NEW YORK (AP) – A jittery Wall Street advanced Monday, reversing some of Friday's sharp losses as investors took a dismal new home sales report as a sign the Federal Reserve will lower rates this week.
The Dow Jones industrial average rose more than 176 points in a session that was relatively calm when compared to the turbulence of last week.
On the surface, the advance appeared surprising after the Commerce Department reported sales of new homes in December fell by 4.7 percent and that 2007 new home sales plunged by a record 26.4 percent compared to 2006. But while the report at first exacerbated the market's concern that the housing and mortgage crises are causing a recession, it also raised hopes that the Fed might cut rates again by a wide margin to stoke the weakening U.S. economy.
CHICAGO (AP) — Sears Holdings Corp. abruptly announced the departure of president and chief executive Aylwin B. Lewis on Monday, leaving a management void at the top of the department store chain controlled by Chairman Edward S. Lampert as it tries a high-stakes restructuring to reconnect with customers and reinvigorate slumping sales.
Lewis was an executive at fast-food chain Yum Brands Inc. and had little retail experience when he was hand-picked by Lampert in 2004 to run Kmart and later Sears. W. Bruce Johnson was named as interim CEO while the company looks for a permanent successor.
Monday's announcement marked the latest chapter for the venerable retailer, which has seen its competitors snatch away customers since Lampert acquired Kmart in 2003 and Sears, Roebuck and Co. in 2005.
NEW YORK (AP) – American Express Co. said Monday its profit slumped nearly 10 percent in the fourth quarter after it set aside more money to prepare for cardholder defaults.
The credit-card issuer posted net income of $831 million, or 71 cents a share, down 9.9 percent from $922 million, or 75 cents a share, in the previous year's fourth quarter.
Total revenue rose 10 percent to $6.42 billion from $5.84 billion in the prior fourth quarter. Excluding interest expense, revenue came to $7.36 billion, up from $6.68 billion a year ago.
PARIS (AP) – Investigating judges filed preliminary charges Monday against a trader accused of causing billions of dollars in losses for France's second-largest bank. He was released from custody while the thorny investigation continues.
Preliminary charges of "breach of trust" and unauthorized computer activity were filed against Jerome Kerviel, his lawyer, Christian Charriere-Bournazel, told reporters.
The judges did not pursue a fraud charge sought by the prosecutor's office or even continue to hold him as the prosecutor wanted for fear he might flee. It was not immediately clear whether the judges were pursuing charges of forgery, also requested by the prosecutor.
NEW YORK (AP) – Verizon Communications Inc. on Monday said it was seeing little effect of the turmoil in the U.S. economy, reporting higher fourth-quarter earnings that were largely in line with expectations.
There has been speculation on Wall Street that telecommunications companies, which have been branching out from their old business of providing utility phone services, would be more sensitive to a recession this time around.
AT&T Inc. reported an increase in disconnections in the last three months of 2007, but Verizon appears to be holding up better.
AT&T is the nation's biggest telecommunications company by revenue while Verizon ranks second.
CHICAGO (AP) – McDonald's Corp. showed its first sign of vulnerability to the U.S. economic slowdown Monday and uneasy investors responded by selling off the fast-food chain's stock despite its booming international sales and healthy $1.27 billion profit.
The company said sales were flat last month at U.S. restaurants open more than a year, blaming winter storms but also acknowledging "softer consumer spending" as Americans tightened their wallets in a volatile economy.
That snapped a streak of 56 consecutive months of higher year-over-year U.S. comparable sales, and a recession-wary Wall Street pushed McDonald's stock to a 4 1/2-month low.
NEW YORK (AP) — Oil futures rose Monday as traders shrugged off recession fears and bet that the Federal Reserve will cut interest rates again this week.
Futures reversed earlier losses that came on a dismal housing report and overnight declines in global stock markets. Sales of new homes plummeted a record 26.4 percent last year while the median price of a new home edged up just 0.2 percent, the worst showing since 1991, the Commerce Department said.
But bad housing news cuts two ways. It reflects a slowing economy, but it also increases the chances that the Federal Reserve will cut interest rates.
NEW YORK (AP) — A pair of investors disclosed plans Monday to name their own slate of four directors at The New York Times Co., saying the current board hasn't acted aggressively enough to meet the demands of the rapidly changing media industry.
The investors, Firebrand Partners and Harbinger Capital Partners, laid out their position in a letter to Times' Chairman Arthur Sulzberger Jr. and CEO Janet Robinson. The letter, dated Sunday, was disclosed in a regulatory filing Monday.
The Times said Friday that Harbinger had notified the company of its intention to name four directors for election at its next annual meeting on April 22. Firebrand indicated that it was working together with Harbinger and that together the two companies owned 4.9 percent of Times stock.
By The Associated Press
The Dow rose 176.72, or 1.45 percent, to 12,383.89 after falling as many as 95 points in morning trading. On Friday, the blue chip index tumbled 171 points after a two-day advance of more than 400 points.
Broader stock indicators also advanced Monday. The Standard & Poor's 500 index rose 23.36 or 1.76 percent, to 1,353.97, while the Nasdaq composite index rose 23.71, or 1.02 percent, to 2,349.91.
Light, sweet crude for March delivery rose 28 cents to settle at $90.99 a barrel on the New York Mercantile Exchange after falling as low as $88.78 earlier.
Other energy futures rose Monday. Heating oil futures for February delivery rose 0.74 cent to settle at $2.5265 a gallon on the Nymex while February gasoline futures rose 0.71 cent to settle at $2.3253 a gallon. February natural gas futures rose 11.2 cents to settle at $8.095 per 1,000 cubic feet.
In London, Brent crude rose 48 cents to settle at $91.38 a barrel on the ICE Futures exchange.