Wall Street has made another big late-day move. The Dow was almost 900 points higher at the closing bell. Bargain hunters were on a rampage, in anticipation of a Federal Reserve rate cut tomorrow. They grabbed stocks that have been pounded lower in recent sessions. Investors looked past news of a sharp drop in consumer confidence. Instead, they're focusing on expectations that the Fed will cut its fed funds rate by half a point to one per cent.
A private research group says consumer confidence in the U.S. economy plunged in October to its lowest in 41 years, as stock markets dropped sharply and companies began laying off workers. The Conference Board reported Tuesday that the consumer confidence index fell to 38, down from a revised 61.4 in September and significantly below analysts' expectations of 52. That's the lowest level for the index since the conference board began tracking consumer sentiment in 1967, and the third-steepest drop.
Employment in the Houston area increased by 55,700 jobs over the year, according to the Bureau of Labor Statistics. Employment rose 2.2 per cent, even as it declined 0.4 per cent nationwide. Houston's job growth rate was the highest in Texas over the past 12 months, and the city had the fastest job growth in the nation in September. Construction employment advanced by 2.9 per cent in Houston, as it declined 5.9 per cent nationwide.
President Bush's first Treasury Secretary says Congress should scrap plans for a new economic stimulus package and instead require that no future home mortgage be awarded without a 20 per cent down payment. Paul O'Neill made the comments before speaking at a conference in Lexington. O'Neill said parts of the recently approved $700 billion bailout package seem to be helping to revive the economy. However, he says the government should have acted more quickly in response to the housing crisis. O'Neill says he opposes another stimulus package because lawmakers will have a "feeding frenzy" by trying to tack on their own pet projects.
A top Treasury Department official says the financial rescue operation will result in unprecedented borrowing needs for the federal government. Anthony Ryan, Treasury's acting Undersecretary for Domestic Finance, said Tuesday that the administration back in July was forecasting that the deficit for the current budget year, which began on October 1st, would hit a record $482 billion. But he said that forecast did not include all the government's efforts since then to deal with the worst financial crisis since the 1930s. With all the rescue programs now in place, Ryan said, "this year's financing needs will be unprecedented." In his speech, Ryan told Wall Street executives that Treasury was considering reviving the three-year note starting in November to help raise the money that will be needed to fund the rising deficits.
An impatient White House is serving notice on banks receiving billions of dollars in federal help to quit hoarding the money and start making more loans. White House Press Secretary Dana Perino told reporters that the Bush administration is trying to "get banks to do what they are supposed to do," which is lend money. Though there are limits on how much Washington can pressure financial firms, she noted that banks are regulated by the federal government. Perino said that the administration is watching lending activity very closely and working with the banks to step it up.
A national survey by J.D. Power & Associates says small business customers want to be reassured that their banks are supporting their business endeavors, according to the Houston Business Journal. Simply meeting with business customers at their place of business greatly improves satisfaction, although those visits rarely happen. The study shows a direct financial impact to a bank's bottom line by enhancing the customer's experience. By shifting four per cent of the bank's low commitment customers to high commitment, banks can boost revenue by four per cent from higher account balances and improved retention.
British Prime Minister Gordon Brown is calling on China and oil-rich Gulf states to offer money for an enhanced IMF bailout fund aimed at helping countries rocked by the global economic downturn. Brown told reporters on Tuesday that countries with the largest surpluses could "do most to help." "We must act now, we must set up the fund as quickly as possible," Brown said in London. The IMF's executive board is expected soon to consider ways to streamline its emergency loan programs as it braces for a stream of petitions from countries seeking support.
A closely watched index shows home prices tumbled by the sharpest annual rate ever in August. The Standard & Poor's/Case-Shiller 20-city housing index released Tuesday dropped a record 16.6 per cent in August from the year-ago month, the largest drop since its inception in 2000. The ten-city index plunged 17.7 per cent, its biggest decline in its 21-year history. Both indices have recorded year-over-year declines for 20 consecutive months. Prices in the 20-city index have plummeted more than 20 per cent since peaking in July 2006. The ten-city index has fallen nearly 22 per cent since its peak in June 2006. No city in the Case-Shiller 20-city index saw annual price gains in August—for the fifth straight month.
