Bets on Spanish bailout lift Wall Street

NEW YORK (Reuters) - U.S. stocks were flat to slightly higher on Tuesday on bets Spain will soon ask the euro zone for a bailout, moving the region a step closer to resolving its three-year-old debt crisis.

Major averages were only marginally higher, however, as the equity market has been unable to sustain a rally in recent days.

If Madrid were to seek a rescue, it would trigger European Central Bank buying of its bonds and help to ease U.S. investors' nervousness about the euro zone's impact on the U.S. economy.

"I think the market feels that we are closer to some type of action and resolution in terms of the Spanish problem," said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont. "That's certainly helping markets this morning."

The Dow Jones industrial average <.DJI> slipped 20.69 points, or 0.15 percent, to 13,494.42. The Standard & Poor's 500 Index <.SPX> gained 0.61 point, or 0.04 percent, to 1,445.10. The Nasdaq Composite Index <.IXIC> added 3.00 points, or 0.10 percent, to 3,116.53.

In spite of Spain's apparent readiness to ask for help, Germany has signaled that Madrid should hold off on making its request, according to European officials on Monday.

JPMorgan Chase & Co was sued by New York's attorney general on Monday in the first action to come out of a working group created by President Barack Obama to go after wrongdoing that led to the financial crisis. The civil fraud lawsuit centered on mortgage-backed securities packaged and sold by Bear Stearns, which JP Morgan acquired.

JPMorgan shares edged down 0.8 percent to $40.65.
Chrysler said September vehicle sales were up 12 percent from a year earlier and the highest for the month since 2007. Shares of majority stakeholder Fiat rose 1.2 percent in Milan.

PetSmart Inc shares added 2.4 percent to $69.15 after S&P Dow Jones Indices said after Monday's close the company will replace Sunoco in the S&P 500 on October 4.

Shares of Express Inc fell 17.5 percent to $12.39 after the apparel retailer revised its third-quarter outlook.

Shares of ArQule Inc tumbled 57 percent to $2.14 after the biotechnology company and Japan's Daiichi Sankyo <4568.T> said they will end a late-stage trial of their experimental lung cancer drug.

At least 20 injured in California train crash

HANFORD, Calif. (AP) — Repair crews worked into Tuesday removing two derailed cars and a locomotive and to repair damaged railroad tracks after an Amtrak train carrying about 169 passengers derailed in a collision with a big rig truck in California's Central Valley.

At least 20 passengers suffered minor to moderate injuries, authorities said.

The Monday afternoon crash occurred when the driver of the tractor-trailer carrying cotton trash failed to yield and hit the train, authorities said. The impact pushed the two passenger cars and the locomotive off the tracks south of Hanford, a farming town.

Passenger Edmund Sanders, who said he was riding the train because he had missed a Greyhound bus from Fresno to his home in Los Angeles, was in one of the middle cars when it collided with the truck.
"Right after it happened I see all these people with a terrified look on their faces, all trying to get to the front of the train," Sanders told the Fresno Bee.
"I tried as best I could to try and calm people down and help them get off that train. I really think that God has his hands on that train today," he said.
The train traveled about 600 feet after the collision before hitting a switchback and derailing, according to California Highway Patrol Officer Scott Harris.
Officials have not determined how fast the train or the truck were going, but the average speed for Amtrak through the area is 70 to 80 mph, while the speed limit on the roadway where the truck was traveling is 55 mph, Harris said.
After the crash, metal pieces from the truck could be seen inside the train, which was covered by cotton seeds. Several pieces of luggage were also scattered around the area.
Kings County Assistant Sheriff Dave Putnam described the injuries to passengers as bumps, bruises, scrapes and possibly broken bones.
The crash occurred at a crossing that was equipped with gates to stop traffic, Putnam said.
Eight of the injured passengers were taken to Adventist Medical Center in Hanford and five more were expected, said hospital spokeswoman Christine Pickering. She did not provide details on the extent of their injuries.
"We did call in additional physicians and staff," Pickering said.
Four additional injured passengers were taken to nearby Adventist Medical Center in Selma, while seven people were taken to Community Regional Medical Center in Fresno, officials said.
The train was on its way from Oakland to Bakersfield, according to Amtrak. It had four rail cars and a locomotive.
The truck driver suffered minor injuries, according to California Highway Patrol spokesman Jerry Pierce. Investigators will try to determine if the crash was caused by driver error, a malfunctioning crossing arm, or something else, the CHP said.
"This is a big, huge chaotic scene with lots of agencies involved," Pierce said.
Pierce said the other passengers were taken to an auditorium in Hanford, where they boarded another train and continued to their destinations or they were picked up by family members.
All train service through the area was halted after the crash.
Initially, Amtrak had expected to resume service through the area in time for the morning rush hour, but Amtrak spokesman Cliff Cole said late Monday that a bus bridge would carry passengers between Bakersfield and Hanford until at least 7:15 a.m.
"We will wait for further word from BNSF to see if we need to make further adjustments," Cole said.
BNSF Railway Co., which operates the tracks, expected to have the tracks open by 7 a.m., spokeswoman Lena Kent said.

Meanwhile, a second accident, this one around 4 p.m. Monday about 10 miles away involving a freight train and a tractor-trailer, left a truck driver with major injuries, the CHP said.

Texas Driver Accused of Crashing $1M Bugatti for Insurance

ABC News' John Schriffen reports:

A trial is set to begin later this month after an insurance company filed a lawsuit against a Texas man accused of intentionally driving his $1 million Bugatti car into a lagoon to collect on the insurance policy.

At the time of the crash three years ago, the car's driver, Andy House, told police he dropped his phone while driving down a highway near Houston. House told police that when he looked up, he saw a pelican and swerved off the road and into a lagoon in Galveston, Texas

Nearby motorists, who were fascinated with the 2006 Bugatti Veyron, caught the entire accident on tape and posted it to YouTube.

"The Bugatti is one of the rarest cars in the world produced today," General Manager Tim O'Hara of Bugatti Beverly Hills said. "What makes them so expensive is the technology involved in building it."

Three weeks before the accident, Philadelphia Indemnity Insurance Co. said, it issued a $2.2 million policy on the Bugatti, one of a few hundred made. The insurance company is using the video as evidence to say House committed fraud because there was no pelican in that now-infamous video, according to the company.

The insurance company is also saying that House, who reportedly owns Performance Auto Sales, made no attempts to brake and he "intentionally drove the Bugatti into the lagoon to destroy the car and collect proceeds approximately twice the value of the car."

Philadelphia Indemnity says it has an informant who alleges that House offered him cash to steal the car and then set it on fire, according to court documents.

House is counter-suing, saying the company owes him $2.2 million for damages to the rare car. He declined a request for an interview, but in a statement to ABC News, his attorney said, "we will not try our case in the media, but will rely on the facts and evidence admitted during the trial of the matter."

ABC News legal analyst Dana Cole said, "This video is exhibit A. It is the critical evidence that the insurance company is relying on to void this insurance policy. It is extremely rare to have evidence like this."