Business Highlights

AP News
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Posted: Jan 29, 2016 6:18 PM

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US economy is expected to strengthen after weak 4th quarter

WASHINGTON (AP) — The U.S. economy struggled to grow in the October-December quarter as consumer spending, business investment and exports slowed. Yet despite global weakness and shrunken oil and stock prices, many economists expect growth to accelerate on the strength of healthy job gains.

The economy grew at an annual rate of just 0.7 percent last quarter, less than half the 2 percent growth rate in the July-September period, the government said Friday.

Though the slowdown late last year could renew doubts about the durability of the 6½-year-old economic expansion, most analysts said they expected the slump to be short-lived.

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Japan introduces negative interest rate to boost economy

TOKYO (AP) — The Bank of Japan on Friday said it will charge lenders that leave too much cash on idle deposit with it, introducing a negative interest rate policy for the first time as it seeks to shore up a stumbling economic recovery.

The central bank said it is imposing a 0.1 percent fee on some new commercial bank deposits with the BOJ, effectively a negative interest rate. It hopes that will encourage commercial banks to lend more, rather than keeping cash at the BOJ, and stimulate investment and growth in the world's third-largest economy.

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US stocks soar to finish tough month as tech stocks climb

NEW YORK (AP) — Stocks soared on the last trading day of January, with Microsoft, Visa and other tech stocks making the biggest gains in a broad market rally Friday.

Indexes rose throughout the day and finished with their biggest gains in about five months. Asian stocks jumped after the Bank of Japan moved to stimulate the economy, and European markets also rose. In the U.S, tech stocks climbed following strong quarterly results from Microsoft and Visa. Materials companies and banks also made large gains, and the price of oil rose for the fourth day in a row.

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US paychecks show little sign of accelerating in 4th quarter

WASHINGTON (AP) — U.S. paychecks increased moderately in the final three months of last year, yet the gain was little changed from the sluggish post-recession trend.

The employment cost index, which tracks wages and benefits, rose 0.6 percent in the October-December quarter, the Labor Department said. That's the same as the previous three months.

In the past year, salaries and benefits have risen just 2 percent, the same annual pace as the previous two quarters. That is below the roughly 3.5 percent rate that is consistent with a healthy economy.

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Survey: US consumer confidence slips in January

WASHINGTON (AP) — American consumers lost some confidence this month after the stock market tumbled and the economy showed signs of weakness, the University of Michigan said Friday.

The university's index of consumer sentiment slipped to 92 in January from 92.6 last month. A year ago, the index stood at 98.1.

Richard Curtin, chief economist for Michigan's surveys, blamed a drop in stocks that caused an "an erosion of household wealth, as well as weakened prospects for the national economy."

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Caterpillar closing 5 plants, cutting 670 jobs

Caterpillar says it plans to close five plants, causing a net reduction of about 670 jobs in Illinois and several other states, as part of a broader cost-cutting campaign announced last year.

The mining and construction equipment company will cut about 230 jobs for office and production workers at a major manufacturing campus in East Peoria, Illinois, where Caterpillar says it's consolidating some manufacturing and transferring some work to outside contractors. Another 120 employees there will be placed on indefinite layoff.

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Nissan to recall Altimas for third time to fix hood latches

DETROIT (AP) — Nissan is recalling nearly 930,000 Altima midsize cars worldwide — some for a third time — to fix a latch problem that could let the hood fly open while the cars are moving.

The new recall covers cars from the 2013 to 2015 model years including 846,000 in the U.S.

Nissan says paint can flake off the latch, exposing bare metal. Over time, the latches can rust and cause the secondary hood latch to remain open. If the main latch isn't closed and the car is driven, the secondary latch may not hold the hood down.

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American Airlines posts record profit for 4Q, all of 2015

FORT WORTH, Texas (AP) — American Airlines reported a record profit for the fourth quarter and all of 2015 as a sharp drop in fuel prices more than offset lower revenue.

The world's biggest airline said Friday that its full-year earnings were the highest for any carrier when one-time items were excluded. American is poised for another big year: airline officials said they expect to save another $2 billion on fuel in 2016.

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Falling oil prices push Chevron to first loss since 2002

DALLAS (AP) — Chevron suffered its first money-losing quarter since 2002 in the final three months of last year, as plunging crude prices chopped more than one-third from its revenue.

Cheaper energy is great for consumers, who save with every fill-up, but oil-producing nations and big exploration companies like Chevron and Exxon are paying the price.

Chevron is cutting spending, laying off workers, and looking to sell even more of its assets. The problem with that strategy: It's a buyer's market right now for oil facilities, with too many for-sale signs.

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Xerox reports sales decline and plans to split company

Xerox reported its 15th consecutive quarter of declining sales on Friday and announced plans to split the company into two businesses.

The move will reverse a six-year-old effort by the printer and copier maker to boost sales by providing outsourced business services to corporate customers. Xerox said Friday that it will spin off the services operation it acquired when it bought Affiliated Computer Services Inc. in 2010.

Xerox has been under pressure from activist investor Carl Icahn, who has argued that its business outsourcing service would be more valuable as a stand-alone company. Xerox says it will split into two independent companies by the end of the year.

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AbbVie cuts costs, turns profit that meets 4Q expectations

NORTH CHICAGO, Ill. (AP) — Soaring U.S. sales of the blockbuster anti-inflammatory drug Humira helped AbbVie post a profit of $1.52-billion for the fourth quarter and match Wall Street's earnings expectations.

The drugmaker said Friday that U.S. sales of Humira jumped 21 percent in the quarter, driven by growth in all of its major treatment categories: rheumatology, dermatology and gastroenterology. Worldwide, Humira brought in $3.72 billion in sales during the quarter and more than $14 billion during the year. AbbVie also pulled in $554 million from its hepatitis C treatment Viekira, which launched late in 2014.

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The Dow Jones industrial average surged 396.66 points, or 2.5 percent, to close at 16,466.30. The Standard & Poor's 500 index rose 46.88 points, or 2.5 percent, to 1,940.24, as more than 480 of its component stocks rose. The Nasdaq composite index jumped 107.28 points, or 2.4 percent, to 4,613.95.

Benchmark U.S. oil added 40 cents, or 1.2 percent, to $33.62 a barrel in New York. Brent crude, a benchmark for international oils, gained 85 cents, or 2.5 percent, to $34.74. In other energy trading, wholesale gasoline picked up 2.4 cents, or 2.2 percent, to $1.103 a gallon. Heating oil added 2.4 cents, or 2.3 percent, to $1.055 a gallon. Natural gas rose 11.6 cents, or 5.3 percent, to $2.298 per 1,000 cubic feet.