Citigroup cuts value of investments by $14B in 1Q
NEW YORK (AP) -- Citigroup's 9,000 job cuts and $14 billion in write-downs suggest that even if the worst of the credit market volatility is over, the industry is now in a conservative, cost-cutting mode.
With banks expecting more loans to go sour, people can expect tight lending standards for many months -- perhaps years -- to come.
Citigroup Inc. is struggling with not only a troubling lending environment in the United States, but also a dented portfolio of investments. The bank's write-downs, plus more than $3 billion in costs related to consumers' credit problems, led it to report a first-quarter loss Friday of $5.1 billion, or $1.02 a share.
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Wall Street jumps as investors weigh Citi, Google results
NEW YORK (AP) -- Wall Street topped off a strong week with a big rally Friday, after results from companies like Citigroup Inc. and Google Inc. helped ease investor anxiety about the health of corporate profits.
Investors have been worried that recent data indicate a slowing economy, which would cut into profit growth at some of the nation's biggest companies. But, results so far have shown that earnings, for the most part, are meeting or beating expectations, and the major indexes all posted gains of more than 4 percent for the week.
Citigroup, the nation's biggest bank, encouraged investors with results that didn't contain any big surprises. Google helped boost investor sentiment, as well as the tech-heavy Nasdaq composite index, by reporting first-quarter earnings and revenue growth that handily topped analysts' predictions.
Advancing issues outnumbered decliners by more than 3 to 1 on the New York Stock Exchange, where volume came to 1.48 billion shares compared with 1.23 billion shares traded Thursday.
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Gas prices push closer to $3.50 a gallon, oil hits $117
NEW YORK (AP) -- Retail gas prices set new records Friday on their seemingly relentless march toward $3.50 a gallon, and diesel prices pushed further above $4 a gallon. Crude futures, meanwhile, surged to a new record of $117 a barrel.
The price of crude oil was pushed higher after a militant group in Nigeria said it had sabotaged a major oil pipeline operated by a Royal Dutch Shell PLC joint venture and promised further attacks on the country's petroleum industry.
A spokeswoman for Shell confirmed that the pipeline was leaking, and said the damage appeared to have been caused by explosives. Nigeria is a major supplier of oil to the U.S.
The escalation in crude prices threatened to further boost gasoline costs.
At the pump, the national average price of regular gas rose 2.7 cents overnight to a record $3.445 a gallon, according to a survey of stations by AAA and the Oil Price Information Service. Diesel fuel added 2.2 cents to a record national average of $4.168 a gallon.
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AT&T to cut about 4,600 jobs, sees $374 million 1Q charge
NEW YORK (AP) -- AT&T Inc. on Friday said it plans to cut about 4,600 jobs, or 1.5 percent of its work force, to shift resources to growing parts of its business.
The nation's largest telecommunications provider said most of the layoffs will be among managers, particularly in wireline operations, including local phone service and service for large corporate customers. Jobs in corporate functions in like finance will also be cut.
The San Antonio-based company said in a regulatory filing that it plans to take a $374 million first-quarter pretax charge against earnings due to the job cuts. The company reports first-quarter earnings on Tuesday.
The company had 309,500 employees at the end of last year. When it announced the acquisition of BellSouth Corp. in 2006, it has said it would cut 10,000 jobs over three years from the combined company to eliminate overlap. The cuts announced Friday are not part of that reduction, and is the largest announcement of job cuts by the company since then.
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Google shares soar 20 percent to record 1-day gain
SAN FRANCISCO (AP) -- Google Inc.'s stock soared 20 percent Friday, restoring $28 billion in shareholder wealth as Wall Street renewed its love affair with the Internet search leader after weeks of worry about an online advertising slowdown.
Driven by stellar first-quarter results that surprised industry analysts, Google shares surged $89.87 to finish at $539.41. It marked the biggest one-day gain since Google's initial public stock offering in August 2004, leaving the shares at their highest closing price since January.
