Stock rally helps regain wealth lost in recession
WASHINGTON (AP) — Americans are continuing to climb out of the hole they sank into during the Great Recession.
A stock rally at the end of 2011 helped rebuild lost wealth — a trend that carried into 2012. Households responded by increasing their borrowing for the first time since the financial crisis began, even as home values fell further.
Household wealth rose 2.1 percent to $58.5 trillion in fourth quarter, the most in a year. It will have to rise 13 percent more to revisit its pre-recession peak.
Americans' stock portfolios rose nearly 10 percent last quarter to drive the gains. And stocks have increased even further since then. The Standard & Poor's 500 index has jumped 24 percent since early October.
Stronger US economy may strain to top expectations
WASHINGTON (AP) — The U.S. economy has been outrunning everyone's expectations.
Factory output has surprisingly surged. Housing, left for dead, is inching back. Most crucially, companies are hiring faster than many envisioned.
Funny thing about expectations, though: Each time you exceed them, it gets harder to do so next time. On Friday, economists expect the government to report a 200,000-plus job gain for a third straight month.
The previous two months, job growth topped expectations, and unemployment sank from 8.7 percent to 8.3 percent. Consumer confidence has since risen. So have President Barack Obama's approval ratings.
This time? Another strong jobs report would be a welcome sign that the economy is further strengthening. But unless it exceeds expectations, it may not ignite a celebration.
iPad dominates due to Apple's supply deals
NEW YORK (AP) — Apple certainly has lots of buzz and corporate cache behind its products, but there's a hidden — almost mundane — reason its newest iPad is likely to dominate the competition: the advantageous deals the company cuts with components manufacturers.
Apple's size, and the fact that the iPad shares components with the highly popular iPhone, means that the company can buy crucial parts such as processing chips and display screens at lower prices. Any company that wants to make a tablet computer that matches the iPad's $499 starting price has to endure higher costs.
As a result, Apple's tablet-making competitors have flailed — and failed. And with the new iPad, Apple is expected to extend its 62 percent market share in the tablet computer category it created. IMS Research expects Apple to capture 70 percent of the market this year.
FDA links once-promising pain drugs to bone decay
WASHINGTON (AP) — Some of the world's largest drugmakers will face an uphill battle next week in their bid to revive a class of experimental pain drugs that have been sidelined by safety concerns for nearly two years.
The Food and Drug Administration says there is a clear association between the nerve-blocking medications and reports of joint failure and bone deterioration that led the agency to halt studies of the drugs in 2010. However, the agency also notes that those side effects were less common when the drugs were used at lower doses, potentially leaving the door open for future use. The agency released its safety analysis ahead of a public meeting next week where outside experts will discuss the drugs' safety.
On Monday, Pfizer Inc., Johnson & Johnson and Regeneron Pharmaceuticals will make their case to continue studies of the drugs, with new safety precautions to protect patients.
McDonald's revenue figure is short of expectations
NEW YORK (AP) — McDonald's Corp. said Thursday that a key revenue figure came in short of expectations for February as severe weather in parts of Europe and the timing of the Chinese New Year hurt its performance.
The world's biggest hamburger chain also noted that it's navigating an environment of "persistent economic uncertainty, austerity measures in Europe and commodity and labor cost pressures, particularly in the U.S."
The Oak Brook, Ill.-based company said the challenges are expected to hurt its first-quarter operating income growth.
Exxon pegs spending at $185 billion over next 5 years
NEW YORK (AP) — Exxon said Thursday that it will spend about $150 billion over the next five years to find more oil and natural gas to satisfy the world's growing energy appetite.
Exxon Mobil Corp., the world's largest publicly traded energy company, expects global energy demand to increase 30 percent by 2040, compared with 2010 levels. As demand grows, CEO Rex Tillerson said Exxon will plow more money into a global search for new resources. Including investments in its refining and chemicals business, Exxon's capital budget for 2012 through 2016 will total $185 billion, up 29 percent from the prior five-year period.
Greece, markets upbeat on bond swap deal
ATHENS, Greece (AP) — Greece government officials and world markets appeared confident that a high number of private investors would participate in a major Greek debt reduction deal as the deadline to do so passed Thursday night.
Participation in the landmark agreement ended as planned at 10 p.m. (2000 GMT; 3 p.m. EST) Thursday.
It is aimed at slashing the country's national debt by $140 billion, with private bond holders accepting a face-value loss of 53.5 percent, in exchange for new bonds with more favorable repayment terms.
Initial results of participation in the exchange are due to be announced early Friday.
Average rate on 30-year mortgage dips to 3.88 percent
WASHINGTON (AP) — Fixed-rate mortgages remain a bargain at the start of the spring-buying season: The average rate on the 30-year mortgage dipped this week, while the 15-year loan fell to a new record low.
Mortgage buyer Freddie Mac said Thursday that the rate on the fixed 30-year loan ticked down to 3.88 percent, from 3.90 percent the previous week. That's slightly above the 3.87 percent average rate hit three weeks ago, which was the lowest since long-term mortgages began in the 1950s.
The average rate on the 15-year fixed mortgage fell to 3.13 percent, from 3.17 percent a week ago.
Coke, Pepsi make changes to avoid cancer warning
NEW YORK (AP) — Coca-Cola Co. and PepsiCo Inc. are changing the way they make the caramel coloring used in their sodas as a result of a California law that mandates drinks containing a certain level of carcinogens bear a cancer warning label.
The companies said the changes will be expanded nationally to streamline their manufacturing processes. They've already been made for drinks sold in California.
Coca-Cola and PepsiCo account for almost 90 percent of the soda market, according to industry tracker Beverage Digest. A representative for Dr Pepper Snapple Group Inc. was not immediately available for comment.
The American Beverage Association, which represents the broader industry, said its member companies will continue to use caramel coloring in certain products but that adjustments were made to meet California's new standard.
By The Associated Press(equals)
The Dow Jones industrial average closed up 70.61 points, or 0.6 percent, at 12,907.94. The S&P 500 added 13.28 points, or 1 percent, to 1,365.91. The Nasdaq composite index rose 34.73 points, or 1.2 percent, to 2,970.42.
Natural gas fell 3 cents to finish at $2.27 per 1,000 cubic feet in New York.
Benchmark crude rose 42 cents to end at $106.58 per barrel in New York. Heating oil rose 5 cents to finish at $3.27 per gallon and gasoline futures increased 3 cents to end at $3.31 per gallon.
Brent crude, used to price foreign crude imported by many U.S. refiners to make gasoline, rose $1.32 to finish at $125.44 a barrel in London.