Business Highlights 11-18

Factory production dips; wholesale inflation muted

WASHINGTON (AP) - A decline in factory production in October signals that consumers and businesses remain cautious in their spending, with the economic recovery likely to be sluggish.

At the same time, the weak economy is taming inflation. Wholesale prices rose less than expected last month, giving the Federal Reserve more leeway to keep interest rates low to try to spur a stronger economic rebound.

Industrial production edged up 0.1 percent last month, the Fed reported Tuesday. It was the poorest showing since output fell 0.4 percent in June. Since then, industrial output had posted strong gains, helped by a rebound in auto production.

But auto output slipped 1.7 percent last month. That helped drag down total factory output, the biggest portion of industrial production.


3 retailers report solid 3Q but cautious on 4Q

CHICAGO (AP) - Deal-craving shoppers helped a trio of prominent U.S. retailers report Tuesday that their third quarter managed to improve this year.

At Target, in-store revenue rose along with foot traffic during the three-month period, but shoppers were still buying fewer items during each trip. But shoppers at both stores and discount retailer TJX Cos. surprised analysts in seeming more willing to indulge.

Of the retailers that reported Tuesday, TJMaxx's parent company, TJX, fared best, with quarterly profit up 32 percent. It also said early holiday sales are strong. Meanwhile, Saks managed to post a surprise profit for the first time in 18 months as the company began selling more luxury brands starting at lower prices to capture consumers' dollars.


Stocks post modest gains on rise in commodities

NEW YORK (AP) - Stocks finished an erratic session mixed Tuesday as higher commodity prices lifted energy and materials shares.

The meager advances were enough to push stocks to new 13-month highs, though more shares fell than rose at the New York Stock Exchange. The market had zigzagged for much of the day on mixed news from retailers and on industrial production. The Dow Jones industrial average ended up 30.46, or 0.3 percent, at 10,437.42.

A rebound in the dollar after three down days kept investors' appetite for stocks in check. A long-term weakening trend in the dollar since March has been lifting commodities prices and shares of U.S. exporters, which benefit from stronger foreign demand for their goods when the dollar falls.


Geithner: US must not drop ball on financial fix

WASHINGTON (AP) - Treasury Secretary Timothy Geithner told Congress on Tuesday that efforts to strengthen the global financial system to prevent another deep crisis will falter if the United States drops the ball on overhauling regulation of its own banking system.

Geithner also echoed remarks by President Barack Obama in Asia that, while the global economy is moving toward a recovery, countries can no longer rely on American consumers to serve as the sole engine of economic growth.

With the president in China wrapping up his first Asian trip, the treasury secretary emphasized that the United States and China "must be at the center of efforts to put the global economy on a more sustainable and balanced growth path."


CIT Group says 3Q loss widened to $1.07 billion

NEW YORK (AP) - Commercial lender CIT Group Inc. provided a further glimpse into its troubled finances, saying it lost $1.07 billion during the third quarter as customers jumped ship and it tried unsuccessfully to avoid filing for bankruptcy protection.

Third-quarter results showed that CIT, one of the nation's largest lenders to small and mid-sized businesses, was struggling to keep its customers and that those that remained during the summer were having difficulties repaying their loans. That points to more uncertainty for the company even after it emerges from bankruptcy protection; many small businesses still have cash flow problems.


Administration widening pursuit of financial fraud

WASHINGTON (AP) - The Obama administration has formed a new task force to target financial fraud - replacing an earlier corporate fraud task force.

Attorney General Eric Holder says the new group will have a broader scope - and incorporate state investigators as well as federal agencies - to investigate and prosecute financial crimes that worsened the market collapse.

The attorney general made the announcement standing with officials from the Securities and Exchange Commission, the Treasury Department, and the Department of Housing and Urban Development. The task force replaces one created in 2002 by the Bush administration following the corporate scandals surrounding WorldCom, Enron, Adelphia, and other firms.


Value of loans at biggest banks drops in September

WASHINGTON (AP) - The value of loans held by the largest banks who received the largest amounts of government bailout support fell for an eighth consecutive month in September, according to the Treasury Department.

Further declines in lending will act as a severe drag on the economy as it struggles to rebound from the longest recession since the 1930s, analysts said.

Critics contend that the long string of drops in value proves the bailout program failed at its stated goal of boosting loans to consumers and businesses. The Obama administration says it's typical for lending to fall sharply during a recession. Administration officials have argued that the lending declines would have been even steeper without the bailout program.


Dems, Republicans at odds over BofA, Merrill deal

WASHINGTON (AP) - A senior House Democrat says the government didn't force Bank of America to take over Merrill Lynch, but a bank board member said much pressure was applied and Republicans charged that a committee inquiry was covering up the role of an Obama administration official.

The House Oversight and Government Reform Committee is focused on the $45 billion federal bailout of Bank of America Corp. and its hastily arranged acquisition of Merrill last December. The hearing examined whether Bank of America executives knew they had little chance of legally being able to back out of the deal to buy Merrill but threatened to do so to pressure the government for more bailout aid.


Home Depot 3rd-qtr earnings fall 8.9 percent

NEW YORK (AP) - Consumers are buying washers to fix leaky faucets rather than replacing the faucets themselves, and professional contractors are spending less overall on projects, Home Depot Inc. reported Tuesday.

The nation's largest home-improvement retailer said third quarter profit fell 9 percent as demand remained soft amid the weak housing market. No. 2 home-improvement chain Lowe's also reported a third-quarter drop in revenue and profit a day earlier.

Cost cuts helped Home Depot top expectations and led it to raise its full-year earnings guidance, but the company did not raise its revenue outlook. Both Home Depot and Lowe's reported sequential improvement in some of the hardest-hit markets during the housing downturn, including Florida, California and Arizona.


Foxwoods fails to make full debt payment

NEW HAVEN, Conn. (AP) - Foxwoods Resort Casino, one of the world's largest, has failed to make a full payment on its debt, leading to a default and another credit-rating downgrade as casinos around the country struggle amid the severe recession.

The Mashantucket Pequot Tribal Nation, which owns Foxwoods, said it has paid $14.2 million of the $21.25 million semi-annual interest payment that was due Monday on $500 million in debt notes. The tribe said it does not anticipate paying the balance within a 30-day period, resulting in a default.

The tribe, which has been seeking to restructure billions of dollars in debt, said its efforts are "separate and distinct" from operations at Foxwoods and will not affect customers, employees, suppliers or business partners.

By The Associated Press

The Dow Jones industrial average rose 30.46, or 0.3 percent, to 10,437.42. It was the highest close for the Dow since Oct. 2, 2008, when it ended at 10,482.85.

The broader Standard & Poor's 500 index rose 1.02, or 0.1 percent, to 1,110.32, while the Nasdaq composite index rose 5.93, or 0.3 percent, to 2,203.78.

Benchmark crude for December delivery rose 24 cents to settle at $79.14 a barrel in afternoon trading on the New York Mercantile Exchange.

In other Nymex trading, heating oil rose 2.65 cents to settle at $2.0585 a gallon. Gasoline for December delivery added 1.81 cents to settle at $2.0049 a gallon. Natural gas for December delivery fell 8.4 cents to settle at $4.530 per 1,000 cubic feet.

In London, Brent crude for December delivery gained 21 cents to settle at $78.97 on the ICE Futures exchange.


Use the comment form below to begin a discussion about this content.

Sign in to comment