NEW YORK (AP) — Oil prices tumbled below $130 a barrel for the first time in more than a month yesterday, as crude's dramatic slide entered a third day accompanied by a sharp sell-off in natural gas.
The declines accelerated amid growing concerns that the weakening economy and creeping inflation are eroding demand for fossil fuels in the U.S. and other large energy-consuming nations.
Light, sweet crude for August delivery dropped $5.31 to settle at $129.29 a barrel on the New York Mercantile Exchange. Prices have fallen nearly $16 in just the past three days.
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Wall Street surges again on falling energy prices
NEW YORK (AP) — Wall Street shot higher yesterday, extending its rally into a second session as tumbling energy prices bolstered an already upbeat mood that followed stronger-than-expected quarterly reports from big names like JPMorgan Chase and United Technologies. The Dow Jones industrial average rose more than 200 points, bringing their two-day advance to more than 480.
Investors got a double dose of good news after weeks of angst about the economy. Oil prices tumbled for the third day in a row, and three components of the Dow industrials — JPMorgan Chase & Co., United Technologies Corp. and Coca-Cola Co. — issued comments that generally indicated that their businesses are holding up despite sometimes difficult economic conditions.
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Single-family building dips to slowest in 17 years
WASHINGTON (AP) — A beat-the-deadline rush to file permits for apartment construction in New York City lifted housing starts to unexpectedly high levels in June, but it was no cause for rejoicing. Construction of single-family homes nationwide fell to the slowest pace in 17 years.
Builders started work on single-family homes at an annual rate of 647,000 units last month, a drop of 5.3 percent from the previous month, the Commerce Department reported Thursday. It marked the slowest pace for singe-family activity since January 1991, another period when housing was going through a severe downturn.
That decline in single-family construction was in contrast to a 42.5 percent surge in apartment building, an increase that was attributed to a change in New York City building codes that triggered a rush by builders to take out applications before new regulations took effect on July 1.
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JPMorgan bests forecasts but sees US credit worsen
NEW YORK (AP) — The banking sector looked a little brighter for a second straight day yesterday after JPMorgan Chase & Co. reported better-than-expected results despite a spike in mortgage and other loan defaults.
The bank's shares gained more than 13 percent yesterday after it reported a 53 percent drop in profit. Following Wells Fargo & Co.'s stronger-than-expected results released Wednesday, investors appear more confident that the banking sector, while struggling, will be propped up by some of its healthier players.
However, JPMorgan Chase, like its weaker competitors, still has a tough environment to slog through as the aftermath of the mortgage and credit crisis continues. Even the bank's more creditworthy borrowers are now failing to make their mortgage payments.
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Merrill Lynch posts 2Q loss; Sells Bloomberg stake
NEW YORK (AP) — Merrill Lynch & Co. yesterday reported a $4.9 billion loss amid massive write-downs from soured mortgage positions and other risky investments, and unveiled plans to raise money by unloading assets including its 20 percent stake in Bloomberg LP.
The world's largest brokerage posted its fourth straight quarterly loss as it struggles to shore up a balance sheet battered by the global credit crisis. Merrill Lynch took $9.4 billion of charges and write-downs from mortgage-backed securities, unprofitable hedge positions, and residential mortgage exposure.
The new charges come on top of nearly $29 billion in write-downs that the New York-based brokerage had already taken because of tightening credit markets. Global banks and brokerages have been forced to take some $300 billion of write-downs in the past year.
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AMD changes CEO as chip maker struggles
SAN FRANCISCO (AP) — Hector Ruiz was pushed aside yesterday after six tumultuous years as CEO of Advanced Micro Devices Inc., as the chip maker tries to pull itself out of a deep financial hole caused by a questionable acquisition and a major product gaffe.
Ruiz, 62, who had been the only person to head AMD other than founder and longtime CEO Jerry Sanders, is stepping down as chief executive but will remain on the board. He's being replaced as CEO by chief operating officer Dirk Meyer, 46.
AMD also reported that it lost $1.19 billion in the second quarter, worse than the $600 million it lost in the same period a year ago. Taking one-time events into account, AMD's adjusted loss totaled 60 cents per share, below the 52 cents expected by analysts polled by Thomson Financial. Revenues rose to $1.35 billion from $1.31 billion, falling short of the $1.45 billion expected on Wall Street.
