Homes in more established areas â¿¿ those that had little room to build on during the housing boom â¿¿ are doing a better job holding their value. Coastal cities in California and Northeast are seeing much smaller price declines. In Washington and San Diego, home prices rose over the past year.Still, many people who want to buy can't. Nearly 25 percent of households cannot move because they owe more on their mortgage than their home is worth, according to Capital Economics. An additional 25 percent can't qualify for a new mortgage because selling their homes would leave them with too little money for a down payment. ___ Consumer comeback skips Wal-Mart's aisles NEW YORK (AP) â¿¿ Wal-Mart is missing out on the consumer comeback. The world's largest retailer failed to reverse an almost two-year slide in a key revenue measure in its fourth quarter, it said Tuesday, after all but promising in November it would do just that. At Wal-Mart, fewer customers are coming in the door. At most other retailers, holiday shoppers spent more, and consumer confidence is now at its highest point in three years. Wal-Mart's mistakes in merchandise and prices, along with financial stress on its lower-income customers, forced it to rely on international growth and cost-cutting to post a 27 percent increase in fourth-quarter net income. Wal-Mart's 1.8 percent decline in revenue at U.S. discount stores open at least a year, its seventh straight quarterly drop, was worse than feared. That important measurement of a retailer's health excludes stores that open or close during the year. For the past year, the discounter has seen customer counts decline as it lost shoppers to rivals like dollar stores for quick trips to buy milk and diapers. Wal-Mart had hoped sweeping changes, from restoring thousands of products it stopped carrying and going back to offering low prices across the store, would help sales rise again.
It's now clear there won't be a quick fix.___ HP shares slide as powerhouse faces growth fears SAN FRANCISCO (AP) â¿¿ Hewlett-Packard Co.'s new CEO Leo Apotheker delivered some disappointing news to Wall Street on Tuesday after his first full quarter with the technology company. Revenue growth, a persistent worry for companies of HP's size, will be slower this year than many analysts had envisioned. It was an unusual letdown that raised questions about the momentum of the company's acquisition-fueled transformation into a computing clearinghouse. HP shares fell more than 10 percent in extended trading after the company reported its fiscal first-quarter results. HP said after the market closed that its net income jumped 16 percent to $2.61 billion, or $1.17 per share, in the three months ended Jan. 31. A year ago, it earned $2.25 billion, or 93 cents per share. HP said that excluding one-time items, it earned $1.36 per share in the latest quarter. That was ahead of the $1.29 per share that analysts polled by FactSet expected on that basis. Revenue rose 4 percent to $32.30 billion, from $31.18 billion a year ago. But analysts expected more: $32.96 billion, according to FactSet. HP appeared to attempt to quell concerns by raising its full-year profit forecast. It expects net income in a range of $5.20 to $5.28 per share, excluding items, which is in line with analysts' target for $5.23 per share on that basis. But revenue prediction fell short. HP said it expects revenue of $130 billion to $131.5 billion in its current fiscal year, which ends in October. Analysts expected $132.91 billion. The guidance raised concerns because HP has spent heavily in recent years on acquisitions that were expected to propel substantial growth in areas that rival IBM Corp. has found highly lucrative, especially selling technical services to corporations.
___Holly and Frontier Oil to join in nearly $3B deal DALLAS (AP) â¿¿ Refinery operators Holly Corp. and Frontier Oil Corp. are combining in an all-stock deal valued at nearly $3 billion. Both companies said Tuesday that the deal will create the most profitable independent U.S. refiner on a per barrel basis. The new company will have a refining capacity of more than 440,000 barrels per day across five refineries. Analysts had been expecting the industry to consolidate after the business rebounded last year and made refining assets attractive to prospective buyers. Refineries that had struggled to pass on high oil prices during the recession started to see profits surge last year as demand grew for gasoline, diesel and other fuels. Marathon Oil announced earlier this year that it was spinning off its refining business and ConocoPhillips plans to minimize its refining arm from 24 percent to 15 percent of its core business. Frontier shareholders will get 0.4811 Holly shares for each Frontier share they own, and Houston-based Frontier plans to chip in a special dividend worth 28 cents per share. Based on Frontier's number of shares outstanding, the transaction is valued at $2.85 billion. The companies said the transaction has an enterprise value of $7 billion. Altogether, including the special dividend, Frontier's investors will receive $27.27 a share based on Holly's closing price on Friday. ___ Forest Labs to buy Clinical Data for $1.2 billion NEW YORK (AP) â¿¿ Forest Laboratories Inc. said Tuesday it is buying specialty pharmaceutical company Clinical Data Inc. in a $1.2 billion deal in order to gain access to a key antidepressant. Forest is paying $30 per share, a discount of nearly 12 percent from Clinical Data's closing price on Friday. Forest also will pay an extra $6 per share if sales of the recently approved antidepressant, Viibryd, achieve certain milestones.
