Greece's, Portugal's woes slam stocks
NEW YORK -- Investors are once again worried that debt problems in Greece and Portugal could threaten the global economic recovery.
Stocks plunged in the United States and Europe on Tuesday after Standard & Poor's downgraded the debt of the two European countries. The Dow Jones industrial average posted its worst loss in almost three months. All the major market indexes were down about 2 percent.
The ratings downgrades also sent the dollar up more than 1.1 percent against the euro, hitting its highest level in about a year. At the same time, gold and Treasury prices also rose as investors sought safer investments. The three often do not trade in the same direction.
"It was a knee-jerk reaction," said Brian Peardon, a wealth adviser at Harrison Financial Group in Citrus Heights, Calif. Peardon said the small size of Greece's and Portugal's economies mean their debt struggles are not yet a major problem.
Wall Street bearish on Ford's recovery
DEARBORN, Mich. -- Ford earned $2.1 billion in the first quarter as the economic clouds parted and consumers grew confident enough to buy cars again. But the confidence didn't extend to investors, who pushed Ford's shares down Tuesday on concerns that the automaker's recovery isn't sustainable.
The profit of 50 cents a share was Ford's fourth straight positive quarter and its highest quarterly profit in six years. It's an about-face from the same period last year, when Ford lost $1.4 billion, or 60 cents per share, at the height of the recession.
Ford said it expects to be solidly profitable this year, a year earlier than its previous guidance.
Investors worried that the company can't maintain its strong gains in the second half of the year. Ford's first-quarter U.S. market share made its biggest jump in 33 years, for example, and is unlikely to keep growing at that pace.
Ford also faces higher prices for steel and other raw materials, rising interest rates and expected weaker European demand.
Home price report reflects tepidness
MIAMI -- Home prices in February posted their first annual increase since the end of 2006, lifted by temporary tax credits for home buyers.
The Standard & Poor's/Case-Shiller home price index released Tuesday squeezed out a 0.6 percent gain -- half the increase analysts had expected. Also, 11 of the 20 cities tracked by the index showed declines from February last year.
The data underscored the fragile nature of the housing recovery. Nationally, home prices are up more than 3 percent from the bottom in May 2009, but still are 30 percent below the May 2006 peak.
Profits up 45% at Norfolk Southern
NEW YORK -- Norfolk Southern said Tuesday that the economy picked up steam and drove its first-quarter earnings up 45 percent, despite sharply higher fuel prices.
The railroad said it earned $257 million. Revenue rose 15 percent to $2.22 billion. Fuel prices shot up 60 percent from a year ago.
The company, which serves Charleston, said general merchandise revenue -- its biggest segment, which includes a wide range of retail and manufactured goods -- rose 23 percent.