Archive for the ‘Business’ Category

NEW YORK (AP) -- Stocks are tumbling as investors worry that Greece won't qualify for a new installment of emergency funds in time to avoid defaulting on its debt.

Investors also appear pessimistic about a Federal Reserve policy decision expected Wednesday. The Fed has hinted it might take new economic stimulus measures. But many analysts think they won't be announced this week.

President Barack Obama on Monday called for $1.5 trillion in new taxes to help reduce the U.S. deficit, saying "we can't just cut our way out of this hole."

In midmorning trading, the Dow Jones industrial average is down 185 points, or 1.6 percent, at 11,324. The Standard & Poor's 500 index is down 19, or 1.6 percent, at 1,197. The Nasdaq composite is down 22, or 0.9 percent, at 2,599.

VOULIAGMENI, Greece (AP) -- Greece will try to avoid international "blackmail and humiliation" by speeding up reforms and civil-service staff cuts, the finance minister said Monday, hours before holding an emergency teleconference with creditors.

Greece's international bailout creditors stepped up the pressure at the start of a crucial week in the nearly two-year debt crisis, urging the government to do more to heal its finances. Global markets were skeptical, however, and stocks fell sharply on fears Athens will default on its mountain of debt.

Out of patience with the Socialist government's delays on promised reforms, Greece's partners and creditors are threatening to cut the cash lifeline without which the country would go bankrupt in less than a month.

Athens is struggling with a deepening recession that is eating away at the impact of its austerity measures while also causing unemployment and public anger to grow.

International debt inspectors will talk to finance chief Evangelos Venizelos around 1600 GMT.

"We expect the Greek authorities to explain, in particular, how they intend to close the fiscal gaps in 2011 and 2012 and how they plan to proceed with the structural reforms and privatizations," said Amadeu Altafaj Tardio, a spokesman for the European Commission.

Initially, Athens said the teleconference would be followed by a ministerial meeting under Prime Minister George Papandreou, who canceled a scheduled trip to the U.S. on Saturday. But government spokesman Elias Mossialos later said in an interview with Real FM radio that the meeting could be moved to another day depending on the course of separate talks between Venizelos and his fellow ministers.

Ahead of the discussions, Venizelos said the government still seeks to generate euro3 billion ($4.1 billion) more revenues next year than it spends, before counting the cost of interest on existing debts.

Greece's economy is expected to contract by about 5.5 percent this year - more than the 3.5 percent earlier assumed - and a further 2.5 percent in 2012, according to new government and IMF estimates.

"The country cannot go forward without the true implementation of major structural reforms - we have delayed them," Venizelos said at a conference south of Athens, adding that achieving the 2012 target was vital.

NEW YORK (AP) -- A promise by European leaders to help Greece avoid default sent stocks sharply higher Wednesday for the third straight day.

The leaders of Greece, France and Germany agreed in a teleconference that Greece was an "integral" part of the 17-country bloc that uses the euro. Greece also said it would stick to agreements to trim its debts, a condition for getting more financial help. The statements were intended to calm fears that Greece was headed for default or might be forced to drop the euro.

The Dow Jones industrial average rose 140.88 points, or 1.3 percent, to close at 11,246.73. The Dow sank as many as 112 points within the first hour of trading, then rose steadily through the rest of the day.

SANTA ANA, Calif. (AP) -- It's early in the morning on the 10th anniversary of the nation's worst terrorist attack, and John Wayne Airport starts to hum with the mundane rituals of airline travel.

Passengers occupy themselves with smartphones, laptops and fast-food breakfast. Travelers in line for security whip out driver's licenses and boarding passes. Flight attendants call out names of passengers to check in at the counter. Someone left a belt at the X-ray. Could you please claim it?

Yet the date's significance is palpable, here and at other airports around the world.

