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Slower declines for housing prices
Home prices rose in March from February in 12 of the 20 cities tracked by S&P’s Case-Shiller Index, it was reported Tuesday, but overall, there was no change month over month. The index was 2.6 percent below March 2011, indicating that prices continued to decline, albeit more slowly than in 2009 and 2010, the worst two years of the real estate downturn. Economist Patrick Newport of IHS Global Insight in Lexington, Mass., said that although housing prices are mainly driven by local forces such as job growth and the neighborhood foreclosure rate, they seem to be stabilizing in most cities. — Alan J. Heavens
Consumer confidence declines
Americans’ confidence in the economy suffered the biggest drop in eight months as worries about the weak job market, housing and stock markets rattled people again. The decline comes after a few months of optimism amid some positive economic news. The Conference Board, a private research group, said that its Consumer Confidence Index now stands at 64.9, down from a revised 68.7 in April. With gas prices falling, Americans were expected to push the measure to 70, according to analysts polled by FactSet. Consumer confidence is widely watched because consumer spending accounts for 70 percent of economic activity. May’s figure is significantly below the 90 reading that indicates a healthy economy. The measure hasn’t been near that level since December 2007. But the latest reading is still well above the 40 figure reached last October and the all-time low of 25.3 in February 2009. — AP
Major law firm files for bankruptcy
The New York law firm Dewey & LeBoeuf L.L.P. filed for bankruptcy after its chairman was ousted and almost all partners quit as creditors began suing for unpaid bills. Dewey listed debt of $245 million and assets of $193 million in a Chapter 11 filing Monday in U.S. Bankruptcy Court in Manhattan. The firm, which had more than 1,300 lawyers in 12 countries after the 2007 merger of Dewey Ballantine LLP and LeBoeuf, Lamb, Greene & McRae LLP, now has 150 employees in the United States to wind it down, Jonathan A. Mitchell, the firm’s restructuring officer, said in court papers. Dewey would be liquidated, he said. Dewey & LeBoeuf "was formed at the onset of one of the worst economic downturns in U.S. history," wrote Mitchell, who works for the restructuring adviser Zolfo Cooper Management L.L.C. "These negative economic conditions, combined with the firm’s rapid growth and partnership compensation arrangements, created a situation where the cash flow was insufficient to cover capital expenses and full compensation expectations." — Bloomberg News
China, Japan ease currency trade
China and Japan have agreed to start direct trading of their currencies as Beijing moves toward making the yuan more of a global currency. Until now, China has only allowed direct trading between the yuan and the U.S. dollar, under tight limits that have been loosened only gradually. The People’s Bank of China said Tuesday that it had authorized the move to help improve the foreign exchange market, promote Sino-Japanese cooperation and develop China’s capital markets. China has long pledged to loosen tight controls on its currency. The move to allow direct trading of the yen and the yuan is a step in that direction and will also streamline foreign exchange dealings between China and Japan, the world’s second and third-biggest economies. China has recently taken several steps to promote the yuan’s use internationally. Last month, the central bank announced it would allow the yuan to rise and fall by a slightly wider margin against the dollar in daily trading. — AP
Shares rise on board shake-up calls
Chesapeake Energy Corp. shares climbed 3.4 percent Tuesday as some prominent shareholders called for a shake-up in the natural gas giant’s board of directors. Investors are unhappy with Chesapeake’s growing debts and a perceived lack of oversight by the board over the company’s founder and CEO, Aubrey McClendon. That has led billionaire investor Carl Icahn and New York State Comptroller Thomas DiNapoli to call for some fresh blood, and independence, in the boardroom. Icahn on Friday said he had acquired a 7.6 percent stake in Chesapeake and wants to replace four board members, two with his own nominees. DiNapoli, the trustee of a retirement fund that owns Chesapeake shares, urged shareholders to withhold votes for two directors who are up for reelection at an annual meeting on June 8. Chesapeake shares have lost $1.49 billion in market value since April 18. — AP
Sprint sets date for Nextel shutdown
Sprint Nextel Corp. said it would shut down the Nextel network as early as June 30 next year, cutting off service for its characteristic walkie-talkie-like Nextel phones. Sprint had already said the shutdown would commence sometime next year, but had not set a date. The company bought the Nextel network in 2005, and has lost money every quarter for the last four years as it has struggled with the cost of running two incompatible wireless networks. There were 5.4 million phones active on the Nextel network at the end of March. Many Nextel customers are businesses or government agencies that issue the phones to construction crews and other mobile workers. Sprint now faces the challenge of persuading those customers to move to the Sprint network rather than competing carriers. Sprint is deactivating the Nextel network to make room on the airwaves for a new fourth-generation, or "4G" data network. — AP
Rates on 3-, 6-month T-bills unchanged
Interest rates on short-term U.S. Treasury bills were unchanged in Tuesday’s auction. The Treasury Department auctioned $30 billion in three-month bills at a discount rate of 0.085 percent, the same as last week. Another $27 billion in six-month bills was auctioned at a discount rate of 0.140 percent, also unchanged from last week. The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,997.85 while a six-month bill sold for $9,992.92. — AP
1-year yields up slightly
The Federal Reserve said Tuesday that the average yield for one-year Treasury bills, a popular index for making changes in adjustable-rate mortgages, edged up to 0.21 percent last week from 0.20 percent the previous week. — AP
