Dow closes at record high as Fed meeting begins

NEW YORK — Investors drove the Dow Jones industrial average to an all-time high Tuesday on expectations that the Federal Reserve will keep its economic stimulus program in place.

The Dow rose 111.42 points, or 0.7 percent, to 15,680.35. The Dow also got a big boost from IBM, which announced that it would buy $15 billion more of its own stock.

The Fed is in the middle of a two-day policy meeting at which it’s expected to maintain its $85 billion worth of bond purchases every month. That program is aimed at stimulating economic growth by keeping borrowing rates very low. The Fed will announce its decision this afternoon.

IBM rose $4.77, or 2.7 percent, to $181.12, accounting for about a quarter of the Dow’s gain. The Standard and Poor’s 500 index rose 9.84 points, or 0.6 percent, to 1,771.95, its seventh record high this month. The Nasdaq composite rose 12.21 points, or 0.3 percent, to 3,952.34.

MeadWestvaco’s profit jumps on higher sales

MeadWestvaco Corp. said its third-quarter profit jumped nearly 57 percent as sales grew and it lowered costs, but earnings and revenue fell short of expectations.

The Richmond, Va.-based packaging company reported earnings Tuesday of $80 million, or 44 cents per share, up from $51 million, or 28 cents per share, a year ago.

On an adjusted basis, MeadWestvaco earned 49 cents per share.

Revenue increased nearly 3 percent to $1.43 billion.

Analysts expected earnings of 50 cents per share on revenue of $1.46 billion, according to FactSet.

Sales rose 2 percent to $260 million at Meadwestvaco’s North Charleston-based specialty chemicals business, which makes tree-based additives for asphalt, adhesives, inks and oilfield drilling, land sales and industrial packaging. That unit’s profit rose 6 percent to $66 million.

Business also was higher in the Summerville-based land management division. Sales for that segment jumped 80 percent last quarter to $63 million, and its profit tripled to $33 million from a year ago.

Sales fell in food and beverage packaging, as well as home, health and beauty packaging.

Watchdog: Treasury to lose $9.7B on bailout of GM

DETROIT — A watchdog says the U.S. government expects to lose $9.7 billion on its bailout of General Motors.

The government spent $49.5 billion to save GM five years ago to save jobs and prevent a deeper recession. The Special Inspector General for the Troubled Asset Relief Program says the government has recovered $34.5 billion. That leaves $15 billion.

The government got 61 percent of GM’s stock in the bailout. It has sold all but 7 percent, or 101 million shares. Those would have to sell for $148 each to break even. GM stock was trading around $36 Tuesday.

The inspector general says in a report to Congress that the government is showing a $9.7 billion loss on its books.

IDC: Smartphone shipments up 39 percent in 3Q

NEW YORK — Research group IDC says worldwide shipments of smartphones grew 39 percent in the most recent quarter to 258 million as Samsung and Apple maintained their dominance.

The total sets a record, beating the previous high of 237 million in the second quarter.

Samsung Electronics Co. remains the world’s largest smartphone maker, shipping more than the next four vendors combined. It shipped 81 million in the July-September quarter for a market share of 31 percent. Apple Inc. shipped 34 million iPhones, for a market share of 13 percent. The company introduced two new iPhones toward the end of the quarter.

Rounding out the top 5 are Huawei with 12.5 million, Lenovo with 12.3 million and LG Electronics Inc. with 12.0 million, each with a market share of less than 5 percent.

Pfizer 3Q net drops due to generics, higher costs

Pfizer Inc. said third-quarter profit dropped 19 percent as generic competition continued to cut sales, while lower operational expenses failed to offset higher taxes and one-time charges.

The maker of Lyrica for fibromyalgia said net income was $2.59 billion, or 39 cents per share, down from $3.21 billion, or 43 cents per share, a year earlier.

Excluding one-time items, the world’s second-largest drugmaker said net income would have been $3.86 billion, or 58 cents per share. Analysts surveyed by FactSet expected 56 cents per share.

Staff and wire reports