Fed institutes interest rate increase
WASHINGTON, D.C. -- With the economy moving ahead and the nation's payrolls picking up a bit, Federal Reserve policy-makers boosted short-term interest rates for a third time this year -- but left economists split about when the next increase might come.\nFederal Chairman Alan Greenspan and his Federal Open Market Committee colleagues -- the group which sets interest-rate policy -- increased the target for the federal funds rate from 1.50 percent to 1.75 percent. The funds rate is the interest banks charge each other on overnight loans and is the Fed's primary tool for influencing economic activity.\nReacting to the Fed's decision, Wells Fargo and Wachovia Corp. said they were increasing the prime lending for many short-term consumer and business loans from 4.50 percent to 4.75 percent. Other commercial banks were expected to follow suit.
Martha Stewart will soon report to prison
NEW YORK -- Martha Stewart must report to prison in less than three weeks, a federal judge ruled Tuesday in granting the celebrity homemaker's request to begin serving her sentence for lying about a stock sale. Her namesake company's stock surged 12 percent.\nThe judge also suggested Stewart, 63, be assigned to prison camps in Danbury, Conn., or Coleman, Fla. -- the two Stewart had requested.\nStewart was allowed to stay out of prison while she appeals her conviction. But she said last week she would surrender anyway to "reclaim my good life" and put the ordeal behind her.\nThe October surrender date means Stewart will likely be out of prison by early March -- in time, as she told reporters last week, for spring gardening. She must serve five months of house arrest after prison.\nStewart was pleased with the judge's decision, a spokeswoman said.
Construction projects reach 5-month high
WASHINGTON, D.C. -- Housing construction in August surged to its highest level in five months, a dose of encouraging news for the economy's expansion.\nThe number of housing projects launched by builders clocked in at a seasonally adjusted annual rate of 2 million units, a 0.6 percent increase from July's level, the Commerce Department reported Tuesday.\nThe 2 million-unit pace of housing construction registered in August was the highest since March and was better than analysts were expecting. They were forecasting housing construction to decline last month, in part because of hurricanes and bad weather in parts of the country.
Suits against tobacco companies begins
WASHINGTON, D.C. -- The nation's biggest tobacco companies worked together for decades to mislead the public about the dangers of smoking, a federal lawyer alleged Tuesday at the start of a civil racketeering trial in which the government seeks a record $280 billion from the industry.\nIn his opening statement, Justice Department attorney Frank Marine said starting in the 1960s the industry spent hundreds of millions of dollars on organizations set up to counter the growing body of scientific evidence linking smoking to cancer.\nHe cited internal industry documents showing company executives knew they were trying to deceive the public.
General Motors to offer 0 percent financing in end-of-year model clearance
DETROIT -- In true retail fashion, General Motors Corp. is planning what it hopes will be a clearance sale next week on 2004 models, offering zero-percent financing for 72 months to help unload a backlog of inventory.\nIndustry observers, however, say the blitz could hurt sales in the coming months and beyond.\nGM spokeswoman Deborah Silverman said the company had no comment on such a promotion, but dealers say they were notified in recent days of the program, which applies to brands such as Chevrolet, Pontiac, Buick and GMC. The dates are Sept. 28-30.\nOther brands, including Chrysler and Isuzu, have offered no-interest loans for 72 months. Analysts say GM is clearly anxious about the above-average number of 2004 models sitting on lots and the need to make room for new 2005 models on the way.
