Bernanke signals no imminent steps to aid economy
WASHINGTON (AP) — Slumping job growth has alarmed some economists who fear the U.S. economy is in trouble.
Ben Bernanke doesn't appear to be one of them.
The Federal Reserve chief sketched a hopeful outlook in testimony to a congressional panel Thursday and sent no signals that the Fed will take further steps soon to aid the economy.
Bernanke acknowledged that Europe's debt crisis poses risks to U.S. financial markets. He also noted that U.S. unemployment remains high at 8.2 percent. And he said the Fed is prepared to take steps to boost the U.S. economy if it weakens.
Spain's hurting banks at heart of eurozone chaos
MADRID (AP) — Spain is under increasing pressure to find a quick way to save its troubled banking sector from collapse.
Politicians and investors around Europe are worried that the economically battered country will not find the money to cover the toxic property loans weighing its banks down. The expectation now is that Spain's government will have no choice but to seek an international bailout to help bolster its lenders.
The concerns have sent Spain's borrowing costs on the international bond markets to worrying levels — close to the points where most market-watchers say a country cannot maintain its debt. Spain, previously rated A by credit-rating agencies, may need as much as €100 billion ($126 billion) to bolster its banking system, compared with an earlier estimate of about €30 billion, U.S credit rating agency Fitch said Thursday. Fitch went on to downgrade the country to BBB, two notches above junk, and warned that Spain faced further downgrades. In its most recent debt auction Thursday Spain managed to raise €2 billion ($2.52 billion) — but at much higher rates than in previous bond sales.
CDC: Older teens often text behind the wheel
ATLANTA (AP) — More than half of high school seniors admit they text or email while driving — the first federal statistics on how common the dangerous habit is in teens.
An anonymous national survey conducted last year found that 58 percent of high school seniors said they had texted or emailed while driving during the previous month. About 43 percent of high school juniors acknowledged they did the same thing.
The Centers for Disease Control and Prevention released the survey results Thursday. Some earlier studies had suggested teen texting while driving was common though perhaps not quite so high.
Virgin Mobile iPhone will cost $549 and $30 per month
NEW YORK (AP) — Virgin Mobile USA, one of Sprint's brands for prepaid, no-contract phone service, said Thursday that it will start selling the iPhone on June 29, charging $549 for a basic model.
The high price of the phone comes with an upside: service will start at $30 per month.
That means the phone, plus two years of service, will cost $1,269, excluding taxes. That's nearly $800 less than a subscriber would pay for the same phone, an iPhone 4 with 8 gigabytes of memory, if buying it under the Sprint Nextel Corp. brand. Sprint charges $100 for the phone and $80 per month for service, excluding taxes.
The iPhone has until recently been restricted to contract-based plans. Now, the floodgates appear open for the phone to enter the prepaid, no-contract market, which is aimed at people with low incomes and poor credit. However, the high initial cost of the phone is likely to be an obstacle. Virgin Mobile sells other smartphones for as little as $80.
US unemployment aid applications fall to 377,000
WASHINGTON (AP) — The number of people applying for unemployment benefits fell last week for the first time in five weeks. But the drop suggests only modest job growth after three months of weak hiring.
The Labor Department said Thursday that applications for weekly benefits dropped by 12,000 to a seasonally adjusted 377,000. That's down from an upwardly revised 389,000 the previous week.
The four-week average, a less volatile measure, rose by 1,750 to 377,500, the highest level in a month.
Stocks helped lift US household wealth in Q1
CHICAGO (AP) — A burst of stock gains and the first rise in home values in six years helped Americans regain more of their wealth in the January-March quarter.
But since then, that effort has hit another bump. Stock prices sank in May on fears about Europe's debt crisis and a weaker U.S. economy. That eroded the first quarter's gains in wealth.
And there's scant evidence of a sustained recovery in the housing market despite an uptick in home equity.
US consumers cut back on credit card use in April
WASHINGTON (AP) — U.S. consumer borrowing increased at a slower pace in April, restrained by a sharp reduction in credit card debt.
The report suggests Americans may be resisting their credit cards after seeing employers pull back on hiring this spring.
The Federal Reserve said Thursday that consumers increased borrowing by $6.5 billion in April. That's just half the March gain.
US 30-year mortgage drops to record-low 3.67 percent
WASHINGTON (AP) — Average U.S. rates on 30-year and 15-year fixed mortgages this week fell to record lows for the sixth straight week. Cheap mortgages continue to help boost prospects for home sales this year.
Mortgage buyer Freddie Mac says the average rate on the 30-year loan dropped to 3.67 percent. That's down sharply from 3.75 percent last week and the lowest since long-term mortgages began in the 1950s.
The 15-year mortgage, a popular refinancing option, declined to 2.94 percent, down from 2.97 percent last week.
Best Buy founder quits board, explores sale
NEW YORK (AP) — The founder and outgoing chairman of Best Buy announced his resignation from the board Thursday and said he may sell off his 20.1 percent stake in the beleaguered electronics retailer.
It's the latest news to hit the Minneapolis company facing increasing competition from online retailers and a CEO scandal, and it removes one obstacle for a possible private equity takeover of the company. Shares fell nearly 8 percent in morning trading.
Richard Schulze, 71, has been with the company since its inception in 1966 and is its largest shareholder by far. Fidelity Management & Research Co., has the second-largest stake with 6.9 percent of the company.
Pfizer spinning off animal health business
TRENTON, N.J. (AP) — Drugmaker Pfizer Inc. said Thursday that it's taking the first steps to spin off its animal health business into a separate company, a long-anticipated move that's part of an ongoing makeover to divest nonpharmaceutical businesses and boost returns to frustrated shareholders.
Pfizer said it is preparing to submit a regulatory filing for a possible initial public offering of a minority stake in the new company, to be called Zoetis. New York-based Pfizer said it will provide more details when it reports its second-quarter results, likely during the first week of August.
Pfizer said the spin-off should be complete by July 2013, a deadline it previously set.
By The Associated Press(equals)
The Dow Jones industrial average had been up as much as 140 points on Thursday but closed 46.17 points higher, up 0.4 percent, at 12,460.96. The Standard & Poor's 500 index ended down 0.14 point at 1,314.99. The Nasdaq composite index finished down 13.70 points at 2,831.02.
Benchmark oil fell 20 cents to finish at $84.82 per barrel in New York. Brent crude, which is used to price international varieties of oil, fell 71 cents to end at $99.93 per barrel in London.
Heating oil fell 0.46 cent to end at $2.6671 per gallon and gasoline futures dropped 0.53 cent to $2.685 per gallon. Natural gas prices fell 14.7 cents to $2.274 per 1,000 cubic feet.