Business Highlights

AP News
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Posted: Jan 13, 2016 5:40 PM

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China turmoil batters faith in Beijing's management skills

BEIJING (AP) — Stock market and currency turmoil has battered Chinese leaders' reputation as shrewd economic managers and fed doubts about their willingness to push through more wrenching reforms.

Recent stock market control measures have backfired and fueled steeper falls. And in currency markets, Beijing has struggled to squelch expectations it plans to devalue the yuan. That has forced the government to spend tens of billions of dollars to defend the exchange rate.

Such volatility is common in developing countries, but China's status as the world's second-largest economy and biggest trader mean missteps cause global shockwaves.

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Russia warns cuts needed to avoid repeat of '98 crash

MOSCOW (AP) — Russia's leaders are warning the government will need to make more cutbacks if the nation is to avoid a repeat of the 1998 financial crash, the country's biggest post-Soviet economic trauma.

The economy, which is heavily reliant on its massive oil and gas industry, is getting hammered by the plunge in global energy prices. State revenues are running dry and the cost of living is soaring for Russians as the currency drops.

Faced with the prospect of the economy languishing in recession in an election year, the government sought Wednesday to manage expectations.

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Stocks plunge; S&P 500 is down 10 percent from November peak

It's been a turbulent ride for stock market investors this year and it got worse Wednesday.

A broad downturn in U.S. stocks on another volatile day for crude oil prices knocked the Standard & Poor's 500 index down 10 percent from its November peak. That's known as a correction on Wall Street, and it's the second time in less than five months for the S&P 500 index, considered the bellwether for the stock market.

The rocky start reflects mounting worries on Wall Street about a slowdown in the global economy, plunging oil prices and the implications for U.S. companies.

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Treasury to track some real estate deals in NY and Miami

WASHINGTON (AP) — The Treasury Department will begin tracking sales of high-end real estate in two of the country's most expensive markets — Miami and Manhattan — to try to crack down on money laundering.

The department's Financial Crimes Enforcement Network said Wednesday that it will temporarily require certain title companies to identify individuals behind companies that buy properties exceeding $3 million in these two markets with all-cash transactions.

The government said it's concerned that some of these real estate deals are made by corrupt foreign government officials or international criminals who use expensive real estate to launder dirty money.

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Fed says economy expanded somewhat in 9 of 12 districts

WASHINGTON (AP) — The Federal Reserve says the economy expanded across most of the United States in December and early January.

The Fed says in its latest snapshot of the economy that most of its 12 regional bank reported steady growth. Only the New York and Kansas City Fed banks reported that economic activity was "essentially flat."

Growth in consumer spending, which accounts for about 70 percent of U.S. economic activity, was "slight to moderate" in most districts.

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General Electric to move headquarters to Boston

HARTFORD, Conn. (AP) — General Electric announced Wednesday it will move its headquarters to Boston, leaving the sprawling suburban Connecticut campus it has called home over the past four decades. Chairman and CEO Jeff Immelt said GE, one of the best known companies in corporate America, wanted to be "at the center of an ecosystem that shares our aspirations."

Wednesday's announcement comes three years after the company said it began considering a new composition and location for its headquarters, and more than seven months after the firm threatened to leave Connecticut, complaining about the state's tax environment.

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Cable news network Al Jazeera America to shut down

PASADENA, Calif. (AP) — The Al Jazeera America cable news network said Wednesday it will shut down two and a half years after its launch, a victim of a rough business environment and political headwinds it could not conquer.

The channel, an offshoot of the Qatar-based Al Jazeera cable network, had trouble persuading cable and satellite companies to carry it, and viewers to watch. It failed despite a promise to offer serious-minded journalism and some award-winning work.

The cable network will shut down on April 30. It launched in October 2013.

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FDA gives OK for company's genetically engineered potato

BOISE, Idaho (AP) — A potato genetically engineered to resist the pathogen that caused the Irish potato famine is as safe as any other potato on the market, the Food and Drug Administration says.

In a letter Tuesday to Idaho-based J.R. Simplot Co., the FDA said the potato isn't substantially different in composition or safety from other products already on the market, and it doesn't raise any issues that would require the agency to do more stringent premarket vetting.

Before the potato is marketed to consumers, it must be cleared by the U.S. Environmental Protection Agency. That's expected to happen in December.

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GoPro cutting about 100 jobs after weak 4Q sales

NEW YORK (AP) — Wearable camera maker GoPro says it will eliminate about 100 jobs after its fourth-quarter sales fell far short of its expectations.

GoPro says fourth-quarter revenue was $435 million instead of the $500 million to $550 million it forecast. The company lowered the price of its new Hero4 Session camera after saying it made the product too expensive. That reduced its fourth-quarter revenue by $21 million.

The company had around 1,500 employees at the end of 2015 after hiring more than 500 people that year. It is cutting 7 percent of its jobs, or around 100 positions.

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CSX predicts challenging year for railroad in 2016

OMAHA, Neb. (AP) — CSX Corp. expects to deliver lower profits in 2016 as weak demand for coal and crude oil persists and the strong U.S. dollar continues to limit exports.

The railroad's forecast for lower freight volume suggests the overall U.S. economy may be slowing after several years of steady growth.

"We're calling it almost a freight recession," Chairman and CEO Michael Ward said Wednesday. "We really think there are some challenges on the industrial side of the economy."

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World Economic Forum revokes invite to North Korea for Davos

GENEVA (AP) — Organizers of the World Economic Forum in Davos say they have revoked an invitation to a delegation from North Korea, in what appears to be an international rebuke over the secretive Communist country's nuclear test this month.

The WEF invitation had been extended to North Korea in the autumn "in view of positive signs coming out of the country," organizers said in a statement. North Korea had accepted to attend the annual high-profile gathering of hundreds of heads of state, CEOs and public figures in the Swiss ski resort of Davos.

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The Dow Jones industrial average lost 364.81 points, or 2.2 percent, to close at 16,151.41. The S&P 500 index fell 48.40 points, or 2.5 percent, to 1,890.28. The Nasdaq slid 159.85 points, or 3.4 percent, to 4,526.06.

Benchmark U.S. crude edged up 4 cents to close at $30.48 a barrel in New York. U.S. crude is down 18 percent so far this year. Brent crude, a benchmark for international oils, fell 57 cents, or 1.8 percent, to $30.31 a barrel in London. In other energy trading, wholesale gasoline fell 3.2 cents to $1.053 a gallon, heating oil fell 2.1 cents to 96.9 cents a gallon and natural gas rose 1.2 cents to $2.269 per 1,000 cubic feet.