Posted on May - 16 - 2010
Business briefs: GM rides cuts, sales to first-quarter profit
In less than a year, General Motors Co. has roared back from bankruptcy to a quarterly profit. Now comes the hard part: Sustaining the income and repaying billions of dollars in government aid.
Revenue is up 40 percent over the first quarter of last year, U.S. sales rose 17 percent for the quarter, and GM made an operating profit in North America.
As a result, the automaker announced Monday, its net income rose to $865 million, a dramatic reversal from the $6 billion the company lost in the same period last year.
Chrysler loan to cost U.S. $1.6 billion
The Treasury Department said Monday that it will lose $1.6 billion on a loan made to Chrysler in early 2009.
Taxpayer losses from bailing out Chrysler and General Motors are expected to rise as high as $34 billion, congressional auditors say.
Treasury said Monday that Chrysler repaid $1.9 billion of a $4 billion loan, which was extended before the company filed for Chapter 11. The government hopes to get another $500 million from the company that emerged from bankruptcy, Chrysler Group LLC.
Homebuilders feel optimistic
U.S. homebuilders are growing more optimistic about their fortunes, with many expecting improved sales and customer traffic in coming months despite the end of homebuyer tax incentives.
The National Association of Home Builders said Monday that its housing market index, which tracks industry confidence, rose three points this month to 22, the highest reading since August 2007.
Readings below 50 indicate negative sentiment about the market. The last time the index was above 50 was in April 2006.
Nations defend currency union
Eurozone finance ministers defended the euro as a “credible” currency early today, despite its slide to four-year lows against the dollar, as they sought to tame the fears that have gripped financial markets in recent weeks.
Investors fear that as European nations make painful spending cuts to rein in their swelling debt, growth will be stifled for years to come. There are also concerns that governments’ rescue efforts for debt-laden EU countries, combined with the European Central Bank’s move to buy government bonds, could cause inflation to rise.
Those worries have helped fuel the euro’s fall to the lowest level against the dollar since April 2006 and hiked the price of gold, traditionally a safe haven when markets lose faith in other assets.
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