FINANCIAL & BUSINESS NEWS
from Eyewitness News Online
BUSINESS UPDATELast Update: May 18, 2013 1:00 PM EDT
Stocks rise amid hopeful signs...GM milestone...Facebook flop anniversary
On Wall Street, stocks closed higher for a fourth straight week. Indexes are at record levels after surging this year on optimism about the economy and record corporate earnings. The market is also being supported by ongoing stimulus from the Federal Reserve, which is keeping long-term borrowing costs at historically low levels. The Dow Jones industrial average rose 121 points. The S-and-P 500 index rose nearly 16 points.
Shares of General Motors reached an important milestone on Friday, closing above their initial public offering price of $33 for the first time in more than two years. GM shares reached $33.77 before slipping back to close at $33.42, up 3.2 percent. The auto giant sold shares to the public for $33 in a November 2010 IPO, but they've traded below that price since May 4, 2011.
Today marks the one-year anniversary of Facebook's debut on the stock market — which turned out to be a big flop. Facebook's stock finished its first day of trading just 23 cents higher than its $38 IPO price. It hasn't been that high since. Despite its disappointing stock market performance, the social network has delivered strong financial results. Net income increased 7 percent to $219 million in the most recent quarter, compared with the previous year, and revenue was up 38 percent to $1.46 billion.
Yahoo may be on the verge of closing its biggest acquisition during the 10-month reign of CEO Marissa Mayer as she tries to attract more traffic and advertisers to the Internet company's website and mobile applications. Yahoo's board of directors will meet Sunday evening to consider approving a $1.1 billion acquisition of online content-sharing site Tumblr in a deal Mayer negotiated, according to the technology news site All Things D. If Yahoo's board signs off, the deal could be announced Monday.
Sonic the Hedgehog is rolling with Nintendo. Sega says it will exclusively release the next three games starring the popular blue critter on Nintendo platforms. The first title will be called "Sonic Lost World" and is set for release on the Wii U and Nintendo 3DS later this year. The original fast-paced side-scrolling "Sonic the Hedgehog" debuted in 1991. The twirling, ring-hoarding hedgehog became Sega's mascot and a video-game icon rivaling the likes of Mario and Pac-Man.
Gauge of US economy's future health up in April
A measure of the U.S. economy's future health rose in solidly in April, buoyed by a sharp rise in applications to build new homes and apartments.
The Conference Board says its index of leading indicators increased 0.6 percent last month to a reading of 95. That followed a 0.2 percent decline in March.
The index is intended to signal economic conditions three to six months out.
Conference Board economist Ken Goldstein said the index is 3.5 percent higher at an annual rate than it was six months ago, suggesting expansion for the economy. He said the biggest risk at the moment is the drag from cuts in federal spending.
Unemployment falls in 40 US states, rises in 3
Solid hiring helped push down unemployment rates in 40 U.S. states last month, the most since November. The declines show job markets are improving in most areas of the country.
The Labor Department says unemployment rates only rose in Louisiana, Tennessee and North Dakota. Rates were unchanged in seven states.
California, New York and South Carolina all reported the largest declines in April unemployment. Each states rate fell by 0.4 percentage points.
The report noted that 30 states added jobs in April; 18 reported fewer jobs.
Nationwide, employers added 165,000 jobs in April and the unemployment rate fell to a four-year low of 7.5 percent. The economy has added an average of 208,000 jobs a month since November. That's up from only 138,000 a month in the previous six months.
GM stock rises above $33 for first time in 2 years
Shares of General Motors are trading above $33 for the first time in over two years.
The automaker's stock reached $33.58 Friday morning before pulling back to $33.50, up 3.4 percent, at midday. It's the first time the stock has risen above GM's initial public offering price since May 4, 2011. GM sold shares for $33 in a November 2010 IPO.
The shares are up almost 14 percent this year, due largely to strong first-quarter earnings, better prospects in Europe and a rally in U.S. stock markets.
The European automakers association said Friday that registrations rose last month for the first time in 18 months. European Union sales rose 1.7 percent, but GM sales fell 4.5 percent.
GM has lost money in Europe for more than a dozen years.
China: Cadillac recalling SUVs to fix wheel nuts
China's product safety agency says General Motors Co.'s main Chinese joint venture is recalling Cadillac SUVs to correct a problem with nuts that hold their wheels in place.
The General Administration of Quality Supervision, Inspection and Quarantine said Friday that Shanghai GM will recall 2,653 imported Cadillac SRXs.
The agency said torque might cause nuts on the wheels to loosen. It said the nuts will be adjusted and tightened.
It was not immediately clear if the problem was limited only to such models in China.
The incident is the second recall of vehicles by a global automaker in China in two months after Volkswagen AG said in March it needed to fix gearboxes on 384,000 vehicles.
