U.S. markets down
NEW YORK, July 28 (UPI) -- Stocks indexes fell Monday in New York after the U.S. Senate approved a housing bill Saturday and two banks were seized by regulators.
The Senate's bill is designed to prop up a struggling housing market and provide support for the Federal Home Loan Mortgage Corp. and the Federal National Mortgage Association. Meanwhile, the Federal Deposit Insurance Corp. took control of the First National Bank of Nevada, Reno, and the First Heritage Bank N.A. of Newport Beach, Calif., Friday, deepening concern over the nation's banking industry.
In late-morning trading Monday, the Dow Jones industrial average was off 93.55 or 0.82 percent to 11,277.14. The Nasdaq composite index fell 16.49 or 0.71 percent to 2,294.04. The Standard and Poor's 500 fell 4.93 or 0.39 percent to 1,252.83.
The 10-year U.S. Treasury note dropped 15/32 to yield 4.01 percent.
The euro traded at $1.5746 Monday from Friday's close of $1.5699. Against the yen, the dollar was at 107.53 compared with Friday's close of 107.9.
Tokyo's Nikkei 225 Index closed up 19.02 points to 13,353.78, up 0.14 percent.
Construction in Iraq plagued with waste
WASHINGTON, July 28 (UPI) -- Lucrative construction projects in Iraq are ending with work incomplete and millions of dollars wasted, government regulators said.
The Special Inspector General for Iraq Reconstruction said Parsons, a contractor from Pasadena, Calif., was paid $142 million to build civic facilities, but "far less was accomplished under this contract than originally planned."
Only a third of Parsons' $333 million in projects were completed, The Washington Post reported Monday.
The company's problems were "emblematic" of construction delays, shoddy work and projects left unfinished in a $50 billion reconstruction effort in Iraq, the Post reported.
One Parsons project, the Kahn Bani Sa'ad Correctional Facility, has been given the derogatory nickname "the whale."
The government paid Parsons $31 million for their work, but fired it from the project in 2006. It paid $9 million to others to complete the job, the Post reported.
The facility still has no plumbing or electricity. Roads to the site are unpaved and the second story of one building has no roof, the Post reported.
"At this point the entire amount disbursed for this project may ultimately be wasted because the government of Iraq currently has no plan for completing or using this facility," an Iraqi official said.
Cars driving China's oil demand
BEIJING, July 28 (UPI) -- China's escalating demand for oil can be traced to increased auto sales in the country and government subsidies that keep prices low, analysts said.
Although subsidies were partly lifted recently, gas now costs $3.40 per gallon in China. SUV sales, meanwhile, rose 43 percent in May this year compared with May 2007 and sales of full-sized sedans jumped 15 percent, The Washington Post reported Monday.
The country now has 15.2 million private cars, which puts it on par with the United States of 1915, when less than 4 percent of the population owned a car.
"The entire energy market of the world is being affected by this country already. Can you imagine when we get to 50 people out of every 1,000 in China owning cars?" asked Friedhelm Engler, design director for an joint Chinese-General Motors design lab in China.
The purchase of cars has government support. Bicycles are now banned on some streets in Beijing. The city of Dalian and others have banned smaller cars on the premise they are old and dirty, the report said. And several municipalities have cut sales tax and worked with banks to make car loans available, the report said.
U.S. banks tighter on business loans
WASHINGTON, July 28 (UPI) -- Tighter credit hasn't only affected U.S. consumers looking for a house but companies are also finding banks holding back, official reports show.
Banks have cut back almost 3 percent in the past year in lending commercial and industrial loans and 270-day "commercial paper" loans, generally used for inventory purchases or for working capital, the U.S. Federal Reserve Bank reported.
The decline from $3.36 trillion to $3.27 trillion is the largest annual decline in these loans since 2001, The New York Times reported Monday.
"Access to capital and credit is essential to growth. If that access is restrained or blocked, the economic system takes a hit," said Michael Darda, chief economist at MKM Partners in Greenwich, Conn.
The numbers are tangible for Drew Greenblatt, president of Marlin Steel Wire Products.
His company, which makes parts for appliances, is profitable and is expanding. But, when he asked Wachovia bank for a $300,000 loan to purchase a new factory robot, which would have added three jobs at his plant, he told the newspaper was turned down.
"The exact words were, 'We're saying 'no' to almost everybody,'" Greenblatt told the Times.