Business update: Stocks surge on upbeat earnings
Stocks surged today after another strong batch of earnings reports revived optimism about the economic recovery. Encouraging signs of growth in Europe added to the upbeat mood. Traders largely wrote off a jump in the number of people seeking unemployment benefits for the first time. The increase was likely skewed by seasonal factors. Instead, investors focused on earnings from a broad range of companies that showed businesses aren’t seeing a slowdown in the recovery. News of corporate deals also lifted shares. The Dow Jones industrial average rose more than 200 points in afternoon trading.
House approves additional jobless benefits: Congress has approved legislation to restore unemployment insurance to people who have been out of work for six months or more, ending a seven-week interruption that caused 2.5 million people to lose benefits averaging about $300 a week. The 272-152 House vote sends the measure to President Barack Obama, who has promised to immediately sign it.
Mine officials slam Massey claims on ventilation: Mine safety officials are painting a portrait of ineptitude and confusion by officials at Massey Energy Co. in the months before an explosion at the company’s West Virginia mine killed 29 men. The depiction — in an internal memo from a top official at the Mine Safety and Health Administration — is part of a lengthy rebuttal to Massey’s claims that the government forced it to make changes that would reduce the volume of fresh air in the mine before the blast. It comes as Massey claimed the explosion may have been caused by a surge of volatile methane outside of the company’s control.
Recovery mixed on strong earnings, weak home sales: A flurry of strong earnings reports renewed Wall Street’s optimism in the economic recovery, even as new data today showed homes sales sinking and claims for unemployment benefits rising. Sales of previously occupied homes fell 5.1 percent in June to a seasonally adjusted annual rate of 5.37 million, the National Association of Realtors said. Meanwhile, new claims for unemployment insurance jumped by 37,000 to a seasonally adjusted 464,000, the Labor Department said.
Fed chief to Congress: Don’t end stimulus spending: Federal Reserve Chairman Ben Bernanke told Congress today that the fragile economy still needs government stimulus spending to strengthen the recovery and help reduce unemployment. Testifying before the House Financial Services Committee, Bernanke did urge lawmakers to come up with a credible plan to reduce the government’s record-high budget deficits in the long run. But he said they shouldn’t move now to slash spending or boost taxes in the near future.
Less money for dead people: Obama signs waste law: President Obama today signed legislation intended to slash by $50 billion the taxpayer money improperly paid to dead people, fugitives and those in jail who shouldn’t be getting benefits. But that goal, if achieved, would not even halve the $110 billion made in such payments last year. The new law will strengthen the efforts by federal agencies to halt the flow of improper money in a series of ways. Among those steps: requiring more audits of programs and adding penalties for agencies that don’t comply with the law.
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