Fewer home-building permits signal weakness ahead WASHINGTON (AP) ¿ Applications for home building permits, a key gauge of future construction, fell in September by the largest amount in five months ¿ a discouraging sign for the housing industry. A rebound in housing is needed to support a broader economic recovery. Representatives for the industry told a congressional panel Tuesday that the $8,000 tax credit for first-time buyers needs to be extended and expanded to ensure the housing sector will emerge from the recession. But the Obama administration, facing soaring budget deficits, has not decided whether to support any extension. And some private economists played down the impact of such a move, arguing that most interested buyers already had taken advantage of the tax break. ___ Stocks fall after mixed economic data, earnings NEW YORK (AP) ¿ A disappointing report on housing starts made investors nervous about the economy Tuesday and sent stocks lower even as profits at many companies exceed expectations.
Stocks fell from 2009 highs after the Commerce Department said home building rose less than expected in September, a discouraging signal for future construction activity. The Dow Jones industrial average fell 50.71, or 0.5 percent, to 10,041.48. The market will get another measure of the housing market's health Friday with a report on existing home sales. After several months of encouraging data on housing, investors have become disappointed in recent weeks with signs that a recovery in home building and home sales is starting to falter, which could bode poorly for the broader economy. ___ Oil hits $80, then falls first time in a week Oil futures closed lower for the first time in more than a week Tuesday, but only after passing $80 per barrel and pulling retail gasoline prices higher. The impact of the U.S. currency became abundantly clear midmorning when crude prices fell by 1 percent as soon as the dollar went into positive territory against the euro. Crude prices have risen swiftly this month, moving in the opposite direction of the dollar. When the dollar loses value, crude becomes very attractive as an investment. Crude is traded in dollars, so it essentially gets cheaper when the U.S. currency is weak.
Benchmark crude for November delivery fell 52 cents to settle at $79.09 on the New York Mercantile Exchange. Earlier in the day, a barrel ran as high as $80.05 as the euro came close to trading for $1.50. ___ Caterpillar 3Q profit drops 53 pct, sees recovery Caterpillar is counting on Asian customers to buy more of its mining and construction equipment next year, helping the company move beyond a recession that slammed its third-quarter earnings. Deliveries of the company's yellow-and-black machinery rose in China, one of the company's rare wins last quarter. The Peoria, Ill., manufacturer, which generates nearly 70 percent of its sales overseas, wants its dealers prepared if that rebound speeds up. CEO Jim Owens cautioned that the world economy still faces significant challenges and that 2010 will be difficult. Those challenges have dogged the world's largest maker of construction and mining equipment. Global machinery sales fell 48 percent in August, the 11th-straight month of declines. Dealers supplied customers by dipping into stockpiles rather than placing new orders.
___ College tuition is up sharply amid recession With the economy struggling, parents and students dared to hope this year might offer a break from rising college costs. Instead, they got another sharp increase. Average tuition at four-year public colleges in the U.S. climbed 6.5 percent, or $429, to $7,020 this fall as schools apologetically passed on much of their own financial problems, according to an annual report from the College Board, released Tuesday. At private colleges, tuition rose 4.4 percent, or $1,096, to $26,273. The price increases came despite painful cost-cutting by colleges on everything from faculty to cafeterias and sports travel. And as usual, the rise in tuition outstripped the overall inflation rate. ___ Yahoo 3Q profit soars despite 12 pct revenue drop SAN FRANCISCO (AP) ¿ Yahoo Inc. may finally be pulling out of a three-year slump that cast aside two CEOs and spurred a cost-costing spree that laid off about 2,000 workers.
The purge is the main reason Yahoo's third-quarter profit more than tripled from last year to soar past analysts' relatively low expectations for the troubled Internet company. But the results released Tuesday also showed Yahoo's revenue fell by at least 12 percent for the third consecutive quarter. The revenue rut means Yahoo still has a long way to go on its comeback trail. Analysts, though, believe Yahoo should be able to boost its ad sales ¿ the main source of its revenue ¿ as long as the U.S. economy continues to heal and marketers funnel more of their budgets to the Web. ___ Sun Microsystems slashing up to 3,000 jobs SAN FRANCISCO (AP) ¿ Sun Microsystems Inc. plans to eliminate up to 3,000 jobs as it awaits a takeover by Oracle Corp., a deal that is being held up by antitrust regulators in Europe. The layoffs Sun outlined Tuesday in a regulatory filing amount to about to 10 percent of the company's 29,000 workers and will happen over the next year.
They are the latest rounds of cuts at the struggling server and software maker, which reached the $7.4 billion deal with Oracle in April after nearly a decade of wobbly financial performance. Sun said in its filing that the layoffs would come from all its major regions, including North America, Europe, Asia and emerging markets. The company expects to incur $75 million to $125 million in restructuring charges over the next several quarters. ___ Sugar cereals are 'Smart Choices'? FDA not so sure WASHINGTON (AP) ¿ The Food and Drug Administration said Tuesday that nutritional logos from food manufacturers may be misleading consumers about the actual health benefits of cereal, crackers and other processed foods. The agency sent a letter to companies saying it will begin cracking down on inaccurate food labeling. The FDA did not name specific products or give a timeline for enforcement. U.S. manufacturers, including Kellogg, Kraft Foods and General Mills, rolled out their so-called Smart Choices program last year, amid growing concern about obesity rates. The green labels appear on the front of foods that meet certain standards for calories per serving and fat content.
But consumer advocates complain about lax standards for the program, with logos appearing on everything from frozen sweets to sugary cereals. ___ Calif. sues bank, alleges more than $200M in fraud SAN FRANCISCO (AP) ¿ California Attorney General Jerry Brown accused State Street Bank and Trust Co. of "unconscionable fraud" on Tuesday, claiming in a lawsuit the firm had bilked the state's largest pension funds of more than $200 million. The suit alleges Boston-based State Street overcharged the California Public Employees Retirement System and the California State Teachers' Retirement System with fees and penalties for handling foreign currency trades. The bank denied the claims.+ Brown launched an independent investigation into the bank after a group of whistleblowers called Associates Against FX Insider Trading raised the claims in a 2008 lawsuit. ___ Kerkorian may cut 'undervalued' MGM Mirage stake LAS VEGAS (AP) ¿ Saying his 37 percent stake in MGM Mirage should be worth more, billionaire investor Kirk Kerkorian said Tuesday that he may cut his investment in the struggling casino operator.
Kerkorian, 92, MGM Mirage's majority stockholder until this year, said through his investment firm Tracinda Corp. that he is "exploring the possibility of strategic partnerships or other alternatives" for his stake in the Las Vegas-based casino company. But Tracinda also said there might not be any change. MGM Mirage had announced minutes earlier on Tuesday that its third-quarter earnings will show a $955 million charge to reflect the falling value of CityCenter, its $8.5 billion joint venture on the Las Vegas Strip. By The Associated Press The Dow Jones industrial average fell 50.71, or 0.5 percent, to 10,041.48. The broader Standard & Poor's 500 index fell 6.85, or 0.6 percent, to 1,091.06, and the Nasdaq composite index fell 12.85, or 0.6 percent, to 2,163.47. Benchmark crude for November delivery fell 52 cents to settle at $79.09 on the New York Mercantile Exchange.
In other Nymex trading, heating oil fell less than a cent to settle at $2.0473 a gallon. Gasoline for November delivery rose by less than a cent to settle at $1.9872 a gallon. Natural gas for November delivery rose 32.6 cents to settle at $5.161 per 1,000 cubic feet. In London, Brent crude for December delivery fell 53 cents to settle at $77.24 on the ICE Futures exchange.