Yellen: Too early to determine impact of global developments
WASHINGTON (AP) — Federal Reserve Chair Janet Yellen cautioned Thursday that global economic pressures pose risks to the U.S. economy but said it’s too soon to know whether those risks are severe enough to alter the Fed’s interest-rate policies.
Yellen said the Fed will determine at its next meeting in March how much economic weakness and falling markets around the world have hamstrung U.S. growth. And for a second day, Yellen was asked about the possibility that the Fed would use negative interest rates as a way to give the economy more support.
She repeated that the Fed had studied the prospect of deploying negative rates in 2010 but had decided then not to use them to try to boost the economy. But she said the Fed thought it should study the issue again now that other central banks, including in Europe and Japan, are using negative rates to try to step up lending and energize growth.
Zika virus has phones ringing at pest control, travel firms
NEW YORK (AP) — Some small U.S. companies are getting an influx in calls — and in some cases, unexpected business— due to fears about the Zika virus.
The virus often produces either no symptoms or mild ones like fever in adults, but an outbreak in Brazil has been linked to a rare birth defect that causes a newborn’s heads to be smaller and brain development issues. Outbreaks also have been reported in parts of Africa, Southeast Asia, the Pacific Islands, and the Americas.
Pest control companies in Texas are getting a surge in business because of concerns that mosquitoes bearing the Zika virus will arrive from neighbouring Mexico. The companies are already spraying homes, schools and other properties; usually they don’t start until April.
Questions grow over banks as profit warnings pile up
PARIS (AP) — Questions are growing over the financial health of banks, particularly in Europe and the U.S., as they face a toxic mix of low economic growth, bad loans and squeezed earnings.
France’s Societe Generale became Thursday the latest bank to issue a confidence-shattering profit warning, which helped trigger a new sell-off in financial stocks. The bank saw its share price stumble 12 per cent and major rivals like Deutsche Bank and UniCredit saw losses of nearly 10 per cent.
European banks are not the only ones to suffer. Japanese bank Mitsubishi Financial fell 7 per cent on Thursday. In the U.S., Morgan Stanley, Citigroup and Bank of America are down more than 30 per cent so far this year.
Morgan Stanley to pay $3.2 billion over contributors to 2008 crisis
ALBANY, N.Y. (AP) — Morgan Stanley will pay $3.2 billion in a settlement over bank practices that contributed to the 2008 financial crisis, including misrepresentations about the value of mortgage-backed securities, authorities announced Thursday.
The nationwide settlement, negotiated by the working group appointed by President Barack Obama in 2012, says the bank acknowledges that it increased the acceptable risk levels for mortgage loans pooled and sold to investors without telling them. Loans with material defects were included, packaged into the securities and sold.
Morgan Stanley said it previously reserved funds for all related amounts. The bank acknowledged an agreement in principle for the federal settlement of $2.6 billion in a regulatory filing a year ago.
Applications for US jobless aid fell sharply last week
WASHINGTON (AP) — Fewer Americans applied for unemployment benefits last week in a sign of a stable job market despite the slowing global economy hitting stocks and commodities.
Weekly applications for jobless aid fell 16,000 to a seasonally adjusted 269,000, the Labor Department said Thursday. The four-week average, a less volatile measure, declined slightly to 281,250. The number of people receiving benefits has declined 4.6 per cent to 2.2 million from a year ago.
Average US rate on 30-year mortgage falls to 3.65 per cent
WASHINGTON (AP) — Average long-term U.S. mortgage rates fell this week for the sixth straight week as markets around the globe continued the whipsaw trading that has marked this year so far.
Mortgage buyer Freddie Mac said Thursday the average rate on a 30-year fixed-rate mortgage dropped to 3.65 per cent this week, down from 3.72 per cent last week and close to its low point last year of 3.59 per cent.
The average rate on a 15-year fixed-rate mortgage eased to 2.95 per cent from 3.01 per cent last week.
PepsiCo’s revenue in North America climbs, helped by pricing
NEW YORK (AP) — PepsiCo said revenue for its North American snacks and drinks units rose in the fourth quarter, boosted by pricing.
The maker of Frito-Lay chips and Tropicana juice has been retooling its product lineup and rethinking pricing to fetch more money from shoppers. The strategies include the introduction of new lines of Gatorade and Mountain Dew Dewshine, which comes in glass bottles that people might feel is worth a higher price.
The focus on finding novel ways to extract more money from shoppers comes as major packaged food and beverage makers face slowing growth in saturated markets like the United States. Coca-Cola Co., for instance, has been pushing its mini-cans that are seen as more premium offerings, and even featured the 7.5-ounce can in its Super Bowl ad.
Reynolds American 4Q profit jumps, but misses forecasts
NEW YORK (AP) — Cigarette maker Reynolds American’s fourth-quarter profit shot up 89 per cent compared to the final quarter of 2014, when earnings fell due to some one-time costs.
The parent of Camel and Pall Mall cigarette maker R.J. Reynolds said Thursday that it earned $279 million in the three months that ended Dec. 31. That’s up from $148 million a year ago when it booked pension charges and other costs ahead of last year’s closing of its $25-billion takeover of Newport seller Lorillard Inc.
Results adjusted for one-time items totalled 48 cents per share in the most recent quarter, and revenue jumped 43 per cent to $3.05 billion, spurred in part by the Lorillard deal.
Trump settles lawsuit against Univision
NEW YORK (AP) — Donald Trump and Univision said Thursday they have resolved the lawsuit that the Republican presidential contender filed after the company decided last summer not to broadcast the Miss Universe and Miss USA pageants.
Trump owned the pageants at the time, but has since sold them. Univision dropped plans to televise the contests following remarks Trump made about Mexicans during the announcement of his presidential candidacy. The New York developer, making a promise to build a wall on the nation’s Southern border, had said that Mexicans had sent some criminals illegally into the U.S.
Univision claimed Trump had “offended millions” with his comments. Trump fired back with a $500 million lawsuit claiming the Spanish-language broadcaster unjustly broke a contract.
Trump said the two sides had amicably resolved their differences, and neither side gave details about the settlement.
Myspace still exists? Yes, and now Time Inc. owns it
NEW YORK (AP) — Myspace still exists?
It does, and the company that owns the once-ubiquitous social network is being bought by Time Inc. to help the magazine publisher target ads.
The parent company, Viant, says it can give marketers access to more than 1.2 billion users. Time Inc. will not say what it paid.
Myspace peaked in 2008 with some 76 million U.S. visitors before losing ground to Facebook. News Corp. sold the company to Justin Timberlake and other investors in 2011 for $35 million. Today, it is an entertainment-focused site that plays music videos and songs.
The Dow Jones industrial average dropped 254.56 points, or 1.6 per cent, to 15,660.18. The average had been down as much as 411 points. The Standard & Poor’s 500 lost 22.78 points, or 1.2 per cent, to 1,829.08. The Nasdaq composite fell 16.76 points, or 0.4 per cent, to 4,266.84.
Benchmark U.S. crude oil fell for the sixth day in a row, sliding $1.24, or 4.5 per cent, to $26.21 a barrel in New York. Brent crude, a benchmark for international oils, dropped 78 cents, or 2.5 per cent, to $30.06 a barrel in London. Natural gas fell 5 cents, or 2.5 per cent, to $1.99 per 1,000 cubic feet. Wholesale gasoline was little changed at 94 cents a gallon and home heating oil was flat at 98 cents a gallon.