Consumer confidence drops in April on inflation, job worries
NEW YORK (AP) -- From soaring gas prices to weaker job prospects, Americans are gloomier about the economy than just before the U.S. invasion of Iraq. They're so anxious that fewer people say they are planning to take a vacation than in 30 years.
And those are worrying signs for the already deteriorating economy, since eroding consumer confidence foreshadows weaker spending.
A widely watched measure of sentiment dropped to a five-year low in April, the fourth straight month of declines. The Conference Board said Tuesday that its Consumer Confidence Index fell to 62.3 in April, down from a revised 65.9 last month and 76.4 in February.
That was in line with the expectations of Wall Street economists, but leaves the index at its weakest point since it registered 61.4 in March 2003, ahead of the Iraq invasion.
Economists closely watch sentiment readings since consumer spending accounts for more than two-thirds of the nation's economic activity.
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Stocks mixed with investors wary before Fed's rate decision
NEW YORK (AP) -- Wall Street turned in a mixed performance Tuesday as investors traded cautiously ahead of the Federal Reserve's Wednesday decision on interest rates.
The Fed, facing a faltering economy but also rising inflation, is expected to cut interest rates by another quarter point after its two-day meeting concludes Wednesday. Many investor believe policy makers will then signal that they are planning to hold rates steady for a while.
Consumers have been worried about inflation because it means energy and grocery bills are harder to pay. Wall Street is also concerned, because inflation tends to curtail consumer spending, which accounts for more than two-thirds of the U.S. economy.
The Conference Board said Tuesday its April index of consumer confidence fell for the fourth straight month because of heightened disappointment about soaring prices and the weakening job market.
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Countrywide loses $893 million in 1Q on rising loss reserve
LOS ANGELES (AP) -- Countrywide Financial Corp. said Tuesday it lost $893 million in the first quarter, as rising loan defaults amid a deepening housing downturn forced the nation's largest mortgage lender and servicer to sharply increase its provision for loan losses and book other credit-related charges.
The latest results marked the third consecutive quarterly loss for Countrywide, which reaped a windfall during the housing boom but has been struggling since last summer, despite predictions last fall by CEO Angelo Mozilo that his company would turn a profit in 2008.
The Calabasas, Calif.-based company, which agreed in January to sell itself to Bank of America Corp. for about $4 billion in stock, did not conduct an earnings conference call with analysts, citing the proposed sale.
The company said its loss amounted to $1.60 per share for the quarter ended March 31. A year earlier, it earned $434 million, or 72 cents per share.
Revenue plunged 72 percent to $679 million from $2.4 billion in the year-ago quarter.
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MasterCard profit more than doubles as card use abroad rises
NEW YORK (AP) -- MasterCard's profit more than doubled in the first quarter as more customers outside the United States used their credit and debit cards for purchases.
Cardholder spending within the United States rose, too, but at a more moderate pace, indicating that while Americans are increasingly turning to plastic in a weak economy, emerging markets are becoming especially lucrative.
The Purchase, N.Y.-based card processor said Tuesday it earned $446.9 million, or $3.38 per share for the January to March period. That is up from $214.9 million, or $1.57 a share, in the same timeframe last year.
Even after excluding the effects of a gain from terminating a customer business agreement and another gain from selling its remaining holdings in the Brazilian company Redecard, MasterCard's earnings per share totaled $2.59. That was above the average analyst estimate of $2 a share, according to Thomson Financial.
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Oil drops as demand falls amid supply growth expectations
NEW YORK (AP) -- Oil prices fell more than $3 a barrel Tuesday as the market absorbed data showing demand is falling even as supplies are rising. Meanwhile, gas prices inched higher at the pump, continuing their record-breaking press toward $4 a gallon.
A monthly Energy Department report said demand for finished petroleum products dropped 8.5 percent in February from January, and demand for gasoline fell by 6.2 percent. Though some of that drop can be attributed to February's being a shorter month, it still suggests high prices are cutting American's appetite for fuel.
