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WALL STREET

Stocks jump; Dow posts best gain in 2 weeks

NEW YORK — Stocks posted their biggest jump in nearly two weeks Tuesday. Investors picked up cheaply priced stocks after fears that the U.S. would slip into a recession pounded the market during the last month.

The Dow jumped 322.11 points, its best day since Aug. 11, when it gained 423.

The Dow, which tracks 30 huge U.S. companies including IBM Corp. and General Electric Co., closed with a gain of 3 percent at 11,176.76. Indexes that track smaller stocks did even better, a sign that investors were more willing to take on risk.

The S&P 500 index rose 38.53 points, or 3.4 percent, to 1,162.35. The Nasdaq composite index, which tracks mainly technology companies, rose 100.68 points, or 4.3 percent, to 2,446.06. The Russell 2000 index of smaller U.S. companies gained even more, 4.9 percent.

RESIGNATION

S&P chief resigns; fund seeks parent split

NEW YORK — The president of Standard & Poor’s is stepping down just two weeks after the rating agency stripped the United States of its AAA credit rating. At the same time, an activist hedge fund is calling for S&P’s parent to break into four separate companies to unlock more value for shareholders.

McGraw-Hill Cos., the parent company, said the resignation of Deven Sharma was not related to Jana Partners’ breakup proposal or to S&P’s polarizing decision to downgrade its rating on U.S. debt. McGraw-Hill named Citibank’s chief operating officer, Douglas Peterson, to the S&P job late Monday.

Jana Partners, which had also called for new leadership at S&P, issued a terse response Tuesday to Mr. Peterson’s appointment. “Recognizing the need for help at S&P will be useful,” the firm said in a statement, “but to address years of chronic underperformance for its shareholders McGraw-Hill will need to take much bolder steps.”

Representatives from Jana Partners and the Ontario Teachers’ Pension Plan, which together own more than 5 percent of McGraw-Hill’s shares, presented a 26-slide show to McGraw-Hill leaders Monday.

REAL ESTATE

New-home sales fall, 2011 could be worst year

Sales of new homes fell for the third straight month in July, a sign that housing remains a drag on the economy. If the current pace continues, 2011 would be the worst year for new-home sales on records dating back at least half a century.

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