Stocks retreat, eroding much of Tuesday's rally
NEW YORK — Stocks pulled back sharply Wednesday, erasing most of Tuesday's big gains as investors grew concerned about high commodities prices and the possibility that banks remain vulnerable to problems from bad debt.
The concerns overshadowed upbeat results from Morgan Stanley, whose earnings indicated it is relatively healthy. Investors have been nervous about even big banks after JPMorgan Chase struck a deal Sunday to buy ailing Bear Stearns.
The Dow Jones industrial average fell 293.00, or 2.36 percent, to 12,099.66. Broader stock indicators also declined. The Standard & Poor's 500 index fell 32.32, or 2.43 percent, to 1,298.42, and the Nasdaq composite index fell 58.30, or 2.57 percent, to 2,209.96.
Boeing 787 buyer says more flight delays likely
SEATTLE — Design changes to part of the wing of Boeing Co.'s new 787 jetliner might further delay its first flight, according to the head of an aircraft leasing company that has ordered 74 of the planes.
Steven Udvar-Hazy of International Lease Finance Corp. said Tuesday that he expects the first 787 flight will not occur until the fall and that the first delivery will be postponed to the end of the third quarter of 2009.
Boeing's goal is to send the 787 on its first flight by late June and deliver the first plane in early 2009. Boeing dismissed Udvar-Hazy's comments as "opinion."
Regulator frees up cash to buy troubled loans
WASHINGTON — A federal housing regulator Wednesday made it easier for mortgage giants Fannie Mae and Freddie Mac to absorb problem loans that are dragging down many U.S. home- owners.
The Office of Federal Housing Enterprise Oversight said it would lower the amount of capital that Fannie and Freddie must keep in reserve to 20 percent from 30 percent. With less in reserve, the government-sponsored enterprises will have about $200 billion more available to buy troubled home loans.
Price hikes, cost cuts pay off for General Mills
MINNEAPOLIS — General Mills said Wednesday its profit climbed 61 percent in the third quarter as strong demand and higher prices led to a big rise in sales.
The earnings for the maker of Cheerios and Wheaties cereals, Progresso soups and Yoplait yogurt were above Wall Street expectations. The company said cost-cutting efforts, in addition to price increases, were offsetting higher grain costs and protecting profit margins.
General Mills earned $430.1 million for the quarter ended Feb. 24. Sales grew 12 percent to $3.41 billion.
Shares of Visa Inc. soar on their first trading day
SAN FRANCISCO — Catapulted by the biggest initial public offering in U.S. history, Visa Inc. shares soared 28 percent in their trading debut Wednesday. After being priced at $44 a share in an IPO, Visa shares climbed to $56.50.
The fervor reflects the view that Visa is in a lucrative position as more people rely on its electronic network to make payments instead of using cash and checks.