"That's a dramatic drop," said Linda Rafield, senior oil analyst at Platts, the energy research arm of McGraw-Hill Cos.
At the same time, a British refinery strike that raised concerns about supplies ended Tuesday, and analysts surveyed by Platts expect the Energy Department's weekly inventory report on Wednesday to show domestic crude supplies rose last week.
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Home prices sink at record clip; foreclosures keep mounting
NEW YORK (AP) -- In a bad omen for sellers and lenders this spring home selling season, the erosion of house values is accelerating and foreclosure filings are doubling, new data showed Tuesday.
A closely watched index of home prices in 20 cities fell almost 13 percent in February from a year earlier, a record for the seven-year-old S&P's/Case-Shiller Home Price index. The report follows news that foreclosure filings between January and March also hit a new high, and comes a day after the government said the number of vacant homes on the market also hit a record.
He said 17 of the metro areas the index tracks reported record annual declines, led again by Miami and Las Vegas.
Charlotte, N.C., was the only city to post an annual gain of 1.5 percent, but Blitzer noted that Charlotte's positive returns continue to diminish with each month and it was the last city in the index to reach its peak.
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Declines in Europe, tubular lower US Steel profit
PITTSBURGH (AP) -- United States Steel Corp. reported a 14 percent drop in first-quarter earnings Tuesday as record sales failed to offset declines in its European and tubular businesses.
But the results beat Wall Street expectations, and the company forecast substantial growth in the second quarter.
The Pittsburgh-based steel producer earned $235 million, or $1.98 per share, for the quarter that ended March 31, down from $273 million, or $2.30 per share, a year earlier.
Sales jumped 38 percent to a record-setting $5.2 billion, from $3.76 billion in the first quarter of 2007, partly due to gains in the company's flat-rolled steel business in North America. Flat-rolled steel is used in products such as automobiles and appliances.
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GMAC 1Q loss widens on declining auto finance income
NEW YORK (AP) -- GMAC Financial Services said Tuesday its first-quarter loss widened as its automotive finance business weakened -- though results improved slightly in its struggling mortgage operations.
GMAC is majority owned by private equity firm Cerberus Capital Management. General Motors Corp. owns a minority stake in the financial services firm, though GMAC's mortgage difficulties of late have weighed on GM's results.
GMAC lost $589 million during the first quarter of 2008, compared with a loss of $305 million during the same period the previous year.
The automotive finance division earned $258 million during the first quarter, a 35 percent decline from the year-ago period. GMAC cited weaker credit performance, including rising credit loss provisions and rising costs tied to restructuring operations.
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Americans unload prized belongings to make ends meet
NEW YORK (AP) -- The for-sale listings on the online hub Craigslist come with plaintive notices, like the one from the teenager in Georgia who said her mother lost her job and pleaded, "Please buy anything you can to help out."
Or the seller in Milwaukee who wrote in one post of needing to pay bills -- and put a diamond engagement ring up for bids to do it.
Struggling with mounting debt and rising prices, faced with the toughest economic times since the early 1990s, Americans are selling prized possessions online and at flea markets at alarming rates.
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By The Associated Press The Dow Jones industrial average fell 39.81, or 0.31 percent, to 12,831.94.
Broader markets were mixed. The Standard & Poor's 500 index dipped 5.43, or 0.39 percent, to 1,390.94, and the Nasdaq composite index rose 1.70, or 0.07 percent, to 2,426.10.
Light, sweet crude for June delivery fell $3.12 to settle at $115.63 a barrel on the New York Mercantile Exchange, oil's lowest settlement since April 17.
Other energy futures followed oil lower Tuesday. In other Nymex trading, May gasoline futures fell 9.15 cents to settle at $2.9392 a gallon, and May heating oil futures fell 5.23 cents to settle at $3.2465 a gallon. June natural gas futures fell 48.7 cents to settle at $10.842 per 1,000 cubic feet.
In London, Brent crude futures fell $3.31 to settle at $113.43 a barrel on the ICE Futures exchange.
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