Consumer confidence soars in May
NEW YORK (AP) -- Consumer
confidence extended its rebound in May, soaring to the highest level since last
September as more shoppers are feeling the worst of the recession is behind
them.
The Conference Board said
Tuesday that its Consumer Confidence Index, which had dramatically increased in
April, zoomed past economists' expectations to 54.9 from a revised 40.8 in
April. Economists surveyed by Thomson Reuters were expecting 42.3. In February,
confidence levels had hit a new historic low of 25.3.
1Q home prices fall by 19.1
pct to 2002 levels
NEW YORK (AP) -- National
home prices are at levels not seen since the end of 2002, but a closer look at
data released Tuesday shows the worst may be over for some cities.
The Standard &
Poor's/Case-Shiller National Home Price index reported home prices tumbled by
19.1 percent in the first quarter compared to the first quarter last year, the
largest drop in its 21-year history. Home prices have fallen 32.2 percent since
peaking in the second quarter of 2006.
Stocks jump after consumer
confidence level surges
NEW YORK (AP) -- Consumers
are getting more confident about the economy, and Wall Street is tagging along.
Stocks surged Tuesday, their
first big win in a week, after the Conference Board said consumer sentiment
rose in May to the highest level since September. Major stock indicators jumped
more than 2 percent, including the Dow Jones industrial average, which added
196 points to 8,473.49.
The day's gains pushed the
Standard & Poor's 500 index barely into the black for the year, and leaves
the Nasdaq composite index up 11 percent in 2009. The Dow is still down 3.5
percent for the year.
UAW trust to get up to 20
percent of GM shares
DETROIT (AP) -- General
Motors Corp. will give the United Auto Workers union up to 20 percent of its
common stock, $6.5 billion of preferred shares and a $2.5 billion note to fund
a trust that will take over retiree health care costs starting next year.
The union's trust will also
get a seat on GM's new board of directors, although that seat will have to vote
at the direction of the other independent directors.
The funding is part of a
tentative agreement that union members will vote on this week as GM tries to
pull together the remaining pieces that would allow it to restructure outside
of bankruptcy.
Judge denies Indiana
pensioners' withdrawal motion
NEW YORK (AP) -- A U.S.
district judge said Tuesday that a legal review of Chrysler's bankruptcy
proceedings isn't needed before a hearing on the sale of most of the
automaker's assets can take place.
Judge Thomas Griesa denied a
withdrawal motion from attorneys representing a pair of Indiana state pension
funds and a state construction fund.
Tuesday's district court
hearing came a day before a bankruptcy court hearing on the proposed sale of
Chrysler LLC's assets to Italy's Fiat Group SpA. Attorneys for Chrysler
maintain that the sale needs to close by June 15, or the deal with Fiat could
crumble and ultimately result in the liquidation of Chrysler.
Facebook's $200M investment
values co. at $10B
NEW YORK (AP) -- Facebook is
getting a $200 million investment from a Russian Internet investor that values
the social networking company at $10 billion even though it has yet to turn a
profit.
The investment gives Digital
Sky Technologies a nearly 2 percent stake in Palo Alto, Calif.-based Facebook's
preferred stock. Digital Sky won't get a board seat.
The $10 billion valuation
for Facebook is less than the $15 billion value implied in 2007, when Microsoft
spent $240 million for a 1.6 percent stake in the company -- even though
Facebook has substantially grown since then. However Facebook's own appraisal
after the Microsoft deal gave the company a market value of about $3.7 billion,
according to details revealed in a legal settlement.
Banco Santander settles with
Madoff trustee
NEW YORK (AP) -- A Spanish
bank that was among the biggest losers in the Bernard Madoff swindle has cut a
deal to avoid a legal brawl with the trustee trying to unwind the massive Ponzi
scheme.
The settlement, announced
Tuesday, calls for Banco Santander to pay $235 million to resolve potential
legal claims over withdrawals a subsidiary made from its investments with
Madoff in the 90 days before the fraud collapsed.
In exchange, the trustee has
agreed to recognize that Santander's hedge fund subsidiary, Optimal Investment
Services, lost far more in the scam than it withdrew. Two funds managed by the
Geneva-based firm had a net loss of $1.55 billion.
China looking at boosting
private role in industry
BEIJING (AP) -- China says
it may encourage private investment in state-controlled industries such as
railways, oil and power generation in an effort to boost the efficiency of the
world's third-largest economy.
The announcement Monday by
China's top planning agency comes as Beijing tries to boost growth and combat
the impact of the global downturn. It would affect areas deemed strategically
important and key to national security.
The government will
"speed up research into encouraging private investment" in oil, power
generation, telecommunications and other fields, the National Development and
Reform Commission statement said.
Fiat CEO pushes Opel bid
with Merkel
BERLIN (AP) -- Fiat CEO
Sergio Marchionne pushed his bid for General Motors Corp.'s Opel unit in talks
Tuesday with German leaders, saying he had lowered his request for government
financial help.
Fiat's rivals in the race
for Opel, Canadian auto parts maker Magna International Inc. and U.S. investment
firm Ripplewood Holdings LLC, took their case to Opel's employee council, whose
head said Magna was in "pole position."
Tuesday's events came ahead
of a meeting planned for Wednesday at Chancellor Angela Merkel's office in
Berlin, at which Merkel hopes to bring together German and U.S. officials with
GM representatives and Opel's potential suitors as pressure builds for a
decision on its future.
US high court to decide on
allowing Vioxx suits
TRENTON, New Jersey (AP) --
The U.S. Supreme Court will decide whether shareholders can sue Merck & Co.
over whether the drugmaker provided adequate information about the risks of its
former blockbuster painkiller Vioxx before it was pulled from the market.
The high court agreed
Tuesday to review Merck's challenge to a federal appeals court's reinstatement
of a class-action securities lawsuit.
Investors had accused Merck
of providing misleading information or omitting information about the risks of
Vioxx. A U.S. district judge dismissed the November 2003 lawsuit on grounds of
a statute of limitations.
By The Associated Press
The Dow rose 196.17, or 2.4
percent, to 8,473.49. The S&P 500 index rose 23.33, or 2.6 percent, to
910.33, and the Nasdaq rose 58.42, or 3.5 percent, to 1,750.43.
Benchmark crude for July
delivery gained 78 cents to settle at $62.45 on the New York Mercantile
Exchange.
In London, Brent prices rose
$1.03 to settle at $61.24 a barrel on the ICE Futures exchange.
In other Nymex trading,
gasoline for June delivery rose 1.16 cents to settle at $1.8524 a gallon and
heating oil added 0.73 cent to settle at $1.5453 a gallon. Natural gas for June
delivery rose 2.2 cents to settle at $3.537 per 1,000 cubic feet.