At Boston's Logan Airport, where the jetliners that brought down the World Trade Center took off, ticket agents, baggage screeners and other workers paused at 8:46 a.m. for a moment of silence to mark the time the first plane struck the twin towers. At the Tampa, Fla., airport, an honor guard of law enforcement officers carried flags while a bagpiper and a bugler played.

LONDON (AP) -- British Prime Minister David Cameron arrives in Moscow on Sunday trying to secure crucial new trade and warmer ties with an often difficult ally, some five years after the poisoning death of a Kremlin critic in London revealed bitter differences.

Cameron is making the first visit to Russia's capital by a British leader in six years, and will hold the first talks by any British official with Prime Minister Vladimir Putin in more than four years - hoping to revive relations ahead of the ex-president's possible return to power in a 2012 election.

In one hiccup ahead of the visit, Russia's Embassy in London said its website was brought down in an apparent cyberattack. The embassy said on Twitter it had launched a mirror - or alternative - website.

THESSALONIKI, Greece (AP) -- Greece will meet ambitious savings targets despite a deepening recession this year, the prime minister said Saturday, to secure the continued flow of international rescue loans that are protecting the debt-crippled country from a catastrophic bankruptcy.

As George Papandreou delivered his annual, keynote speech on the economy in Greece's second-largest city of Thessaloniki, police on the streets outside clashed with violent demonstrators as more than 25,000 people - from taxi-drivers to sports fans - joined a wave of anti-austerity protests.

Two people were arrested and nearly 100 people detained, police said, while at least two demonstrators were injured during the clashes in the northern port city.

"We will push through all the major changes our country has needed for years," Papandreou said in a nationally televised address. "And we will take whatever other decisions are needed, we will do whatever is necessary to keep the country on its feet."

MARSEILLE, France (AP) -- Wealthy countries and international lenders promised more money Saturday to encourage democratic reforms in Arab nations, promising at least $58 billion.

After Tunisia and Egypt ousted their authoritarian regimes earlier this year, eight of the world's most developed economies along with rich Arab countries and a raft of development banks had pledged in May to give $40 billion in support to their nascent democracies and hopefully keep them on the path to open government.

Those uprisings set off a cascade of revolts across the Middle East, and the Group of Eight and others are now increasing their pledges and expanding the recipients to include Morocco and Jordan.

BEIJING (AP) -- U.S. Ambassador to China Gary Locke said Friday a stronger U.S. economy is in China's interest and he will promote trade and human rights as the new envoy in Beijing, a focal point for U.S. diplomacy.

"The highest priority of the United States today is to create jobs for Americans and revitalize our economy. Given our economic interdependence, a stronger American economy is in the economic self-interest of the Chinese people," he said to university students.

A former commerce secretary, Locke is the first Chinese-American to hold the post. It's become increasingly important as China's economy, now the world's second-largest, grows steadily, and the United States fitfully copes with high unemployment.

WASHINGTON (AP) -- President Barack Obama is challenging congressional Republicans to back an aggressive plan to cut payroll taxes in an effort to revive the economy and entice employers to hire more workers.

Obama wants to extend and expand a payroll tax cut that is scheduled to expire at the end of the year. He reminded lawmakers that if they fail to act, they will be allowing taxes to increase on nearly every worker who earns a wage, starting in January.

That is a prospect the president wants to avoid as he embarks on a tough re-election fight, with unemployment stuck at 9.1 percent.

NEW YORK (AP) -- Parents have a new goal this back-to-school shopping season: Buy their kids the name brands they want without spending like it's 2007.

After the recession began in late 2007, cost-conscious consumers sought out the cheapest shirts and shoes they could find at merchants like Wal-Mart and Target to keep their budget in check. But these days, value is the name of the game.

Shoppers who are just as concerned about style and quality as price are flocking to factory outlets, where they can snag Gap, Nike, Vans and other designer clothes and accessories for 25 to 70 percent off. In fact, a quarter of parents said they plan to do the bulk of their back-to-school shopping at factory outlets and discount stores, compared with just 16 percent planning to do so at malls, according to the American Express Spending and Saving Tracker.

