Friday's Business Highlights
For Oct. 18, 2013
Friday, October 18, 2013
Here's a roundup of business news from Friday, Oct. 18, 2013.
Season of uncertainty for stores
NEW YORK (AP) — Will Washington be the Grinch who stole Christmas?
After weeks of bickering between Congress and the White House, President Barack Obama on Wednesday signed into law a plan that ended a partial 16-day government shutdown and suspended the nation’s debt limit until early next year.
But the measure, which comes just weeks ahead of the holiday shopping season, only temporarily averts a potential default on U.S. debt that could send the nation into a recession.
Retailers hope that short-term uncertainty won’t stop Americans from spending during the busiest shopping period of the year, but they’re fearful that it will.
J.C. Penney to open on Thanksgiving
NEW YORK (AP) — J.C. Penney is opening its doors on Thanksgiving evening to kick off the holiday shopping season, as the beleaguered retailer hopes to get back in the game for the crucial selling period.
The Plano, Texas-based chain will open most of its 1,100 stores at 8 p.m. on the holiday, the same as rival Macy’s, and will be open 25 hours straight, closing at 9 p.m. the following day.
The Thanksgiving evening opening is much earlier than last year, when Penney didn’t open until 6 a.m. Friday. That made the retailer one of the laggards for the unofficial kickoff to the season.
Google stock crosses $1,000 mark after earnings
NEW YORK (AP) — Strong third-quarter results have sent Google’s stock past the $1,000 mark for the first time.
Shortly after the markets opened Friday, Google Inc. shares jumped more than 12 percent to $1,007.40 in heavy trading before edging back down to $1,000 later in the morning. The stock had never been higher than $928 in regular market trading since Google went public at $85 per share nine years ago.
Late Thursday, Google reported a 36 percent jump in third-quarter net income that beat Wall Street’s predictions. The numbers showed that while the company’s average ad prices continue to decline, they’re being offset by a larger number of people clicking on ads.
Health care law turns to social media in Illinois
CHICAGO (AP) — Inside a command center at a Chicago marketing agency, a small team of social media experts hunkers down to monitor online chatter about President Barack Obama’s health care law, answer questions on Facebook from discouraged consumers and post information and advice on Twitter.
They are holding down the fort for a $33 million ad campaign planned for Get Covered Illinois, the new health insurance marketplace that’s a cornerstone of the law, also known as “Obamacare,” in what is arguably the biggest social media campaign rolled out by the state of Illinois.
As the state-contracted agency pivots away from a full-force marketing barrage because of early technical problems with the law’s federal website, the social media team has assumed responsibility for educating consumers and tending to their frustrations in Obama’s home state.
NYSE to hold ‘dry run’ for Twitter IPO
NEW YORK (AP) — The New York Stock Exchange isn’t taking any chances with Twitter’s initial public offering.
The Big Board said Friday it would allow trading firms to conduct a dry run of their systems to prepare for Twitter’s IPO. The NYSE test will occur on Saturday, Oct. 26, according to a notice sent out to traders.
The exchange seems to want to avoid the technical problems that marred Facebook’s debut on the Nasdaq Stock Exchange in May 2012. The glitches were a major embarrassment for Nasdaq, and resulted in a big fine.
GE shows improvement despite lower 3Q profit
NEW YORK (AP) — General Electric Co. posted lower overall revenue and profit in the third quarter, but improving sales of complex industrial equipment gave hope to investors that the company’s transformation of its business is succeeding.
GE said Friday that net income fell 9 percent to $3.19 billion and revenue fell 1 percent to $35.73 billion in the third quarter. In last year’s comparable quarter, the company earned $3.49 billion on revenue of $36.3 billion. GE’s earnings per share dropped to 31 cents, from 33 cents last year.
Still, the company’s results exceeded Wall Street expectations on the strength of 11 percent growth in profit at its industrial divisions — those that make aircraft engines, CT-scanners, gas turbines, locomotives and oil and gas drilling equipment.
Morgan Stanley third-quarter profit almost doubles
NEW YORK (AP) — Investment bank Morgan Stanley’s third-quarter earnings almost doubled as the firm’s stock sales and trading revenue rose.
The bank earned $1.01 billion from July to September after stripping out an accounting charge. That compares with earnings of $560 million a year earlier. That profit works out to 50 cents per share before the charge, compared with 28 cents per share in the same period a year earlier. Financial analysts polled by FactSet expected earnings of 40 cents. Analysts generally strip out one-time items.
Total revenue amounted to $8.1 billion, up 6.5 percent from $7.6 billion a year earlier.
Boeing reduces 747 production rate as demand lags
Boeing will slow down production of its double-decker 747 jumbo jet as demand continues to be weak.
Counting cancellations, Boeing has not booked any new orders this year for that plane.
Boeing said on Friday that it will slow 747 production to 18 per year, or 1.5 per month. Boeing originally planned to build 24 per year, but slow sales had already prompted it to make plans to cut the rate to 21 per year.
The slowdown begins early next year, and Boeing said it will stay at that lower rate through 2015.
Train strike clogs San Francisco-area highways
OAKLAND, Calif. (AP) — San Francisco Bay Area rapid transit workers are on strike for the second time since July, scrambling the morning commute for hundreds of thousands of workers who were up before dawn to clog highways, swarm buses and shiver on ferry decks as they found alternative ways to the office.
Six months of on-again, off-again negotiations have brought agreement on key issues such as raises, health care and pensions. But there remained a snarl Friday: a package of work rules involving when schedules are posted, whether workers can file for overtime when they’ve been out sick, and how paychecks are delivered.
The labor details were meaningless to Marsha Smith, who watched the sun rise as she rode toward her office in a crowded bus. Like many commuters Friday, Smith left her house while the moon still shone brightly to be sure to make it in on time.
China’s economic growth rebounds to 7.8 percent
BEIJING (AP) — China’s economic growth rebounded in the latest quarter, easing pressure on communist leaders for more stimulus and allowing them to focus on longer-term reforms.
The world’s second-largest economy grew by 7.8 percent over a year earlier in the three months ending in September, boosted by higher government spending, data showed Friday. That was up from a two-decade low of 7.5 percent the previous quarter.
The Dow Jones industrial average rose 28 points, or 0.2 percent, to 15,399.65. The Nasdaq composite was up 51.13 points, or 1.3 percent, at 3,914.28. The S&P 500 added 11.35 points, or 0.7 percent, to a record 1,744.50.
Benchmark crude for November delivery rose 14 cents at close at $100.81 on the New York Mercantile Exchange. Brent crude, the international benchmark, gained 83 cents to $109.94 a barrel on the ICE futures exchange in London.
Wholesale gasoline rose 3 cents to $2.67 a gallon. Natural gas dropped 1 cent to $3.77 per 1,000 cubic feet. Heating oil added 5 cents to $3.04 a gallon.
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