The Associated Press
Wednesday, March 23, 2011; 5:51 PM
New-home sales plunged in February to record low
WASHINGTON (AP) - Sales of new homes plunged in February to the fewest on records dating back nearly half a century, a dismal sign for an already-weak housing market.
New-home sales fell 16.9 percent last month to a seasonally adjusted annual rate of 250,000 homes, the Commerce Department said Wednesday. It's the third straight monthly decline and far below the 700,000-a-year pace that economists view as healthy.
The median price of a new home dropped nearly 14 percent to $202,100, the lowest since December 2003. New-home prices are now 30 percent higher than of those being resold.
Japan disaster likely to be world's costliest
TOKYO (AP) - Japan's government said the cost of the earthquake and tsunami that devastated the northeast could reach $309 billion, making it the world's most expensive natural disaster on record.
The extensive damage to housing, roads, utilities and businesses across seven prefectures has resulted in direct losses of between 16 trillion yen ($198 billion) and 25 trillion yen ($309 billion), according to a Cabinet Office estimate Wednesday.
If the government's projection proves correct, it would top the losses from Hurricane Katrina. The 2005 megastorm that ravaged New Orleans and the surrounding region cost $125 billion, according to the Insurance Information Institute.
In blow for BofA, Fed rejects its dividend plan
NEW YORK (AP) - It was one more blow for Bank of America: The Federal Reserve didn't allow nation's largest bank to increase its dividends.
The decision by the Fed makes Bank of America Corp. the only one of the four largest U.S. banks that wasn't able to raise its dividend, something shareholders have been clamoring for.
The Fed's decision, which BofA disclosed in a regulatory filing Wednesday, also raised questions over whether the bank is strong enough to withstand another economic downturn.
Bernanke says bank overhaul will help small banks
WASHINGTON (AP) - Federal Reserve Chairman Ben Bernanke told a group of executives from smaller banks Wednesday that the financial overhaul will level the playing field for them with the industry's giants.
Bernanke said it would be important for the banks to adapt to the changing regulatory environment, in remarks to the annual convention in San Diego of small- and medium-size banks. Bernanke acknowledged their concerns about the new law. But he said most of the requirements are aimed the country's biggest banks and not them.
Congress passed the regulatory law last year in an effort to prevent a repeat of the 2008 financial crisis. Small-bank executives have complained that it will cost them a lot of money to meet the new rules, even though they were not responsible for causing the financial crisis.
Portugal's prime minister quits after losing debt vote
LISBON, Portugal - Debt-stressed Portugal's prime minister says he has quit after opposition parties rejected his proposals that were devised to avoid a bailout.
All opposition parties united to defeat Prime Minister Jose Socrates' latest austerity measures in a parliamentary vote Wednesday, saying the belt-tightening went too far. Socrates said in a statement the defeat made it impossible for him and his government to ensure Portugal's economic future.
The government's resignation was expected after days of political tension, but could re-ignite market anxiety about the financial soundness of the wider eurozone. European leaders hope to soothe nervous international investors at a summit starting Thursday.
General Mills 3Q net income climbs on snack sales
NEW YORK (AP) - General Mills Inc.'s net income rose 18 percent in the fiscal third quarter, driven by the sale of more snacks and strength abroad.
The maker of Nature Valley snack bars and Cheerios cereal has started to raise prices for some of its products over the past few months to cope with rising ingredient costs. It expects price increases will accelerate during the current fiscal fourth quarter.
S&P: Stock buybacks more than doubled in 2010
BOSTON (AP) - America's biggest corporations more than doubled their repurchases of stock last year in another sign of confidence in the economic recovery.
Standard & Poor's said Wednesday that S&P 500 companies spent $299 billion last year to buy back their shares. That's up from the $138 billion spent in 2009, when the recession officially ended at midyear.
In the fourth quarter alone, share repurchases jumped 81 percent from a year earlier, to $86 billion.
Despite the surge, S&P said buybacks last year were still just half of their pre-recession level.
Egypt exchange plunges on reopening after uprising
CAIRO (AP) - Egypt's stock market plummeted almost 9 percent in its first day of trading Wednesday in nearly two months, with foreign investors leading a sell-off that offered a window into concerns about the country's stability after mass protests toppled former President Hosni Mubarak.
Starbucks growth strategy: new places, products
SEATTLE (AP) - Starbucks Corp. is expanding the products and places it sells to customers and adding extras - like free online access to Marvel Comics in its cafes and single-serve coffee machines in other stores.
The company has been working for some time to move its business beyond its cafes, which took a hit during the recession but have since rebounded. On Wednesday, executives laid out how the company is putting its new strategy into practice.
CEO Howard Schultz said one of Starbucks' critical steps is expanding its consumer packaged-goods business, which he said could one day rival its retail business in revenue. A key component of that will be increasing single-serve coffee sales in the U.S., an estimated $1.6 billion market. Starbucks says two-thirds of the growth in the U.S. coffee market during the past year has come from the single-serve market.
By The Associated Press
The Dow Jones industrial average rose 67.39 points, or 0.6 percent, to close at 12,086.02. The Standard & Poor's 500 index edged up 3.77 points, or 0.3 percent, to close at 1,297.54.
The Nasdaq composite index rose 14.43, or 0.5 percent, to 2,698.30.
Benchmark West Texas Intermediate crude for May delivery added 78 cents to settle at $105.75 per barrel on the New York Mercantile Exchange. Oil hasn't settled that high since Sept. 26, 2008.
In other Nymex trading for April contracts, heating oil dropped 2.12 cents to settle at $3.0550 per gallon and gasoline futures added 1.68 cents to settle at $3.0213 per gallon. Natural gas gained 8.1 cents to settle at $4.335 per 1,000 cubic feet.
In London, Brent crude lost 17 cents to settle at $115.47 per barrel on the ICE Futures exchange.