Obama urges major new stimulus, jobs spending
WASHINGTON (AP) --
President Barack Obama called for a major new burst of federal spending
Tuesday, perhaps $150 billion or more, aiming to jolt the wobbly economy into a
stronger recovery and reduce painfully persistent double-digit unemployment.
Despite Republican
criticism concerning record federal deficits, Obama said the U.S. has had to
"spend our way out of this recession" with so many people out of work
but insisted he was still mindful of a need to confront soaring deficits. More
than 7 million Americans have lost their jobs since the recession began two
years ago, and the jobless rate stands at 10 percent, statistics Obama called
"staggering."
Stock market drops as
dollar strengthens
NEW YORK (AP) -- Investors
rushed to safety Tuesday as concerns about spiraling debt loads and
disappointing corporate reports tarnished hopes for an economic recovery.
Stocks tumbled as investors
favored safe-haven assets like the dollar and Treasurys. Most major stock
indexes fell 1 percent, including the Dow Jones industrial average, which lost
104 points but ended off the day's lows.
An earnings forecast from
3M Co. and a sales report from McDonald's Corp. disappointed investors. The
reports weighed on the Dow and overshadowed an increased profit forecast from
FedEx Corp., whose results are seen as a gauge for the health of the economy.
CIT Group to exit
bankruptcy protection Thursday
NEW YORK (AP) -- CIT Group
Inc., one of the nation's biggest lenders to small and mid-sized businesses,
said Tuesday that a judge approved its reorganization plan and it plans to
emerge from bankruptcy protection on Thursday.
CIT Group filed for
bankruptcy protection on Nov. 1 after it failed to restructure outstanding debt
to alleviate a cash crunch. The reorganization plan, which was approved by key
bondholders in advance, reduces CIT's total debt by $10.5 billion. It also
defers debt maturities for three years.
CIT, based in New York, had
continued to operate while working through bankruptcy proceedings.
Reducing and delaying debt
repayments gives CIT more time to repair its finances, which were hammered by
the collapsing credit markets late last year and rising loan defaults among its
customers.
GE Capital outlook
improving, losses to continue
WASHINGTON (AP) -- General
Electric Co. says profits at its lending arm will start improving by 2011, but
first it will have to slog through another year of big losses on loans gone bad
in areas like commercial real estate.
The conglomerate told
analysts Tuesday that profit is expected to be flat next year, ranging between
$2 billion to $2.5 billion, and then rise in 2011. GE is ahead of schedule with
plans to shrink the size of GE Capital, which once provided nearly half of the
company's overall profits. And GE says credit markets are improving, making it
easier and cheaper to borrow money.
But some big problems that
have beset GE Capital during the financial crisis and recession, like big
losses, are expected to continue to dog the lender next year.
McDonald's sales take hit
from US joblessness
CHICAGO (AP) -- The
supersized recession that was a boon for business last year caught up further
with McDonald's Corp. in November, as high unemployment ate into sales.
While the world's largest
burger chain is still faring better than its competitors, who've increasingly
been pushing value menus and discounts of their own, the restaurant's fortunes
likely won't improve unless the U.S. economy does.
On Tuesday, McDonald's said
sales at restaurants open at least a year fell 0.6 percent in the U.S. It was
the second consecutive monthly decline for the measure, an important indicator
of a restaurant chain's health, and a steeper fall than October's 0.1 percent.
Surveys: Hiring to remain
weak early next year
WASHINGTON -- Few employers
plan to ramp up hiring early next year, two surveys show -- evidence that the
economic recovery isn't likely to create many jobs anytime soon.
That will mean fierce
competition for job openings that do exist. Nearly 6.3 unemployed workers, on
average, are vying for each opening, government figures released Tuesday show.
When the recession began, only 1.7 jobless workers were competing for each
opening.
More of America's largest
companies will shrink their staffs than will hire in the next six months, according
to a quarterly survey from the Business Roundtable, a group of large-company
CEOs released Tuesday.
Morgan Stanley names new
CFO, other top managers
NEW YORK (AP) -- Morgan
Stanley elevated its chief financial officer to a new role as co-chief of investment
banking and global securities trading Tuesday as part of a management shake-up
ahead of James Gorman's assumption of the CEO role on Jan. 1.
Gorman, who is 51, succeeds
John Mack, 65, who will remain as chairman.
Colm Kelleher, who had been
chief financial officer, will run Morgan Stanley's institutional securities
business along with Paul Taubman, who had been head of investment banking.
Kelleher is 52, and Taubman is 48.
With Kelleher moving to a
new position, Ruth Porat will take over as chief financial officer. Porat, 52,
was previously the global head of Morgan Stanley's financial institutions
group.
Airlines' on-time
performance falters in October
ATLANTA (AP) -- U.S.
airlines did a poorer job getting passengers to their destinations on-time in
October compared to the same month a year ago.
The Department of
Transportation said Tuesday that the 19 carriers surveyed recorded an overall
on-time arrival rate of 77.3 percent in October. That was lower than the 86
percent recorded in October 2008 and below the 86.2 percent recorded in
September of this year.
Hawaiian Airlines had the
best on-time performance in October, with a 93.4 percent rate, followed by
Alaska Airlines at 85.8 percent and JetBlue Airways at 82.9 percent.
Texas Instruments raises 4Q
profit, sales targets
DALLAS (AP) -- Texas
Instruments Inc. raised its fourth-quarter profit and sales outlook on Tuesday,
citing an improving market for chips used in cell phones and other electronic
gadgets like hard disk drives and video game consoles.
Dallas-based Texas
Instruments now expects to earn between 47 cents and 51 cents per share, up
from a prior estimate of 42 cents to 50 cents and above third-quarter earnings
of 42 cents per share. In its regular mid-quarter update, the company also lifted
its revenue forecast to between $2.90 billion and $3.02 billion from $2.78
billion to $3.02 billion, previously. That would mark sequential growth of 1
percent to 5 percent.
Analysts are expecting the
company to earn 47 cents per share on sales of $2.93 billion, according to a
Thomson Reuters poll.
Whitacre: GM has found
replacement for current CFO
DETROIT (AP) -- General
Motors Co. is close to replacing its chief financial officer after finding a
candidate to take his job, its CEO said in a Web chat with reporters on
Tuesday.
The candidate was not
identified during the chat with GM's Chairman and CEO Ed Whitacre Jr. but it
was the first time the automaker has publicly acknowledged that the board plans
to replace current CFO Ray Young. An announcement is likely in two to three
weeks.
Young is the second top
executive to be replaced by Whitacre and the new government-appointed board,
which took over control of the troubled automaker as it emerged from bankruptcy
protection in July. Fritz Henderson, the former CEO, left last week.
By The Associated Press
The Dow ended down 104.14,
or 1 percent, to 10,285.97 after being down as much as 140 points.
The broader S&P 500
index fell 11.31, or 1 percent, to 1,091.94, while the Nasdaq composite index fell
16.62, or 0.8 percent, to 2,172.99.
Benchmark crude for January
delivery dropped $1.31 to settle at $72.62 a barrel on the New York Mercantile
Exchange.
In London, Brent crude for
January delivery fell $1.24 to settle at $75.19 a barrel on the ICE Futures
exchange.
In other Nymex trading in
January contracts, heating oil fell 1.88 cents to settle at $1.9909 a gallon
while gasoline gave up 1.6 cents to settle at $1.9246 a gallon. Natural gas
rose 14.3 cents to settle at $5.114 per 1,000 cubic feet.