Business Highlights

AP News
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Posted: Jan 19, 2016 5:43 PM

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Latest gauge on China slowdown brings relief it wasn't worse

BEIJING (AP) — The slowdown of China's once-sizzling economy has fueled anxiety over its impact on the rest of the world. Yet when Beijing reported Tuesday that its economy grew last year at the slowest pace in a quarter-century, the reaction seemed to be mainly relief it wasn't worse.

Economists welcomed details in the report suggesting that the world's second-biggest economy is making some progress in a difficult and complex transition — away from a reliance on manufacturing and investment in real estate and factories and toward dependence on services and consumer spending.

Beijing reported that economic growth fell in 2015 for a fifth straight year.

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Dubai tower blaze shows risks in common building material

Skyscraper fires like the blaze that struck a 63-story luxury hotel in Dubai on New Year's Eve, swiftly turning it into a towering inferno, are not that rare.

A review by The Associated Press found similar cases across the world, with building and safety experts saying blame likely lies with flammable exterior panels that were not designed to meet strict safety standards.

While types of cladding can be made with fire-resistant material, experts say those that have caught fire weren't designed to meet stricter safety standards and often were put onto buildings without any breaks to slow or halt a possible blaze.

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Insurance customers begin new year with delays

Thousands of health insurance consumers around the country have started the new year dealing with missing ID cards, billing errors and other problems tied to an enrollment surge at the end of 2015.

Brokers and insurers in several states told The Associated Press that they've been inundated with complaints about these issues from customers with individual plans and those with coverage through small businesses. Insurance provider Health Care Service Corp., for instance, has been dealing with delays for about 10,000 companies, while billing errors caused bank overdrafts for 3,200 individual customers of a North Carolina insurer.

These delays mean that some customers may have to pay for care up front or wait for their insurance cards to arrive before scheduling a doctor's appointment, even though many have technically been covered since Jan. 1.

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Faced with array of risks, CEOs increasingly pessimistic

DAVOS, Switzerland (AP) — Facing risks from the economic slowdown in China to the rise of the Islamic State group, chief executives around the world are more pessimistic about the global economy than at any time in three years — a development that has the potential to seriously affect their investment and growth plans.

That's the conclusion from a survey of CEOs conducted by consulting and accounting firm PricewaterhouseCoopers, or PwC, during the last quarter of 2015 and released in time for the start of the World Economic Forum in the Swiss ski resort of Davos.

The survey found top executives fretting over problems including regulation and cybersecurity.

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Netflix impresses Wall St. with robust 4Q overseas growth

SAN FRANCISCO (AP) — As its U.S. subscriber growth tapers off, Netflix's Internet video service is setting out to conquer the rest of the world in an audacious expansion likely to sway the company's stock and the prices it pays for TV shows and movies.

Netflix added 1.56 million U.S. subscribers from October through December, slightly below what management had predicted. It marked the second-straight quarter that Netflix's subscriber gains in the U.S. have disappointed.

But international growth exceeded the company's projections to give Netflix nearly 75 million worldwide subscribers through December.

Netflix Inc.'s fourth-quarter earnings also exceeded analyst forecasts.

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JC Penney to start selling home appliances again

J.C. Penny will sell refrigerators, washing machines and other appliances at some of its stores for the first time in more than 30 years.

The move, announced Tuesday, comes as many department stores are under pressure to attract shoppers who are spending more money on their homes than on clothing.

J.C. Penney says many of its customers are either buying their first home or already own one and want to update them. Shoppers were often searching for refrigerators or washing machines on the department store's website, says company spokeswoman Daphne Avila.

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Johnson & Johnson to cut about 3,000 jobs in medical devices

Johnson & Johnson said Tuesday that it plans to cut about 3,000 jobs over the next two years as the health care conglomerate works to restructure its medical devices business.

The company said that amounts to more than 2 percent of its global workforce of around 127,000 people.

The cuts come after a tough year for the healthcare bellwether, which has seen sales of its prescription drugs, devices and consumer medicines squeezed by a weakening global economy and unfavorable currency exchange rates.

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Bank of America profit grows, but says growth is a struggle

NEW YORK (AP) — Bank of America reported higher profits on better performance in consumer banking and lower costs, but the bank acknowledged that it is struggling to increase revenue despite an improving U.S. economy.

BofA earned a profit of $3.01 billion, or 28 cents per share, after payment of dividends to preferred shareholders. That's an improvement of nearly 10 percent over the same period last year and beat market expectations.

CEO Brian Moynihan said that results for the year, which were the highest earnings in a decade for the bank, were the result of "doing more business with each customer and client."

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Delta posts $980 million 4Q profit on lower fuel prices

DALLAS (AP) — Cheaper jet fuel helped Delta Air Lines earn $980 million in the fourth quarter despite lower revenue than a year ago.

Delta forecast another decline in a key revenue measure through the first three months of 2016. That could add to investor concern that airlines are adding too many flights while fuel is relatively cheap, which is pushing fares lower.

But Delta officials said bookings for this spring are ahead of last year's pace because lower gasoline and heating bills mean that consumers have more money to spend.

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Morgan Stanley swings to profit in 4Q, beating expectations

NEW YORK (AP) — Morgan Stanley swung back to a profit in the fourth quarter as the bank moved on from large legal settlements, its wealth management division improved and investment bank advisory activity picked up.

Morgan Stanley had $3.1 billion in legal expenses in 2014, when the bank settled with state and federal regulators over its role in the housing bubble and subsequent financial crisis.

Removing an adjustment tied to the value of Morgan Stanley's debt, the bank earned $986 million, or 43 cents per share, in its most recent quarter.

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Getting in on the joke, Univision buys stake in The Onion

NEW YORK (AP) — The Spanish-language broadcaster Univision is buying a stake in the owner of satirical website The Onion, in what may be considered a serious grab for younger viewers.

Univision says it sees comedy as crucial in covering news for young people, particularly with the upcoming U.S. presidential election.

Once solely comedic enterprises have earned younger audiences who rely on them as a news source. While The Onion veers well outside of news boundaries, its preposterous articles regularly involve politics, health care and science.

There is a scramble by TV networks for younger viewers and their spending dollars.

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The Dow Jones industrial average rose 27.94 points, or 0.2 percent, to close at 16,016.02. The Standard & Poor's 500 index rose one point to 1,881.33. The Nasdaq composite index fell 11.47 points, or 0.3 percent, to 4,476.95.

U.S. crude fell 96 cents, or 3.3 percent, to close at $28.46 a barrel in New York. Brent crude, a benchmark for international oils, rose 21 cents to close at $28.76 a barrel in London. In other trading of energy futures, the price of wholesale gasoline inched up 0.5 cent to $1.026 a gallon. Heating oil fell 2.6 cents to 90.9 cents a gallon. Natural gas slipped 0.9 cent to $2.091 per 1,000 cubic feet.