Wednesday's Business News
For Dec. 4, 2013
Wednesday, December 4, 2013
Here are business news highlights for Wednesday, Dec. 4, 2013.
Services send mystery boxes of socks, sex toys
NEW YORK (AP) — Sex toys. French films. Star Wars action figures. Erotic photos.
What do these things have in common? They're the gifts that keep on giving — about every month.
Dozens of online subscription businesses have popped up offering to ship boxes of different goodies within a given niche or theme, like makeup or travel, each month. Most often, the exact products remain a mystery until they're shipped.
These monthly subscriber services have gained fans among those who appreciate novelty and surprise. But as their popularity has grown, the list of products they offer has gone from ordinary (Think: hair products) to really niche (Think: black socks) to naughty (Think: vibrators).
Overall, subscription services account for less than one percent of the nation's $231 billion online business, excluding the movie subscription service Netflix, Forrester Research estimates. But experts say they are poised to do well during the holiday season because there aren't a lot of must-have gifts on people's wish lists.
EU fines global banks $2.3 billion for market rigging
AMSTERDAM (AP) — The European Commission has fined a group of major global banks a total of 1.7 billion euros ($2.3 billion) for colluding to profit from the manipulation of key interest rates.
The banks that received fines, which include JPMorgan, Citigroup and Deutsche Bank, are accused of manipulating for years European and Japanese benchmark interest rates that affect hundreds of billions of dollars in contracts globally, from mortgages to credit card bills.
Switzerland's UBS bank escaped a whopping 2.5 billion-euro fine only because it informed the Commission, the EU's executive arm, of a cartel's existence and cooperated with the subsequent investigation.
US trade deficit drops to $40.6 billion in October
WASHINGTON (AP) — The U.S. trade deficit fell in October, helped by America's energy boom that lifted overall exports to an all-time high.
The trade gap narrowed to $40.6 billion in October, the Commerce Department said Wednesday. That's 5.4 percent lower than the September gap of $43 billion, which was higher than initially estimated.
Exports rose 1.8 percent to a record $192.7 billion, buoyed by a 6 percent gain in petroleum exports. Imports rose 0.4 percent to $233.3 billion, the highest since March 2012. Oil imports rose 1.5 percent.
US service sector grows at slower pace last month
WASHINGTON (AP) — U.S. service sector firms grew in November at the weakest pace since June, evidence that cautious spending by consumers and businesses may be slowing growth.
The Institute for Supply Management said Wednesday its service-sector index fell to 53.9 in November, down from 55.4 in October. Any reading above 50 indicates expansion. The index hit an eight-year high of 58.6 in August.
A measure of sales fell sharply last month to 55.5 from 59.7. While that is still above 50, the decline suggests consumers were reluctant to spend.
US new-home sales jump in October after September drop
WASHINGTON (AP) — Americans ramped up purchases of new homes in October after three months of soft sales, evidence that the housing recovery is improving fitfully.
Sales of new homes grew 25.4 percent to a seasonally adjusted annual rate of 444,000, the Commerce Department said Wednesday. That was the largest monthly percentage increase since May 1980.
But the increase came after sales had fallen 6.6 percent in September to a 354,000 annual rate, the weakest since April 2012. And sales in August and July were revised lower to 379,000 and 373,000, respectively.
Survey: US companies add 215,000 jobs, most in year
WASHINGTON (AP) — A private survey shows U.S. businesses last month added the most jobs in a year, powered by big gains in manufacturing and construction.
Payroll processor ADP said Wednesday that companies and small businesses added 215,000 jobs in November. And ADP said private employers added 184,000 jobs in October, much stronger than its initial estimate of 130,000.
The ADP numbers cover only private businesses and often diverge from the government's more comprehensive report. Last month, the Labor Department said private businesses added 212,000 jobs in October. The Labor Department will report on November job growth Friday.
Federal Reserve: US growth stays moderate during shutdown
WASHINGTON (AP) — A Federal Reserve survey released Wednesday found that the U.S. economy held steady during the 16-day partial government shutdown, growing moderately in most regions from October through late November.
The Fed said seven of its 12 banking districts described growth as moderate. Four — Philadelphia, Chicago, Kansas City and San Francisco — said growth was modest. Boston said its regional economy continued to expand.
Manufacturing strengthened in most districts, helped by more production of cars, trucks and high-tech products. Consumers boosted spending in most regions, and retailers were hopeful yet cautious about the holiday shopping season. Hiring improved in five of the districts; the other seven reported little change.
3 banks failed to meet some relief tests: monitor
WASHINGTON (AP) — Three of the biggest U.S. lenders failed this year to meet some requirements for giving relief to struggling homeowners in a $25 billion settlement over foreclosure abuses, according to an official.
The monitor overseeing the settlement said in a report issued Wednesday that Bank of America, JPMorgan Chase and Citigroup together failed to meet seven of the 29 requirements tested in the first half of the year.
The failures include requirements to notify borrowers of any missing documents in mortgage modification applications within five days of receipt and to give borrowers accurate information before foreclosure is started. Monitor Joseph Smith said the banks had taken steps to correct the errors.
Carl Icahn ups ante in crusade for Apple buyback
SAN FRANCISCO (AP) — Activist investor Carl Icahn is seeking the support of Apple shareholders as he tries to pressure the iPhone maker into spending more of its cash to buy back the company's stock.
Icahn is upping the ante with a shareholder proposal that he submitted to Apple last week. The investor disclosed the move in a Wednesday post on his Twitter account and elaborated on his reasoning in an exclusive interview published by Time magazine.
Apple confirmed it has received Icahn's proposal, but didn't reveal anything about its content.
Newsweek to start printing again next year
NEW YORK (AP) — Paper copies of Newsweek will again roll off the presses starting next year.
Editor-in-Chief Jim Impoco says the news magazine's owners, IBT Media, want to "hit the reset button" and move to a business model where a weekly print magazine would be mainly supported by subscription fees instead of advertising.
Impoco said in an interview Wednesday that officials haven't decided how much the magazine will cost, but it's expected to be less than $10 per issue.
After struggling for years, Newsweek ceased print publication at the end of 2012.
The Dow Jones industrial average fell 24.85 points, or 0.2 percent, to 15,889.77. The S&P 500 index fell 2.34 points, or 0.1 percent, to 1,792.81. The Nasdaq composite edged up 0.80 point to 4,038.
Benchmark crude oil for January delivery rose $1.16 to $97.20 a barrel on the New York Mercantile Exchange. Brent crude, a benchmark for international oils, dropped 74 cents to $111.88 a barrel on the ICE Futures exchange in London.
Wholesale gasoline was flat at $2.72 a gallon. Heating oil fell 1 cent to $3.06 a gallon. Natural gas lost 2 cents to $3.96 per 1,000 cubic feet.
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