BEIJING (AP) -- Chinese millionaire Su builds skyscrapers in Beijing and is one of the people powering China's economy on its path to becoming the world's biggest.

He sits at the top of a country - economy booming, influence spreading, military swelling - widely expected to dominate the 21st century.

Yet the property developer shares something surprising with many newly rich in China: he's looking forward to the day he can leave.

Su's reasons: He wants to protect his assets, he has to watch what he says in China and wants a second child, something against the law for many Chinese.

The millionaire spoke to The Associated Press on condition that only his surname was used because of fears of government reprisals that could damage his business.

China's richest are increasingly investing abroad to get a foreign passport, to make international business and travel easier but also to give them a way out of China.

LONDON (AP) -- Wall Street braced for losses on Tuesday after world stock markets took a beating over fears that the U.S. economy was heading back into recession.

Any troubles in the world's largest economy cast a long shadow over the markets, and a report Friday that the U.S. economy failed to add any new jobs in August caused European and Asian stock markets to sink sharply Monday.

That jobs figure was far below economists' already tepid expectations for 93,000 new U.S. jobs and renewed concerns that the U.S. recovery is not only slowing but actually unwinding. U.S. hiring figures for June and July were also revised lower, only adding to the gloom.

The full impact of the jobs report will hit U.S. markets on Tuesday, since trading there was closed Monday for the U.S. Labor Day holiday.

WASHINGTON (AP) -- The job market is even worse than the 9.1 percent unemployment rate suggests.

America's 14 million unemployed aren't competing just with each other. They must also contend with 8.8 million other people not counted as unemployed - part-timers who want full-time work.

When consumer demand picks up, companies will likely boost the hours of their part-timers before they add jobs, economists say. It means they have room to expand without hiring.

And the unemployed will face another source of competition once the economy improves: Roughly 2.6 million people who aren't counted as unemployed because they've stopped looking for work. Once they start looking again, they'll be classified as unemployed. And the unemployment rate could rise.

WASHINGTON (AP) -- Employers stopped adding jobs in August, an alarming setback for an economy that has struggled to grow and might be at risk of another recession.

The government also reported that the unemployment rate remained at 9.1 percent. It was the weakest jobs report since September 2010.

Stocks tumbled on the news. The Dow Jones industrial average sank 245 points soon after trading began.

A strike by 45,000 Verizon workers lowered the job totals. Those workers are now back on the job.

The weakness in employment was underscored by revisions to the jobs data for June and July. Collectively, those figures were lowered to show 58,000 fewer jobs added. The downward revisions were all in government jobs.

CERNOBBIO, Italy (AP) -- Business leaders and finance experts gathered in Italy offered a downbeat assessment of the global economy Friday - with several predicting another recession due to a calamitous cocktail of sluggish growth, eurozone dysfunction, and financial market volatility.

The year's events - from natural disasters and violent uprisings to fears of debt defaults - have not only sent shock waves through the financial world but also caused a slump in confidence among consumers and industry.

"There is a significant probability of a double-dip recession," pronounced New York University economist Nouriel Roubini, in opening remarks that lived up to his nickname of "Dr. Doom" - earned for forecasting a financial crisis years before the 2008 crash, even as many reveled in the boom times.

More than 400,000 homes and businesses lost power Saturday as Hurricane Irene slammed into the East Coast.

Winds of up to 80 miles per hour whipped ashore Saturday morning, ripping power lines from poles and snapping trees in half. Hospitals, emergency call centers and other crucial facilities were holding up, but officials said it could get much worse as Irene churns north.

Gasoline supplies were falling as drivers top off their tanks on their way out of town. Pump prices rose about 3 cents per gallon overnight in New Jersey and Pennsylvania.

The power losses were most heavily concentrated in Wilmington and Wrightsville Beach, N.C., where Progress Energy reported 250,000 customers without power, mostly residences.

