The Associated Press___ European Union weighs greater unity to save euro BRUSSELS (AP) â¿¿ European leaders were wrestling Thursday over how much of their sovereignty they are willing to give up in a desperate attempt to save the ambitious project of continental unity that grew from the ashes of World War II. At stake at the summit in Brussels is not only the future of the euro, but also the stability of the global financial system and the balance of power in Europe. To convince financial markets that Europe's economy-crushing debt crisis is a one-time event, countries will have to give up significant powers, such as some decisions on borrowing and spending, to a central authority. ___ ECB cuts rate, tempers hopes for bigger bond buys FRANKFURT, Germany (AP) â¿¿ European Central Bank President Mario Draghi disappointed financial markets Thursday by keeping them guessing about whether the bank is willing to take aggressive action to bail out heavily indebted euro countries. But in a sign of rising concern about Europe's debt crisis, the ECB cut its benchmark interest rate by a quarter point to 1 percent and announced several steps to bolster the continent's economy and financial system. The actions didn't impress markets. Stocks and the euro fell heavily, while borrowing costs for European governments rose. ___ Lack of ECB bond-buying plan sends stocks lower NEW YORK (AP) â¿¿ The Dow Jones industrial average dropped nearly 200 points Thursday after the head of the European Central Bank said there was no plan for large-scale purchases of European government bonds, as many in the markets had hoped. ECB President Mario Draghi's remarks sent borrowing costs soaring for Italy, Spain and other countries with heavy debt burdens. European stock indexes fell and the euro weakened against the dollar. Draghi made his comments after the central bank cut its benchmark interest rate to 1 percent and took other modest steps to help shore up Europe's financial system.
Bank stocks led the way lower. Citigroup Inc. plunged 7 percent; Morgan Stanley 8.4 percent. JPMorgan Chase & Co. slid 5.2 percent, the most of the 30 large companies in the Dow average.___ Corzine blames predecessors for MF Global's fall WASHINGTON (AP) â¿¿ Jon Corzine told a congressional panel Thursday that he never intended to break rules requiring failed securities firm MF Global to safeguard client funds. He also said he doesn't know what happened to an estimated $1.2 billion that went missing. Corzine testified before the House Agriculture Committee for nearly three hours about the firm's bankruptcy, which followed disastrous bets on European debt that were made while Corzine was CEO. Corzine deflected blame for the company's collapse. He argued that he inherited a firm already doomed by his predecessors' bad financial decisions. ___ Exxon Mobil predicts surge in hybrid vehicles NEW YORK (AP) â¿¿ Exxon Mobil Corp. expects to see more and more hybrids on the world's roads, with gas-sipping models like the Toyota Prius making up half of all vehicles by 2040. The largest publicly traded oil and gas company on Thursday released its annual energy outlook. It says the use of hybrids â¿¿ vehicles that rely on both gas and electricity for power â¿¿ and other gains in fuel efficiency will keep energy demand in check in the U.S. and other major industrialized countries for years. Exxon predicts that energy demand will remain flat through 2040 in developed nations. ___ Hiring outlook brightens as jobless claims fall WASHINGTON (AP) â¿¿ A steady decline in the number of people applying for weekly unemployment benefits is the latest signal that the economy has strengthened and businesses may be poised to step up hiring. Applications fell last week fell to a seasonally adjusted 381,000, the Labor Department said Thursday. That's the lowest level since late February.
And the four-week average for applications, which smooths week-to-week fluctuations, fell for the ninth time in 11 weeks to an eight-month low.The downward trend in unemployment benefit applications bolsters the view that the economy has improved from its spring slump, when many feared another recession was likely. Consumer confidence is up, retailers reported a strong start to the holiday shopping season and the unemployment rate fell last month to its lowest point in two and a half years. ___ US household wealth takes biggest hit since 2008 WASHINGTON (AP) â¿¿ Americans' wealth last summer suffered its biggest quarterly loss in more than two years as stocks, pension funds and homes lost value. At the same time, corporations raised their cash stockpiles to record levels. Household net worth fell 4 percent to $57.4 trillion in the July-September quarter, according to a Federal Reserve report released Thursday. It was the sharpest drop since the tumultuous period after the September 2008 bankruptcy of investment bank Lehman Brothers. And it was the second straight quarterly fall. Household wealth, or net worth, is the value of assets like homes, bank accounts and stocks, minus debts like mortgages and credit cards. ___ Fixed mortgage rates hover near lows for 6th week WASHINGTON (AP) â¿¿ The average rate on the 30-year fixed mortgage hovered above its record low for a sixth straight week. But the super-low rates aren't providing a lift to the struggling housing market. Freddie Mac said Thursday that the rate on the 30-year home loan ticked down to 3.99 percent from 4 percent the previous week. It hit a record low of 3.94 nine weeks ago, according to the National Bureau of Economic Research. The average rate on the 15-year fixed mortgage edged down to 3.27 percent from 3.30 percent. Nine weeks ago, it too hit a record low of 3.26 percent.
Rates have been below 5 percent for all but two weeks this year. Yet this year could be the worst for home sales in 14 years.___ Brown-Forman 2nd-quarter profit rises 2 percent LOUISVILLE, Ky. (AP) â¿¿ Brown-Forman Corp. on Thursday said fiscal second-quarter profit rose 2 percent, helped by sales gains for its flagship Jack Daniel's whiskey as the liquor maker spent more to market its new flavored concoctions. The company, which also sells Southern Comfort and Finlandia vodka, said revenue rose 12 percent in the August-October quarter. Brown-Forman said gains overseas, particularly in Germany, Mexico, Russia, the U.K. and a few other countries, have helped propel sales over the past six months. But as revenues grew, so did the company's expenses. The liquor maker's advertising spending rose 14 percent from a year ago to promote new products such as Southern Comfort Fiery Pepper and a honey-flavored Jack Daniel's. Selling and administrative expenses increased 10 percent. Higher costs for materials and excise taxes also hurt margins. ___ Costco profit up slightly, struggles with costs PORTLAND, Ore. (AP) â¿¿ Costco Wholesale Corp. sacrificed on profitability for the sake of popularity in its fiscal first quarter. The wholesale club operator reported Thursday that its profit rose 2.6 percent for the period, despite significantly stronger revenue gains, as it kept prices low on gas, food and other products to gain market share. The company, based in Issaquah, Wash., has performed better than many retailers during the down economy as consumers turned to it for deals on necessities like food and household basics. Costco has long recognized that it must continue to hold that low-price position to maintain its popularity even if it puts pressure on its margins from time to time. ___ By The Associated Press(equals) The Dow Jones industrial average dropped 198.67 points, or 1.6 percent, to close at 11,997.70. The drop was the worst since Nov. 23 and ended a three-day run of modest gains. The last time the Dow closed below 12,000 was Nov. 29.
The Standard & Poor's 500 index fell 26.66, or 2.1 percent, to 1,234.35. The Nasdaq lost 52.83, or 2 percent, to 2,596.38.Benchmark West Texas Intermediate crude gave up $2.15 to end the day at $98.34 per barrel in New York. Brent crude, which is used to price foreign oil that's imported by US refineries, lost $1.34 to finish at $107.94 in London. In other energy trading, natural gas rose 3.6 cents to end the day at $3.457 per 1,000 cubic feet after the government reported that supplies fell more than expected last week. Heating oil gave up 5.26 cents to end at $2.9298 per gallon and gasoline futures fell by 2.03 cents to finish at $2.5666 per gallon.