Treasury: Bailed-out firms to slash pay in Nov.
WASHINGTON (AP) - The Treasury Department on Thursday ordered seven companies that received billions of dollars in government bailouts to halve total compensation for their top executives. But the big reductions will not apply to pay earned before November.
Kenneth Feinberg, the Treasury official leading the pay review, told reporters that average salaries for the top 25 executives are being cut 90 percent starting next month.
The action will apply to the top executives at Bank of America Corp., American International Group Inc., Citigroup Inc., General Motors, GMAC, Chrysler and Chrysler Financial.
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China's 3Q growth accelerates to 8.9 percent pace
SHANGHAI (AP) - Lavish government spending and bank lending helped China's growth rate accelerate to an 8.9 percent pace in the third quarter, far outstripping expansions elsewhere around the globe and raising questions about whether the rapid rebound can be sustained.
China also announced Thursday that industrial production and investment spending are growing at a faster pace. That seemingly good news unsettled local stock investors, however, on fears Beijing may need to rein in its stimulus policies to avoid asset bubbles and inflation.
Companies, central bankers and political leaders around the world are increasingly counting on growing demand from Chinese producers and consumers to offset sluggish home markets.
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Leading indicators signal growth, but jobs scarce
NEW YORK (AP) - A private forecast of economic activity rose for the sixth straight month in September, a sign the economy may keep growing early next year despite rising unemployment.
The number of new claims for jobless benefits jumped more than expected last week. Claims had fallen in five out of the previous six weeks, and most economists expect that trend to continue but at a slow pace, with employers still reluctant to hire.
The Conference Board said Thursday that its index of leading economic indicators rose 1 percent last month after a 0.4 percent gain in August, beating economists' expectations.
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Stocks rise as financial, consumer stocks gain
NEW YORK (AP) - Investors encouraged by a good batch of earnings reports and forecasts jumped back into stocks after a two-day slide.
Stocks posted big gains Thursday as investors snapped up financial shares after several banks said they weren't seeing as many loans go bad. The market extended its gains in afternoon trading when Wal-Mart Stores Inc. said it expects sales to grow this year and increase at a faster pace next year.
The Dow Jones industrial average jumped 132 points to 10,081.31, logging the biggest gains of major indexes after Wal-Mart's forecast and as several companies included in the index reported earnings that beat expectations.
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McDonald's powers through Q3, cautions about Oct.
CHICAGO (AP) - McDonald's Inc., a notable winner from the recession because of its cheap menu, cautioned Thursday that the company could post disappointing U.S. sales figures in October.
That first hint of weakness from a company that's managed to thrive as its competitors falter came as it posted a solid 6 percent profit increase.
CEO Jim Skinner told investors that sales in U.S. locations open at least a year would be "flat to slightly negative" in October. If that happens, it would be only the third time the monthly figure hasn't climbed in 6 1/2 years and shows McDonald's isn't immune to the pressures on customers who are eating out less and spending less when they do.
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Dow cuts costs and turns profit; outlook cautious
Better but not good was the third-quarter message from Dow Chemical Co., which produces basic ingredients used to make everything from automobiles to toys and diapers.
What Dow sells makes its way into so many products that the company's performance and what it sees coming can serve as an early barometer for consumer sentiment.
The company, based in Midland, Mich., saw a modest uptick in revenue from the second quarter, even in chemicals used in the distressed housing and automobile industry. That suggests the market has stabilized somewhat, said Andrew Liveris, Dow's chairman and CEO.
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Heating oil, natural gas prices rise in October
NEW YORK (AP) - Sparked by a cold snap in the northeast, home heating fuels are getting more expensive even though supplies are well above normal for this time of year.
Heating oil futures spiked with crude oil contracts last week. Retail prices followed, surging an average of 10.2 cents per gallon for residential customers by Monday, according to an Energy Information Administration report released Thursday.
Natural gas prices rose everywhere for retail customers, with hikes of between 31 cents and $1.14 per each million British thermal units in the lower 48 states.
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Banks cut back on emergency loans from Fed
WASHINGTON (AP) - Banks cut back on loans from the Federal Reserve's emergency lending program over the past week, a sign some credit problems are easing as the economy recovers.
The Fed on Thursday said commercial banks averaged $23.8 billion in daily borrowing over the week that ended Wednesday. That was down from $27.4 billion in the week ended Oct. 14.
The identities of the financial institutions are not released. They pay just 0.50 percent in interest for the emergency, overnight loans.
Banks also trimmed their use of other credit programs set up to ease the financial crisis, including one aimed at boosting the availability of short-term financing crucial for paying salaries and supplies.
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FCC votes to begin crafting 'net neutrality' rules
WASHINGTON (AP) - Federal regulators took an important step Thursday toward prohibiting broadband providers from favoring or discriminating against certain kinds of Internet traffic.
Despite the concerns of the telecommunications industry and the agency's two Republicans, the Federal Communications Commission voted to begin writing so-called "network neutrality" regulations to prevent phone and cable companies from abusing their control over the market for broadband access.
FCC Chairman Julius Genachowski said regulations are needed to ensure that broadband subscribers can access all legal Web sites and services, including Internet calling applications and video sites that compete with the broadband companies' core businesses.
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AmEx reports 21 percent decline in 3Q profit
NEW YORK (AP) - American Express Co. reported its eighth straight quarter of falling profits as consumers spent and borrowed less.
However, while the New York-based credit card company reported a 22 percent drop in earnings, it said there are signs that loan losses could be stabilizing and that business spending is picking up.
For the period ended Sept. 30, American Express said earnings after accounting for preferred stock dividends and other items totaled $632 million, or 53 cents per share. That is down from $810 million, or 70 cents per share, a year earlier.
Results included a one-time benefit of $180 million due to an accounting adjustment. By The Associated Press
The Dow rose 131.95, or 1.3 percent, to 10,081.31. The index is 11 points below its highest close of the year, which it reached on Monday.
The broader Standard & Poor's 500 index rose 11.51, or 1.1 percent, to 1,092.91. The Nasdaq rose 14.56, or 0.7 percent, to 2,165.29
Benchmark crude for December delivery gave up 18 cents to settle at $81.19 a barrel on the New York Mercantile Exchange. In London, Brent crude for December delivery fell 18 cents to settle at $79.51 on the ICE Futures exchange.
In other Nymex trading, heating oil for November delivery fell 1.07 cents to settle at $2.0946 and gasoline for November delivery fell a penny to settle at $2.0442 a gallon. Natural gas for November delivery gave up 15.3 cents to settle at $4.947 per 1,000 cubic feet.