"We expect those numbers to increase," Progress spokeswoman Julia Milstead said.

NEW YORK (AP) -- Travelers across the country are facing days of grief ahead as thousands of flights are being cancelled because of Hurricane Irene.

Airlines are scrapping more than 8,300 flights this weekend from North Carolina to Boston, grounding passengers as Irene sweeps up the East Coast. There were more than 3,600 cancellations on Saturday alone.

All New York City-area airports closed to arriving flights at noon on Saturday, when the city's public transportation system shut down. The biggest airlines, United Continental Holdings Inc. and Delta Air Lines Inc., canceled thousands of flights each. Ronald Reagan Washington National Airport and Washington Dulles International Airport were both open as of noon, but most flights had been cancelled.

SAN FRANCISCO (AP) -- It's easy to forget now, but Apple's magnetism was once confined to a cult-like following of geeks seduced by the elegance and simplicity of the company's computers.

Over the past decade, though, Apple has emerged as a trendsetter and a wealth-making machine - the rare company that appeals to the cool cats hanging out in hip cafes and the fat cats looking to make another killing on Wall Street.

In the process, Apple has left an indelible mark that extends far beyond that first personal computer Steve Jobs and Steve Wozniak introduced 35 years ago. Since then, Apple has transformed the music, retailing, marketing and cellphone industries. Now, it's engineering yet another evolution in computing with the increasingly popular iPad tablet.

Those achievements have endeared Apple to the masses, turning its product announcements into the technology industry's latter-day version of a Beatles concert and turning its familiar logo into an emblem of exquisite taste.

NEW YORK (AP) -- Warren Buffett is coming to the rescue of another fallen giant.

Buffett's Berkshire Hathaway announced Thursday that it would invest $5 billion in Bank of America Corp., giving a much-needed vote of confidence in the struggling bank.

The bank's stock had plunged 52 percent in the past year on concerns over the bank's mortgage problems and worries that it would have to sell large amounts of stock to shore up its balance sheet.

Investors' confidence in the bank took another blow this month as its mortgage headaches got even worse. On Aug. 8, American International Group Inc. sued Bank of America for more than $10 billion, saying the bank deceived AIG by selling it overvalued mortgage-backed securities.

Much of the Charlotte, N.C. bank's problems stem from its 2008 purchase of Countrywide Financial Corp., the country's largest mortgage lender. Bank of America has been under heavy pressure from investors for selling them securities based on mortgages that later lost value.

The bank paid a total of $12.7 billion earlier this year to settle claims that it sold investors faulty mortgage investments. Investors have become worried that the bank would have to pay out even more to settle future claims.

Buffett, one of the most successful and respected investors of all time, has lent his credibility to several other icons of American business at times when investors' confidence in them was waning. His investments have usually proven to be both prescient and profitable.

Buffett pumped $5 billion into Goldman Sachs Group Inc. at the height of the 2008 financial crisis, helping to reverse a crisis of confidence in the investment bank and the U.S. banking system in general. He also invested $3 billion in General Electric Co.

Those investments, which paid annual dividends of 10 percent, wound up being lucrative. Berkshire made $2 billion from the Goldman investment alone. Unlike the Bank of America deal, those companies approached Berkshire seeking financial help and the stamp of approval that came with the endorsement of the legendary investor.

Buffett said in a statement Thursday he called Bank of America's CEO Moynihan to ask about investing because he considered the bank a strong, well-led company.

Berkshire will receive a dividend of 6 percent on his investment in Bank of America. Berkshire will get 50,000 preferred shares and warrants to purchase 700 million shares of common stock at $7.14 per share. Buffett can exercise the warrants at any time in the next 10 years. If he does, it would make him the banks largest shareholder with a stake of 7 percent.

An hour after the deal was announced, Buffett had already made a profit on paper of $500 million on the stock warrants thanks to a surge in Bank of America's stock price. After closing at $6.99 Wednesday, the stock jumped 87 cents or 12 percent to $7.86 Thursday. Bank of America's stock traded as high as $15 in January, before its mortgage woes worsened.

