US sues S&P over pre-crisis mortgage ratings
WASHINGTON (AP) — The U.S. government says Standard & Poor's knowingly inflated its ratings on risky mortgage investments that helped trigger the 2008 financial crisis.
The credit rating agency gave high marks to mortgage-backed securities because it wanted to earn more business from the banks that issued the investments, the Justice Department alleges in civil charges filed in federal court in Los Angeles.
The government is demanding that S&P pay at least $5 billion in penalties.
Dell to go private in $24.4 billion deal led by founder
SAN FRANCISCO (AP) — Slumping personal computer maker Dell is bowing out of the stock market in a $24.4 billion buyout that represents the largest deal of its kind since the Great Recession dried up the financing for such risky maneuvers.
The complex agreement announced Tuesday will allow Dell Inc.'s management, including eponymous founder Michael Dell, to attempt a company turnaround away from the glare and financial pressures of Wall Street.
Dell stockholders will be paid $13.65 per share to leave the company on its own. That's 25 percent more than the stock's price of $10.88 before word of the buyout talks trickled out three weeks ago. But it's a steep markdown from the shares' price of $24 six years ago when Michael Dell returned for a second go-round as CEO.
Japan 787 probe finds thermal runaway in battery
TOKYO (AP) — An investigation into a lithium ion battery that overheated on a Boeing 787 flight in Japan last month found evidence of the same type of "thermal runaway" seen in a similar incident in Boston, officials said Tuesday.
The Japan Transportation Safety Board said CAT scans and other analysis found damage to all eight cells in the battery that overheated on the All Nippon Airways 787 on Jan. 16, which prompted an emergency landing and probes by both U.S. and Japanese aviation safety regulators.
They also found signs of short-circuiting and "thermal runaway," a chemical reaction in which rising temperature causes progressively hotter temperatures. U.S. investigators found similar evidence in the battery that caught fire last month on a Japan Airlines 787 parked in Boston.
Gun background checks drop 10 percent in January
WASHINGTON (AP) — The number of federal background checks for firearms sales declined in the U.S. last month, as retailers continue to run out of guns to sell during a buying spree driven by Washington's new focus on gun control.
Background checks decreased 10 percent nationally between December and January, with large declines in the Southern states of Alabama, Arkansas, Louisiana, Mississippi, Tennessee and Virginia as well as Texas, according to an Associated Press analysis of new FBI data published Tuesday.
Firearms sales surged around the country after the December shooting spree in Newtown, Conn. A gunman killed 20 children and six adults at the school.
US home prices rose last year by most in 6.5 years
WASHINGTON (AP) — U.S. home prices jumped by the most in 6 1/2 years in December, spurred by a low supply of available homes and rising demand.
Home prices rose 8.3 percent in December compared with a year earlier, according to data Tuesday from CoreLogic, a real estate data provider. That is the biggest annual gain since May 2006. Prices rose last year in 46 of 50 states.
Home prices also rose 0.4 percent in December from the previous month. That's a healthy increase given that sales usually slow over the winter months.
US service firms grew more slowly in January
WASHINGTON (AP) — Growth at U.S. service companies slowed slightly in January behind weaker new orders and business activity. But hiring improved, a bright sign for the economy.
The Institute for Supply Management said Tuesday that its index of non-manufacturing activity dipped to 55.2 in January. That's down from 55.7 in December, which was the highest level in nearly a year. Any reading above 50 indicates expansion.
The modest decline from December's strong reading suggests the industry was not greatly hampered by an increase in Social Security taxes that reduced take-home pay for most Americans.
Feds: 18 charged in $200 million global credit card fraud
NEWARK, N.J. (AP) — Eighteen people were charged in what may be one of the nation's largest credit card fraud rings, a sprawling international scam that duped credit-rating agencies and used thousands of fake identities to steal at least $200 million, federal authorities said Tuesday.
The elaborate scheme involved improving fake cardholders' credit scores, allowing the scammers to borrow more money that they never repaid, investigators said.
Paul Fishman, the U.S. attorney in Newark, described an intricate Jersey City-based con that began in 2007, operated in at least 28 states and wired money to Pakistan, India, the United Arab Emirates, Canada, Romania, China and Japan.
Pringles pop boosts Kellogg's sales in 4Q
NEW YORK (AP) — A boost from Pringles and strong international results helped Kellogg's fourth-quarter earnings surpass expectations.
Kellogg's, known for breakfast food such as Froot Loops, Eggo waffles and Pop Tarts, has been seeking to improve its results by investing in its supply chain after several product recalls and by expanding its salty snacks business.
It acquired Pringles from Procter & Gamble in February 2012. The brand provided a boost in the fourth quarter, with Pringles revenue up 5 percent in the U.S. and 1 percent in Europe.
Toyota raises annual forecasts on profit rise
TOKYO (AP) — Toyota Motor Corp. raised its fiscal year profit forecast Tuesday to triple what it eked out for the disaster-struck previous year, as the world's top automaker continued on a comeback roll as sales surged, especially in the U.S.
Toyota's October-December profit jumped 23 percent to 99.91 billion yen ($1.09 billion), compared to the same period the previous year. Quarterly sales edged up 9 percent to 5.3 trillion yen ($58 billion).
Underlining its solid recovery, Toyota is now expecting fiscal year profit of 860 billion yen ($9.3 billion). It had initially expected a 780 billion yen ($8.5 billion) profit. It had marked a 283.5 billion yen profit through March 2012.
Pew: Most Facebook users take a break
NEW YORK (AP) — Too much drama, boredom and scads of irrelevant information are just some of the reasons Facebook users give for taking a break from the world's biggest social networking site for weeks at a time, according to a new study.
A report from the Pew Research Center's Internet and American Life Project found that some 61 percent of Facebook users had taken a hiatus of at least several weeks for myriad reasons, whether they were weary from an onslaught of gossip, or for the more pious, the arrival of Lent.
Yet the use of Facebook, whether constant or not, is pervasive in America.
Of the American adults who use the Internet, 67 percent are on Facebook, Pew found. That compares with 20 percent who use LinkedIn and 16 percent who are on Twitter.
By The Associated Press(equals)
The Dow Jones industrial average ended the day 99.22 points higher at 13,979.30. The Standard & Poor's 500 gained 15.59 points to 1,511.29. The Nasdaq composite was up 40.41 points to 3,171.58.
Benchmark oil for March delivery rose 47 cents to finish at $96.64 a barrel on the New York Mercantile Exchange. Crude dropped by $1.60 to finish at $96.17 a barrel.
Wholesale gasoline added 3 cents to finish at $3.04 per gallon. Natural gas rose 8 cents to end at $3.40 per 1,000 cubic feet. Heating oil gained 4 cents to finish at $3.19 a gallon.