Recovery likely strengthening after weaker 3Q
WASHINGTON (AP) – All signs suggest the economic recovery will end the year on firmer footing despite a report Tuesday that the economy grew at a 2.2 percent pace in the third quarter, less than previously thought.
The Commerce Department’s new reading on gross domestic product for the July-to-September quarter was weaker than the 2.8 percent growth rate estimated a month ago. Economists had predicted this figure would remain the same in the final estimate of the quarter’s GDP – the value of all goods and services produced in the United States.
The main factors behind the downgrade were that consumers didn’t spend as much, commercial construction was weaker, business investment in equipment and software was softer and companies cut back more on their stockpiles of goods.
Stocks rise for 3rd day after jump in home sales
NEW YORK (AP) – Stocks pushed higher for a third straight day after a surprisingly strong report on housing provided the latest evidence that the economy is picking up speed.
All major indexes gained less than 1 percent Tuesday, with the Standard & Poor’s 500 index and the Nasdaq composite index closing at new highs for the year. The Dow Jones industrial average rose 50 points, bringing its three-day point gain to 156.
Stocks got off to a positive start after a report from the National Association of Realtors said home resales jumped 7.4 percent in November. That was much more than the 2.5 percent increase analysts expected. The government’s tax breaks have spurred sales to their highest level in nearly three years.
Court bans sale of Word; Microsoft has fix ready
SEATTLE (AP) – A federal appeals court ordered Microsoft Corp. to stop selling its Word program in January and pay a Canadian software company $290 million for violating a patent, upholding the judgment of a lower court.
But people looking to buy Word or Microsoft’s Office package in the U.S. won’t have to go without the software. Microsoft said Tuesday it expects that new versions of the product, with the computer code in question removed, will be ready for sale when the injunction begins on Jan. 11.
Toronto-based i4i Inc. sued Microsoft in 2007, saying it owned the technology behind a tool in the popular word processing program. The technology in question gives Word users an improved way to edit XML, or code that tells the program how to interpret and display a document’s contents.
Community bankers get Obama’s soft touch
WASHINGTON (AP) – President Barack Obama took his plea for more small business lending to community bankers Tuesday, but his prodding was far gentler than it was with high finance CEOs last week.
The president offered to help ease regulation that bankers say has restricted lending. He praised the small bankers as pillars of their communities. And he listened sympathetically to their pleas for easier access to capital.
The tone of the meeting with 12 regional bankers and top administration officials differed from last week when he famously called top bankers “fat cats” in a television interview and then told them in a White House meeting that they had a responsibility to make “an extraordinary commitment” to help rebuild the economy.
White House picks new cyber coordinator
WASHINGTON (AP) – The White House has tapped a corporate cyber security expert and former Bush administration official to lead the effort to shore up the country’s computer networks and better coordinate with companies that operate 80 percent of those critical systems.
Howard A. Schmidt, a former eBay and Microsoft executive, will become the government’s cyber security coordinator, weathering a rocky selection process that dragged on for months, as others turned the job down.
In a letter posted on the White House web site Tuesday, John Brennan, assistant to President Barack Obama for homeland security and counterterrorism, said Schmidt will have regular access to the president and play a vital role in the country’s security.
FDA: Review finds no proof Vytorin causes cancer
TRENTON, N.J. (AP) – There’s no evidence Merck & Co.’s blockbuster cholesterol drug Vytorin causes cancer, federal regulators said Tuesday. They reviewed reams of data after a patient study last year raised suspicions of a link, weakening sales already hurt by questions about the drug’s efficacy.
The Food and Drug Administration said Tuesday it reviewed data from that study and two others and found no evidence linking Vytorin to a higher risk of cancer or death from cancer. Still, the agency said it cannot definitively rule that out.
Vytorin, a top moneymaker for Merck, combines two types of brand-name cholesterol pills, Zetia and Zocor, which is available as an inexpensive generic drug. At their peak, Vytorin and Zetia generated more than $5 billion a year in combined sales.
OPEC opts to hold output steady
LUANDA, Angola (AP) – OPEC held its year-old output targets unchanged Tuesday, as the group grappled with overproduction by some in its ranks that could undercut efforts to support oil prices amid a fragile global economic recovery.
The Organization of the Petroleum Exporting Countries wrapped up its meeting Tuesday in the Angolan capital by deciding that the best plan of action was not to act. The 12-member bloc highlighted concerns about the strength of the global economic recovery, and again called on oil producers outside the group to cooperate in propping up oil markets.
Treasurys continue to fall on signs of recovery
NEW YORK (AP) – The improving economy propelled long-term interest rates higher for the third straight day on Tuesday, lifting a key bond market barometer to another record.
A report that existing homes surged last month gave investors another incentive to keep buying riskier assets including stocks, and less reason to hold on to defensive investments like government debt.
The yield curve, the market measure that reflects the difference between the yields on two-year and 10-year Treasurys, widened further as investors sold longer-term bonds. Investors have been selling long-dated bonds in anticipation that a healthier economy will bring higher inflation, which undermines the value of fixed-income securities.
Dubai’s main stock market to buy Nasdaq Dubai
DUBAI, United Arab Emirates (AP) – Dubai’s main stock market says it is buying another exchange run by Nasdaq in the struggling Arab boomtown in a deal it valued at $121 million.
Dubai Financial Market said Tuesday it is offering to buy the Nasdaq Dubai from the bourse’s parent Nasdaq OMX Group to broaden its offerings to investors and further link the two exchanges.
The deal follows a sharp drop in local markets after Dubai shocked investors with word it was seeking to restructure $26 billion in debts held by its main state-run conglomerate.
Berkshire Hathaway names Comcast’s Burke to board
OMAHA, Neb. (AP) – Billionaire Warren Buffett’s Berkshire Hathaway Inc. on Tuesday named Stephen Burke, the chief operating officer of Comcast Corp., to its board of directors.
Buffett said in a statement that Burke, 51, is “keenly interested” in the company. Burke also is president of Comcast Cable Communications, a unit of Comcast.
Berkshire did not say if Burke was replacing anyone on the board. A representative could not immediately be reached for comment. By The Associated Press
The Dow Jones industrial average rose 50.79, or 0.5 percent, to 10,464.93.
The Standard & Poor’s 500 index rose 3.97, or 0.4 percent, to 1,118.02, while the Nasdaq composite index rose 15.01, or 0.7 percent, to 2,252.67. Both the S&P 500 and the Nasdaq are at their highest levels since last October.
Benchmark crude for February delivery rose 68 cents to settle at $74.40 on the New York Mercantile Exchange.
In other Nymex trading in January contracts, gasoline rose almost 2 cents to settle at $1.8888 per gallon and heating oil rose less than a penny to settle at $1.9486. Natural gas rose 4.6 cents to settle at $5.715 per 1,000 cubic feet.
In London, Brent crude for February delivery rose 47 cents to settle at $73.46 on the ICE Futures exchange.