TOPICS > Economy

Other News: U.S. Jobless Claims Rise, Stocks Fall on Health Care Plans

February 26, 2009 at 6:10 PM EDT

JUDY WOODRUFF: Wall Street fell again today, reacting in part to the president’s health care plan. Stocks in medical and drug companies were down on concerns they would lose money under the new proposals.

The Dow Jones Industrial Average lost more than 88 points to close at 7,182. The Nasdaq fell more than 33 points to close at 1,391.

Claims for people who are out of a job have reached their highest level since October of 1982. The Labor Department reported that new claims rose more than expected last week to 667,000. A total of more than 5 million Americans are now receiving unemployment benefits. That number is expected to keep rising.

Today, JPMorgan Chase announced that it is cutting 12,000 jobs.

It’s now official: The nation’s banks lost money at the end of 2008 for the first time in 18 years. The Federal Deposit Insurance Corporation reported that the losses topped $26 billion in the fourth quarter.

At a congressional hearing, Paul Volcker, leading the president’s Economic Recovery Advisory Board, said the solution is a return to basics.

PAUL VOLCKER, Economic Recovery Advisory Board: Banks ought to go back in the banking business. Maybe it’s a very old-fashioned idea, but I think we ought to have a core. Recent events show how dependent we are on banks as kind of custodians of the system (inaudible) of the system. And let’s not get them distracted by the glamour of speculating in the capital markets.

JUDY WOODRUFF: For the year as a whole, the banking industry actually made a profit, $16 billion, but it was the smallest annual gain since 1990.

U.S. automakers also reported steep losses for 2008. General Motors announced that it went nearly $31 billion in the hole as sales plunged. The auto giant has already accepted more than $13 billion in federal rescue funds, and it’s asking for more. Ford reported losing nearly $15 billion last year; Chrysler lost $8 billion.

New home sales had their worst showing last month since government records began in 1963. The Commerce Department reported that sales were down more than 10 percent. The average home price fell below $235,000.

The report came as the U.S. House of Representatives delayed action on letting bankruptcy judges cut mortgage payments for some homeowners. The banking industry has lobbied hard against the measure.

In a policy change, the Defense Department will allow news photographs of the coffins of America’s war dead. The announcement today ended a ban going back almost 20 years.

NewsHour correspondent Spencer Michels has more.

SPENCER MICHELS, NewsHour Correspondent: Every week, coffins of fallen soldiers and Marines arrive at Dover, Delaware, Air Force Base, but the public rarely sees them. Media coverage of the transfer ceremonies at Dover has been banned since 1991.

Today, Defense Secretary Gates announced a partial reversal of that ban.

ROBERT GATES, Secretary of Defense: After receiving input from a number of sources, including all the military services and organizations representing military families, I have decided that the decision regarding media coverage of the dignified transfer process at Dover should be made by those most directly affected on an individual basis by the families of the fallen. We ought not presume to make that decision in their place.

SPENCER MICHELS: Coverage of military funerals has been left to surviving families to decide. The ban on photographing the Dover transfers became particularly controversial during the Iraq war. Antiwar groups and news organizations criticized the policy. Military families were divided.

KRISTIA CAVERE, Families United: Having the media presence shows a lack of respect for the privacy of the overwhelming number of Gold Star family members who do not want the media present.

MILITARY FAMILY MEMBER: I don’t feel like he ought to be snuck in on a plane in the middle of the night where no one knows. People ought to be told, just like when they welcome the soldiers when they come back from Iraq.

SPENCER MICHELS: Secretary Gates acknowledged splits within the Pentagon about lifting the ban.

ROBERT GATES: I’ll be perfectly honest about it. There was a division in the building. And I thought that the — and I sided with those who thought that the issue ought to be up to the families.

JOURNALIST: And so what changed? Is there not still a division?

ROBERT GATES: No, I’d say there still is a division, but not anymore.

SPENCER MICHELS: A Pentagon working group will develop guidelines for the new policy. The secretary expects its recommendations soon.

JUDY WOODRUFF: Residents of the District of Columbia took a giant step today toward getting a vote in Congress. The Senate passed a bill giving Washington, D.C., a seat in the U.S. House. The city is heavily Democratic, so as a compromise the bill also adds a House seat for the mostly Republican state of Utah. The House takes up the bill next week.

Anti-government riots erupted in Pakistan today after two opposition leaders were barred from elected office. The Pakistani Supreme Court ruled yesterday against former Prime Minister Nawaz Sharif and his brother, who was governor of Punjab province.

Today, hundreds of demonstrators barricaded the streets with burning tires in and around Islamabad, the capital. They marched with banners and chanted slogans.

Border guards in Bangladesh laid down their arms today after revolting over low wages. Yesterday, they turned on commanding officers during a conference. Today, they surrendered, after tanks besieged their headquarters and the prime minister promised to address their grievances. At least 11 people were killed during the insurrection.