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Merck to start Vioxx settlement payouts in August
TRENTON, N.J. (AP) — Merck & Co. will start cutting checks for former users of its withdrawn painkiller Vioxx next month after announcing yesterday that it will fund a $4.85 billion settlement expected to resolve roughly 50,000 lawsuits.
The decision marks the beginning of the end of the four-year legal saga, which began when cardiovascular side effects forced Merck to pull Vioxx off the market in 2004, triggering tens of thousands of lawsuits, sullying its once-spotless reputation and forcing out its then-chief executive.
The Vioxx case has cost Merck at least $6.8 billion, including more than $1.53 billion through March 31 on legal costs for defense research and individual trials, most of which it has won.
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Google 2Q profit rises 35 pct, below analyst views
SAN FRANCISCO (AP) — Google Inc.'s earnings growth slowed more than investors anticipated during the second quarter — an indication that sluggish U.S. economy is starting to weigh on the Internet search leader. The results released after the stock market closed caused Google shares to plunge by about 7 percent.
Google earned $1.25 billion, or $3.92 per share, during the three months ended in June. That represented a 35 percent increase from net income of $925.1 million, or $2.93 per share, at the same time last year.
If not for costs incurred for employee stock compensation, Google said it would have earned $4.63 per share. That figure missed the average earnings estimate of $4.74 per share among analysts surveyed by Thomson Financial.
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Microsoft 4Q profit jumps 42 percent
SEATTLE (AP) — Microsoft Corp. said yesterday its fiscal fourth-quarter profit jumped 42 percent, helped by strong sales of its Office and Windows software, but investors sent shares down on disappointing first-quarter guidance.
Earnings for the three months ended June 30 rose to $4.3 billion, or 46 cents per share, but that missed Wall Street's expectations by a penny per share. In the year-ago quarter, Microsoft reported earnings of $3.0 billion, or 31 cents per share.
Revenue increased 18 percent to nearly $15.8 billion from $13.4 billion last year, just ahead of Wall Street's average forecast of $15.65 billion, according to a Thomson Financial survey.
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Europeans expand antitrust case against Intel
BRUSSELS, Belgium (AP) — European Union regulators have expanded their antitrust case against Intel Corp., claiming that the world's largest semiconductor maker has deliberately squeezed rival AMD out of the chip market.
The European Commission said Thursday it has added three new charges against Intel, warning that it may order Intel to change its behavior under threat of large fines that can total 10 percent of its global revenue. Intel's 2007 sales were $38 billion.
Advanced Micro Devices Inc., the company's only real rival, applauded the EU for bringing the latest charges, and said it showed a resolve to protect consumers.
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Witness tells how US taxes evaded abroad
WASHINGTON (AP) — A man wanted by Liechtenstein for leaking secret banking information that identified millionaire tax cheats across Europe and the United States has described to congressional investigators how money was concealed.
Lawmakers played a videotape of the testimony by Heinrich Kieber at a congressional hearing Thursday that revealed rare details of offshore practices at two European banks. At the hearing, Swiss banking giant, UBS AG, announced that because of recent revelations, it will stop offering U.S. clients offshore services through branches based abroad.
Kieber is living under a new name in an undisclosed witness protection program, and has never spoken publicly about his role in exposing tax shelters he says were used by Liechtenstein's LGT group.
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By The Associated Press
The Dow rose 207.38, or 1.85 percent, to 11,446.66, bringing their two-day advance to more than 480.
Broader stock indicators also rose Thursday. The Standard & Poor's 500 index advanced 14.96, or 1.20 percent, to 1,260.32, and the Nasdaq composite index rose 27.45, or 1.20 percent, to 2,312.30.
Light, sweet crude for August delivery dropped $5.31 to settle at $129.29 a barrel on the New York Mercantile Exchange. Prices have fallen nearly $16 in just the past three days.
In other Nymex trade, heating oil fell 9.72 cents to settle at $3.7438 a gallon, while gasoline futures fell 11.61 cents to settle at $3.1633.
Brent crude for September delivery fell $5.12 to settle at $131.07 on the ICE Futures Exchange in London.
