Wednesday's Business Highlights
For Nov. 6, 2013
Wednesday, November 6, 2013
Here are business news highlights for Wednesday, Nov. 6, 2013.
User burnout could threaten Twitter’s prosperity
LOS ANGELES (AP) — They loved it. Now they hate it.
A growing number of celebrities, athletes and self-promoters are burnt out and signing off of Twitter. Some people built big audiences on the short messaging service only to have their followers turn against them. Others complain that tweets that once drew lots of attention now get lost in the noise.
As Twitter Inc. prepares to go public this week, the company is selling potential investors on the idea that its user base of 232 million will continue to grow along with the 500 million tweets that are sent each day. The company’s revenue depends on ads it inserts into the stream of messages. But Wall Street could lose its big bet on social media if prolific tweeters lose their voice.
Why a spike in Oct. unemployment may not be so bad
WASHINGTON (AP) — The jobs report for October due out Friday may be bleak. It might even be scary. The unemployment rate could jump by the most in three years. Hiring may slow from an already weak pace.
The ugly figures will reflect the government’s partial shutdown, which coincided with 16 days in October. The trends for the job market will likely reverse themselves in coming months.
Economists have all but thrown up their hands trying to forecast Friday’s figures or to suggest what they might mean. However the numbers turn out, the distortions mean the monthly jobs data will be less useful in gauging the economy’s health than they normally are.
Gov’t to sell Treasury security with variable rate
WASHINGTON (AP) — The government says that it will begin selling Treasury securities next year that have variable interest rates. It’s the first new Treasury security in 17 years.
Treasury officials said Wednesday that the initial offering on Jan. 29 will be in a range of $10 billion to $15 billion. Auctions will occur each month. The securities will have a two-year maturity and the rate will be allowed to go up or down. It will be pegged to rates on three-month Treasury bills.
The government expects more investors will be drawn to the prospect of earning higher yields if rates go up. And it believes the attractiveness of the new security will offset any risk of having to pay more to borrow funds.
500 year-old shipyard, home of Royal Navy, to shut
LONDON (AP) — BAE Systems, Britain’s largest military shipbuilder, has announced a restructuring plan that will cut 1,775 jobs and potentially close a shipyard that has operated for five centuries.
Since the time of the Tudors, the shipyard in Portsmouth, England, built warships that helped Britain rule the waves and create an empire. On Wednesday, the yard’s workers learned the site will be shut.
Portsmouth, the home of the Royal Navy’s command, will be hit hardest by the changes and stop building military ships altogether. Shipyards Glasgow and Rosyth in Scotland will face fewer cuts. The decision was all the more charged because Scotland, where all of Britain’s military shipbuilding will be concentrated, will vote next year on whether to become independent.
Defense Secretary Philip Hammond, who broke the news of the cuts to Parliament, said there was no getting around the fact that times had changed. Shipbuilding is an increasingly competitive market, particularly in the military sector, where governments are cutting down on procurement costs. He said it is simply a “fantasy” to think that Britain’s ship builders could experience a renaissance.
Swiss probe metals refiner over Congo gold
GENEVA (AP) — Swiss prosecutors confirmed Wednesday that a criminal investigation has been opened against one of the world’s largest processors of precious metals over allegations that it laundered gold obtained through war crimes.
Earlier this week, the Geneva-based campaign group TRIAL announced that it had filed a criminal complaint against Swiss refiner Argor-Heraeus, claiming the company processed three tons of gold ore between 2004 and 2005 that was obtained by an unlawful armed group through pillaging in the Democratic Republic of the Congo.
The Federal Prosecutors’ Office in Bern confirmed it has examined the complaint and has decided to open a formal probe against the company over suspected money laundering in connection with a war crime and complicity in war crimes.
Privately-owned Argor-Heraeus denies the accusations and said previous investigations by Swiss authorities had already cleared it of all allegations, which were first aired in a report by a panel of U.N. experts on Congo in 2005.
Dish to close rest of its Blockbuster stores in US
SAN FRANCISCO (AP) — The final curtain is falling on the remaining Blockbuster video-rental stores that Dish Network Corp. runs in the U.S.
About 300 Blockbuster locations scattered around the country will be closed by early January. But 50 franchised stores will remain open in the U.S. As part of Dish Network’s retreat, Blockbuster’s DVD-by-mail service is also shutting down next month.
The cost-cutting measures culminate a Blockbuster downfall that began a decade ago with the rise of Netflix’s DVD-by-mail service, followed by the introduction of a subscription service that streams video over high-speed Internet connections.
Google: barges will be interactive learning space
Internet giant Google says it is exploring using two large barges on the East and West coasts as interactive learning centers.
A statement released Wednesday from Google’s press center helps end weeks of speculation about the purpose of structures on two barges, one being built in the San Francisco Bay, another now floating off Portland, Maine.
Google has been building a four-story structure in the heart of the San Francisco Bay for several weeks, but managed to conceal its purpose by constructing it on docked barges instead of on land, where city building permits and public plans are mandatory. The East Coast barge, built in a New London, Conn., harbor in July was recently towed to Maine.
The Dow Jones Industrial average rose 128.66 points, or 0.8 percent, to close at 15,746.88. The Standard & Poor’s 500 index rose 7.52 points, or 0.4 percent, to 1,770.49. The Nasdaq composite fell 7.92 points, or 0.2 percent, to 3,931.95.
Benchmark U.S. crude for December delivery gained $1.43 to close at $94.80 a barrel on the New York Mercantile Exchange. Wholesale gasoline added 3 cents to $2.55 a gallon. Heating oil rose 1 cents to $2.87 a gallon. Natural gas gained 3 cents to $3.50 per 1,000 cubic feet.
Brent crude, the international benchmark, fell 9 cents at $105.24 a barrel on the ICE Futures exchange in London.
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