Bernanke says recovery on track despite headwinds WASHINGTON (AP) â¿¿ The European debt crisis is likely to have only a "modest" impact on the U.S. economic recovery as long as Wall Street stabilizes, Federal Reserve Chairman Ben Bernanke told Congress on Wednesday. Testifying before the House Budget Committee, Bernanke struck a more confident tone that the recovery will remain intact despite problems in Europe as well as stubbornly high unemployment and a fragile housing market here at home. However, the pace of the expansion â¿¿ 3.5 percent this year by the Fed's estimate â¿¿ won't be strong enough to quickly bring relief to the 15 million Americans who are unemployed. The unemployment rate, now at 9.7 percent, would likely see only a "slow reduction," Bernanke warned. ___ Fed survey finds a modest recovery is spreading WASHINGTON (AP) â¿¿ For the first time since the beginning of the recession, economic growth â¿¿ modest and fragile, but growth nonetheless â¿¿ has spread to every corner of the country. A survey released Wednesday found economic activity was improving across all 12 regions of the nation tracked by the Federal Reserve. It was the first clean sweep in the report since 2007. Metal producers in Chicago and St. Louis cranked out more steel. Makers of drugs and medical equipment in the Northeast did better business. And sales of summer clothes were strong in fashion-conscious New York. ___ Drop in energy stocks punctures early market rally NEW YORK (AP) â¿¿ The stock market had another late-day slide, this time because of fears that the Gulf oil spill will send BP into bankruptcy court. The Dow Jones industrials, up more than 125 points at midday, closed down 41. Most selling came in the last hour, the third time in four days that stocks had a late-day drop.
Investors got a "sell" signal from a news report that quoted an analyst as saying BP could be forced to seek bankruptcy protection in about a month because of the oil spill. Analysts also said there were concerns that the company might have trouble paying its dividend.___ Wholesale inventories and sales both up in April WASHINGTON (AP) â¿¿ Inventories held by wholesalers rose for a fourth straight month in April while sales rose for a 13th consecutive time. Both gains were encouraging signs for a sustained economic recovery. Wholesale inventories increased 0.4 percent last month after a 0.7 percent gain in March, the Commerce Department said Wednesday. Sales increased 0.7 percent in April, helped by higher demand for autos, lumber, computers and electrical equipment. The rise followed a 2.4 percent surge in March. The hope is that a steady rise in demand will prompt businesses to step up orders and restock depleted shelves. That would give a boost to factories and prompt them to increase hiring. ___ More employees jump ship as economy improves One sign of better economic times is when more people start finding jobs. Another is when they feel confident enough to quit them. More people quit their jobs in the past three months than were laid off â¿¿ a sharp reversal after 15 straight months in which layoffs exceeded voluntary departures. The trend suggests the job market is finally thawing. Some of the quitters are leaving for new jobs. Others have no firm offers. But their newfound confidence about landing work is itself evidence of more hiring and a strengthening economy. ___ German government rejects aid for GM's Opel BERLIN (AP) â¿¿ Germany on Wednesday rejected General Motors' request for aid from the federal government for its Opel unit, saying the U.S. automaker had enough funds to pull its subsidiary through.
The decision by Economy Minister Rainer Bruederle came just days after Germany announced a plan to cut public spending and reduce the deficit, and denied GM more than 1.1 billion euros, or $1.2 billion, in loan guarantees.But Chancellor Angela Merkel insisted that "the last word on the future of Opel naturally has not been spoken." She added that she would seek assistance from governors of states that host Opel sites in talks with them Thursday. ___ Overall mortgage application volume falls 12.2 pct WASHINGTON (AP) â¿¿ The number of customers applying for a mortgage to purchase property fell to the lowest level in 13 years last week, a sign the housing market is struggling without government incentives. Purchase volume declined 5.7 percent and is at its lowest point since February 1997, the Mortgage Bankers Association said Wednesday. Overall mortgage application volume, which includes loans for purchases and refinancings, dropped by 12.2 percent during the week ended June 4, compared with the previous week. Refinance volume tumbled 14.3 percent. ___ BP shares plunge as estimate of leaking oil grows Investors dumped shares of BP Wednesday, as estimates of the amount of oil flowing from its blown-out well grew, along with concerns about its ability to pay for the spill in the Gulf. The stock dropped more that 10 percent, at one point hitting $29.77, the lowest level in 14 years. BP shares have now lost half their value since the April 20 rig explosion off the Louisiana coast. Analysts say shareholders are worried that BP will stop paying its dividend, either to conserve cash or because of political pressure from U.S. lawmakers. The company is scheduled to make a $2.63 billion payout on June 21. BP hasn't said whether it would approve a payout for the second quarter. ___ Bernanke comments help boost oil prices
Oil prices jumped sharply Wednesday as Federal Reserve Chairman Ben Bernanke told Congress that the economic recovery remains on track.Prices also got a boost after the government reported that stocks of crude fell more than expected last week. There are also concerns about what effect the six-month moratorium on deepwater drilling in the Gulf could have on domestic energy production. Oil also got a boost from the Energy Information Administration report that showed crude supplies fell more than expected last week. The draw was particularly steep in the Gulf Coast region and larger than normal for this time of year, oil analyst and trader Stephen Schork said. ___ Allscripts buying health-care info rival Eclipsys NEW YORK (AP) â¿¿ The health-care information technology company Allscripts-Misys Healthcare Solutions Inc. is buying rival Eclipsys Corp. for about $1.3 billion in stock, the companies said Wednesday. Allscripts is a leader in providing physicians and their offices with ways to keep tabs on patient care records while Eclipsys provides similar services for hospitals and health systems. Those records include test results and medical histories. The combined company's client base will include over 180,000 U.S. physicians, 1,500 hospitals, and nearly 10,000 nursing homes, hospices and home care organizations, the companies said. By The Associated Press The Dow fell 40.73, or 0.4 percent, to 9,899.25. The Standard & Poor's 500 index fell 6.31, or 0.6 percent, to 1,055.69, while the Nasdaq composite index fell 11.72, or 0.5 percent, to 2,158.85. Benchmark crude for July delivery rose $2.39 to settle at $74.38 a barrel on the New York Mercantile Exchange. In other Nymex trading in July energy contracts, heating oil rose 4.43 cents to settle at $2.0096 a gallon, and gasoline gained 5.06 cents to settle at $2.0397 a gallon. Natural gas fell 13.1 cents to settle at $4.677 per 1,000 cubic feet.
Brent crude rose $1.97 to settle at $74.27 a barrel on the ICE futures exchange.