Spike in wholesale inflation sends stocks lower
NEW YORK (AP) – The stock market fell for the first time in five days and Treasurys slipped after a jump in inflation stoked concerns that the Federal Reserve would be forced to raise interest rates.
Stocks extended their slide late Tuesday after General Electric Co. forecast that revenue and earnings would be largely flat in 2010. Major stocks indexes fell 0.5 percent from 14-month highs, including the Dow Jones industrial average, which lost 49 points to 10,452.00.
Trading was subdued as Fed policymakers gathered for a two-day meeting on interest rates. The Fed isn’t expected to raise rates from their record low level, but the day’s economic reports brought reminders that the central bank could be forced to raise rates sooner than expected to keep inflation at bay.
Best Buy 3Q profit up, but co sees slimmer margins
NEW YORK (AP) – Customers snapping up electronics and gift cards for the holidays boosted Best Buy’s third-quarter profit, but the nation’s largest electronics retailer said Tuesday that shoppers are focused on prices, particularly of TVs and computers.
Best Buy predicted consumers will stay that way in the fourth quarter, squeezing its profit margin. Still, Best Buy Inc. raised its annual profit and revenue forecasts and said both traffic and shoppers’ average spending rose from a year ago.
Sales at Best Buy stores that have been open at least one year – a key retail measure – rose more than 10 percent Thanksgiving weekend, CEO Brian Dunn said in a conference call with analysts. Half the gain came from higher traffic and half from customers spending more.
Judge tosses case against 2 former Broadcom execs
SANTA ANA, Calif. (AP) – A federal judge Tuesday dismissed fraud and conspiracy charges in the stock-option backdating case against Broadcom Corp. co-founder Henry T. Nicholas III and former Chief Financial Officer William Ruehle because of prosecutorial misconduct.
U.S. District Judge Cormac J. Carney also asked prosecutors to explain why a separate drug indictment against Nicholas should not also be thrown out, and he dismissed a civil case the Securities and Exchange Commission filed against four Broadcom executives.
The stunning move came after Carney last week vacated a guilty plea by Broadcom co-founder Henry Samueli in the same case after hearing him testify for two days as a defense witness for Ruehle under a grant of immunity.
Boeing’s 787 jetliner makes first test flight
EVERETT, Wash. (AP) – Boeing’s new 787 jetliner finally got airborne Tuesday, the long-delayed inaugural flight of the world’s first commercial plane constructed with half its components made from lightweight composite materials.
The sleek jet lifted off from Everett’s Paine Field on a flight over Washington state, beginning an extensive testing program needed to obtain Federal Aviation Administration certification.
The two-member crew performed a variety of basic system checks before landing at Seattle’s Boeing Field about three hours later. Deteriorating weather brought the plane back to earth about an hour earlier than planned, but company spokeswoman Lori Gunter said the pilots managed to test the landing gear and flaps.
NYC hedge fund manager indicted in trading case
NEW YORK (AP) – A wealthy hedge fund manager has been indicted in a massive insider trading case.
The indictment filed Tuesday in Manhattan federal court charged billionaire Raj Rajaratnam and another defendant with multiple counts of conspiracy to commit securities fraud.
The Sri Lanka-born Rajaratnam was arrested in October. A total of 20 people have been charged in the $52 million insider trading case.
Rajaratnam remains free on $100 million bail. His lawyer didn’t immediately comment.
GE CEO: Company undergoing rebuilding after crisis
General Electric CEO Jeffrey Immelt said Tuesday the giant conglomerate is undergoing a renewal after what has been one of the most difficult years in the company’s 117-year history.
Immelt said in his annual outlook session for analysts in New York that GE is focusing on sectors such as energy and health care as it looks to its big industrial divisions to navigate out of the deep recession. It also plans to rely much less on its lending arm, GE Capital, for profits next year.
Yet despite the shift in strategy, GE’s forecast for 2010 shows that the effects of the recent economic crisis will linger.
Adobe Systems posts 4Q loss, weighed by charges
NEW YORK (AP) – Adobe Systems Inc. said Tuesday that although it took a loss in the fiscal fourth quarter, consumer demand improved and allowed the maker of design and desktop publishing software to post an optimistic outlook for the current period.
Adobe reported a net loss of $32 million, or 6 cents per share, for the three months that ended Nov. 27, compared with a profit of $245.9 million, or 46 cents per share, in the same period a year earlier.
Stripping out special items such as restructuring charges, and an income tax adjustment, Adobe earned 39 cents per share, surpassing Wall Street analysts’ expectations.
FDA panel OKs Crestor cholesterol pill’s wider use
GAITHERSBURG, Md. (AP) – Federal health advisers said Tuesday that expanded use of AstraZeneca’s cholesterol pill Crestor can benefit patients with healthy cholesterol levels by preventing heart attack, stroke and death.
A Food and Drug Administration panel of experts voted 12-4 with one abstention that Crestor’s benefits outweigh its risks in patients with normal cholesterol and no history of heart disease, setting the stage for a dramatic expansion of a drug that is already a blockbuster.
The FDA is not required to follow the group’s advice, though it usually does.
32 accused of $60M in Medicare fraud in 3 states
FORT LAUDERDALE, Fla. (AP) – Federal agents arrested 26 suspects in three states Tuesday, including a doctor and nurses, in a major crackdown on Medicare fraud totaling $61 million in separate scams.
Arrests in Miami, Brooklyn and Detroit included a Florida doctor accused of running a $40 million home health care scheme that falsely listed patients as blind diabetics so that he could bill for twice-daily nurse visits.
The U.S. Department of Justice and U.S. Department of Health and Human Services said the total of 32 indicted suspects lined up bogus patients and otherwise billed Medicare for unnecessary medical equipment, physical therapy and HIV infusions.