Buffett's investment in Bank of America sent the stocks of other banks higher too. Citigroup Inc. rose 2.7 percent and Morgan Stanley rose 3.4 percent.

Berkshire also holds investments in several other banks. One of Berkshire's biggest stock investments is a 16 percent stake in Wells Fargo & Co. Berkshire also holds stakes in US Bancorp, M&T Bank Corp. and the Bank of New York Mellon Co.

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AP Business Writers Christina Rexrode and Josh Funk contributed to this story.

WASHINGTON (AP) -- The number of people who bought new homes fell for the third straight month in July, putting sales on track to finish this year as the worst on records dating back half a century.

Sales of new homes fell nearly 1 percent in July to a seasonally adjusted annual rate of 298,000, the Commerce Department said Tuesday. That's less than half the 700,000 that economists say represent a healthy market.

Housing remains the weakest part of the economy. Last year was the worst for new-home sales on records that go back nearly 50 years.

While new homes represent less than one-fifth of the housing market, they have an outsize impact on the economy. Each home built creates an average of three jobs and $90,000 in taxes, according to the National Association of Home Builders.

WASHINGTON (AP) -- News flash: Congressional Republicans want to raise your taxes.

Impossible, right? GOP lawmakers are so virulently anti-tax, surely they will fight to prevent a payroll tax increase on virtually every wage-earner starting Jan. 1, right?

Apparently not.

Many of the same Republicans who fought hammer-and-tong to keep the George W. Bush-era income tax cuts from expiring on schedule are now saying a different "temporary" tax cut should end as planned. By their own definition, that amounts to a tax increase.

WASHINGTON (AP) -- The number of people applying for unemployment benefits rose back above 400,000 last week. Still, the four-week average, a more reliable gauge of the job market, fell to the lowest level since mid-April.

The report suggests that the economy is creating jobs but not nearly enough to lower the high unemployment rate.

Weekly applications rose 9,000 to a seasonally adjusted 408,000, the Labor Department said Thursday. That's the highest level in four weeks. Applications have been above 400,000 for 18 of the past 19 weeks.

The four-week average dropped for the seventh straight week to 402,500.

MOUNTAIN VIEW, Calif. (AP) -- Google Inc. is buying cell phone maker Motorola Mobility Holdings Inc. for $12.5 billion in cash. It's by far Google's biggest acquisition and a sign the online search leader is serious about expanding beyond its core Internet business and setting the agenda in the fast-growing mobile market.

Google will pay $40.00 per share, a 63 percent premium to Motorola's closing price on Friday.

Five-year-old Frank Allocco is 37,000 feet above America, face pressed against the window.

"Cool," he says to his 6-year-old sister. "Francesca, look."

It's their first flight. They ignore a Harry Potter DVD and video games. Instead, there are rivers, mountains and tiny cars below.

Francesca chimes in: "Wow, Frank, look at that cloud."

For Frank and Francesca, soaring high above the country is magical. The kids from Park Ridge, Ill., are treated like stars. A flight attendant gives them wing pins. Mom and dad snap photos.

For most of us, though, the romance of flight is long gone - lost to Sept. 11, 2001, and hard-set memories of jets crashing into buildings.

We remember what it was like before. Keeping all our clothes on at security. Getting hot meals for free - even if we complained about the taste. Leg room.

Today, we feel beaten down even before reaching our seats. Shoes must be removed and all but the tiniest amounts of liquids surrendered at security checkpoints. Loved ones can no longer kiss passengers goodbye at the gate. And airlines, which have struggled ever since the day terrorists used airplanes as missiles, are adding fees, squeezing in passengers and cutting amenities to survive.

The stock market buckled Monday under the weight of a crisis in Europe and danger of recession at home. Reeling from a downgrade of American debt, the Dow Jones industrials plunged 634 points.

