Rising home sales likely to cool despite low rates WASHINGTON (AP) â¿¿ A now-expired homebuyer tax credit and low mortgage rates helped boost sales of previously occupied homes in April. The improvements aren't likely to last. The tax credit is now gone. And economists caution that Americans are facing so many financial obstacles that falling rates alone won't be enough to lift the housing market. "Although mortgage rates have fallen sharply, the combination of high unemployment, heavy indebtedness and tight credit suggest to us that demand will stumble," said Paul Dales, an economist at Capital Economics. ___ Late slide in financial stocks hits stock market NEW YORK (AP) â¿¿ Financial companies dragged stocks lower Monday as already anxious investors grew even more uncertain about the U.S. government's financial overhaul plan and debt problems in Europe. The Dow Jones industrial average slid 80 points in the final 15 minutes of trading to end with a loss of almost 127. It was the lowest close for the Dow since February. All major indexes fell more than 1 percent. Investors are worried about limits that could be placed on U.S. banks in a final version of the financial overhaul bill. A bill that passed the Senate last week is now being reconciled with the House version. The late drop illustrates how jittery traders are in particular about what will happen in Europe. ___ Regulators probe firms' role in stock plunge WASHINGTON (AP) â¿¿ Federal regulators said Monday they are looking at whether big trading firms abandoned the market during the massive sell-off on May 6 rather than providing cash support required under law. Staff of the Securities and Exchange Commission said the possible retreat of big "liquidity providers" during the market plunge is an area of focus in the investigation. Major securities firms are required by law to remain in the market by buying and selling stocks; high-speed electronic trading firms are not.
Some firms that act as liquidity providers stopped doing so during the freefall, the SEC officials found.___ China taking tough line as dialogue with US begins BEIJING (AP) â¿¿ China showed its growing assertiveness Monday as it launched high-level talks with Washington, saying it will carry out currency reform at its own pace and calling for an end to U.S. curbs on high-tech exports. Beijing also called on Washington to simplify foreign investment rules that it says are hampering Chinese companies and defended a policy to promote domestic technology that its trading partners say might hurt foreign companies. At an opening ceremony for the strategic talks, President Hu Jintao promised changes in exchange rate controls that Washington and others say keep China's yuan undervalued and distort trade. But he gave no indication when it might happen. ___ Campbell Soup net income down, revenue rises 7 pct The Campbell Soup Co.'s third-quarter revenue rose almost 7 percent â¿¿ its biggest quarterly increase since 2008. But one-time expenses took a bite out of its net income. The 3.4 percent decline in net income reported Monday by the world's largest soup maker represented a reversal of a recent trend in which Campbell managed to increase net income by cutting expenses in quarters when sales have been down or just barely higher. The Camden, N.J., company reported net income fell to $168 million, or 49 cents per share, in the three months ended May 2, down from $174 million, or 49 cents a share, a year ago. ___ FDA fines Genzyme $175M for manufacturing problems WASHINGTON (AP) â¿¿ Biotech drugmaker Genzyme Corp. has agreed to pay a $175 million penalty to federal regulators in connection with long-standing manufacturing problems that have already cost the company millions. The payment, which Genzyme disclosed last month when it reported its first-quarter performance, is the return of "unlawful profits" from the sale of products made at the plant, the Food and Drug Administration said in a statement released Monday.
The FDA also said the company signed a legal agreement to fix problems at its biotech drug plant in the Allston neighborhood of Boston. Under terms of the consent decree, Genzyme must map out a plan for overhauling the plant and stick to a preset timetable or face additional fines.___ Thrifts post 1Q net income of $1.82B WASHINGTON (AP) â¿¿ U.S. thrifts posted a first-quarter profit in the latest sign the industry is stabilizing as the economy recovers, the government reported Monday. The federal Office of Thrift Supervision said savings and loans had net income of $1.82 billion in the January-March period. That compared with a net loss of $1.62 billion a year earlier. It was the thrift industry's third profitable quarter in a row. The Treasury Department agency said the industry's net income in the latest quarter was the highest since the April-June quarter of 2007. ___ Toyota stops sale of Lexus LS as it awaits part NEW YORK (AP) â¿¿ Toyota Motor Corp. has stopped sales of the Lexus LS sedan for about three weeks while it works to get parts to dealers to fix a problem with the vehicle's steering system, a spokesman said Monday. Toyota on Friday recalled about 3,800 2009 and 2010 LS 460 and LS 600h sedans in the U.S. to fix a problem in which the steering wheel briefly shifts out of alignment with the wheels when it is turned to the extreme right or left and then quickly re-centered, such as in a tight U-turn. Toyota said it will remedy the problem by replacing the computer processor in the vehicle's variable gear ratio steering system. ___ Gentiva Health plans nearly $1B Odyssey buy ATLANTA (AP) â¿¿ Home health provider Gentiva Health Services Inc. said Monday it plans to spend nearly $1 billion in cash to buy hospice firm Odyssey HealthCare Inc. in a move to create the nation's largest provider of home health and hospice care.
Atlanta-based Gentiva said it will pay $27 per share for Odyssey stock, marking a 40 percent premium to the shares' closing price Friday. Based on Odyssey's 33.8 million shares outstanding at March 31, the deal is valued at $912.3 million.The boards of both companies have approved the acquisition, which is expected to close in the third quarter, pending approval by regulators and Odyssey stockholders. ___ IBM to buy AT&T's Sterling unit for $1.4B NEW YORK (AP) â¿¿ IBM Corp. said Monday that it is buying AT&T Inc.'s Sterling Commerce unit, which makes software that helps businesses buy and sell to each other, for $1.4 billion. The deal would be IBM Corp.'s largest acquisition since it bought business software maker Cognos in 2008. Sterling runs "collaboration networks" where companies can interact with vendors. It has 18,000 clients worldwide, IBM and AT&T said. Customers include H.J. Heinz Co., Motorola Inc., Boise Cascade LLC and Boston Market Corp. The parties would not provide a figure for the unit's annual revenue. By The Associated Press The Dow fell 126.82, or 1.2 percent, to 10,066.57, its lowest close since Feb. 10. The broader Standard & Poor's 500 index fell 14.04, or 1.3 percent, to 1,073.65, and the technology-dominated Nasdaq composite index fell 15.49, or 0.7 percent, to 2,213.55. Oil prices, which have fallen more than 19 percent since hitting an 18-month high of $87.15 per barrel just three weeks ago, rose slightly. Benchmark crude for July delivery gained 17 cents to settle at $70.21 a barrel on the New York Mercantile Exchange. In other Nymex trading in June contracts, heating oil added 0.26 cent to settle at $1.8993 gallon, and gasoline rose 0.96 cent to settle at $1.9708 a gallon. Natural gas fell 1.8 cents to settle at $4.017 per 1,000 cubic feet. The Brent crude July contact in London fell 51 cents to settle at $71.17 on the ICE futures exchange.