On Friday May 28, 2010, 5:16 pm EDT
Stocks retreat as Fitch downgrades
Spain's debt
NEW YORK (AP) -- Stocks closed out
their worst month in more than a year by sliding again on more unsettling news
about Europe.
The Dow Jones industrials dropped 122
points Friday after Fitch Ratings gave Spain the second downgrade of its credit
rating in a month. The rating agency's action was another reminder to traders
of the long-term economic problems still facing several European countries, and
perhaps the rest of the continent and the global economy as well.
May was difficult as persistent and
intensifying worries about Europe's debt problems sent the Dow down 7.9 percent
and the broader Standard & Poor's 500 index down 8.2 percent. The Dow had
its biggest May drop since 1962.
Consumers more cautious about spending
in April
WASHINGTON (AP) -- Consumers don't
appear confident enough in the economy to open their wallets more freely.
Their spending stalled in April.
Without stronger job creation and higher pay, people are less likely to up
their spending in the months ahead and invigorate the recovery.
The flat level for consumer spending
was the weakest showing in seven months, according to the Commerce Department
report. Personal incomes rose 0.4 percent, in line with expectations but not
fast enough to help generate real growth.
Falling gas prices and cheaper utility
bills could make people feel better about spending more over the summer. So
could historically low mortgage rates. That would lead more people to refinance
and leave them with more disposable income.
Toys R Us to go public again through
$800M IPO
NEW YORK (AP) -- Toys R Us Inc. said
Friday that it plans to go public again by raising as much as $800 million in
an initial public offering, a bid to take advantage of its business turnaround
even in a rocky IPO market.
The offering would be one of the
biggest retail IPOs in years. But experts say IPOs so far this year have been
disappointing, so pricing will be key.
Despite the recession dampening sales
over the past year, Toys R Us has steadily improved net income under CEO Jerry
Storch, the former Target Corp. vice chairman who joined the company in 2006.
The year before, the company had been taken private in a $6.6 billion buyout by
investors led by Bain Capital, Kohlberg Kravis Roberts and Vornado Realty
Trust.
Reynolds American to close 2 cigarette
plants
RICHMOND, Va. (AP) -- Tobacco company
Reynolds American Inc. said Friday it will close two cigarette plants -- one in
its headquarters city in Winston-Salem, N.C., and another in Puerto Rico -- as
it adjusts to declining demand for cigarettes.
The nation's second-largest cigarette
maker said production of cigarettes like Camel and Pall Mall will start to
shift to its largest facility in nearby Tobaccoville, N.C., this summer.
Workers at the Winston-Salem plant will transition to the other facility.
In December, Reynolds offered buyouts
to about 1,800 workers at the North Carolina manufacturing plants to cut costs.
About 400 workers opted to take the offer. Most of the reductions were
scheduled to take place in 2010 and begin as early as January, and others will
have release dates in early 2011.
Obama arrives in Gulf as BP tries to
stop oil leak
COVINGTON, La. (AP) -- BP's chief
executive cautioned Friday that it will be two more days before anyone knows if
the latest fix attempt will stop the oil spewing into the sea, and President
Barack Obama arrived on the Gulf Coast to tell residents they are not alone in
dealing with it.
The spill has already become the worst
in U.S. history, and there are no guarantees the so-called "top kill"
being tried for the first time 5,000 feet underwater will work.
Though engineers had stopped pumping
the mud hours earlier, BP and Coast Guard officials assured the public Thursday
morning that the process was going as planned.
Teva won't make more of powerful
sedative propofol
NEW YORK (AP) -- The drugmaker Teva
said Friday it won't make any more of its sedative propofol, which could
intensify a shortage of one of the most common anesthetics in the U.S.
The company had to halt production and
recall some of the drug last year because of manufacturing issues, and it is
facing a raft of propofol-related civil lawsuits.
The Food and Drug Administration says
there has been a shortage of the drug since last fall because manufacturing
problems forced both Teva and Hospira Inc. to suspend manufacturing and recall
some of their versions of the sedative. With no U.S. companies making the drug,
the agency authorized the importation of a version approved in Europe.
Shell buys US company East Resources
for $4.7 bln
AMSTERDAM (AP) -- Royal Dutch Shell PLC
said Friday it will buy East Resources Inc., a major owner of shale gas
holdings in the northeast United States, for $4.7 billion from private
investors.
Europe's largest oil company said it
will pay cash for East Resources, which produces oil and gas equivalents of 10,000
barrels of oil per day, mostly in Marcellus Shale, which extends over large
parts of the northeastern United States. East Resources is based in Warrendale,
Pennsylvania.
Shell said it was buying the company
from Kohlberg Kravis Roberts & Co., as well as Jefferies & Company and
privately held East Resources itself. The deal must be approved by regulators.
Prudential, AIG in talks about AIA sale
LONDON (AP) -- Prudential PLC said
Friday it is talking with U.S. insurer AIG about the terms for the proposed
sale of AIG's Asian unit, AIA, a deal which faces strong resistance from
Prudential shareholders.
Some shareholders are organizing
opposition to the $35.5 billion price agreed for AIA, and needs to line up
support from holders of 75 percent of shares by June 7.
Prudential shares were up 1 percent at
553 pence in early trading on the London Stock Exchange.
A number of analysts believe Prudential
agreed too high a price for AIA.
US drivers will find cheaper gas
NEW YORK (AP) -- Gasoline prices have
tumbled almost every day this month, dropping Friday to a national average of
$2.749 a gallon, according to auto club AAA, Wright Express and Oil Price
Information Service.
A gallon of regular unleaded is 12
cents cheaper than it was a month ago, 8 cents cheaper than just a week ago.
The timing couldn't be better for holiday travelers.
AAA says 1.6 million more Americans
will hit the highways this weekend than last Memorial Day, but the travel club
expects them to spend less than last year.
Taiwan's Foxconn raising pay for
workers
TAIPEI, Taiwan (AP) -- The Taiwanese
electronics company buffeted by a spate of suicides at its China factories said
Friday it will raise the pay of workers by an average of 20 percent.
The pay raises at Foxconn Technology
Group have been in the works for months to cope with a labor shortage following
China's recovery from the global recession, said a company official speaking on
condition of anonymity because he was not authorized to talk to the press.
By The Associated Press
The Dow fell 122.36, or 1.2 percent, to
10,136.63.
The S&P 500 index fell 13.65, or
1.2 percent, to 1,089.41, while the Nasdaq composite index dropped 20.64, or
0.9 percent, to 2,257.04.
The benchmark oil contract for July
delivery lost 58 cents to settle at $73.97 a barrel in afternoon trading on the
New York Mercantile Exchange.
In London, Brent crude fell 64 cents to
settle at $74.02 on the ICE futures exchange.
In other Nymex trading in June
contracts, heating oil fell 1.92 cents to settle at $1.9802 a gallon, and gasoline
lost 1.91 cents to settle at $2.0198 a gallon. Natural gas rose 4.7 cents to
settle at $4.341 per 1,000 cubic feet.
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