Rice University hosts an overview of current issues affecting real estate markets and the credit crisis this evening at McNair Hall at the Jones Graduate School of Management. Speakers discussed the rising cost of gasoline, the dramatic stock market swings and the value of U.S. currency. Presentations focused on sinking property values and subprime mortgage failures.
Casualty loss federal tax declarations are being discussed at an O'Connor & Associates luncheon tomorrow at the InterContinental Hotel. The two-hour panel discussion will explore ways commercial property owners can reap the most benefits from Hurricane Ike. Panelists include a casualty loss appraiser, an insurance representative, and insurance adjuster and a CPA/attorney.
The UK Trade & Investment and the Texas Alliance of Energy Producers is holding its North Sea Gas Operating Opportunities Workshop tomorrow at the Petroleum Club on Bell. The workshop is based on newly-discovered opportunities for exploration and production in the North Sea, which has been considered past its prime. Keynote speaker William Transier, CEO of Endeavour International, says the North Sea offers plenty of opportunities for energy players with an understanding of the unique European market and how it operates.
Lawyers for a Texas oil executive say he's finishing up his prison sentence at home, after being transferred from a halfway house. An attorney says 84-year-old Oscar Wyatt, Jr., began serving the final stint of his sentence at home last week. Wyatt was sentenced to year and a day in prison for approving the payment of millions of dollars in kickbacks to Saddam Hussein's Iraq regime. Besides the prison sentence, he agreed to forfeit $11 million. He pleaded guilty to one count of conspiring to make illegal payments for Iraqi oil. In pleading guilty, he acknowledged he had orchestrated a $200,000 payment to Hussein's government. Prison officials say Wyatt is due to be released November 15th and they say his sentence has been trimmed because of good behavior. Wyatt was transferred on September 22nd from a minimum-security federal prison to a halfway house in downtown Houston.
Gasoline prices are now below $2 a gallon in some parts of the U.S. it reflects the impacts of plunging oil prices and reduced driving. In Ohio, the Web site gasbuddy.com, where consumers post prices they spot, said a few stations in the Cincinnati suburbs were now charging $1.99 for regular. New government statistics show gasoline prices continue to tumble, falling more than 25 cents in the past week to a national average of nearly $2.66 a gallon. The Energy Information Administration says the Gulf Coast had the cheapest prices with an average of $2.46 a gallon.
A new survey finds that fees for bounced checks and withdrawing cash from an out-of-network ATM rose again this year, Bankrate.com found the average cost of using another bank's ATM is now $3.43 while a bounced check now costs an average of $28.95, up 2.5 per cent from a year ago. Senior financial analyst Greg McBride says there's no excuse for losing track of a balance anymore with 24-7 online access to accounts. In addition, more banks are offering free checking accounts. The average monthly service fee on noninterest-bearing checking accounts fell to $1.93. That's down from ten years ago when it was $5.37. That fee is only applied if you don't maintain the minimum balance--which dropped to an average of just over $109 this year, down from $155 and change last year. Bankrate.com's survey was based on information from 249 banks and thrifts in the nation's 25 largest metropolitan areas.
BP posted an 83 per cent increase in third-quarter profit, with net income at $8.05 billion, compared to $4.41 billion a year earlier. The company's CEO says the global financial crisis may create opportunities, and BP is able to cope with volatility in oil prices. New projects offset hurricane-induced refinery shutdowns. Refining and marketing earnings rose by more than five times to $1.97 billion, with the full return of BP's Texas City plant.
Valero, the nation's largest independent oil refiner, says third-quarter profit fell nine per cent from a year ago, when the company sold a refinery. The San Antonio-based company also said that it reducing capital spending by another $800 million. Valero said net income for the July-September quarter amounted to $1.15 billion compared with $1.27 billion a year ago. Valero had fewer outstanding shares in the most-recent quarter. Income from continuing operations was $1.15 billion versus $848 million a year ago. Excluding a gain from the July sale of a Louisiana refinery, income from continuing operations was $982 million. Third-quarter revenue grew nearly 52 per cent to $35.9 billion.
Power provider Entergy reports a two per cent increase in third-quarter profit on a double-digit rise in sales. The New Orleans-based company earned $470.3 million--up from $461.2 million a year ago. Entergy, for the first nine months of the year, had net income of $1.05 billion compared with $941.0 million a year ago.