by The Associated Press

 

Bernanke says recession possible

WASHINGTON (AP) — For the first time, Federal Reserve Chairman Ben Bernanke acknowledged the U.S. could reel into recession from the powerful punches of housing, credit and financial crises. Yet, he was coy about the Fed’s next move.

With home foreclosures swelling to record highs and job losses mounting, Bernanke on Wednesday offered Congress an unflinching — and more pessimistic — assessment of potential damage to the national economy.

Whether or not the economy already has fallen into its first recession since 2001 — and many economists believe it has — the housing debacle and other economic woes are a major concern for homeowners, job losers and investors. That means they’re a concern to Congress and the presidential contenders, too.

The Fed and the White House have been thrust into crisis-management mode.

 

Gas, oil futures jump as demand rises

NEW YORK (AP) — Gasoline and oil futures rose sharply in early April after the Energy Department reported an unexpected jump in gasoline demand and a big drop in supplies. Prices at the pump returned to record levels, and appeared poised to extend their march higher.

In its weekly inventory report, the Energy Information Administration said gasoline supplies fell by 4.5 million barrels last week, twice the decline forecast by analysts surveyed by Dow Jones Newswires. The EIA data also showed that demand for gas rose by nearly 1 percent when compared to the same week last year. That reverses a pattern in which demand had been falling.

Falling gasoline inventories and rising demand suggest supplies are tightening as the peak summer driving season approaches. That could boost gas prices further, and keep oil prices elevated.

Surging gas and oil futures prices are likely to contribute to the upward trend at the pump.

 

Factory orders drop

WASHINGTON (AP) — Orders to U.S. factories fell for a second straight month, a worse-than-expected performance that reinforced worries that the risk of recession is rising.

The Commerce Department reported Wednesday that factory orders dropped by 1.3 percent in February, about double the downturn that economists had been expecting.

Orders had fallen an even bigger 2.3 percent in January, the largest decline in five months.

The falloff in demand was widespread, with steep declines in orders for motor vehicles, various types of heavy machinery and demand for iron and steel.

Many economists believe a prolonged housing slowdown and credit crunch have already pushed the country into a recession.

The report on factory orders showed demand falling by 1.1 percent for durable goods, items expected to last at least three years, while orders for nondurable goods, products such as oil and chemicals, fell by 1.5 percent.

 

Research In Motion 4Q profit soars

TORONTO (AP) — Research In Motion Ltd. says its fiscal fourth-quarter profit and sales more than doubled as the BlackBerry maker boosted its subscriber base and shipped about 4.4 million of its smart phones.

For the quarter ended March 1, the Canadian company earned $412.5 million, or 72 cents per share, up from a profit of $187.4 million, or 33 cents per share, in the same period a year earlier.

Revenue more than doubled to $1.88 billion from $930 million.

U.S.-traded shares in RIM rose $5.71, or 5 percent, to $121.50 in after-hours trading Wednesday after closing at $115.79.

 

Bernanke: Bear Stearns wasn’t a bailout

WASHINGTON (AP) — The Federal Reserve’s unprecedented actions to prevent the collapse of Bear Stearns were taken to preserve the “integrity and viability of the American financial system” and did not represent any kind of bailout, Fed Chairman Ben Bernanke said Wednesday.

Bernanke told a congressional panel that the Fed and other government agencies were informed on March 13 that without help Bear Stearns Cos. would have to file for bankruptcy the next day, forcing the central bank to make the difficult choice of deciding whether to allow the nation’s fifth largest investment bank to collapse or provide assistance.