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— The top business news from The Associated Press for the morning of Wednesday, May 6, 2009:
Banks returning bailouts will face conditions
WASHINGTON (AP) — Banks that want to pay back their federal bailout funds and free themselves from government restrictions on compensation and dividends will have to sever their ties to another financial assistance program. Financial firms eager to return infusions from the $700 billion Troubled Asset Relief Program will have to demonstrate that they can operate without debt guarantees provided by the Federal Deposit Insurance Corp., a senior government official said Tuesday. The FDIC program allows financial institutions to borrow money at lower costs.
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Boston Globe: Newspaper reaches deal with union
BOSTON (AP) — A spokesman for the Boston Globe says the newspaper has completed negotiations with its largest union. The Globe reports on its Web site that the newspaper and the Boston Newspaper Guild reached a tentative settlement early Wednesday on major contract concessions.
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Public scrutiny blunted bank stress tests
WASHINGTON — Treasury Secretary Timothy Geithner said in February that putting the nation's biggest banks through "stress tests" was vital to getting the financial system back on solid ground. But with the results set to be released Thursday, critics say regulators seem so intent on avoiding statements that might undermine confidence in the banks that they risk eroding trust in the stress tests themselves.
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World markets brush aside US stress test concerns
LONDON (AP) — World stock markets rose Wednesday as investor worries about the outcome of the U.S. government's stress tests of the country's 19 leading banks were allayed by better than expected economic and corporate news around the world. In Europe, the FTSE 100 index of leading British shares was up 21.95 points, or 0.5 percent, to 4,358.89 after a closely watched survey from the Chartered Institute of Purchasing and Supply indicated that the British services sector is close to growing once again.
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Oil rises above $54 on economic recovery optimism
SINGAPORE (AP) — Oil prices rose above $54 a barrel Wednesday in Asia as comments by the U.S. central bank chief stoked investor optimism that economic growth and crude demand may pick up by the end of the year. Benchmark crude for June delivery was up 36 cents to $54.20 a barrel by late afternoon in Singapore, in electronic trading on the New York Mercantile Exchange. The contract Tuesday fell 63 cents to settle at $53.84.
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Auditors see SEC deficiencies
WASHINGTON (AP) — The Securities and Exchange Commission has made progress in tightening its procedures for managing its caseload of enforcement investigations but internal communications and use of resources still must be improved, congressional auditors have concluded in a new report. The workings of the SEC's enforcement division have come under intense congressional scrutiny after revelations in December that the agency failed to detect the massive Ponzi scheme run by money manager Bernard Madoff, despite red flags raised to its staff by outsiders over the course of a decade.
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Judge OKs Chrysler's steps toward sale to Fiat
NEW YORK (AP) — The judge overseeing Chrysler LLC's Chapter 11 proceedings has ruled that the automaker can start taking steps toward selling the vast majority of its assets to Italy's Fiat Group SpA. The judge also said lawyers for a dissident group of lenders have until noon Wednesday to file a list of members with the court, ruling that their identities do not need to be sealed despite reported death threats. After more than seven hours of testimony and legal arguments, Judge Arthur Gonzales approved the bidding procedures for the proposed sale late Tuesday, saying they represented a "clear and orderly process."
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Asia faces weak recovery from slowdown, IMF says
SINGAPORE (AP) — Most Asian economies are facing a weak recovery next year from a sharp contraction this year and should boost spending to help offset struggling global export demand, the International Monetary Fund said Wednesday. Asia's collective economic growth will likely slow to 1.3 percent this year from 5.1 percent last year, before expanding 4.3 percent in 2010, the IMF said in a report. Excluding China and India, Asian economies will contract 2.9 percent this year and grow 1.6 percent next year, the fund predicted.
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Mexicans fly back to home emerging from flu scare
MEXICO CITY (AP) — Dozens of Mexican nationals who were quarantined at hospitals and hotels in China despite showing no symptoms of swine flu headed home early Wednesday on a government-chartered jet. Scheduled to land before sunrise, the travelers are returning to a capital that has begun emerging from a government-ordered lockdown designed to contain the spread of the virus that has caused 31 deaths in Mexico and the U.S. and sickened nearly 1,900 in 21 countries.
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Bernanke more optimistic, sees growth in 2009
WASHINGTON (AP) — Federal Reserve Chairman Ben Bernanke gave his most optimistic prediction yet Tuesday about the end of the recession, saying he expects the economy to start growing again this year — although the comeback could be weak and more jobs will disappear even after a recovery takes hold. The Fed chief told Congress' Joint Economic Committee that he saw hopeful signs, including firmer home sales, a revival in consumer spending and some improvement in lending conditions for banks, businesses and individual borrowers.
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GM plans 1-for-100 reverse stock split
DETROIT (AP) — General Motors Corp. notified shareholders Tuesday it is planning a reverse stock split that would give them one share of new stock for every 100 shares they currently own. The automaker said in a filing with the Securities and Exchange Commission that the deal would be part of an agreement with the Treasury Department in which the government would assume at least half of GM's debt in exchange for company shares. GM will send the information to shareholders currently holding a total of 610.5 million outstanding shares.
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Stocks slip as traders take profits after surge
NEW YORK (AP) — Sometimes a down day on Wall Street can be a good thing — especially when it shows that investors are carefully weighing their next steps. Traders collected a few profits Tuesday, leaving the major indexes with fairly modest losses, as the market waited for key reports on the government's assessment of banks' health and the latest numbers on jobs.
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US service sector contracts, but at slower pace
WASHINGTON (AP) — A private measure of the U.S. services sector contracted for the seventh straight month in April but at a slower pace, the latest sign the economic downturn could be moderating. The services index from the Institute for Supply Management, a Tempe, Ariz.-based trade group of purchasing executives, came in at 43.7 in April compared with 40.8 in March. Any reading below 50 indicates the service sector, where most Americans work, is contracting.
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Pulte 1Q loss narrows
Pulte Homes Inc. says its first-quarter loss improved versus a year ago as the homebuilder cut costs and absorbed smaller losses from declining value of its land and other assets. The Bloomfield Hills, Mich.-based homebuilder said Tuesday it lost $514.8 million, or $2.02 a share, in the three months ended in March. That compares with a loss of $696.1 million, or $2.75 a share, in the year-ago period.
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CVS Caremark profit falls on costs, charges
NEW YORK (AP) — CVS Caremark Corp. said Tuesday that charges and higher costs outweighed a boost in the drugstore operator's pharmacy sales, pushing first-quarter profit down slightly. But overall, CVS' results showed some resilience to the tough economy, which has battered even sales of essential items like prescriptions.
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Japan Markets
TOKYO (AP) — Japanese financial markets were closed Wednesday for part of the "Golden Week" holidays. They will reopen Thursday.
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