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News Wrap: Goldman Sachs Agrees to Settle Civil Fraud Charges

In other news Thursday, Wall Street giant Goldman Sachs agreed to pay $550 million to settle civil fraud charges brought by the SEC.

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  • HARI SREENIVASAN:

    Goldman Sachs agreed today to pay $550 million to settle civil fraud charges. The Securities and Exchange Commission had accused the firm of misleading investors who bought securities tied to subprime mortgages. Under the settlement, the Wall Street giant will pay fines of $300 million. The rest will go to compensate customers. Actual losses on the investments totaled nearly $1 billion.

    The Goldman announcement helped Wall Street recover from a daylong funk. The Dow Jones industrial average had been down as much as 100 points. But it came back, and ended down just seven points to close at 10359. The Nasdaq fell a fraction of a point to close at 2249.

    A batch of new numbers raised more questions today about where the U.S. economy is headed.

    The latest data on jobs, housing and manufacturing underscored concerns that the recovery may be losing steam at the year's midpoint. In manufacturing, the Federal Reserve reported factory output fell last month, after three months of growth. At the same time, new claims for jobless benefits fell to the lowest in nearly two years. But it was mostly due to seasonal factors.

    Meanwhile, the private firm RealtyTrac reported 528,000 home foreclosures in the first six months of 2010. The company warned that lenders could repossess more than a million homes by year's end, a new record. At that rate, it could take until 2013 to work through the backlog of repossessed properties.

    President Obama focused on the broad economic picture as he spoke at the groundbreaking of a new factory in Holland, Michigan.

  • U.S. PRESIDENT BARACK OBAMA:

    The progress we've made so far is not nearly enough to do — undo the enormous damage that this recession caused. And I have said since the first day I took office, it's going to take time to reverse the toll of the deepest downturn in a generation.

  • HARI SREENIVASAN:

    There was also word that even China's powerhouse economy may be slowing. The world's third largest economy grew more than 10 percent in the year's second quarter, but that was down from nearly 12 percent earlier this year. Even a slight reduction in China's growth could hold back any global recovery.

    In Iran, at least 21 people were killed and more than 100 wounded in a pair of suicide bombings today. The target was a Shiite mosque in the southeastern city of Zahedan. Iranian news reports said a number of elite Revolutionary Guards were among the dead. A Sunni rebel group claimed responsibility. It said the bombings were retaliation for the recent hanging of its leader.

    U.S. forces in Iraq have handed over the last prison under their control. Camp Cropper is on the outskirts of Baghdad. At one time, it held members of Saddam Hussein's ousted regime. In the handover ceremony today, the U.S. general in charge of detainee centers gave the Iraqi minister of justice the symbolic key to the prison, but he said the U.S. will still hold some detainees.

  • MAJ. GEN. JERRY CANNON, U.S. Army:

    In the 200 that we are holding, there are former regime elements. There are al-Qaida. There are some very dangerous detainees. And the government of Iraq at this point in time has asked us to continue to hold onto them. We both, in partnership, are very interested in a safe and stable Iraq. And so timing is everything.

  • HARI SREENIVASAN:

    U.S. officials have handed over 55 former members of Saddam's regime in the last year. One-time Foreign Minister Tariq Aziz was transferred to Iraqi custody this week.

    Argentina is now the first Latin American country to legalize gay marriage nationwide. The National Senate debated until the wee hours of the morning, when a vote was finally called — 33 lawmakers were in favor and 27 against. Crowds of supporters celebrated outside, while protesters objected. President Cristina Fernandez is expected to sign the law within days.

    The Vatican today issued new rules on handling claims of sexual abuse by the Roman Catholic clergy. The rules extend the church's statute of limitations on 20 years for those claiming abuse. But there was no reference to bishops reporting abuses to police. Advocates for victims of abuse said the measures do not go far enough.

    A heat wave scorched much of Northern Europe again today. From Russia to Western Germany, unusually warm temperatures hovered in the mid-90s. Peopl e sought relief in city sprinklers and on Baltic city — Baltic Sea beaches. Czech and Polish authorities had to postpone road repairs due to melting pavement. The heat also added to Russia's worst drought in a century, with up to 25 million acres of crops destroyed.

    Health care in North Korea is in a state of crisis. That's according to a new Amnesty International report today. It's based on interviews with more than 40 North Korean defectors. The human rights group told of amputations performed without anesthesia and spreading disease tied to chronic malnutrition.

    Archaeologists in New York City have discovered the hull of a centuries- old ship at the World Trade Center site. Workers uncovered curved timbers this week during construction. The 32-foot-long ship is thought to be at least 200 years old. It may have been used as landfill to expand the island of Manhattan into the Hudson River.

    Those are some of the day's major stories — now back to Jeff.