Thursday's Business Highlights
Thursday, January 23, 2014
Here are Thursday's business highlights.
Natural gas locomotives may prove cheaper, cleaner
OMAHA, Neb. (AP) — The diesel-burning locomotive, the workhorse of American railroads since World War II, will soon begin burning natural gas — a potentially historic shift that could cut fuel costs, reduce pollution and strengthen the advantage railroads hold over trucks in long-haul shipping.
Rail companies want to take advantage of booming natural gas production that has cut the price of the fuel by as much as 50 percent. So they are preparing to experiment with redesigned engines capable of burning both diesel and liquefied natural gas.
Natural gas "may revolutionize the industry much like the transition from steam to diesel," said Jessica Taylor, a spokeswoman for General Electric's locomotive division, one of several companies that will test new natural gas equipment later this year.
Any changes are sure to happen slowly. A full-scale shift to natural gas would require expensive new infrastructure across the nation's 140,000-mile freight-rail system, including scores of fueling stations.
Weekly applications for US jobless aid mostly flat
WASHINGTON (AP) — The number of Americans seeking unemployment benefits ticked up 1,000 last week to a seasonally adjusted 326,000, a level consistent with steady job gains.
The Labor Department says the four-week average, a less volatile measure, fell for the third straight week to 331,500. Both figures are close to pre-recession levels and suggest that companies are laying off few workers.
Still, hiring will also need to pick up to make a dent in the still-high 6.7 percent unemployment rate. Many economists forecast that job gains will pick up a bit this year.
One sour note in the report: Nearly 1.4 million people who have been unemployed longer than six months lost benefits in the week that ended Jan. 4, the latest period for which figures are available. That's because an emergency program that provided extended benefits expired Dec. 28.
The number of recipients fell to 3.7 million from 4.7 million in the previous week. About 300,000 people began receiving unemployment benefits in the week ended Jan. 4.
US home sales edged up 1 percent in December
WASHINGTON (AP) — Sales of existing U.S. homes edged up slightly in December, helping to lift sales for the year to the highest level in seven years.
Sales increased to an annual rate of 4.87 million units last month, up 1 percent from the November sales pace, the National Association of Realtors reported Thursday. Both months represented a slower pace of sales than earlier in 2013, reflecting the drag from higher mortgage rates and higher home prices.
For all of 2013, sales totaled 5.09 million, the best performance since 2006, when sales climbed to 6.48 million. However, the sales gains in both 2005 and 2006 represented an unsustainable housing bubble. Analysts say a more normal sales pace currently would be around 5.5 million units.
The median price of an existing home rose 11.5 percent last year to $197,100, the highest in eight years.
Sales of previously owned homes are up 19.5 percent since 2011 but sales fell from September through November and the December level is still 9.6 percent below the summer peak.
Gauge of US economy's health rises 0.1 percent
WASHINGTON (AP) — A measure of the economy's health rose modestly in December, suggesting that growth will remain steady early this year.
The Conference Board said Thursday that its index of leading indicators rose 0.1 percent last month. That's down from a 1 percent gain in November, the month after a partial 16-day shutdown of the federal government.
The index is designed to signal economic conditions over the next three to six months.
Average US rate on 30-year loan at 4.39 pct.
WASHINGTON (AP) — Average U.S. rates for fixed mortgages changed little this week.
Mortgage buyer Freddie Mac says the average for the 30-year loan declined to 4.39 percent from 4.41 percent last week. The average for the 15-year loan eased to 3.44 percent from 3.45 percent.
Mortgage rates have risen about a full percentage point since hitting record lows roughly a year ago. The increase was driven by speculation that the Federal Reserve would reduce its $85 billion a month in bond purchases. The Fed determined last month that the economy was strong enough to start trimming the purchases, which have kept long-term interest rates low.
The rise in mortgage rates and higher home prices slowed sales of existing homes, which have fallen for three straight months.
FDA takes another look at caramel coloring in soda
WASHINGTON (AP) — The Food and Drug Administration says there's no reason to believe that the coloring added to sodas is unsafe. But the agency is taking another look just to make sure.
The agency's announcement comes in response to a study by Consumer Reports that shows 12 brands of soda have varying levels of 4-methylimidazole — an impurity found in some caramel coloring.
Though studies have not been conclusive about whether 4-methylimidazole is a carcinogen, California includes it on the state list of carcinogens and a state law mandates a cancer warning label on products that have a certain level of the substance. In reaction to that law, Coke, Pepsi and other soft drink makers have directed their caramel-color suppliers to reduce the levels of 4-methylimidazole. It is not found in all caramel colorings.
The FDA says it has studied the use of caramel as a flavor and color additive for decades but will review new data on the safety of 4-methylimidazole. The agency did not provide details about the data.
There are no federal limits on the amount of 4-methylimidazole in food and drink. The substance is formed in some caramel coloring at low levels during the manufacturing process. The FDA says it also can occur in trace amounts when coffee beans are roasted or some meats are grilled.
The Consumer Reports study urged the agency to set a maximum level of the substance when it is artificially added to foods or soda, to require labeling when it is added and to bar products from carrying the "natural" label if they contain caramel colors.
Platinum miners strike in South Africa
RUSTENBURG, South Africa (AP) — Tens of thousands of platinum miners in South Africa went on strike Thursday, demanding higher wages in a protest that is disrupting one of the country's major industries.
Protesters from the Association of Mineworkers and Construction Union sang and danced outside one mine shaft in Rustenburg, the center of major platinum operations. Some wore hard hats, and one donned a zebra mask.
Union president Joseph Mathunjwa addressed thousands of cheering workers at the Lonmin mine at Marikana, and told them the demand for a minimum monthly wage of 12,500 rand ($1,200), was less than what mine bosses spend on their pets.
South Africa is the world's leading producer of the metal, which is used in medical, electronic and other industries.
Carl Icahn snaps up another $500M of Apple stock
SAN FRANCISCO (AP) — Outspoken billionaire Carl Icahn has tossed another bushel of Apple stock into his investment portfolio as he tries to persuade the iPhone maker to buy back more of its own shares.
Icahn says he invested another $500 million in Apple Inc. in a series of purchases made Thursday. With the latest shopping spree, Icahn has spent $1 billion on Apple stock during the past weeks to raise his total holdings in the Cupertino, Calif., company to $3.6 billion. That represents a stake of less than 1 percent in Apple, which has a market value of about $500 billion.
Apple's stock has fallen by about 20 percent from its peak reached 16 months ago. Icahn believes Apple's stock will bounce back if the company spends more money buying back its stock.
The Dow Jones Industrial average closed down 175.99 points, or 1.1 percent, at 16,197.35. The S&P 500 lost 16.40 points, or 0.9 percent, to 1,828.46. The Nasdaq composite declined 24.13 points, or 0.6 percent, to 4,218.87.
Brent crude, a benchmark for international oil used by many U.S. refineries, fell 69 cents to close at $107.58 in London. U.S. crude for March delivery rose 59 cents to close at $97.32 a barrel in New York. In other energy futures trading on Nymex: wholesale gasoline fell 1.5 cents to close at $2.662 a gallon and heating oil rose 1 cent to close at $2.991 a gallon.
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