New York-based Forest makes the blockbuster antidepressant Lexapro, the Alzheimer's disease treatment Namenda and the blood pressure drug Bystolic. It expects the deal will dilute earnings for the next three years and may add to earnings afterward.The Food and Drug Administration approved Viibryd last month. Clinical Data, based in Newton, Mass., holds exclusive worldwide rights to the drug from Germany-based Merck KGaA. The drug should be available in U.S. pharmacies in the second quarter. Forest said it will make significant investments in marketing and sales to launch the drug, including expanding its sales force. ___ Icahn offers $17 a share for Mentor Graphics NEW YORK (AP) â¿¿ Activist investor Carl Icahn has offered to buy the remaining shares of software maker Mentor Graphics Corp. for $17 per share in cash, valuing the company at about $1.9 billion, according to a regulatory filing on Tuesday. Mentor makes software and systems used to test electronics components used in aerospace and military-grade products, automobiles and low-power electronics. The offer is a 17 percent premium over the Wilsonville, Ore., company's closing price last Friday. Mentor said in a statement that it will review the proposal and said Icahn and his affiliates already own a 15 percent stake in the company. In the meantime, it advised its shareholders not to take any action until the review is complete. The billionaire investor's offer leaves room for Mentor Graphics to receive even higher bids without paying him a break-up fee, according to the filing. ___ Obama pitches economic message one state at a time CLEVELAND (AP) â¿¿ Twenty months ahead of the 2012 election, President Barack Obama is traveling the nation, vying for the public's attention one state at a time, while international crises and budget fights compete with his plans for economic revival. On Tuesday, Obama curried favor with small businesses in politically important Ohio, pushing his plans to boost American competitiveness by increasing spending on sectors like education and infrastructure. That agenda, however, is running up against opposition from some Republican governors in cash-strapped states, and GOP lawmakers on Capitol Hill, whose demands for deep spending cuts raise the prospect of a federal government shutdown.
The president's domestic initiatives have also been overshadowed by the turmoil in the Middle East. Tuesday's trip came amid an escalation of violence in Libya, where government-backed security forces clashed with protesters, and news that four Americans were killed at the hands of pirates off the coast of Africa.Since his State of the Union address last month, Obama has traveled away from Washington at least once a week, mostly stopping in political battleground states that will be crucial to his re-election bid, including Wisconsin, Michigan and Pennsylvania. He plans a trip to Florida next week. As was the case during the 2008 campaign, Obama aides are willing to forgo national media headlines in favor of mostly positive coverage in local media outlets in regions the president visits. They're also courting the press in swing states even when Obama is not on the road, inviting reporters from local television stations in Virginia, Wisconsin and Ohio to the White House for interviews last week. ___ By The Associated Press The Dow Jones industrial average sank 178.46 points, or 1.4 percent, to close at 12,212.79. It was the biggest drop since Nov. 16. Bond prices rose as investors sought safety. The Standard & Poor's 500 index fell 27.57, or 2 percent, to 1,315.44. It was the S&P's worst day since Aug. 11. The Nasdaq fell 77.53, or 2.7 percent, to 2,756.42. Benchmark West Texas Intermediate for April delivery jumped $5.71, or 6.4 percent, to settle at $95.42 per barrel on the New York Mercantile Exchange. Oil hasn't been that high since it settled at $97.92 on Oct. 1, 2008. Retail gasoline prices in the U.S. held steady overnight at a national average of $3.171 per gallon. In other Nymex trading in March contracts, heating oil rose 7.75 cents to settle at $2.8035 a gallon and gasoline gained 5.63 cents to settle at $2.7464 a gallon. Natural gas futures lost about a penny to settle at $3.867 per 1,000 cubic feet.