Many expect Fed to unveil stimulus after meeting
WASHINGTON (AP) — Anticipation is high that the Federal Reserve will announce some new step Wednesday to try to rejuvenate the U.S. economy and boost investor confidence.
Just what that might be is unclear.
One option would be an effort to drive long-term interest rates even lower to try to spur borrowing and spending. A more modest step would be for the Fed to stress its readiness to do more should the economy weaken further.
Or the Fed might do or promise nothing further — for now, anyway.
Millions still go without insurance if law passes
One of the biggest misconceptions about President Obama's health care overhaul isn't who the law will cover, but rather who it won't.
If it survives Supreme court scrutiny, the landmark overhaul will expand coverage to about 30 million uninsured people, according to government figures. But an estimated 26 million U.S. residents will remain without coverage — a population that's roughly the size of Texas and includes illegal immigrants and those who can't afford to pay out-of-pocket for health insurance.
To be sure, it's estimated that the Affordable Care Act would greatly increase the number of insured Americans. The law has a provision that requires most Americans to be insured. It also calls for an expansion of Medicaid, a government-funded program that covers the health care costs of low-income and disabled Americans. Starting in 2014 there will be tax credits to help middle-class Americans buy coverage.
Walgreen to spend $6.7 billion on Alliance Boots stake
Walgreen Co. will pay $6.7 billion in cash and stock to buy a stake in European health and beauty retailer Alliance Boots in a deal that will give global clout to a U.S. drugstore chain struggling with slipping sales at home.
The combination would create the largest single purchaser of prescription drugs in the world and give Walgreen access to emerging markets like China and Egypt, company officials said Tuesday. However, it also will plant the biggest U.S. drugstore chain in Europe, a continent beset by debt worries in Greece, Spain and other nations.
Walgreen said Alliance Boots brings in revenue from some of the most stable countries in Europe. CEO Greg Wasson told analysts the acquisition is "a truly game-changing step" for his Deerfield, Ill., company.
US builders start more single-family homes
WASHINGTON (AP) — U.S. builders started work on more single-family homes in May and requested the most permits to build homes and apartments in three and a half years. The increase suggests the housing market is slowly recovering even as other areas of the economy have weakened.
The Commerce Department said Tuesday that builders broke ground on 3.2 percent more single-family homes in May, the third straight monthly increase.
Overall housing starts fell 4.8 percent last month to a seasonally adjusted annual rate of 708,000. That was entirely because of a 21.3 percent plunge in apartment construction, which can be volatile from month to month.
Europe divided over whether to ease up on Greece
BRUSSELS (AP) — European leaders are locked in a fierce debate over how to solve the debt crisis that is killing growth on the continent, including whether to ease up on the terms of Greece's bailout deal.
A European Union official says worsening economic conditions have made Greece's current bailout agreement an "illusion," but Germany is resisting any changes.
A narrow victory for the New Democracy party in elections over the weekend in Greece means that the country is more likely to stick to the harsh austerity terms of its €240 billion ($300 billion) bailout packages and avoid a chaotic exit from the euro in the very near future — an event many fear would destabilize Europe and send shockwaves around the world.
Dimon faces tougher questions on $2 billion trading loss
WASHINGTON (AP) — JPMorgan Chase CEO Jamie Dimon had a much tougher reception Tuesday when he returned to Capitol Hill for a second round of questions over the bank's $2 billion trading loss.
House lawmakers from both parties pressed Dimon on a number of fronts: Did JPMorgan manage risk properly? Why was the bank trading so much out of its London office? Has the bank become too large and complex to control?
The hearing before the House Financial Services Committee was far more combative in tone than Dimon's appearance last week before the Senate Banking Committee.
For his part, Dimon again apologized for the trading loss and the damage it caused shareholders. The company has lost about $23 billion in market value since the huge loss came to light on May 10.
FedEx predicts slower earnings growth this year
NEW YORK (AP) — FedEx Corp. said Tuesday that slow global economic growth will crimp its earnings over the next 12 months. The company vowed to make significant cost cuts to counter any drop in package shipments.
The world's second-largest package delivery company is closely watched for signs about the health of the economy. It forecast moderate growth for both the U.S. and global economies, amid the debt crisis in Europe and slowing growth in Asia.
The company's results for its fiscal fourth quarter topped Wall Street estimates when a charge for retiring planes was excluded. Its stock rose nearly 3 percent.
Barnes & Noble 4Q loss narrows
NEW YORK (AP) — Barnes & Noble said Tuesday that its fiscal fourth-quarter loss narrowed as the company continues to invest in its Nook e-reader business and adjust to the evolving book business.
Facing tough competition from online retailers and discount stores, the largest traditional U.S. book retailer has invested heavily in the Nook e-reader and e-books.
Barnes & Noble broke out sales of its Nook e-reader for the first time, the most transparent it has been about the division to date. The numbers show that the division is a work in progress.
Nook sales fell 11 percent to $164 million during the quarter as the company took back its Nook Simple Touch e-reader from retailers to make room for new inventory. For the fiscal year, Nook sales rose 34 percent to $933 million.
House panel boosts rural air service subsidies
WASHINGTON (AP) — Tea party lawmakers from rural areas were among those fighting the hardest to preserve taxpayer subsidies for airline flights into and out of small towns last year, after senior Republicans tried to eliminate the program, which has often been criticized. Now the House Appropriations Committee is awarding the program an 11 percent budget hike.
Next year the subsidies would reach a record $214 million under a bill approved by the GOP-run committee.
The subsidies can reach hundreds of dollars per ticket — and can exceed $1,000 in a few cases — though a recent overhaul of the program could soon take care of such cases.
Airlines have been cutting back flights in smaller markets as they deal with the high cost of fuel and the sluggish economy.
Spotify offers free radio play on mobile devices
LOS ANGELES (AP) — The music-subscription company Spotify is joining Pandora, Slacker and Songza in offering a free radio service for mobile devices in the U.S.
Until now, the company charged people $10 per month to use its mobile app.
The free service, which comes with audio ads, is a way for Spotify to entice people to sign up for a paid subscription, which strips out the ads and enables users to choose songs.
By The Associated Press(equals)
The Dow Jones industrial average rose 95.51 points to 12,837.33. The Standard & Poor's 500 index rose 13.20 points to 1,357.98. The Nasdaq composite index rose 34.43 points to 2,929.76.
U.S. West Texas Intermediate crude climbed 76 cents to end the day at $84.03 per barrel. Brent crude, the benchmark which helps set the price of oil imported into the U.S., fell by 29 cents to end the day at $95.76 per barrel in London.
In other energy futures trading, heating oil rose 1.74 cents to finish at $2.6351 per gallon, while wholesale gasoline fell by 1.94 cents to end at $2.6415 per gallon. Natural gas dropped 9 cents to finish at $2.545 per 1,000 cubic feet.