Fewer home-building permits signal weakness ahead
WASHINGTON (AP) --
Applications for home building permits, a key gauge of future construction,
fell in September by the largest amount in five months -- a discouraging sign
for the housing industry. A rebound in housing is needed to support a broader
economic recovery.
Representatives for the
industry told a congressional panel Tuesday that the $8,000 tax credit for
first-time buyers needs to be extended and expanded to ensure the housing
sector will emerge from the recession.
But the Obama
administration, facing soaring budget deficits, has not decided whether to
support any extension. And some private economists played down the impact of
such a move, arguing that most interested buyers already had taken advantage of
the tax break.
Stocks fall after mixed
economic data, earnings
NEW YORK (AP) -- A
disappointing report on housing starts made investors nervous about the economy
Tuesday and sent stocks lower even as profits at many companies exceed
expectations.
Stocks fell from 2009 highs
after the Commerce Department said home building rose less than expected in
September, a discouraging signal for future construction activity. The Dow
Jones industrial average fell 50.71, or 0.5 percent, to 10,041.48.
The market will get another
measure of the housing market's health Friday with a report on existing home
sales. After several months of encouraging data on housing, investors have
become disappointed in recent weeks with signs that a recovery in home building
and home sales is starting to falter, which could bode poorly for the broader
economy.
Oil hits $80, then falls
first time in a week
Oil futures closed lower for
the first time in more than a week Tuesday, but only after passing $80 per
barrel and pulling retail gasoline prices higher.
The impact of the U.S.
currency became abundantly clear midmorning when crude prices fell by 1 percent
as soon as the dollar went into positive territory against the euro.
Crude prices have risen
swiftly this month, moving in the opposite direction of the dollar. When the
dollar loses value, crude becomes very attractive as an investment. Crude is
traded in dollars, so it essentially gets cheaper when the U.S. currency is
weak.
Benchmark crude for November
delivery fell 52 cents to settle at $79.09 on the New York Mercantile Exchange.
Earlier in the day, a barrel ran as high as $80.05 as the euro came close to
trading for $1.50.
Caterpillar 3Q profit drops
53 pct, sees recovery
Caterpillar is counting on
Asian customers to buy more of its mining and construction equipment next year,
helping the company move beyond a recession that slammed its third-quarter
earnings.
Deliveries of the company's
yellow-and-black machinery rose in China, one of the company's rare wins last
quarter. The Peoria, Ill., manufacturer, which generates nearly 70 percent of
its sales overseas, wants its dealers prepared if that rebound speeds up.
CEO Jim Owens cautioned that
the world economy still faces significant challenges and that 2010 will be
difficult.
Those challenges have dogged
the world's largest maker of construction and mining equipment. Global
machinery sales fell 48 percent in August, the 11th-straight month of declines.
Dealers supplied customers by dipping into stockpiles rather than placing new
orders.
College tuition is up
sharply amid recession
With the economy struggling,
parents and students dared to hope this year might offer a break from rising
college costs. Instead, they got another sharp increase.
Average tuition at four-year
public colleges in the U.S. climbed 6.5 percent, or $429, to $7,020 this fall
as schools apologetically passed on much of their own financial problems, according
to an annual report from the College Board, released Tuesday. At private
colleges, tuition rose 4.4 percent, or $1,096, to $26,273.
The price increases came
despite painful cost-cutting by colleges on everything from faculty to
cafeterias and sports travel. And as usual, the rise in tuition outstripped the
overall inflation rate.
Yahoo 3Q profit soars
despite 12 pct revenue drop
SAN FRANCISCO (AP) -- Yahoo
Inc. may finally be pulling out of a three-year slump that cast aside two CEOs
and spurred a cost-costing spree that laid off about 2,000 workers.
The purge is the main reason
Yahoo's third-quarter profit more than tripled from last year to soar past
analysts' relatively low expectations for the troubled Internet company.
But the results released
Tuesday also showed Yahoo's revenue fell by at least 12 percent for the third
consecutive quarter. The revenue rut means Yahoo still has a long way to go on
its comeback trail.
