WASHINGTON (AP) — The world economy has entered a "dangerous new phase," according to the chief economist of the International Monetary Fund. As a result, the international lending organization has sharply downgraded its economic outlook for the United States and Europe through the end of next year.
The IMF expects the U.S. economy to grow just 1.5 percent this year and 1.8 percent in 2012. That's down from its June forecast of 2.5 percent in 2011 and 2.7 percent next year.
To achieve even that still-low level of growth, the U.S. economy would need to expand at a much faster rate in the second half of the year than its 0.7 percent annual pace in the first six months.
EU, IMF raise concerns over bank capital
BRUSSELS (AP) — The European Union and the International Monetary Fund on Tuesday raised concerns over the health of European banks as the continent's debt crisis worsens.
The EU's competition commissioner warned that more than the nine banks that failed the stress tests this summer may need to be recapitalized and proposed extending crisis rules that make it easier for governments to rescue failing lenders.
Meanwhile, the IMF said in its half-yearly World Economic Outlook that banks needed to boost their capital buffers more quickly and beyond new minimum levels set to come into force in 2019.
US files complaint against Chinese chicken tariffs
WASHINGTON (AP) — The United States filed a complaint Tuesday with the World Trade Organization that says China violated international trade rules when it imposed tariffs last year on U.S. chicken exports.
The tariffs affect an industry that employs about 300,000 people, U.S. Trade Representative Ron Kirk said. They ranged from 50 to 100 percent, a U.S. trade official said. That means some Chinese importers paid as much as twice the price for U.S. chicken.
The case is one of several that U.S. trade officials have filed against China this year at the WTO. The United States has also filed complaints about Chinese tariffs on steel products and its subsidies of wind power equipment.
August home building fell 5 percent, slide continues
WASHINGTON (AP) — Builders broke ground on fewer homes in August, evidence that the housing market remains depressed.
The Commerce Department said Tuesday that builders began work on a seasonally adjusted 571,000 homes last month, a 5 percent decline from July and a three-month low. That's less than half the 1.2 million that economists say is consistent with healthy housing markets.
Single-family homes, which represent roughly two-thirds of home construction, fell 1.4 percent. Apartment building plunged 12.4 percent.
Hurricane Irene slowed construction in the Northeast, analysts said.
Carnival third-quarter net income up on strong ticket prices
NEW YORK (AP) — The peak summer season did not disappoint Carnival Corp., as strong ticket prices and lower-than-expected costs helped drive its third-quarter net income up 3 percent.
Despite the strong quarterly results, the Miami cruise operator cut the high end of its full-year earnings guidance on Tuesday in part because of fuel costs. But the trimmed outlook was largely shrugged off by investors in favor of a third-quarter performance that beat Wall Street's expectations.
Carnival, which runs 101 ships, with 10 new ships set to be delivered between April 2012 and March 2016, earned $1.34 billion, or $1.69 per share, for the period ended Aug. 31, up from $1.3 billion, or $1.62 per share, during the same period a year earlier. Revenue climbed 12 percent to $5.06 billion from $4.53 billion.
ConAgra first-quarter profit falls on higher costs
ConAgra Foods Inc.'s fiscal first-quarter net income fell 42 percent as soaring costs for ingredients cut into its profitability.
The maker of foods such as Slim Jim, Chef Boyardee and Healthy Choice said Tuesday that it is dealing with "severe" cost inflation. The company backed its full-year earnings forecast, but said it expects those costs to grow during the year and it will continue to increase its prices.
It's tough news for shoppers, whose budgets are already strained, as it appears food makers are likely to continue to raise prices as they have for the past year or more.
Oracle's net rises 36 percent, but servers slip
SAN FRANCISCO (AP) — Stronger spending on business software helped Oracle Corp.'s quarterly profit jump 36 percent, but the company's server business further deteriorated, a decline Oracle attributed to its move to shed lower-margin deals.
The company said after the stock market closed Tuesday that its net income rose to $1.84 billion, or 36 cents per share, in the quarter that ended Aug. 31. That compared with $1.35 billion, or 27 cents per share, a year earlier.
Its adjusted net income for the latest quarter was 48 cents per share, a penny higher than the average forecast of analysts polled by FactSet.
Revenue rose 12 percent to $8.37 billion, slightly exceeding the $8.36 billion that analysts expected.
Merck speeding up layoffs of many US employees
WHITEHOUSE STATION, N.J. (AP) — Drugmaker Merck & Co. has told employees it can't reach its goal of cutting up to 13,000 jobs by 2015 just by eliminating vacant jobs, so it is speeding up layoffs in the U.S.
According to an internal memo, by the end of October Merck will notify employees losing their jobs in sales and other departments. The memo states the teams affected are: marketing & customer solutions; managed markets & policy; strategy & commercial model innovation; and the neuropsychiatric and women's healthcare specialty sales teams.
The memo, titled "Update on Ongoing Changes to the US Market's Business Operations," was sent Sept. 15 by Mark Timney, Merck's President US Market. It was first reported by the Pharmalot blog.
Google opens Plus social network to everyone
NEW YORK (AP) — Google Inc. has opened up its Google Plus social network to everyone after testing it with a limited audience for 12 weeks.
Google said in a blog post Tuesday that it will now let anyone sign up for Google Plus. Previously the service was only available by invitation, though it got easier to join in recent weeks.
The company also added a search capability to Google Plus that will let users sift through posts on the site.
By The Associated Press(equals)
The Dow Jones industrial average rose 7.65 points, or 0.1 percent, at 11,408.66. It had been up as much as 149.21 points earlier in the day. The Standard & Poor's 500 index fell 2, or 0.2 percent, to 1,202.09. The Nasdaq composite fell 22.59, or 0.9 percent, to 2,590.24.
Benchmark crude rose $1.11 to finish at $86.92 per barrel in New York. Brent crude, which is used to price oil produced in foreign countries, gained $1.40 to end at $110.54 in London.
In other energy trading, heating oil rose 1.69 cents to finish at $2.9616 per gallon and gasoline futures fell about half a cent to end at $2.7014 per gallon. Natural gas was 3.1 cents lower at $3.798 per 1,000 cubic feet.