Financial News

LONDON (ShareCast) - Barack Obama is on Wednesday expected to announce a package of new measures to boost the supply of credit to small businesses still facing a credit squeeze in spite of the improvement in financial markets, according to the FT.

Congressional investigators think that reams of internal documents turned over by Bank of America (NYSE: IKJ - news) last Friday show that its executives were alarmed by mounting losses at Merrill Lynch (NYSE: MER - news) well before shareholders voted to approve the merger, according to sources familiar with the matter, writes the Washington Post (NYSE: WPO - news) .

A Treasury Department watchdog is warning that a key $700bn bailout program has damaged the government's credibility, won't earn taxpayers all their money back and has done little to change a culture of recklessness on Wall Street. "The American people's belief that the funds went into a black hole, or that there was a transfer of wealth from taxpayers to Wall Street, is one of the worst outcomes of this program, and that is the reputational damage to the government," said Neil Barofsky, special inspector general of the TARP, reports USA Today.

California has launched a $200m legal action against State Street (NYSE: STT - news) , accusing the institutional money manager of committing "unconscionable fraud" against Calpers and Calstrs, the largest US pension funds, according to the FT.

United Airlines said it expects to pocket $100m annually and expand its worldwide reach from a new partnership that will kick off Tuesday when Continental Airlines (NYSE: CAL - news) joins the Star Alliance, a global airline consortium co-founded by United (UNC.TO - news) , says the Chicago Tribune.

Computer server maker Sun Microsystems (NASDAQ: JAVAD - news) said Tuesday it would shed 3,000 jobs globally over the next 12 months because of the delay in its acquisition by Oracle (NASDAQ: ORCL - news) as European regulators examine the $7bn deal, writes USA Today.

The federal government is wading into the supermarket aisle, making its first effort to provide better nutritional information on food products since it developed the black-and-white Nutrition Facts label 15 years ago, reports the Washington Post.

Kenneth Feinberg, the Obama administration's special master on executive pay, on Tuesday said he was struggling with an "incredible gap - the chasm between Wall Street perceptions and Main Street perceptions", according to the FT.

The group allied with Brian P. Tierney, chief executive of the bankrupt Philadelphia newspapers, on Tuesday raised its bid to keep control of the papers to at least $86.5m, from $66.5m, says the NY Times.

US Bancorp (NYSE: USB - news) , which has acquired more than $16bn in assets of failed banks during the past year, hasn't sated its appetite yet. Executives at the Minneapolis bank, which ranks sixth in assets among U.S. banks, have been conducting due diligence on FBOP, the beleaguered Oak Park, Ill., owner of eight banks in Arizona, California, Illinois and Texas, according to people familiar with the situation, writes the Wall Street Journal.

A growing number of companies are quitting the US Chamber of Commerce over its climate change policies. The latest is a New York paper company. Mohawk Fine Paper says membership in an organization that has been critical of climate change legislation hurts its position as a business with a strong commitment to climate protection, reports USA Today.

Walt Disney is close to unveiling technology that it says will enable entertainment companies to adapt their business models to a new reality in which consumers increasingly rely on computers and cell phones in place of DVD players and TVs. The technology, code-named Keychest, could contribute to a shift in what it means for a consumer to own a movie or a TV show, by redefining ownership as access rights, not physical possession, according to the Wall Street Journal.