A key gauge of U.S. economic activity rose strongly in December, and the third consecutive monthly gain signaled that the nation’s recession may soon be over. The New York-based Conference Board said Tuesday that its Index of Leading Economic Indicators increased 1.2 percent in December following a revised rise of 0.8 percent in November and an increase of 0.1 percent in October. It was the largest monthly gain since February 1996. Analysts had been expecting a December increase of about 0.7 percent. Three upward movements in the index generally indicate that the economy will expand in the next three to six months.
Bank of America Corp. reported Tuesday that its fourth-quarter profits rose 49 percent, beating Wall Street’s expectations by capitalizing on higher credit card, mortgage and other revenues. The nation’s third-largest bank posted a profit of $2.06 billion, or $1.28 a share, compared with earnings of $1.39 billion, or 85 cents a share, in the same period last year. A consensus of Wall Street analysts had projected earnings of $1.24 a share, according to the research firm Thomson Financial/First Call. Chairman and chief executive officer Ken Lewis said an increase in bad loans caused by the recession cut into the bank’s yearly profits. He predicted more tough sledding ahead for the U.S. banking industry.
The Bush administration will seek $200 million in the next budget to help low-income families pay for their first homes. The program would help about 40,000 families a year for five years to pay a down payment or closing costs, the Department of Housing and Urban Development said Tuesday. Most of the grants would be less than $5,000 for each family, and money would be distributed by state and local housing programs. To be eligible, a family’s income must be below 80 percent of an area’s median household income, the midpoint at which half of families earn more and half earn less.
A judge prodded parties in a lawsuit against Enron Corp. on Tuesday to work out a plan to halt the destruction of documents. FBI agents, meanwhile, were dispatched to Enron headquarters to investigate new allegations of document shredding. The hearing before U.S. District Judge Melinda Harmon was primarily on a previous request to ban any shredding by Enron’s former auditor, Arthur Andersen. She asked plaintiffs and Andersen to discuss the problem and get back to her Wednesday. Andersen attorney Rusty Hardin told the judge the number of documents related to the case could total 20 million.
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