Torrent of bad financial news flows out of Europe
DUBLIN (AP) — Alarming financial news flowed out of Europe in a torrent Friday, just a week after the EU leaders struck a deal they hoped would contain the continent's debt crisis.
The bombardment shredded hopes of a lasting solution to the turmoil that is endangering the euro — the currency used by 17 European nations — and threatening the global economy.
In quick succession:
— Moody's Investors Services downgraded Belgium's credit rating by two notches, citing strains on eurozone countries as they try to finance their heavy debt loads. The ratings remain investment grade.
— The Fitch Ratings agency announced it was considering further cuts to the credit scores of six eurozone nations — heavyweights Italy and Spain, as well as Belgium, Cyprus, Ireland and Slovenia. It said all six could face downgrades of one or two notches.
— Ireland's economy shrank again, much deeper than had been expected, with its third-quarter gross domestic product falling 1.9 percent. Ireland is one of three eurozone nations kept solvent by an international bailout.
— Bankers and hedge funds balked in talks about forgiving 50 percent of Greece's massive debts, a key issue in the debate over Greece's second rescue bailout.
— The red ink in Spain's regional governments surged 22 percent in the last year, endangering the central government's efforts to cut overall Spanish debt.
— France, the second-largest eurozone economy after Germany, warned that it faced at least a temporary recession next year.
SEC charges ex-Fannie, Freddie CEOs with fraud
WASHINGTON (AP) — The Securities and Exchange Commission on Friday brought civil fraud charges against six former top executives at Fannie Mae and Freddie Mac, saying they misled investors about risky subprime loans the mortgage giants held when the housing bubble burst.
Those charged include the agencies' two former CEOs, Fannie's Daniel Mudd and Freddie's Richard Syron. They are the highest-profile individuals to be charged in connection with the 2008 financial crisis.
The federal government has faced criticism for not bringing charges against top executives who may have contributed to the worst financial meltdown since the Great Depression.
'Farmville' maker's stock lukewarm in public debut
NEW YORK (AP) — As its workers celebrated with hot chocolate and cinnamon buns, Zynga saw its stock dinged on its first day of trading Friday — an unexpected turn for a closely watched public debut seen as a precursor to Facebook's next year.
Zynga Inc., the online game developer behind "FarmVille," "Mafia Wars" and other popular time killers on Facebook, raised at least $1 billion in its initial public offering of stock, the largest for a U.S. Internet company since Google's $1.4 billion IPO in 2004.
By Friday afternoon Zynga's stock fell 50 cents, or 5 percent, to close at $9.50. The stock priced at $10 on Thursday, at the high end of its expected range. It traded as high as $11.50 on Friday before heading into a downward spiral on the Nasdaq Stock Market.
TV channel squeeze proposed to pay for tax cuts
NEW YORK (AP) — Call it the Great Channel Squeeze.
Congress is considering letting cellphone companies pay television stations to give up their frequencies so they can be put to better use for wireless broadband.
The idea is to squeeze over-the-air television, which has few viewers, into a smaller slice of the airwaves. The government would be the broker in the deal and would use some proceeds to fund tax cuts and unemployment benefits.
In years to come, you might see Channel 17 cease to broadcast and Channel 49 take its place, for instance. The empty slot at Channel 49 would then become available for a range of wireless services. That could mean faster downloads for smartphones and tablet computers.
BP settles with maker of failed blowout preventer
NEW ORLEANS (AP) — Cameron International, maker of the Deepwater Horizon blowout preventer that failed to stop last year's massive oil spill in the Gulf of Mexico, has agreed to pay $250 million to BP under a legal settlement, BP said Friday.
BP said it was "in their mutual best interests, and the agreement is not an admission of liability by either party." The companies are dropping all claims against one another, they said.
The settlement comes in advance of a federal trial over the catastrophic Gulf oil spill. The non-jury trial is slated to begin in February to determine fault in the April 20, 2010, explosion and subsequent oil spill off the Louisiana coast of more than 200 million gallons of oil.
Delta announces big LaGuardia expansion
NEW YORK (AP) — Delta Air Lines Inc. plans a massive flight expansion out of New York's LaGuardia airport, hoping to improve its competitive edge against its two biggest rivals in one of the nation's most important air travel markets.
Delta said Friday that the additions make it the biggest airline between the New York area and other cities in the U.S., as it adds routes that target American Airlines and put it in a better position to compete against United Continental. That should help it grab more high-paying business travelers, a critical passenger segment in major cities like New York.
The list of added cities reads like a map of the hubs of competing airlines. Delta is adding Miami and Dallas, both American Airlines hubs. It will also fly to Houston and Denver, which are United hubs, and Charlotte, N.C. — a hub for US Airways. In all, it will add more than 100 flights to 29 new destinations.
United Rentals to buy RSC for $1.9 billion
NEW YORK (AP) — United Rentals Inc. said Friday it has agreed to buy rival equipment rental company RSC Holdings Inc. for about $1.9 billion in cash and stock.
Shares of RSC surged 58 percent Friday while United Rentals rose more than 7 percent.
United Rentals, based in Greenwich, Conn., said the deal is expected to accelerate its growth with industrial customers, lower costs and provide a less volatile revenue stream. It said it has already identified $200 million in potential cost savings.
Research firm boosts holiday outlook
NEW YORK (AP) — ShopperTrak, a Chicago-based research firm, upgraded its holiday sales forecast, a day after the nation's largest retail group boosted its outlook.
ShopperTrak now believes that sales for the November and December period combined will rise 3.7 percent. That's up from the 3 percent growth forecast issued in September when the economy's recovery looked more uncertain.
The 3.7 percent forecast is still below the 4.1 percent growth registered in the year-ago period, according to ShopperTrak's measure.
By The Associated Press(equals)
The Dow Jones industrial average closed down 2.42 points Friday, less than 0.1 percent, to 11,866.93. The Standard & Poor's 500 index rose 3.89, or 0.3 percent, to 1,219.65. The Nasdaq composite index rose 14.32, or 0.6 percent, to 2,555.33.
Benchmark crude fell 34 cents to end at $93.53 per barrel in New York. Prices fell as low as $92.52 earlier in the day.
Brent crude, which is used to price foreign oil that's imported by many U.S. refineries, fell 25 cents to finish at $103.35 a barrel in London.
In other energy trading, heating oil fell 2.2 cents to end at $2.8005 per gallon, and gasoline futures were virtually unchanged at $2.4870 per gallon. Natural gas finished unchanged at $3.127 per 1,000 cubic feet.