Financial & Business News from Eyewitness News Online

WALL STREET Stocks fall as job losses top estimates
NEW YORK
Wall Street has sent stock prices sharply lower after today's monthly employment report contained more job losses than expected.

Major stock indexes were down about 2 percent after the U.S. unemployment rate hit a 26-year high of 9.5 percent. European markets were also down following similarly disappointing data on unemployment in the 16 countries that use the euro currency.

Recession-weary employers in the U.S. slashed 467,000 jobs in June, far worse than the 363,000 that economists expected.

OBAMA-ECONOMY Obama: More work needed to create new jobs
WASHINGTON
President Barack Obama says he's still "deeply concerned" about the continuing loss of jobs across the country.

He said that developing both a short-term and longer-term solution to America's economic woes is "one of the things that I'm most focused on."

Obama also told The Associated Press in an interview that he feels his administration has stabilized the housing and financial markets, while he acknowledged that more work needs to be done in the area of job creation.

The president said he understands that people are "worrying if they're going to be next." He commented after the Labor Department reported that the unemployment rate rose to 9.5 percent last month.

ECONOMY Jobless rate rises, payrolls cut more deeply
WASHINGTON
The Labor Department says employers cut a larger-than-expected 467,000 jobs in June. The unemployment rate climbed to a 26-year high of 9.5 percent.

The report shows that even as the recession flashes signs of easing, companies likely will want to keep a lid on costs and be wary of hiring until they feel certain the economy is on solid ground.

June's payroll reductions were deeper than the 363,000 that economists expected and average weekly earnings dropped to the lowest level in nearly a year.

However, the rise in the unemployment rate from 9.4 percent in May wasn't as sharp as the expected 9.6 percent. Still, many economists predict the jobless rate will hit 10 percent this year, and keep rising into next year, before falling back.

All told, nearly 15 million people were unemployed in June.

FDIC-FAILED BANKS FDIC seeks more investor interest in failed banks
WASHINGTON
The Federal Deposit Insurance Corp. is proposing rules that it hopes will attract more private equity investors as buyers of failed banks.

Regulators already have shut down 45 banks this year. But some recent auctions have been lackluster, with many investors taking a pass because the banks for sale are too small, or because they have their own financial troubles.

The FDIC hopes the auctions can command higher prices if there are more bidders. It also wants to set standards for potential investors to ensure they are committed to the banks they buy.

More bank closures are expected as the longest recession since World War II has hobbled financial institutions of all sizes.

O'HARE-UNITED DELAYS United computer problems cleared up at O'Hare
CHICAGO
A computer problem today temporarily disrupted United Airlines flights at O'Hare International Airport, causing long delays and lines for travelers headed out for the Fourth of July holiday weekend.

An airline spokeswoman said the outage affected all of the United's computers at the airport and also caused some flight cancellations.

An FAA spokeswoman says the problem started shortly after 5 a.m. and at one point, the airline instituted a "ground stop," keeping United flights bound for O'Hare grounded if they hadn't taken off yet.

O'Hare is a United hub, and the problems caused delays at other U.S. airports.

JOHNSON & JOHNSON-ELAN J&J pays $1B for Elan stake
NEW BRUNSWICK, N.J.
Johnson & Johnson says it will take an 18 percent stake in Ireland-based drug developer Elan Corp. with a $1 billion investment. The news sent Elan's shares soaring.

Johnson & Johnson also is acquiring Elan Corp.'s stake in its Alzheimer's disease treatment partnership with Wyeth, and rolling it into a new Johnson & Johnson company that will be nearly half owned by Elan. The partnership develops drugs intended to engage the patient's immune system to fight the brain-destroying disease.

At midday, Elan's U.S. shares were up 14 percent.

CRIB RECALL Cribs recalled for suffocation risk
WASHINGTON
About 400,000 Simplicity drop-side cribs are being recalled for posing a suffocation or entrapment hazard.

The Consumer Product Safety Commission says the crib's hardware can break or deform, allowing the drop side to detach. This creates a gap between the mattress and the side of the crib, where a small child could be trapped or suffocated.

The agency previously reported the death of an 8-month-old child, who suffocated when some of the hardware on his crib broke and created a gap.

Last September, Simplicity recalled about 600,000 drop-side cribs with similar defects. In 2007, the company recalled 1 million older model drop side cribs.

FACTORY ORDERS Factory orders rise more than expected in May
WASHINGTON
Orders to U.S. factories jumped in May by the largest amount in nearly a year, further evidence that the nosedive in manufacturing is nearing an end.

The Commerce Department says total orders rose 1.2 percent in May, better than the 0.8 percent increase that economists had expected. The April performance was revised slightly lower to a gain of 0.5 percent, from 0.7 percent.

The May increase was the best showing since a 2.1 percent rise last June. The back-to-back increases in April and May were the first consecutive gains in nearly a year.