Google had lost favor with investors as Web surfing data and the faltering U.S. economy raised concerns that people aren't clicking as frequently on the Internet advertising links that generate most of the Mountain View-based company's revenue.
The trend threatened to chip away at Google's earnings because the company typically gets paid by the click.
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Global sales boost Caterpillar 1Q profits, stock price
CHICAGO (AP) -- Caterpillar Inc. parlayed an increased reliance on international markets to surprisingly strong sales and a 13 percent jump in first-quarter profits, impressing investors who expected the heavy equipment maker to be slowed more by the weak U.S. economy and dollar.
The Peoria, Ill.-based manufacturer's stock surged more than 8 percent in Friday trading after it easily beat Wall Street's earnings estimates, benefiting from its strategy of diversification.
Shares rose $6.69, or 8.5 percent, to close at $85.28 Friday and were up more than 40 percent since mid-January to within $2 of their all-time high, despite what CEO Jim Owens characterized as a depressed market for construction equipment in North America.
Even though the housing market slowdown limited sales in the United States and Western Europe, Caterpillar's stepped-up push into emerging markets and the oil-and-gas, marine, and parts-and-service businesses paid off in a 30 percent leap in international sales.
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Xerox swings to 1Q loss on litigation charge
HARTFORD, Conn. (AP) -- Xerox Corp. said Friday that a litigation charge left it with a loss of $244 million in the first quarter, but its results excluding the one-time item matched Wall Street expectations.
Chief Executive Anne Mulcahy said tighter profit margins due to investment spending were offset by a lower tax rate.
The Norwalk-based office equipment maker said it lost the equivalent of 27 cents per share in the three months ended March 31, compared to a profit of $233 million, or 24 cents a share, a year ago.
Excluding the previously announced charge of 54 cents per share, the company earned 27 cents per share in the period, matching expectations of analysts in a Thomson Financial poll.
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Honeywell Int'l 1Q profit rises on increased revenue
NEWARK, N.J. (AP) -- Diversified manufacturer Honeywell International Inc. on Friday reported that first-quarter profit rose 22 percent on higher sales, beating Wall Street forecasts.
Honeywell raised its sales forecast and the lower end of its earnings forecast for the year, sending its shares up more than 6 percent in midday trading.
The Morris Township-based company said earnings increased to $643 million, or 85 cents per share, in the three months ended March 31 from $526 million, or 66 cents per share, a year earlier.
Revenue climbed 11 percent to $8.9 billion from $8.04 billion a year earlier.
Analysts polled by Thomson Financial had expected net income of 82 cents per share on sales of $8.73 billion.
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Canada says chemical in plastic water bottles is unsafe
TORONTO (AP) -- An ubiquitous chemical found in hard plastic water bottles, DVDs, CDs and hundreds of other common items came under increased pressure Friday when Canada labeled it dangerous and said it may ban its use in baby bottles.
Health Canada made the announcement shortly after a U.S. company said it would stop selling hard-plastic Nalgene water bottles made with bisphenol A because of growing consumer concern over whether the chemical poses a health risk.
Health Canada is the first regulatory body in the world to call bisphenol A dangerous. It could be the first step in Canada banning the chemical altogether.
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By The Associated Press The Dow Jones industrial average jumped 228.87, or 1.81 percent, to 12,849.36.
Broader stock indicators also showed sizable advances. The Standard & Poor's 500 index increased 24.77, or 1.81 percent, to 1,390.33, and the Nasdaq rose 61.14, or 2.61 percent, to 2,402.97.
Light, sweet crude for May delivery rose to a new trading record of $117 in after-hours electronic trading Friday after settling up $1.83 at a record $116.69 a barrel on the New York Mercantile Exchange. It was the fifth day in a row crude prices set new records.
In other Nymex trading Friday, May heating oil futures rose 2.49 cents to settle at $3.2923 a gallon while May gasoline futures rose 3.15 cents to settle at a record $2.9893 a gallon after earlier rising to a new trading record of $2.9934 a gallon.
