US economy showing strength as spending cuts loom
WASHINGTON (AP) – Even with automatic spending cuts looming, the outlook for the U.S. economy brightened a bit Tuesday after reports showed that Americans are more confident and are buying more new homes.
Home prices are also rising steadily, and banks are lending more. Such improvements suggest that the economy is resilient enough to withstand deep government budget cuts that will kick in Friday.
That's encouraging because uncertainty over the federal budget could persist for months.
AP survey: US budget impasse holding back economy
WASHINGTON (AP) – The political standoff over the U.S. budget is slowing the U.S. economy – more so than any hesitance by Americans to spend freely.
That consensus emerges from the latest Associated Press Economy Survey just as the budget impasse in Washington is about to trigger automatic spending cuts across the economy.
Many of the economists think consumer spending has slowed in response to higher tax burdens but will rebound later in the year. By contrast, they worry that the budget fights in Washington will persist for much of 2013 and drag on economic growth.
Bernanke signals continued support for low rates
WASHINGTON (AP) – Ben Bernanke sent a message Tuesday to Congress: The Federal Reserve's low-interest-rate policies are giving crucial support to an economy still burdened by high unemployment.
The Fed chairman acknowledged the risks of keeping rates low indefinitely. But he expressed confidence that such risks pose little threat now.
Delivering the Fed's semiannual monetary report to Congress, Bernanke sought to minimize concerns that the central bank's easy-money policies might cause runaway inflation later or dangerous bubbles in assets like stocks. He sought to reassure sometimes-skeptical senators that the Fed is monitoring potential threats and can defuse them before they hurt the economy.
US 4Q bank earnings up 37 percent as lending rises
WASHINGTON (AP) – Profits at U.S. banks jumped almost 37 percent for the October-December period, reaching the highest level for a fourth quarter in six years as banks continued to step up lending.
The figures are fresh evidence of the industry's sustained recovery more than four years after the financial crisis.
Banks earned $34.7 billion in the last three months of 2012, up from $25.4 billion a year ago and the highest for a fourth quarter since 2006, the Federal Deposit Insurance Corp. reported Tuesday. Sixty percent of banks reported improved earnings from the fourth quarter of 2011, the agency said.
The FDIC, created during the Great Depression to ensure bank deposits, monitors and examines the financial condition of U.S. banks.
US Senate panel backs Lew nomination for Treasury
WASHINGTON (AP) – The Senate Finance Committee on Tuesday approved President Barack Obama's choice of Jacob Lew to be Treasury secretary and sent the nomination to the full Senate.
Lew would succeed Timothy Geithner, who completed a tumultuous four-year term in which he helped lead the administration's response to the financial crisis and recession.
The committee approved Lew's nomination, 19-5. The timing of a Senate vote is unclear.
Macy's profit beats Wall Street expectations
NEW YORK (AP) – Macy's reported a fourth-quarter profit that beat Wall Street expectations as its strategy of tailoring merchandise to local markets paid off during the holiday season.
The department store chain, which also operates the upscale Bloomingdale's stores, also said Tuesday that it expects that same game plan to help increase revenue at stores open at least a year by 3.5 percent in fiscal 2013. That's on top of the increase of 3.7 percent for 2012. The measure is a key indicator of health because it strips out the impact of newly opened and closed locations.
Home Depot 4Q results top Street, OKs $17 billion buyback
NEW YORK (AP) – Home Depot Inc., the largest U.S. home improvement retailer, said Tuesday that its fiscal fourth-quarter net income surged 32 percent, beating expectations, helped by strong U.S. sales and the cleanup related to Superstorm Sandy.
The news follows smaller rival Lowe's Cos. results on Monday, which also beat expectations, and is the latest sign that Americans are feeling more comfortable spending money on their homes as the housing market slowly recovers.
The company said its results were solid across the country. New York and New Jersey were the strongest regions as people repaired homes after Superstorm Sandy, but there was also recovery in Florida, California and Arizona – the hardest hit regions during the housing downturn.
JPMorgan to trim 4,000 jobs, many in consumer banking
NEW YORK (AP) – JPMorgan is trimming about 4,000 jobs, or about 1.5 percent of its workforce, becoming the latest big bank to shrink its staff.
The bank said the cuts will be focused in consumer banking and mortgages. Many of the cuts will come through attrition, but the bank will lay off workers as well, a bank spokeswoman said.
The cuts were revealed in a presentation to investors Tuesday. They are part of a bigger cost-cutting campaign and come after a year of higher profit and revenue.
Best Buy to cut 400 jobs at headquarters
NEW YORK (AP) – Electronics chain Best Buy Co. says it is cutting 400 jobs at its headquarters as part of a larger $725 million cost-cutting plan.
The cuts are part of a move to save $150 million in selling, general and administrative costs. Best Buy says they're the first phase of the larger cost-cutting plan that new CEO Hubert Joly announced in November.
Best Buy has been trying to turn around results as it faces increased competition from online and discount retailers.
For 1st time since 1999, music revenues inch up
LONDON (AP) – More than a decade after online file swapping tipped the music industry into turmoil, record executives may finally be getting a sliver of good news.
Industry revenue is up. A measly 0.3 percent, but it's still up.
Since its 1999 peak, the global music industry's revenues have crashed more than 40 percent. Tuesday's figures, which show a rise in global revenue from $16.4 billion in 2011 to $16.5 billion in 2012, are the first hint of growth in more than a decade.
By The Associated Press(equals)
The Dow Jones industrial average closed up 115.96 points, or 0.8 percent, to 13,900.13. The Standard & Poor's 500 index rose 9.09 points, or 0.6 percent, to 1,496.94. The Nasdaq composite was up 13.40 points, or 0.4 percent, at 3,129.65.
Benchmark crude for April delivery finished down 48 cents at $92.63 a barrel on the New York Mercantile Exchange. Brent crude, used to price many kinds of oil imported by U.S. refineries, fell $1.73 to end at $112.71 per barrel on the ICE Futures exchange in London.
Wholesale gasoline fell 6 cents to finish at $3.20 a gallon. Heating oil dropped 7 cents to end at $3.03 a gallon. Natural gas rose 1 cent to finish at $3.43 per 1,000 cubic feet.