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US home construction in slow but steady comeback

WASHINGTON (AP) — Home construction is making a long-awaited recovery that could help energize the U.S. economy.

From areas like Phoenix that are finally arising from the housing bust to cities like Chicago and Minneapolis where strong economies have lifted demand, residential construction is healthier than at any time since sales and prices collapsed five years ago.

The improvement has been gradual. But builders are responding to interest from buyers drawn by reduced prices, record-low mortgage rates and rising rents, which have made home purchases comparatively appealing. And the supply of new homes has shrunk to near record lows. That's pushing developers to build more.

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Capital One to pay $210 million over marketing tactics

WASHINGTON (AP) — The Obama administration's consumer watchdog agency flexed its enforcement muscles for the first time Wednesday and ordered Capital One Bank to repay millions of credit card customers allegedly tricked into buying costly add-on services.

Capital One will pay $210 million in refunds and regulatory fines. Most of the money will go directly to customers.

The bank's phone-sales operators told customers that services like payment protection and credit monitoring were free or mandatory or offered more benefits than they did, federal officials said. The hard selling targeted people with poor credit, they said.

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Chinese companies see profits plunge amid slowdown

BEIJING (AP) — Some of China's biggest companies, from tech giants to airlines and retailers, are warning of unexpectedly sharp drops in profit of up to 80 percent, adding to pressure on Beijing to reverse a painful economic slump.

On Wednesday, Air China Ltd., one of three main government-owned airlines, warned first-half profit will fall by at least half from a year earlier. State-owned ZTE Corp., one of the world's biggest producers of telecommunications equipment, is projecting a decline of up to 80 percent.

The woes facing even politically favored companies that benefit from monopolies, low-cost bank loans and other government aid highlight the challenges for the authoritarian country's leaders who are trying to pull China out of its deepest slowdown since the 2008 crisis.

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Fed survey: Growth, hiring slowed in parts of US

WASHINGTON (AP) — The U.S. economy expanded modestly in June and early July, but growth and hiring slowed in several parts of the country. The key findings of the Federal Reserve survey echoed the gloomier outlook that Chairman Ben Bernanke offered to Congress this week.

Three of the Fed's 12 banking districts — New York, Philadelphia and Cleveland — reported weaker growth, according to the Beige Book survey released Wednesday. A fourth, Richmond, said economic activity was mixed.

The report was a shift from the Fed's previous survey, which noted that growth had picked up or held steady in 11 districts from mid-April through May.

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Bernanke: Fed's efforts have helped the economy

WASHINGTON (AP) — Chairman Ben Bernanke told lawmakers Wednesday that the Federal Reserve's efforts to bolster growth have helped lift the U.S. economy out of the Great Recession. But he acknowledged that growth remains weak and the Fed can only do so much.

Bernanke was on the Hill to deliver his twice-a-year report to Congress on the state of the economy. But he spent part of the hearing defending the Fed's previous two rounds of large-scale bond purchases against Republican criticism.

The economy has weakened since the start of the year, and Bernanke said the Fed is prepared to take further action if unemployment stays high. He didn't specify what steps the Fed might take or whether any action was imminent.

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BofA swings to profit; mortgages cast long shadow

Bank of America can't shake its mortgage headache.

In a reminder that the consequences from the financial crisis are far from over, the bank said Wednesday that investor disputes over bad mortgages and mortgage-backed bonds have more than doubled from a year ago.

The bank beat Wall Street's profit expectations for April through June, and executives emphasized that the bank is setting aside less money for bad loans overall, a sign that more customers are paying back loans on time.

But the growing investor claims suggest the mortgage problem, which has already cost the bank more than $13 billion, is growing.

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Yum posts rare profit decline in China

LOUISVILLE, Ky. (AP) — The owner of the Taco Bell, Pizza Hut and KFC chains says its second-quarter net income rose 5 percent on strong sales in its U.S. business. But the restaurant company reported a rare profit decline in its key China market. Continued...