Friday's Business Highlights
Friday, October 4, 2013
US housing rebound likely to handle spike in rates
LOS ANGELES (AP) — When mortgage rates began climbing in May from rock-bottom lows, Kevin Williams worried he might miss out on an opportunity.
So he listed his home in Orange County, Calif., and planned to buy a bigger house in San Diego after it sold. The process took all summer. Last week, he and his wife locked in a mortgage.
The extra time added at least $1,000 more a year than if they had secured a loan in May. Still, Williams believes they made a prudent decision.
Williams’ justification — buy now or risk paying more later — is why many brokers and analysts remain confident that the housing recovery can handle higher mortgage rates. While the jump in rates should test the strength of the recovery, analysts foresee stable sales increases over the next year for a number of reasons.
Twitter dishes tantalizing tidbits in IPO treatise
SAN FRANCISCO (AP) — Twitter, a privately held company built on blurbs, has finally laid itself bare in documents that read more like a treatise than a tweet.
The roughly 800-page filing Twitter Inc. released late Thursday on its way to an eagerly anticipated IPO contains tantalizing tidbits about its growth and its attempts to make money from its influential short messaging service.
The suspense surrounding Twitter’s IPO was heightened by the company’s decision to take advantage of a law passed last year that allows companies with less than $1 billion in annual revenue to keep their IPO documents under seal until management is ready to make formal presentations to investors.
Not all federal agencies taking a hit in shutdown
WASHINGTON (AP) — As many high-profile agencies sit idle because of the federal government shutdown, others are humming along just fine, thank you.
Many of them have escaped the fiscal ax because they pay much of their own way, or enjoy a revenue stream that’s insulated from Congress.
That means the cable bill and weekly grocery ads will still fill the mailbox, due to the stamps and other items the post office sells. Social Security checks, food stamps and some other benefits will also show up on time because they are either funded with payroll taxes or otherwise deemed necessary and paid for in ways that keep them protected from lapsed budgets.
Prospect for quick end to shutdown is remote
WASHINGTON (AP) — Prospects for a swift end to the 4-day-old partial government shutdown all but vanished Friday as lawmakers squabbled into the weekend and increasingly shifted their focus to a midmonth deadline for averting a threatened first-ever default.
“This isn’t some damn game,” said House Speaker John Boehner, as the White House and Democrats held to their position of agreeing to negotiate only after the government is reopened and the $16.7 trillion debt limit raised.
House Republicans appeared to be shifting their demands, de-emphasizing their previous insistence on defunding the health care overhaul in exchange for re-opening the government. Instead, they ramped up calls for cuts in federal benefit programs and future deficits, items that Boehner has said repeatedly will be part of any talks on debt limit legislation.
Senate Majority Leader Harry Reid, D-Nev., also said the two issues were linked. “We not only have a shutdown, but we have the full faith and credit of our nation before us in a week or ten days,” he said.
In Vegas, clubbing almost as popular as gambling
LAS VEGAS (AP) — The cannon at the Flutter Fetti booth near the front of the gambling trade show in Las Vegas last week delivered regular bursts of metallic and crepe paper cutouts, shooting them to the ceiling in big booms and carpeting the floor with shimmering hearts, stars and circles. The glittery mess outshone the slot machines and online poker touchscreens in more ways than one.
A poll conducted this year by the national gambling lobby found that 26 percent of casino-goers now skip wagering, and the city’s growing mega-clubs are threatening to become the most lucrative draw for a town built on betting.
Sin City now boasts 21 of the country’s 100 most profitable nightclubs, according to the trade publication Nightclub & Bar. The town also dominates the top 10 spots, with seven clubs bringing in more than $25 million a year. The other three clubs with earnings in that range are LIV and Mango’s Tropical Cafe in Miami Beach, and LAVO in New York City.
As clubs become increasingly important to casinos’ bottom line, programmers are competing ever more fiercely to offer partiers novelties they would never see at their local dance spot.
New Jersey’s casinos to launch Internet gambling Nov. 26
ATLANTIC CITY, N.J. (AP) — New Jersey residents and visitors will be able to start gambling online on Nov. 26, after a five-day trial period to make sure the systems operated by the city’s 12 casinos work properly.
The state Gaming Enforcement Division told The Associated Press on Friday that Atlantic City’s casinos may begin a “soft play” period on Nov. 21 for invited guests. If all goes well, the casinos can begin full Internet gambling at 9 a.m. EDT on Nov. 26.
Gamblers would have to be physically located within New Jersey’s boundaries to play. New Jersey will be the third state in the nation to offer online gambling, along with Nevada and Delaware.
Investors gobble up Potbelly shares in debut
NEW YORK (AP) — Investors gobbled up shares of Potbelly Corp. Friday, and the sandwich chain’s shares more than doubled in their debut on the Nasdaq.
The company’s initial public offering was another win for food companies going public. Shares of Sprouts Farmers Market Inc. rose 123 percent in the natural and organic grocery’s August IPO. Restaurant chain Noodles & Co.’s stock more than doubled in its June debut.
Potbelly’s stock rose $16.77, or 120 percent, to close at $30.77, after the IPO raised $105 million — more than the company had expected.
‘Hobbit’ trilogy costs $561 million so far
WELLINGTON, New Zealand (AP) — Making the movie trilogy “The Hobbit” has cost more than half a billion dollars so far, double the amount spent on the three movies in the “The Lord of the Rings” series.
That figure includes the major 266 days of filming with actors that was completed last year, although it doesn’t include an additional two months or so of “pick-up” shoots done this year. There will likely also be additional post-production costs as the next two movies are completed.
Through March 31, production had cost 676 million New Zealand dollars, or $561 million at current exchange rates, according to financial documents filed Friday in New Zealand, where the movies are being made.
Lockheed Martin to furlough 3,000 workers
BETHESDA, Md. (AP) — Lockheed Martin will furlough 3,000 employees on Monday and potentially more in coming weeks due to the government shutdown.
The defense contractor said Friday that the furloughs will affect its business nationwide and it is working closely with customers to assess the impact. It said the number of employees put on furlough will increase weekly if the shutdown continues, but did not specify how high the count could rise.
Lockheed says the furloughs include employees who are unable to work because the government facility where they perform their work is closed, as well as those whose work requires a government inspection that cannot be completed or for which the company has received a stop work order.
Tesla CEO says fire caused by impaled battery
SEATTLE (AP) — The CEO of electric car company Tesla says a battery in a Model S that caught fire this week was apparently impaled by a metal object.
Elon Musk gave more detail in a blog post Friday about the fire that became an Internet sensation and unsettled Tesla investors. He also defended the car’s battery technology.
Musk wrote in a blog post Friday that fires are more common in conventional gas-powered vehicles.
The Dow Jones industrial average closed up 76.10 points, or 0.5 percent, at 15,072.58. The Standard & Poor’s 500 index rose 11.84 points, or 0.7 percent, at 1,690.50 and the Nasdaq composite index gained 33.41 points, or 0.9 percent, at 3,807.75.
Benchmark oil for November delivery rose 53 cents to close at $103.84 on the New York Mercantile Exchange.
Brent, the benchmark for international crudes, gained 46 cents to $109.46 on the ICE Futures exchange in London.
Wholesale gasoline fell 3 cents to $2.61 per gallon. Natural gas rose 1 cents to $3.51 per 1,000 cubic feet. Heating oil was flat at $3.00 per gallon.
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