June 12, 2007 > Business Highlights
Investors recoup some losses
NEW YORK (AP), Jun 08 _ Stocks snapped a three-day losing streak Friday, allowing investors to recoup some of the losses incurred during a week in which concerns about interest rates roiled Wall Street. In Friday's session, the Dow Jones industrial average showed a triple-digit gain, and the Standard & Poor's 500 index crossed back above the 1,500 mark.
After briefly dipping into negative territory in late morning, stocks gained steam in the afternoon as yields on the 10-year Treasury note backed off five-year highs of 5.25 percent. As stocks closed Friday, yields on the benchmark note hovered around 5.11 percent.
Yields, which move in the opposite direction as bond prices, rose during the week as investors grew less optimistic that the Federal Reserve would lower short-term interest rates. A move above the 5 percent level Thursday in the 10-year bond yield sent stock market investors rushing to bonds.
According to preliminary calculations, the Dow industrials rose 157.66, or 1.19 percent, to 13,424.39.
U.S. Trade Deficit drops
WASHINGTON (AP), Jun 08 _ The trade deficit dropped sharply in April as continued strong overseas demand pushed American exports to an all-time high.
While the Bush administration hailed the unexpectedly large improvement as a sign that an export-boom was continuing, critics noted the imbalance with China rose in April, underscoring what they said was an urgent need for Congress to take action to punish China for unfair trade practices.
The Commerce Department reported Friday that the gap between what America sells abroad and what it imports totaled $58.5 billion in April, a 6.2 percent decline from the March deficit.
Exports edged up 0.2 percent to a record $129.5 billion, reflecting strong sales of soybeans and other farm products, commercial aircraft and industrial machinery. Imports fell 1.9 percent to $188 billion, reflecting big declines in imports of foreign cars, televisions and clothing and a small dip in America's foreign oil bill.
Oil futures plunge
NEW YORK (AP), Jun 08 _ Oil futures plunged by more than $2 a barrel Friday after news that Cyclone Gonu had spared major oil installations in the Gulf of Oman and alleviated supply worries.
Traders also let go of earlier concerns over poor refinery runs.
Light, sweet crude for July delivery dropped $2.17 to settle at $64.76 a barrel on the New York Mercantile Exchange after dropping as low as $64.60 in the session.
The contract had jumped above $67 a barrel early Thursday and settled 97 cents higher at $66.93 a barrel following a U.S. government report that showed refinery utilization fell 1.5 percent last week to 89.6 percent of capacity.
Brent crude for July lost $2.40 to settle at $68.60 a barrel on the ICE Futures exchange in London.
Cascading computer failure in air traffic control
WASHINGTON (AP), Jun 08 _ A cascading computer failure in the nation's air-traffic control system caused severe flight delays and some cancellations along the East Coast Friday.
A computer system in Atlanta that processes pilots' flights plans and sends them to air-traffic controllers failed late Thursday or early Friday, Federal Aviation Administration spokeswoman Diane Spitaliere said. In response, the agency rerouted the system's functions to another computer in Salt Lake City, which overloaded due to the increased volume of data, magnifying the problem.
The FAA could not immediately calculate the number of flight delays caused by the problem, which was made worse by bad weather, Spitaliere said.
Although the computer problem was fixed shortly before 11 a.m. Friday, its impact lingered on into the late afternoon, especially in New York, where computer systems took two extra hours to get back online, Spitaliere said. She said the flight delays in the rest of the country were not as severe.
Consumer confidence tumbles
WASHINGTON (AP), Jun 08 _ Consumer confidence tumbled to a 10-month low as gyrating gasoline prices and persisting problems in the housing market gnawed at people's sense of economic well-being.
The magnitude of the drop shown in the latest RBC Cash Index was surprising given the healthy state of the nation's job market, which is usually an important factor coloring consumers' perceptions of how the economy and their own financial fortunes are faring.
But nagging worries about gasoline prices, if the yearlong housing slump will worsen and drag down home prices further and whether the economy will, in fact, snap out of its sluggish spell, are taking a toll on confidence, economists explained.
Facing uncertainties, some consumers are feeling angst, watching their budgets more closely and turning cautious, he said.
Clampdown on Iranian companies
WASHINGTON (AP), Jun 08 _ The Bush administration moved Friday to financially clamp down on four Iranian companies suspected of connections to Tehran's nuclear program.
It marked the government's latest move to put the financial squeeze on Iran, a country the United States accuses of fostering terrorism and whose nuclear ambitions have drawn international rebuke.
The Treasury Department's action is against Pars Tarash, Farayand Technique, Fajr Industries Group and Mizan Machine Manufacturing Group.
The action means that any bank accounts or other financial assets belonging to these three companies found in the United States must be frozen. Americans also are forbidden from doing business with them.
Vail Resorts reports third-quarter increase
DENVER (AP), Jun 08 _ Vail Resorts Inc. on Friday reported a 15 percent increase in third-quarter earnings as higher lift-ticket sales offset a dip in the number of skiers on its slopes during the challenging winter.
The major North American ski operator also reported higher revenue in its lodging and real estate operations.
The weather in the Rockies proved unpredictable this past winter with lower-than-average snowfall amounts recorded at all five company resorts, Chief Executive Officer Rob Katz said. Yet heavy snow in metropolitan Denver and along the Front Range thwarted skiers trying to reach the resorts.
The results, which beat Wall Street estimates, prompted Vail Resorts to increase its 2007 guidance and pushed its stock up 3 percent to a 52-week high in afternoon trading.
Asian and European markets fall
LONDON (AP), Jun 08 _ Most Asian and European markets fell Friday following on a tumble in the U.S. a day earlier amid growing speculation a U.S. interest rate cut was unlikely. Declines in Europe were muted, however, and Chinese stocks bucked the trend and rose for a fourth straight session.
The slide across much of Asia came on the heels of recent rallies in many regional markets, some to record highs.
In Tokyo, the Nikkei 225 average fell 1.52 percent to 17,779.09 and Hong Kong's Hang Seng Index lost 1.4 percent to 20,509.15. London's FTSE 100 index ended flat at 6,505.10, the German DAX Xetra 30 lost 0.4 percent to 7,590.50 and the French CAC-40 edged down 0.1 percent to 5,883.29.