WASHINGTON (AP) — President Barack Obama challenged congressional Republicans Wednesday to let taxes rise on the wealthiest Americans on both economic and political grounds, noting he campaigned successfully for re-election on the point and contended it would instantly ease the threat of the "fiscal cliff" plunging the nation back into recession.
"A modest tax increase on the wealthy is not going to break their backs," Obama said of the nation's top income earners. "They'll still be wealthy," he said at his first news conference since winning a second term.
At the same time, the president stressed he was amenable to compromise on other approaches from Republicans who say they will refuse to raise tax rates.
Sandy, careful consumers lower US retail sales
WASHINGTON (AP) — Superstorm Sandy combined with cautious consumers to lower retail sales in October and raise concerns about weaker economic growth and a tepid holiday shopping season.
Consumers may also be holding back because of anxiety over big tax increases and spending cuts — known as the "fiscal cliff" — that will take effect in January unless Congress and the White House reach a budget deal by then.
Retail sales dropped 0.3 percent last month after three months of gains, the Commerce Department said Wednesday. Sales at auto dealers fell 1.5 percent, the most in more than a year.
Fed minutes suggest new bond-buying plan is likely
WASHINGTON (AP) — The Federal Reserve may be preparing to take further steps to stimulate an economy that remains too weak to reduce high unemployment.
Minutes of the Fed's Oct. 23-24 policy meeting released Wednesday suggest that it might unveil a bond buying program in December to replace a program that expires at year's end.
The bond purchases are intended to lower long-term borrowing rates to encourage spending and strengthen the economy. The hope is that more hiring will follow.
California debuts landmark program to cap emissions
SAN FRANCISCO (AP) — California began auctioning permits Wednesday for greenhouse gas emissions, launching one of the world's most ambitious efforts to cut heat-trapping gases from industrial sources.
The California Air Resources Board said it began selling the pollution "allowances" in a closed, online auction expected to create the world's second-largest marketplace for carbon emissions.
Under the program, the state sets a limit, or cap, on emissions from individual polluters. Businesses are required to either cut emissions to cap levels or buy allowances through the auction from other companies for each extra ton of pollution discharged annually.
Republicans grill FDA chief on meningitis outbreak
WASHINGTON (AP) — Republican lawmakers challenged the country's top medical regulator Wednesday to explain why her agency did not take action sooner against the specialty pharmacy at the center of a deadly meningitis outbreak.
Food and Drug Administration Commissioner Margaret Hamburg testified before the House Energy and Commerce Committee, which has convened the first hearing to examine the outbreak that has sickened about 440 people and caused 32 deaths across the U.S. The illness has been tied to the New England Compounding Center, which distributed pain steroids that later tested positive for contamination.
Health officials say as many as 14,000 people received the steroid shots, mostly for back pain.
NTSB urges safety technologies be made standard
WASHINGTON (AP) — The government should require automakers to make the latest collision prevention technologies standard equipment on all new cars and trucks, a move that could reduce fatal highway accidents by more than half, federal accident investigators said Wednesday.
The technologies include lane departure warning, forward collision warning, adaptive cruise control, automatic braking and electronic stability control. They are available on many cars and trucks already, although some are limited primarily to higher-end models. The National Transportation Safety Board said they should be required on all vehicles, despite the auto industry's concern that doing so could add thousands of dollars to the cost of a new car.
Such technologies can prevent accidents that involve running off the road, rear-ending another vehicle and lane-change maneuvers, the board said. Those types of accidents account for 60 percent of fatal highway accidents. There were more than 32,000 traffic deaths in the U.S. last year.
Toyota recalls vehicles for steering, pump defects
TOKYO (AP) — Toyota Motor Corp. is recalling 2.77 million vehicles around the world for a water pump problem and a steering shaft defect that may result in faulty steering — the latest in a spate of quality woes for Japan's top automaker.
No accidents have been reported that are related to the two problems announced Wednesday, according to Toyota.
Some 1.51 million vehicles are being recalled for the steering defect in Japan and 1.25 million vehicles abroad — including 670,000 in the U.S. Affected models include the Prius hybrid, Corolla, Wish and other models produced from 2000 to 2011 in Japan, and from 2000 to 2009 overseas.
A&F's shares surge on strong 3Q report
NEW YORK (AP) — Abercrombie & Fitch Co. delivered a pleasant pre-Christmas surprise to investors: the teen retailer raised its full-year earnings guidance on a strong third-quarter performance, sending shares surging over 34 percent.
The company, based in New Albany, Ohio, reported a 41 percent increase in net income for the third quarter as international, domestic and direct-to-consumer sales strengthened. The results beat Wall Street expectations.
The strong quarterly performance is welcome news for A&F, which has been struggling to sell its preppy jeans and T-shirts as fashion trends are shifting and a rough economy has left teens around the world on tighter budgets.
Starbucks bags Teavana for $620 million
SEATTLE (AP) — Starbucks Corp. said Wednesday that it will buy Teavana Holdings Inc. for $620 million as the coffee company moves to expand its tea business.
Starbucks already owns the Tazo tea brand, which it bought in 1999. It sells Tazo products in its stores and to other retailers and will move into the tea store format with the Teavana acquisition.
Teavana, based in Atlanta, operates 300 mall-based stores.
Texas Instruments cutting 1,700 wireless unit jobs
NEW YORK (AP) — Chipmaker Texas Instruments Inc. says it will eliminate about 1,700 jobs as it trims spending in its wireless business.
The cuts will reduce Texas Instruments' staff positions by almost 5 percent.
Texas Instruments expects the job cuts and other changes will save about $450 million per year by the end of 2013. The Dallas company expects to take $325 million in one-time charges connected to the moves. Most will come in the current quarter.
By The Associated Press(equals)
The Dow Jones industrial average dropped 185.23 points to 12,570.95. The Standard & Poor's 500 index slipped 19.04 points, or 1.4 percent, to 1,355.49, and the Nasdaq composite was down 37.08 points, or 1.29 percent, at 2,846.81.
Benchmark oil rose 94 cents to finish at $86.32 per barrel in New York. Brent crude, used to price international varieties of oil, rose $1.14 to $108.48 per barrel in London.
Heating oil rose 2.74 cents to end at $2.9882 per gallon. Gasoline futures rose 2.52 cents to end at $2.679 per gallon. Natural gas rose 2.1 cents to end at $3.76 per 1,000 cubic feet.