Fannie Mae sees sharper home-price declines, loses $2.2B
WASHINGTON (AP) -- The steeper slide in home prices is accelerating the pace of foreclosures, Fannie Mae said Tuesday as it outlined plans for shoring up its finances following a $2.2 billion first quarter loss.
While the nation's largest buyer of home loans will slice its dividend and attempt to raise $6 billion, mostly by issuing new shares, federal regulators loosened Fannie's capital requirements as the government looks for ways to bolster the housing market.
Moody's Investors Service downgraded the company's financial strength rating because of the potential for further losses from soured home loans over the next two years, but investors pushed Fannie's shares higher, in anticipation of the bigger role Fannie will play in the mortgage market.
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Oil nears $123 on $200 oil prediction, supply concerns
NEW YORK (AP) -- Oil futures blasted to a new record near $123 a barrel Tuesday, gaining momentum as investors bought on a forecast of much higher prices and on any news hinting at supply shortages.
Retail gas prices edged lower, but appear poised to rise to new records of their own in coming weeks.
A new Goldman Sachs prediction that oil prices could rise to $150 to $200 within two years seemed to motivate much of Tuesday's buying, although a falling dollar and increasing concerns about declining crude production in Mexico and Russia contributed, analysts say.
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Stocks lift even as oil prices soar near $123 a barrel
NEW YORK (AP) -- Wall Street reversed early losses to close higher Tuesday, as investors monitored the movements of record high oil prices but still laid bets that the economy and companies are in recovery mode.
Crude oil climbed to a record near $123 a barrel on the New York Mercantile Exchange as traders, who have nearly doubled the price of oil over the past year, reacted to the weakening U.S. dollar, supply threats, and a note from Goldman Sachs & Co. predicting that oil could reach $200 a barrel.
But oil price sticker-shock waned and as investors looked past wider-than-expected quarterly losses at Swiss bank UBS, government-sponsored mortgage company Fannie Mae and homebuilder D.R. Horton Inc.
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D.R. Horton swings to 2Q loss on impairment charges
DALLAS (AP) -- D.R. Horton said Tuesday it swung to a loss in the second quarter, as a sustained housing slump forced the nation's largest homebuilder to take hefty charges and write down the value of property.
Fort Worth, Texas-based D.R. Horton Inc. posted a loss of $1.31 billion, or $4.14 per share, compared with year-ago profit of $51.7 million, or 16 cents per share. The latest period, reported Tuesday, includes pretax write-down charges of $834.1 million.
Revenue plunged to $1.62 billion from $2.62 billion a year ago.
On average, analysts surveyed by Thomson Financial expected a loss of 39 cents per share on revenue of $1.36 billion. Wall Street estimates typically exclude one-time charges or gains.
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Cisco 3Q profit beats subdued expectations
SAN JOSE, Calif. (AP) -- Cisco Systems Inc.'s profit fell 5 percent in its fiscal third quarter but beat Wall Street's expectations, a sign the turbulent U.S. economy didn't rattle the world's largest networking equipment maker as hard as expected.
The San Jose-based company earned $1.77 billion, or 29 cents per share, during the three months ended April 26. That represents a drop of 5.4 percent from the $1.87 billion, or 30 cents per share, that Cisco earned during the same period a year ago.
Stripping out 9 cents per share in one-time charges for acquisition and employee stock-based compensation, Cisco earned 38 cents per share. That's 2 cents per share above the average estimate on the same basis from analysts polled by Thomson Financial.
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Walt Disney's net profit grows 22 percent to $1.1B in 2Q
LOS ANGELES (AP) -- Strong growth in its media networks, film studios and theme parks lifted The Walt Disney Co.'s second-quarter net profit 22 percent from a year ago, the company said Tuesday.
Disney said it earned $1.13 billion, or 58 cents per share, in the quarter ended March 29, compared with $931 million, or 44 cents per share, a year earlier.
Revenue for the period grew 10 percent to $8.71 billion.
The results beat Wall Street estimates.
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UBS reports 1Q net loss $11 billion
ZURICH, Switzerland (AP) -- Swiss bank UBS, hard hit by the U.S. subprime crisis, reported a first-quarter loss of $10.97 billion and said Tuesday it will slash almost 7 percent of its work force.
The 11.5 billion Swiss franc loss compares with a net profit of 3 billion francs in the same period last year. The company also said it would unload $15 billion in subprime and other mortgage-based securities from its portfolio.
UBS AG shares tumbled 4.5 percent to close at 35.22 francs ($33.41).
The bank warned investors last month to expect net losses of $11.42 billion from the first three months of the year after writing down about $19 billion on U.S. real estate and related credit positions.
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Fed auctions $75 billion to banks to ease credit stresses
WASHINGTON (AP) -- Battling to relieve stressed credit markets, the Federal Reserve said Tuesday it has provided a total of $435 billion in short-term loans to squeezed banks since December to help them overcome credit problems.
The central bank announced the results of its most recent auction -- $75 billion in short-term loans -- the 11th such auction since the program started in December.
It's part of an ongoing effort by the Fed to help ease the credit crunch, which erupted last August, intensified in December and January and took another turn for the worst in March.
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Wachovia nearly doubles its 1Q loss to $708 million
CHARLOTTE, N.C. (AP) -- Wachovia Corp. said Tuesday it is nearly doubling previously reported losses for the first quarter after reviewing its portfolio of bank-owned life insurance.
The Charlotte-based bank said it lost $708 million, or 36 cents per share, during the January-March period, according to a filing with the Securities and Exchange Commission. It previously said losses totaled $393 million, or 20 cents per share, during the quarter.
Shares of Wachovia rose 30 cents to $30.08 Tuesday.
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By The Associated Press The Dow Jones industrial average rose 51.29, or 0.40 percent, to 13,020.83.
Broader stock indicators also rebounded. The Standard & Poor's 500 index rose 10.77, or 0.77 percent, to 1,418.26, and the Nasdaq composite index rose 19.19, or 0.78 percent, to 2,483.31.
Light, sweet crude for June delivery jumped to a new record of $122.73 a barrel before retreating to settle up $1.87 at a record $121.84 on the New York Mercantile Exchange.
In other Nymex trading Tuesday, June gasoline futures rose 5.26 cents to settle at $3.1055 a gallon after earlier setting a new trading record of $3.126. June heating oil futures rose 4.7 cents to settle at $3.3535 a gallon after rising to their own trading record of $3.3712, and June natural gas futures fell 2.8 cents to settle at $11.15 per 1,000 cubic feet.
In London, June Brent crude futures rose $2.18 to settle at $120.31 a barrel on the ICE Futures exchange.
