Business Highlights
Consumer prices flat in July as energy retreats
WASHINGTON (AP) - U.S. consumer prices were flat in July as energy costs retreated following a big surge in June. Over the past 12 months, prices dropped the most in nearly six decades as the recession and lower energy costs kept a lid on inflation.
The Labor Department said Friday that consumer prices showed no changed in July, in line with analysts' expectations and far below the 0.7 percent jump in June.
Prices fell 2.1 percent over the past 12 months, the biggest annual decline since a similar drop in the period ending in January 1950. Most of the past year's decline reflects energy prices falling 28.1 percent since peaking in July 2008.
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Industrial production up for 1st time in 9 months
WASHINGTON (AP) - Production from the nation's factories, mines and utilities rose more than expected in July, with the first gain in nine months driven by increased output from auto companies.
The increase provides more evidence that the worst recession since World War II is easing. It marks only the second gain in industrial production since the downturn began in December 2007.
The Federal Reserve said Friday that production rose 0.5 percent in July, after falling 0.4 percent in June. Economists expected a 0.3 percent increase, according to Thomson Reuters.
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Stocks drop as investors worry about consumers
NEW YORK (AP) - The fear on Wall Street is that nervous consumers are going to short-circuit the economic recovery.
Stocks fell sharply Friday, taking the major indexes down about 1 percent, after investors were disappointed by reports that the Reuters/University of Michigan index of consumer sentiment fell significantly short of expectations for the first part of August. That's a sign consumers may well keep cutting back their spending as they worry about losing their jobs. Consumer spending is crucial for the economy to emerge from recession as it accounts for two-thirds of all U.S. economic activity.
The Dow Jones industrial average fell 76.79, or 0.8 percent, to 9,321.40 after falling as much as 165 points after the consumer sentiment survey was released.
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US official: parts of regulatory plan won't fly
WASHINGTON (AP) - Federal Deposit Insurance Corp. Chairman Sheila Bair is pushing back against key pillars of the Obama administration's financial overhaul plan, saying they wouldn't survive in Congress and calling her own alternatives more viable.
In an interview with The Associated Press, Bair said Congress won't approve two major parts of the package: Expanding the Federal Reserve's authority to regulate the largest financial companies and giving a proposed new consumer protection agency examination and enforcement powers over banks.
Such authority now belongs to her agency and other bank regulators.
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Penney posts small 2Q loss, raises profit outlook
NEW YORK (AP) - Cutting inventory and other costs helped J.C. Penney Co. post a smaller loss for the second quarter than Wall Street expected, but the moderate-price department store chain expects sales to stay sluggish as consumers grapple with economic worries.
Penney's shares fell more than 6 percent, by $2.04 to $31.30, in afternoon trading as investors were disappointed with its upgraded but conservative profit forecast, which fell mostly below Wall Street expectations.
During a conference call with investors, Chairman and CEO Myron Ullman III said Penney's business is stabilizing amid signs the economy is beginning to recover. And that steadiness is making it easier for the company to plan methodically, though sales are still below what Ullman would like.
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Energy prices slump with consumers still nervous
NEW YORK (AP) - Energy prices finished the week sharply lower, giving up more than 4 percent Friday on evidence that consumers are unlikely to take the lead in an economic recovery.
Oil, which has been propped up by optimism that people will begin spending more, tumbled after a week-ending report suggested those hopes may be premature.
Benchmark crude for September delivery lost $3.01 to settle at $67.51 a barrel on the New York Mercantile Exchange, a low point for the month. In London, Brent prices gave up $1.07 to settle at $72.41 a barrel on the ICE Futures exchange.
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Runaway receiver at odds with SEC in Stanford case
DALLAS (AP) - The attorney supposed to clean up what the government says was Texas businessman R. Allen Stanford's multibillion-dollar Ponzi scheme is managing to anger just about every party involved in the case.
The Securities and Exchange Commission and other stakeholders in the complicated and far-flung case say Dallas attorney Ralph Janvey, appointed by the court to track down billions of missing dollars, has instead become a rogue receiver who refuses to cooperate with the SEC.
The latest flash point has been Janvey's demands for more than $27 million in fees for himself and the team of lawyers and consultants he hired to take over Stanford's business empire and track down the missing billions.
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Euro area prices fell 0.7 pct in year to July
LONDON (AP) - Prices in the 16 countries that use the euro fell on an annual basis for the second straight month in July and by more than previously anticipated, official figures showed Friday.
The European Union's statistics office Eurostat said consumer prices in the euro zone fell by 0.7 percent in July from the previous year, 0.1 percentage point more than it had previously estimated and ahead of June's 0.1 percent fall. The monthly decline was also 0.7 percent.
Eurostat said the biggest drops were recorded in Ireland and Belgium.
It said a 5.5 percent decline in transport cost, related to lower year-on-year energy prices, was the main influence behind the further fall in overall prices.
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Hong Kong recession ends as economy grows 3.3 pct
HONG KONG (AP) - Hong Kong's economy broke out of a yearlong recession in the second quarter as the territory benefited from strong growth in mainland China and better conditions in the West, the government said Friday.
The pickup adds to the list of economies in Asia and beyond to emerge from recession or shrink at a less-dismal pace since the banking crisis sent global production and demand plunging last year. Both Germany and France resumed growing last quarter.
The southern Chinese territory's economy, slammed four straight quarters by free-falling world demand for exports, grew by 3.3 percent on a seasonally adjusted quarter-to-quarter basis, the government said. The economy contracted 4.3 percent in the first quarter.
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SoCal man to plead guilty in bank secrets case
LOS ANGELES (AP) - Federal prosecutors say a Malibu man has agreed to plead guilty to failing to report $1 million he transferred to an account at Swiss bank UBS to avoid paying taxes.
Prosecutors in Los Angeles said Friday that John McCarthy will plead guilty to failing to file tax papers.
McCarthy is expected to appear in court Sept. 14. He faces up to five years in prison and fines totaling $250,000 if the plea is approved by a judge. McCarthy's attorney did not immediately return a phone message seeking comment.
McCarthy is the first alleged tax dodger to be named after the Swiss government agreed to U.S. demands to reveal identities of UBS AG bank customers.
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By The Associated Press
The Dow Jones industrial average fell 76.79, or 0.8 percent, to 9,321.40.
The S&P 500 index fell 8.64, or 0.9 percent, to 1,004.09, while the Nasdaq composite index fell 23.83, or 1.2 percent, to 1,985.52.
Benchmark crude for September delivery lost $3.01 to settle at $67.51 a barrel on the New York Mercantile Exchange, a low point for the month. In London, Brent prices gave up $1.07 to settle at $72.41 a barrel on the ICE Futures exchange.
Natural gas prices fell to its lowest level this year. The contract for September delivery dropped 9.8 cents to settle at $3.238 per 1,000 cubic feet.
In other Nymex trading, gasoline for September delivery gave up 8.12 cents to settle at $1.938 a gallon. Heating oil fell 6.18 cents to settle at $1.841 a gallon.