FINANCIAL & BUSINESS NEWS

Last Update on July 30, 2010 13:09 EDT

WALL STREET

NEW YORK (AP) -- Stock prices have fluctuated after investors poured over the government's second quarter GDP report.

The Dow Jones industrial average, down more than 100 points in the first minutes of trading, has been little changed at midday.

The Commerce Department said growth expanded at an annual pace of 2.4 percent from April to June.

The University of Michigan/Reuters consumer sentiment index for July rose slightly more than expected to 67.8 from a preliminary reading of 66.5. And the Chicago Purchasing Managers Index, which measures manufacturing activity in the Midwest, rose unexpectedly to 62.3 this month from 59.1 in June.

ECONOMY

WASHINGTON (AP) -- The recovery lost momentum in the spring as growth slowed to a 2.4 percent pace, its most sluggish showing in nearly a year and too weak to drive down unemployment.

The Commerce Department says consumers spent less, companies slowed their restocking of shelves and the nation's trade deficit dragged more on the economy in the April-to-June quarter.

Businesses invested the most in 13 years on equipment and software during the second quarter. For the first time in two years, builders boosted spending on commercial projects. And home builders spent the most in 27 years, although many expect that to fade now that government homebuying tax credits have expired.

The report also showed that the economy grew at a 3.7 percent pace in the first three months of this year. That was much better than the 2.7 percent pace estimated just a month ago.

GDP-REVISIONS

WASHINGTON (AP) -- The recession was deeper than the government previously thought.

Issuing revisions today, the Commerce Department estimated the economy shrank 2.6 percent last year -- the steepest drop since 1946. It is worse than the 2.4 percent decline originally estimated.

The unemployment rate surged to 10.1 percent in October, a 26-year high.

The revisions in gross domestic product, or GDP, now show zero growth in 2008.

From the start of the recession in December 2007 until the April-to-June quarter of 2009, the economy sank 4.1 percent. That was deeper than the 3.7 percent decline previously estimated for the recession.

GDP is the broadest gauge of the economy's health. It measures the value of all goods and services -- from machinery to manicures -- produced in the United States.

OBAMA

DETROIT (AP) -- President Barack Obama is in Michigan hailing a recent turnaround for U.S. automakers, which he says vindicates his unpopular decision to bailout the industry.

Ahead of congressional elections in three months, Obama is seizing on positive new trends in the auto industry as evidence of broader economic good news. He launched an intensive campaign to highlight the story as a concrete area of improvement with direct ties to his administration's actions.

He said the industry is "growing stronger" speaking on the floor of Chrysler's Jefferson North plant, which recently added a second shift of production with about 1,100 jobs.

Obama greeted workers making Jeep Grand Cherokees. He's going to nearby Hamtramck to visit a GM plant planning to assemble the Chevrolet Volt rechargeable electric car. It is one of nine plants the automaker will keep open during the usual two-week summer shutdown.

AVIATION SAFETY

WASHINGTON (AP) -- Congress has approved far-reaching US aviation safety legislation. It is in response to a deadly commuter airline crash in western New York state last year.

The Senate approved the measure without debate, following similar action by the House. The legislation goes to President Barack Obama for his signature.

The measures attempt to force airlines to hire more experienced pilots, investigate pilots' previous employment more thoroughly and train them better. The legislation requires a major overhaul of rules governing pilot work schedules to prevent fatigue.

The move follows the crash of Continental Connection Flight 3407 near Buffalo-Niagara International Airport in Feb. 2009. All 49 people aboard and one man in a house were killed. A National Transportation Safety Board investigation faulted actions by the flight's pilots and deficiencies in pilot hiring and training by Colgan Air, the regional carrier that operated the flight for Continental Airlines.

BUSINESS VIDEO

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Associated Press Writer

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