America’s banks are still broken despite all their bailout billions, Treasury Secretary Timothy Geithner told impatient rescue overseers Tuesday as they pressed him on when things will get better and how much it will cost. A bleak new report estimated U.S. banks and other financial institutions could lose a stunning $2.7 trillion in all. How well is the mostly-spent $700 billion federal bailout working? “To date, frankly, the evidence is mixed,” Geithner told a congressionally appointed oversight panel. Confidence in the program is wearing thin on Capitol Hill. With lawmakers back from their spring break, even bailout supporters are skeptical that Congress — weary of bankers’ bonuses and still-scarce credit — would approve additional bank rescue money.
House passes Aerospace Council bill
The state House voted Tuesday to create the Washington Institute of Aerospace Technology and Advanced Manufacturing in Snohomish County. Legislation passed by the House directs Edmonds Community College to oversee development of the institute. Once set-up, this center will coordinate efforts in the state to educate and train aerospace workers, and research and development new technologies for the industry. Another goal of the institute is to craft curriculum for a statewide consortium of schools and programs providing instruction and job skills for aerospace workers. By Jan. 1, 2010, Edmonds Community College officials will recommend to the Legislature how to operate and fund the institute and maybe select a site. A second report is due in September 2010 with specific recommendations for aerospace-related legislation. House Bill 2318 passed the House on a 86-9 vote. It now goes to the Senate for consideration.
Delta adds fee for second bag
Fee-weary travelers will get another dose of what they don’t need, just in time for the peak summer season. Delta Air Lines Inc. said Tuesday most passengers will have to pay $50 to check a second bag on international flights, as the carrier and the parent of United Airlines posted nearly $1.2 billion in combined first-quarter losses. United, AMR Corp.’s American Airlines and US Airways Group Inc. said they were studying Delta’s decision, but didn’t immediately announce plans to match it. Continental Airlines Inc. declined to comment. Among foreign carriers, British Airways has a fee for a second checked bag for some passengers for travel to some international destinations.
Merck profits drop 57 percent
Drugmaker Merck &Co. on Tuesday posted a 57 percent drop in first-quarter profit, falling short of expectations and sending its stock down, as the global recession and other factors cut sales of its drugs and joint venture income. Last year’s quarter also benefited from a one-time pretax gain of $2.2 billion from Merck’s partnership with Britain’s AstraZeneca PLC. Analysts called the quarter “disappointing” and “relatively weak,” with Seamus Fernandez of Leerink Swann telling investors Merck had a “top line whiff” of $460 million compared with his revenue forecast. Merck missed forecasts for nearly all of its drugs, analysts noted, and put future revenue in doubt by delaying plans to seek approval for a new migraine drug.
Yahoo losses prompt layoffs
Yahoo Inc. will lay off more than 600 workers after getting off to another bumpy start under a tough-talking new boss who has promised to engineer a long-awaited turnaround at one of the Internet’s best-known franchises. Yahoo earned $118 million, or 8 cents per share, during the first three months of the year. That represents a 78 percent drop from net income of $537 million, or 37 cents per share, in the year-ago period. Last year’s results included a noncash gain of $401 million.
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