It was the worst day for the market since the financial crisis in the fall of 2008 and extended Wall Street's sudden, sharp decline. Stocks have lost 15 percent of their value in just two and a half weeks.

Monday was the first trading day since Standard and Poor's downgraded the United States' risk-free credit rating, and the selling started at the opening bell. The Dow dropped 250 points in minutes. For the rest of the day, investors looked for safer places for their money. With few buyers left for stocks, the market could only drift lower.

The Dow finished the day down 5.5 percent. The point decline was the worst since Dec. 1, 2008, and the sixth-steepest ever. The average ended at 10,809.85, its first close under 11,000 since November.

FRANKFURT, Germany (AP) -- A risky European Central Bank decision to fight the continent's debt crisis by buying Spanish and Italian bonds on Monday started pushing down the soaring interest yields threatening those countries with financial disaster.

But some analysts warned that the move transfers significant risk to the balance sheet of an institution long reluctant to move beyond its traditional role controlling inflation. Others warned that a half-hearted intervention would not stamp out the crisis.

The radical expansion of the ECB's bond-buying program cements the bank's unwilling role as the institution with primary responsibility for solving's Europe 21-month-old financial crisis.

The ECB had been reluctant to become directly involved in averting the crisis, instead pushing politicians to get their countries' finances under control and build up their own crisis management system.

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NEW YORK (AP) -- U.S. stock futures tumbled Monday amid a rout in global stocks after Standard & Poor's downgraded the U.S. credit rating for the first time.

S&P cut the long-term debt rating for the U.S. by one notch to AA+ from AAA late Friday. The move wasn't unexpected, but it comes when investors are already feeling nervous about a weak U.S. economy, European debt problems and Japan's recovery from its March earthquake.

Ahead of the opening bell, Dow Jones industrial futures are down 222 points, or 1.9 percent, to 11,181. S&P 500 futures are down 27, or 2.3 percent, to 1,171. Nasdaq 100 futures are down 50, or 2.3 percent, to 2,134.

In Europe, the German DAX index fell 2 percent. In Asia, Japan's Nikkei 225 index fell 2.2 percent.

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TOKYO (AP) -- The world's leading economies on Sunday urgently discussed the stability of financial markets after a historic U.S. credit downgrade rattled investors already worried about European debt crises.

Deputies from the Group of 20 advanced and emerging economies talked by telephone Sunday about proposals to minimize market shocks, South Korea's central bank said. And the financial ministers from the Group of Seven economies planned talks before Asian markets open Monday.

The countries are concerned Standard & Poor's downgrade of the U.S. credit rating late Friday will shake global markets. In a sign of the fallout, Middle East markets tumbled Sunday on the first day of business after the downgrade.

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JERUSALEM (AP) -- Israel on Sunday formed a panel of government ministers and some of the country's leading economic experts to draw up a plan to reduce the soaring cost of living, marking a new effort to defuse demonstrations over prices that drew over a quarter-million people onto the streets the night before.

The announcement comes after three weeks of mushrooming protests sparked by complaints over housing costs. Since then, the protests have gained new momentum as Israelis grow increasingly frustrated with their struggle to make ends meet despite economic growth in the country that is outpacing that of other developed nations. Saturday's turnout of over 250,000 people in public squares presented Israel's most stable government in years with a chorus of discontent it could not afford to ignore.

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The person spoke on condition of anonymity because the level and timing of the contacts had yet to be confirmed.

Standard & Poor's downgrade of the U.S. credit rating Friday night added to growing fears over debt levels and economic growth in the world's biggest economy and in large European nations such as Italy and Spain. The downgrade is also set to hurt Europe, whose economy is closely linked to the U.S. and whose weak members depend on strong demand abroad for their goods to help them grow.

Many economists see the world's big central banks as the last line of defense at this moment in the crisis, after policymakers in Europe and the U.S. have failed to agree on the kind of shock-and-awe moves that many investors demand.

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