The top business news from The Associated Press for the morning of Wednesday, August 13, 2008:
Japanese economy posts second-quarter contraction
TOKYO (AP) _ Japan’s economy shrank for the first time in a year in the second quarter, the government said Wednesday, but officials _ joined by many economists _ denied the downturn heralded a return of the “lost decade” economy of the 1990s. Hit by faltering exports and wilting consumer demand, the world’s No. 2 economy, which until now had managed to power forward, is beginning to succumb to the onslaught of rising commodities prices and global economic turmoil.
Oil rises on mixed dollar
VIENNA, Austria (AP) _ Traders bid oil moderately higher Wednesday amid mixed signals on the strength of the U.S. dollar and ahead of weekly U.S. crude inventory data expected to show a slight increase in oil supplies. A weakening dollar has helped boost oil prices this year, because dollar-denominated commodities are often used as hedges against inflation and a falling U.S. currency. The euro rose Wednesday to $1.4919 but the yen was weaker against the greenback, trading at 1 U.S. dollar to 108.93 yen.
Ford exec says company can weather downturn
TRAVERSE CITY, Mich. (AP) _ Despite the headwinds of a slumping U.S. economy, tight credit, high gasoline prices and declining home values, Ford Motor Co.’s top American executive said he is confident the company has enough cash to weather losses and make a profit again. But Mark Fields, Ford’s president of the Americas, told reporters at a dinner Tuesday night that there will be a lag time before the company can start making profits on the small cars U.S. drivers are now craving.
ING bank reports 25 percent fall in 2Q earnings
AMSTERDAM, Netherlands (AP) _ ING Groep NV, the Dutch insurer and bank, said Wednesday its second quarter earnings fell 25 percent, mostly due to smaller gains on investments. Net profit was 1.92 billion ($2.86 billion), from 2.56 billion in the same period a year ago.
CVS Caremark buys Longs Drug Stores
CHICAGO (AP) _ Drug store chain CVS Caremark Corp., looking to build its West Coast presence, said Tuesday it would buy Longs Drug Stores Corp. in a deal valued at $2.7 billion. The $71.50 per-share cash offer, announced after the end of trading Tuesday, was a 32 percent premium over Walnut Creek, Calif.-based Longs’ closing price of $54.04.
Stocks fall sharply amid financial sector concerns
NEW YORK (AP) _ Wall Street skidded lower Tuesday as downbeat news from JPMorgan Chase & Co. and other financial companies lifted the market’s anxiety about the continuing impact of the credit crisis on the economy. The Dow Jones industrials fell nearly 140 points. The latest reminder of continuing troubles for banks and brokerages came when JPMorgan said late Monday it has incurred wider losses in its mortgage holdings so far in the third quarter than in the second quarter. The nation’s second-largest bank by assets said in a regulatory filing it lost $1.5 billion, after hedges, in its mortgage-backed securities and loans this quarter, compared to $1.1 billion in the second three months of 2008.
June trade deficit shrinks as exports climb
WASHINGTON (AP) _ The U.S. trade deficit has gone on a diet, helped by strong exports of farm products and manufactured goods and by Americans spending less as the economy limps along. The deficit for June fell by 4.1 percent to $56.8 billion. That’s the lowest level in three months and a surprise to economists who had expected an increase reflecting a big surge in oil prices during the month, the Commerce Department reported Tuesday.
JPMorgan shares tumble on widening 3Q losses
NEW YORK (AP) _ JPMorgan Chase & Co. shares tumbled nearly 10 percent Tuesday as the bank’s disclosure about escalating losses in its mortgage portfolio set off new concerns about the health of the overall financial sector. An analyst’s lowering of the bank’s earnings estimates and price target contributed to the decline. JPMorgan Chase plunged $3.88, or 9.3 percent, to close at $38.01. It has traded between $29.94 and $49.95 in the past 12 months.
UBS posts Q2 loss, announces reorganization
GENEVA (AP) _ UBS AG, one of the hardest-hit banks in the subprime mortgage crisis, announced Tuesday that it is reorganizing into three distinct businesses after reporting a large quarterly loss and taking another $5.1 billion hit in writedowns. Switzerland’s largest bank is separating its ailing investment bank from its healthier businesses: wealth management for high net worth individuals and asset management.
Qantas grounds 6 planes to check maintenance files
SYDNEY, Australia (AP) _ Australia’s airline safety body said Wednesday it would expand its investigation of Qantas after the company announced it temporarily pulled six aircraft from service because of irregularities in maintenance records. Three flights were canceled Tuesday night after Qantas pulled the planes. It was the latest in a spate of incidents with the airline since one of its planes made an emergency landing in Manila last month after an explosion tore a large hole in the fuselage.
LONDON (AP) _ Gold up in London morning trading, fixed at $824.00 per troy ounce.
TOKYO (AP) _ The benchmark Nikkei 225 Stock Average shed 280.55 points, or 2.11 percent, to 13,023.05.
TOKYO (AP) _ The dollar was trading at 108.78 yen Wednesday afternoon in Asia, down from 109.31 yen late Tuesday.
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