NATURAL GAS-EXPORT TERMINAL
APNewsBreak: Energy Dept. backs Texas LNG plan
The Energy Department has given conditional approval to a Texas company that wants to export liquefied natural gas, the second LNG export project the Obama administration has approved as it faces a wave of export requests.
The permit would allow Freeport LNG Expansion L.P. to export up to 1.4 billion cubic feet of natural gas per day from its terminal near Freeport, Texas, south of Houston. It is subject to environmental review and final regulatory approval.
The approval Friday follows Energy Department authorization for the Sabine Pass LNG Terminal in Louisiana in 2011.
Energy companies are seeking federal permits for 20 export projects that could handle as much as 29 billion cubic feet of natural gas a day as production booms as a result of improved drilling techniques.
Ousted IRS chief says it wasn't about politics
The ousted head of the Internal Revenue Service is apologizing to Congress for his agency's tougher treatment of tea party and other conservative groups seeking tax-exempt status.
At a hearing that saw lawmakers from both parties harshly criticize his agency, Steven Miller conceded that "foolish mistakes were made" by IRS officials trying to handle a flood of groups seeking tax-exempt status.
But he told the House Ways and Means Committee that the process that resulted in conservatives being targeted, "while intolerable, was a mistake and not an act of partisanship."
Tea party tax returns show activism on a budget
Dozens of tea party groups and other conservative organizations of the kind subjected to improper scrutiny by the Internal Revenue Service operate with small budgets and rarely displayed overt partisan activities.
The Associated Press reviewed the public tax filings by 93 such activist groups.
Tax law experts say that a few of the groups built million-dollar operations and political ties that could have been legitimate grounds for IRS investigation.
Only 21 of the 93 groups the AP reviewed reported annual gross receipts higher than $25,000 between 2009 and 2011.
The median income for all the groups was just $16,700 a year. That figure includes the nation's biggest tea party group, the Georgia-based Tea Party Patriots Inc. It took in $20.2 million in 2012.
BUDGET BATTLE-AIR SHOWS
Dark clouds hang over air shows after budget cuts
The automatic budget cuts that grounded the Navy Blue Angels and Air Force Thunderbirds are taking a toll on performers, air show announcers, concessionaires, vendors and others who depend on air shows and the millions of spectators.
All told, the International Council of Air Shows says 64 air shows that depended on military participation have canceled this season.
Those included Wings over Wayne at Seymour Johnson Air Force Base in North Carolina and Skyfest 2013 at Fairchild Air Force Base in Washington state this weekend.
The council says air shows draw nearly three times more spectators than NASCAR events and pump about $1.5 billion into the economy and. Aerobatic pilot Sean Tucker describes the air shows as "the Indianapolis 500, the Fourth of July, and 'Top Gun' rolled into one."
Syrian hackers compromise FT blogs, Twitter feeds
The Financial Times says that several of its blogs and Twitter feeds have been compromised by hackers. The Syrian Electronic Army, a pro-government group which has repeatedly attacked Western media organizations, has claimed responsibility.
A few of the FT's dozens of Twitter feeds were compromised Friday and broadcast messages supporting Syrian President Bashar Assad. One described the Syrian rebel group Jabhat al-Nusra as terrorists and linked to a graphic video of a hooded man shooting kneeling prisoners in the back of the head.
The hackers have apparently spent much of the past 24 hours trying to break into the FT's system.
An internal company memo distributed Thursday and seen by The Associated Press warned FT employees not to click on suspicious emails.
Bloomberg appoints ex-IBM CEO as privacy advisor
Bloomberg LP, the financial news and information service, says it's appointing Samuel Palmisano, the former CEO of IBM, as an independent adviser on its privacy and data standards.
The move comes a week after revelations that Bloomberg journalists had access to some information on customers' use of Bloomberg's data terminals, including when they last logged in.
The company apologized for the breach of privacy. The Federal Reserve and the European Central Bank are looking into Bloomberg's use of data.
Palmisano will review Bloomberg's practices and policies for client data and advise on changes, the company says.
Bloomberg also says Clark Hoyt, an editor at Bloomberg and the former editor-at-large at The New York Times, will review the relationship between Bloomberg's news service and its commercial operations.
Former Tuesday Morning CEO sues over firing
The former CEO of Tuesday Morning has filed a discrimination lawsuit against the discount retailer, saying she was fired just months after revealing she had breast cancer.
The lawsuit by Kathleen Mason follows a discrimination filing with the Equal Employment Opportunity Commission this summer. Mason's lawyer, Rogge Dunn, says she was fired during a phone call last June, even though she had overseen the company's growth during her tenure.
Dunn said a board member even made a "caustic" comment about Mason's wig.
Tuesday Morning Corp., which sells closeout housewares and home decor, has said that Mason's termination was lawful. In announcing her termination, the Dallas-based company had said it was time to transition to a new executive who would "guide the company through its next stage."
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