Analysts, though, believe
Yahoo should be able to boost its ad sales -- the main source of its revenue --
as long as the U.S. economy continues to heal and marketers funnel more of
their budgets to the Web.
Sun Microsystems slashing up
to 3,000 jobs
SAN FRANCISCO (AP) -- Sun
Microsystems Inc. plans to eliminate up to 3,000 jobs as it awaits a takeover
by Oracle Corp., a deal that is being held up by antitrust regulators in
Europe.
The layoffs Sun outlined
Tuesday in a regulatory filing amount to about to 10 percent of the company's
29,000 workers and will happen over the next year.
They are the latest rounds
of cuts at the struggling server and software maker, which reached the $7.4
billion deal with Oracle in April after nearly a decade of wobbly financial
performance.
Sun said in its filing that
the layoffs would come from all its major regions, including North America,
Europe, Asia and emerging markets. The company expects to incur $75 million to
$125 million in restructuring charges over the next several quarters.
Sugar cereals are 'Smart
Choices'? FDA not so sure
WASHINGTON (AP) -- The Food
and Drug Administration said Tuesday that nutritional logos from food
manufacturers may be misleading consumers about the actual health benefits of
cereal, crackers and other processed foods. The agency sent a letter to
companies saying it will begin cracking down on inaccurate food labeling. The
FDA did not name specific products or give a timeline for enforcement.
U.S. manufacturers,
including Kellogg, Kraft Foods and General Mills, rolled out their so-called
Smart Choices program last year, amid growing concern about obesity rates. The
green labels appear on the front of foods that meet certain standards for
calories per serving and fat content.
But consumer advocates
complain about lax standards for the program, with logos appearing on
everything from frozen sweets to sugary cereals.
Calif. sues bank, alleges
more than $200M in fraud
SAN FRANCISCO (AP) --
California Attorney General Jerry Brown accused State Street Bank and Trust Co.
of "unconscionable fraud" on Tuesday, claiming in a lawsuit the firm
had bilked the state's largest pension funds of more than $200 million.
The suit alleges
Boston-based State Street overcharged the California Public Employees
Retirement System and the California State Teachers' Retirement System with
fees and penalties for handling foreign currency trades. The bank denied the
claims.+
Brown launched an
independent investigation into the bank after a group of whistleblowers called
Associates Against FX Insider Trading raised the claims in a 2008 lawsuit.
Kerkorian may cut
'undervalued' MGM Mirage stake
LAS VEGAS (AP) -- Saying his
37 percent stake in MGM Mirage should be worth more, billionaire investor Kirk
Kerkorian said Tuesday that he may cut his investment in the struggling casino
operator.
Kerkorian, 92, MGM Mirage's
majority stockholder until this year, said through his investment firm Tracinda
Corp. that he is "exploring the possibility of strategic partnerships or
other alternatives" for his stake in the Las Vegas-based casino company.
But Tracinda also said there
might not be any change.
MGM Mirage had announced
minutes earlier on Tuesday that its third-quarter earnings will show a $955
million charge to reflect the falling value of CityCenter, its $8.5 billion
joint venture on the Las Vegas Strip.
By The Associated Press
The Dow Jones industrial
average fell 50.71, or 0.5 percent, to 10,041.48.
The broader Standard &
Poor's 500 index fell 6.85, or 0.6 percent, to 1,091.06, and the Nasdaq composite
index fell 12.85, or 0.6 percent, to 2,163.47.
Benchmark crude for November
delivery fell 52 cents to settle at $79.09 on the New York Mercantile Exchange.
In other Nymex trading,
heating oil fell less than a cent to settle at $2.0473 a gallon. Gasoline for
November delivery rose by less than a cent to settle at $1.9872 a gallon.
Natural gas for November delivery rose 32.6 cents to settle at $5.161 per 1,000
cubic feet.
In London, Brent crude for
December delivery fell 53 cents to settle at $77.24 on the ICE Futures
exchange.