On Thursday May 20, 2010, 5:55 pm EDT
Stocks dive, Dow off 376 on world
economic worries
NEW YORK (AP) -- Stocks plunged again
Thursday as more investors woke up to the possibility that economic problems
such as Europe's debt crisis might spread around the world and stop the growing
recovery in the U.S.
The Dow Jones industrial average fell
376 points, its biggest one-day point drop since February 2009, and all the
major indexes were down well over 3 percent. Meanwhile, interest rates fell
sharply in the Treasury market as investors once again sought the safety of
U.S. government debt.
The Standard & Poor's 500 index is
down almost 12 percent from its 2010 high close of 1,217.28, reached April 23.
That means the market is officially in what's called a correction, a drop of 10
percent or more from a recent high.
Merkel calls for tough steps on
regulation
BERLIN (AP) -- German Chancellor Angela
Merkel urged the world's economic powers to send a "signal of
strength" by agreeing to stronger global financial regulation, as markets
sagged on doubts about whether European leaders have a handle on their
continent's debt crisis.
European stocks and the euro slipped,
still unnerved by a unilateral German move to ban some speculative trading
practices -- a step Merkel's finance minister defended against pointed remarks
by other officials that Europe needed to regulate as one.
The trading-practices ban was taken by
some as a sign European leaders are not coordinating their efforts to shore up
government finances in the 16-nation eurozone, despite agreeing on a $1
trillion loan backstop for governments in danger of defaulting on debt.
Jobless claims rise by largest amount
in 3 months
WASHINGTON (AP) -- The number of people
filing new claims for unemployment benefits unexpectedly rose last week by the
largest amount in three months. The surge is evidence of how volatile the job
market remains, even as the economy grows.
Applications for unemployment benefits
rose to 471,000 last week, up by 25,000 from the previous week, the Labor
Department said Thursday. It was the first increase in five weeks and the
biggest jump since a gain of 40,000 in February. The total was the highest
since new claims reached 480,000 on April 10. It also pushed the average for
the last four weeks to 453,500.
In a separate report, a private
research group said its index of leading economic indicators dipped slightly in
April. It was the first decline in more than a year. Six of the 10 components
on the Conference Board's index deteriorated.
More banks are troubled even as
industry recovers
WASHINGTON (AP) -- The number of
troubled banks kept growing last quarter even as the industry as a whole had
its best quarter in two years.
The Federal Deposit Insurance Corp.
said Thursday that the number of banks on its confidential "problem"
list grew to 775 in the January-March period from 702 in the previous quarter.
But banks overall posted net income of $18 billion. That was up from $5.6
billion in the same quarter a year earlier.
The largest banks showed the most
improvement. They have mounted a strong recovery with help from federal bailout
money and record-low borrowing rates from the Federal Reserve.
Agencies consider new rules post-plunge
WASHINGTON (AP) -- The Securities and
Exchange Commission will propose new rules covering cancellation of trades in
the wake of the May 6 stock market plunge, the agency's chairman told a Senate
panel Thursday.
Nearly 21,000 trades were canceled
because exchanges deemed them erroneous after the "flash crash,"
which sent the Dow Jones industrial average down nearly 1,000 points in less
than 30 minutes. Many retail investors were affected, and senators pressed at the
hearing for remedies.
Schapiro said the agency is examining
whether decisions to cancel trades were made fairly and if market professionals
fully met their legal obligations to investors.
Sears' net income falls on appliance
discounts
NEW YORK (AP) -- Heavy discounts on
appliances squeezed Sears Holdings Corp. in the first quarter even as a key
measure of revenue rose, bolstered by federal rebates for those same
appliances.
Sears' shares fell almost 11 percent,
or $10.86, to close Thursday at $88.70. The drop was the sharpest of any stock
in the Standard & Poor's 500 Index on a day when just three stocks rose.
The company's falling net income stood
out among the batch of recent earnings reports from major retailers.
Home-improvement rivals Lowe's Cos. and Home Depot Inc. both said their net
income and total revenue rose as consumers spent not only on appliances but on
home renovations and seasonal goods like patio furniture.
Dell fiscal 1Q net income jumps 52
percent
SEATTLE (AP) -- Computer maker Dell Inc.
said Thursday its first-quarter net income rose 52 percent, helped by sales of
computers to businesses and technology services to public-sector customers.
But Dell's gross profit margin dropped
from a year ago, and the company said certain PC components are likely to
remain in short supply. Investors sent shares down sharply in extended trading.
Dell said that from February through
April, it earned $441 million, or 22 cents per share. In the same period a year
ago it earned $290 million, or 15 cents per share.
Oil settles 2 percent lower after wild
swings
NEW YORK (AP) -- Oil prices resumed
their May swoon Thursday as concerns over the European economy had traders
bailing out of energy commodities.
The session was a volatile one. An
early 2 percent gain had turned into an 8 percent decline by early afternoon on
the New York Mercantile Exchange. Prices settled about 2 percent lower, the
12th decline in 14 trading days this month.
This was the final trading day for the
June contract. Benchmark crude for June delivery lost $1.86 to settle at $68.01
a barrel on the Nymex. Prices tumbled as low as $64.24 earlier in the day, the
lowest price for oil since July. Oil has shed nearly 22 percent of its value
since hitting $86.84 on April 6.
BP concedes Gulf oil spill is bigger
than estimate
NEW ORLEANS (AP) -- BP conceded
Thursday that more oil than it estimated is gushing into the Gulf of Mexico as
heavy crude washed into Louisiana's wetlands for the first time, feeding
worries and uncertainty about the massive monthlong spill.
Mark Proegler, a spokesman for oil
giant BP PLC, told The Associated Press that a mile-long tube inserted into a
leaking pipe over the weekend is capturing 210,000 gallons a day -- the total
amount the company and the Coast Guard have estimated is gushing into the sea
-- but some is still escaping. He would not say how much.
Several professors who have watched
video of the leak have said they believe the amount spewing out is much higher
than official estimates.
McDonald's says no way Ronald will
retire
CHICAGO (AP) -- Retire Ronald McDonald?
No way.
That's the message McDonald's Corp.'s
CEO Jim Skinner gave Thursday to the red-haired clown's critics who say the
cartoon promotes unhealthy eating and should go the way of the Marlboro Man and
Joe Camel.
"The answer is no," Skinner
told a room full of shareholders who gathered for a meeting at the company's
headquarters in the Chicago suburb of Oak Brook, Ill.
Shareholders applauded Skinner. And
they unleashed a chorus of boos when representatives from the advocacy group
Corporate Accountability International requested the famous icon be shelved --
for good.
By The Associated Press
The Dow fell 376.36, or 3.6 percent, to
10,068.01.
The S&P 500 fell 43.46, or 3.9
percent, to 1,071.59. The Nasdaq composite index fell 94.36, or 4.1 percent, to
2,204.01.
Benchmark crude for June delivery lost
$1.86 to settle at $68.01 a barrel on the Nymex.
In other Nymex trading in June
contracts, heating oil fell 4.33 cents to settle at $1.9019 a gallon, and
gasoline lost 5.07 cents to settle at $1.9645 a gallon.
In London, Brent crude July contact
gave up $1.85 to settle at $71.84 a barrel on the ICE futures exchange.
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