Stocks fall on signs of slowing global economy
NEW YORK (AP) — As evidence of a slowing global economy grows, investors are showing some caution just one week after U.S. stocks hit an all-time high.
Stocks fell after lackluster earnings from Bank of America and an apparent drop in demand for Apple's iPod and iPhone dragged financial and technology stocks lower. New signs of weakness in Europe, where car sales are plunging and unemployment is rising, also weighed on the market.
On Monday, stocks sank after China reported economic growth that was slower than economists had expected. Metals, energy and other commodities have been hit hard this week and that has dragged down the stocks of miners and drillers and companies that provide services to them. Gold fell the most in 30 years.
American Airlines resumes most flights
DALLAS (AP) — American Airlines resumed most flights Wednesday, a day after a massive technology failure forced the nation's third-largest carrier to ground all planes from coast to coast.
Some lingering problems remained. At midday, American and regional offshoot American Eagle had canceled more than 200 flights, according to flight-tracking service FlightAware.com. But that was a huge improvement over Tuesday, when American and Eagle cancelled nearly 1,000 flights and delayed another 1,100.
Some of Wednesday's cancellations were because of bad weather in Chicago and a lack of crews and planes in the right places. The airline added five unscheduled flights to accommodate passengers stranded in Chicago, Dallas and Los Angeles, Huguely said.
Amazon nears debut of original TV shows
SANTA MONICA, Calif. (AP) — Amazon is letting viewers help choose its new lineup of TV shows, scuttling a secretive, wasteful process once reserved for Hollywood taste-makers.
The online retailing giant will let visitors from the U.S, U.K. and Germany watch, rate and critique 14 pilot episodes the company has bankrolled. Viewer comments will help the company decide which shows — if any — get the green light.
Amazon's foray into TV production is unique in the way it saves money. Every spring, traditional TV networks like ABC, NBC, CBS and Fox order dozens of pilots and show them to focus groups. Executives pick just a handful to make into series. Then, they commission 13 episodes of each promising show, with each one potentially costing a few million dollars. Many episodes won't ever air if the first few don't attract big audiences.
European car sales plummet, even in solid Germany
MILAN (AP) — Europe's auto market is in freefall. Once the motor for Europe's economy, the car industry has fallen victim to the region's widening recession and soaring unemployment. Carmakers have suffered 18 straight months of declining sales as people worried that they might soon be out of a job put off making big purchases.
New car sales across Europe slid 10 percent in the first quarter of 2013 to 2.9 million, down from 3.3 million in 2012, the European automakers association ACEA reported from Brussels on Wednesday. Even in Germany, one of Europe's strongest economies, new car sales plunged 13 percent during the first three months of the year.
Across the rest of Europe, the figures were just as disappointing. Most major markets saw double-digit contractions: down 11.5 percent in Spain, 13 percent in Italy and 14.6 percent in France.
BofA closes one mortgage lawsuit, another lingers
NEW YORK (AP) — As soon as Bank of America puts one mortgage-related lawsuit behind it, another always seems to rear its head.
The bank announced Wednesday that it would pay $500 million to settle a class-action lawsuit led by pension funds and other investors who say they were misled about $350 billion worth of mortgage-backed investments they bought from Countrywide, a mortgage lender Bank of America bought in 2008. The bank portrayed the settlement as good news because it resolved the bulk of securities claims related to residential mortgage-backed securities.
But financial analysts, in a conference call to discuss the bank's first-quarter results, peppered bank executives with questions about another pending settlement. Bank of America is still waiting for court approval for a similar settlement it made with Bank of New York Mellon almost two years ago. If it doesn't get the go-ahead, Bank of America could have to spend more to resolve the claims.
Fed survey: Housing and auto sales lift US economy
WASHINGTON (AP) — A strengthening housing recovery and robust auto sales contributed to moderate economic growth across the United States in late February and March, according to a Federal Reserve survey released Wednesday.
Growth was moderate or modest in all of the Fed's 12 banking districts, and it accelerated in two — New York and Dallas — from January and early February.
The survey suggested that the economy performed better in March than some government data on hiring and consumer spending had indicated. That could mean the economic weakness might have been temporary.
IMF urges Fed, central banks to monitor stimulus
WASHINGTON (AP) — The International Monetary Fund is urging the Federal Reserve and other central banks to closely monitor their extraordinary efforts to jump-start economic growth, warning that the policies could inflate asset bubbles and destabilize financial markets.
The global lending organization said in a global stability report released Wednesday that the low interest rate policies, which are intended to spur borrowing, spending and investing, are providing "essential support" for economic growth and should continue. But it noted that the policies could have "adverse side effects," including excessive corporate debt, a stock market bubble and risky investments by pension funds.
The fund says there are few signs of asset price bubbles yet.
Lew calls on Europe to pursue more growth policies
WASHINGTON (AP) — Treasury Secretary Jacob Lew called on Europe's leaders to pursue pro-growth policies in the short term rather than trim their budget deficits, noting that the U.S. economy is "inextricably tied" to the health of its global partners.
Lew's comments were delivered in a speech at Johns Hopkins University School of Advanced International Studies previewing this week's global finance meetings in Washington.
Earlier this week, the International Monetary Fund lowered its outlook for the world economy this year, predicting that government spending cuts will slow U.S. growth and keep the euro currency alliance in recession.
Mattel 1Q profit rises, Monster High sales climb
NEW YORK (AP) — Move over Barbie. Mattel said Wednesday its first-quarter net income more than quadrupled helped by strong sales of dolls like Monster High, Disney Princess and American Girl.
Results beat expectations and shares rose more than 4 percent in morning trading after briefly hitting its highest level in 15 years.
The fashion doll category has been one of the toy industry's strongest, helped by new entrants such as Monster High — a doll line based on the offspring of famous monsters — which has grown to the No. 2 doll category in just three years of existence, according to Mattel.
EBay grows 1Q earnings but outlook falls short
NEW YORK (AP) — EBay grew its earnings and revenue in the first quarter thanks to growth in its PayPal business and its e-commerce sites. But revenue fell shy of Wall Street's expectations and the company's outlook for the current quarter is weaker than expected, causing investors to send the company's stock lower in after-hours trading.
The company recently issued an upbeat long-term forecast, but some analysts are worried about short-term challenges EBay faces. Benchmark analyst Daniel Kurnos believes EBay is confronted with tight retail inventories and potential pressure from credit card companies on PayPal's profit margins if they start charging fees for the payments service.
EBay Inc. said Wednesday that it earned $677 million, or 51 cents per share, in the January-March period. That's up 19 percent from $570 million, or 44 cents per share, in the same period a year earlier.
By The Associated Press(equals)
The Dow Jones Industrial average fell 138 points, or 0.9 percent, to 14,618.59. The Standard & Poor's 500 index dropped 22 points, or 1.4 percent, to 1,553. The Nasdaq composite index fell 59.96 points, or 1.8 percent, to 3,204.
Oil dropped $2.04, or 2.3 percent, to close at $86.68 in New York. Brent crude, which is used to price oil used by many U.S. refiners, dropped $2.22, or 2.2 percent, to $97.69.
Heating oil fell 7 cents to $2.73 a gallon. Natural gas rose 5 cents to $4.21 per 1,000 cubic feet. Gasoline futures fell 5 cents, or 1.7 percent, to $2.73 per gallon.