald's Corp.'s same-store sales by 6.9 percent in April, the nation's
largest hamburger chain said Friday.
Same-store sales, or sales
in stores open at least 13 months at the chain, climbed 6.1 percent in the U.S.
The rise comes even as, or perhaps because of, a recession that has kept
consumers from spending on meals out.
McDonald's has largely
benefited from consumers' desire to save cash since its meals are typically
less expensive than those at sit-down chains. Most restaurant companies other
than fast food businesses have seen sharp declines in same-store sales in the
past few months as consumers have cut back.
SEC chief backs 'systemic
risk council' idea
WASHINGTON (AP) -- The head
of the Securities and Exchange Commission said Friday she favors a new proposal
for federal regulators sharing oversight of companies that pose financial risks
to the economy.
SEC Chairman Mary Schapiro
said she's "inclined toward" the idea floated this week by the head
of the Federal Deposit Insurance Corp. for a new "systemic risk
council" to monitor large institutions against financial threats. The
council would include the Treasury Department, Federal Reserve, FDIC and SEC,
according to the proposal by FDIC Chairman Sheila Bair.
Congress and the Obama
administration are working to craft an overhaul of U.S. financial rules to
prevent a repeat of the crisis that plunged markets worldwide into distress.
By The Associated Press
The Dow rose 164.80, or 2
percent, to 8,675.65. The Standard & Poor's 500 index rose 21.84, or 2.4
percent, to 929.23, and the Nasdaq composite index rose 22.76, or 1.3 percent,
to 1,739.00.
Benchmark crude for June
delivery rose $1.92 to settle at $58.63 a barrel, its top closing price this
year on the New York Mercantile Exchange. In London, Brent prices rose $1.67 to
settle at $58.14 a barrel on the ICE Futures exchange.
In other Nymex trading,
gasoline for June delivery rose 4 cents to settle at $1.7055 a gallon and
heating oil gained 3.32 cents to settle at $1.5184 a gallon. Natural gas for
June delivery jumped 23 cents to settle at $4.311 per 1,000 cubic feet.