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Political Heat Sears AIG
President Barack Obama said Monday that he would “pursue every single legal avenue to block” $165 million in bonuses to American International Group Inc. (NYSE:AIG) employees who were in part responsible for the insurance giant’s near collapse. But hours later, administration officials said the payouts made Friday couldn’t be extracted from their recipients without a legal fight that would cost the taxpayers even more.
U.S. Housing Starts Unexpectedly Increase on Condos
Housing starts in the U.S. unexpectedly snapped the longest streak of declines in 18 years in February, adding to signs that the pace of the economy’s decline may be easing. Work began on 583,000 homes at an annual rate, a 22 percent rise from January, the Commerce Department said in Washington today. The jump was influenced by warmer weather and an 82 percent surge in starts on condominiums, apartments and townhouses that’s unlikely to be sustained, analysts said.
Apple, Dell lead early tech gains
Technology stocks put in a strong early trading performance Tuesday, as gains from Apple Inc. (NASDAQ:AAPL) and Dell Inc. (NASDAQ:DELL) gave a slight lift to the sector that was trying to come back from the previous session’s losses. With tech stocks leading the pace, the Nasdaq Composite Index rose 13.7 points to 1,417. The Philadelphia Semiconductor Index was up 1.5% and the Morgan Stanley High Tech 35 Index rose 1%.
Nokia to cut 1,700 jobs
Nokia (NYSE:NOK), the world’s largest maker of cell phones, said it was cutting 1,700 jobs worldwide in response to “pruned” demand from consumers. Nokia, in its third announcement this year involving reduced employment, said it was cutting the jobs in its devices and markets unit as well as in its corporate development office and global support functions.
Wagoner Confident That GM Would Fare Better Outside of Bankruptcy
General Motors Corp. (NYSE:GM) Chief Executive Rick Wagoner said Tuesday the company remains confident it can restructure outside of bankruptcy court and warned that filing for bankruptcy could lead management and the board to lose considerable control. Mr. Wagoner, speaking to reporters in Washington, said that bankruptcy “could work but it might not work.”
Pfizer Plans Five-Part Sale of $13.5 Billion of Notes
Pfizer Inc. (NYSE:PFE), the world’s biggest drugmaker, is planning a five-part, $13.5 billion sale of notes to help finance its purchase of Wyeth (NYSE:WYE) in the biggest non-financial offering since Roche Holding AG’s sale in February. Bankers for New York-based Pfizer are marketing the bonds at yields of 1.95 percentage points to 3.45 percentage points more than benchmarks, according to a person familiar with the offering who declined to be identified because terms aren’t set. Roche paid yields of 2 percentage points to 3.65 percentage points last month for debentures of similar maturity.
Oil swings on inventories expectation, housing data
Crude-oil futures swung between gains and losses Tuesday, as data showing a surge in U.S. housing starts offset expectations that U.S. crude inventories rose last week, the second in a row. Plus, options on the front-month April futures contract expire Tuesday, adding more volatility to crude trading as traders scrambled to cover their option positions before they expire.
Philip Morris Pushes ’09 Bond Sales to EU100 Billion
Bond sales by Philip Morris International Inc. (NYSE:PM) and Deutsche Lufthansa AG (FRA:LHA) today will push European issuance for the year above 100 billion euros ($130 billion), the quickest it has ever reached that level. Companies are taking advantage of the first drop in yields relative to government debt in two weeks to sell more than 5 billion euros of bonds, according to Merrill Lynch & Co. data.
Goldman Sachs Offers Loans to Employees to Aid Fund Investments
Goldman Sachs Group Inc. (NYSE:GS), which set a record for Wall Street bonuses in 2007, offered loans to more than 1,000 employees to help them meet obligations to put more money into Goldman’s private equity and real-estate funds. The loans are being made at market rates and are fully collateralized, said Ed Canaday, a spokesman for the New York- based firm. They will range from thousands to hundreds of thousands of dollars.
Alcoa shares hit hard on dividend cut
Alcoa (NYSE:AA) shares dropped more than 10% Tuesday after the aluminum giant announced that it will slash its dividend and cut back on capital spending in an effort to position the company to withstand a “prolonged” downturn. At last check, Alcoa component of the Dow Jones Industrial Average, shed 62 cents to $5.50.
Obama Says He Won’t Give Up Health-Care, Education Budget Plans
President Barack Obama said he won’t scale back his plans to revamp the health-care and education systems in his proposed $3.6 trillion budget, saying they represent investments to assure long-term economic growth.
