Friday's Business Highlights
For Oct. 25, 2013
Friday, October 25, 2013
Here are business news highlights for Oct. 25, 2013.
JPMorgan paying $5.1B in Fannie, Freddie deal
WASHINGTON (AP) — JPMorgan Chase has agreed to pay $5.1 billion to resolve claims that it misled Fannie Mae and Freddie Mac about risky home loans and mortgage securities it sold them before the housing market collapsed.
The Federal Housing Finance Agency, which oversees Fannie and Freddie, announced the settlement Friday with JPMorgan, the largest U.S. bank. A broader deal with the Justice Department is still being negotiated.
JPMorgan sold $33 billion in mortgage securities to Fannie and Freddie between 2005 and 2007, according to the agency. That was the second-most sold to Fannie and Freddie ahead of the crisis, behind only Bank of America. The securities soured after the housing bubble burst in 2007, losing billions in value.
In a statement Friday, JPMorgan called the agreement with the FHFA “an important step towards a broader resolution of the firm’s” mortgage-related matters.
Stocks rise on profit gains from Microsoft, others
NEW YORK (AP) — Strong third-quarter results from technology companies drove investors into stocks on Friday, giving the market its third straight weekly gain.
After reporting results that topped expectations, Microsoft rose 6 percent and Amazon.com rose 9 percent. The Standard & Poor’s 500 index hit a record. The Nasdaq is the highest it’s been in 13 years.
The gains were broad. All 10 industry groups in the S&P 500 rose, led by telecommunications with an increase of 1 percent.
Earnings for companies in the S&P 500 index are expected to grow 4.5 percent in the third quarter over the same period a year ago, according to S&P Capital IQ, a research firm. While respectable, that rate of growth is less than half what was expected at the start of the year.
Some market watchers say even that profit growth may not last. They note that much of it is coming from cutting expenses, not increasing revenue, as the global economy remains sluggish.
Long-lasting US factory goods orders rise 3.7 pct.
WASHINGTON (AP) — A jump in demand for commercial airplanes boosted orders for long-lasting U.S. factory goods last month. But orders for most other goods fell as businesses cut spending, a possible sign of concern about the partial government shutdown that began Oct. 1.
The Commerce Department said Friday orders for durable goods rose 3.7 percent in September, above the 0.2 percent gain in August. But a 57.5 percent jump in aircraft orders accounted for nearly all the gain. Durable goods are meant to last at least three years.
United Airlines fined $1.1M for tarmac delays
CHICAGO (AP) — United Airlines will pay more than $1 million in fines for stranding passengers on 13 planes for more than three hours on the tarmac during a stormy day last year at Chicago’s O’Hare International Airport, federal officials announced Friday.
The $1.1 million fine is the largest levied against an airline since 2010, when new rules took effect that bar airlines from stranding passengers on the tarmac for longer than three hours without giving them the opportunity to leave the plane, according to the U.S. Department of Transportation.
Oklahoma judge: Settlement reached in Toyota case
OKLAHOMA CITY (AP) — Toyota Motor Corp. reached a confidential settlement with the victims of a deadly crash in Oklahoma to avoid punitive damages in a case where a jury found a 2005 Camry’s on-board electronics system was defective and caused it to accelerate suddenly.
A day earlier, the Oklahoma Country jury awarded a total of $3 million in monetary damages to the driver of the car, who was injured, and the family of the passenger, who was killed in the crash in 2007.
It’s the first jury ruling against Toyota in a personal injury case involving unintended acceleration. Of equal significance was the jury’s determination that a defect in a Toyota vehicle’s software linked to the electronic throttle-control system was to blame. The Japanese automaker has recalled millions of car following claims of unintended acceleration. It has denied that electronics played any role in the problem.
McDonalds ending relationship with Heinz
McDonald’s has lost its taste for Heinz ketchup.
The fast-food giant said in a statement Friday that it is cutting ties with the condiment company following management changes there. A former Burger King CEO became head of Heinz in June.
Heinz is led by Bernardo Hees, who is also a partner at 3G Capital. 3G teamed up with Warren Buffett’s company Berkshire Hathaway to buy Heinz earlier this year. Hees still serves as serves as vice chairman of Burger King’s board.
McDonald’s uses Heinz products only in Pittsburgh and Minneapolis restaurants in the U.S., limiting the impact of the change to overseas markets.
Jack Daniel’s in legal fight with small distiller
LOUISVILLE, Ky. (AP) — A white whiskey named for a famed Appalachian moonshiner started out being sold in Mason jars, to honor its roguish roots, but switched to square-shaped bottling. That new look has the upstart distiller embroiled in a trademark infringement fight with Jack Daniel’s Tennessee whiskey.
The legal feuding pits an industry blue blood against a tiny distiller that proudly claims to carry on the tradition of moonshiner Marvin “Popcorn” Sutton. The irascible Sutton wrote a paperback called “Me and My Likker” and recorded videos on how to make moonshine.
Sutton, known for his long gray beard and faded overalls, took his own life in 2009 rather than go to prison for making white lightning.
Now, the whiskey maker he inspired is facing its own legal problems.
The owner of the Jack Daniel’s trademark sued the Nashville, Tenn.-based distiller of Popcorn Sutton’s Tennessee White Whiskey. The lawsuit claims the bottling and labeling for the Popcorn Sutton product is “confusingly similar” to the ubiquitous packaging for Jack Daniel’s.
The Dow Jones Industrial average rose 61.07 points, or 0.4 percent, to close at 15,570.28 Friday. The Standard & Poor’s 500 rose 7.7 points, 0.4 percent, to 1,759.77. The Nasdaq composite rose 14.4 points, or 0.4 percent, to 3,943.36.
Benchmark U.S. crude for December delivery gained 74 cents to close at $97.85 a barrel on the New York Mercantile Exchange. Wholesale gasoline was flat at $2.59 a gallon. Natural gas added 8 cents to $3.71 per 1,000 cubic feet. Heating oil rose 1 cent to $2.91 a gallon.
Brent crude, a benchmark for international crude also used by U.S. refineries, fell 6 cents to $106.90 a barrel on the ICE Futures exchange in London.
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