Stocks finished mixed after oil spikes at $127
Investors hoping for an economic rebound in the second half of the year and searching for signs that the housing market is bottoming got some relief before the market opened: the Commerce Department’s report that home construction jumped 8.2 percent in April.
But investors were clearly sidetracked for much of the session by energy prices and their effect on consumer spending, which accounts for more than two-thirds of U.S. economic activity. The price of a barrel of oil spiked to $127.82 for a new trading record on Friday.
The Dow Jones industrial average slipped 5.86, or 0.05 percent, Friday, closing at 12,986.80. For the week, the Dow rose 1.89 percent.
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WASHINGTON (AP) ‘ Treasury Secretary Henry Paulson said Friday that financial markets are “considerably calmer” now than they were two months ago. He predicted the economy will be rebounding by the second half of this year.
In a speech to business executives in Washington, Paulson said the drag from housing, which he characterized as still the biggest risk to the economy, will soon be lessened by nearly $100 billion in economic stimulus payments to U.S. households.
In his remarks, Paulson never used the word recession, although many private economists believe the country is in one.
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NEW HAVEN, Conn. ‘ General Electric Co. plans to sell or spin off the business that for a century has put appliances in American homes, a decision that could presage further asset sales, analysts said.
The industrial conglomerate, one of the world’s largest companies, said in a statement Friday that the move is part of an ongoing plan to exit “slower growth and more volatile businesses.”
Last year, Fairfield-based GE shed its underperforming plastics business by selling it to a Saudi Arabian company for $11.6 billion.
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UNITED NATIONS (AP) ‘ The world economy is “teetering on the brink” of a severe downturn and is expected to grow only 1.8 percent in 2008, the United Nations said in its mid-year economic projections Thursday.
That’s down from a global growth rate of 3.8 percent in 2007, and the downturn is expected to continue with only a slightly higher growth of 2.1 percent in 2009, the U.N. report said.
The mid-year update of the U.N. World Economic Situation and Prospects 2008 blamed the downturn on further deterioration in the U.S. housing and financial sectors in the first quarter.
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COLUMBUS, Ohio (AP) ‘ Teen retailer Abercrombie & Fitch Co. said Friday that its first-quarter earnings rose 3 percent from a year ago on stronger sales.