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Bank of America 4Q earnings jump nearly five-fold
NEW YORK (AP) — Bank of America Corp. said Wednesday that its fourth-quarter profit jumped sharply from a year earlier, as the loans on the bank’s balance sheet continued to improve.
The nation’s second-largest bank earned $3.44 billion in the October to December period, up from $732 million a year earlier. On a per-share basis, the bank earned 29 cents, beating the 26 cents expected by financial analysts.
Fourth-quarter revenue rose to $22.32 billion from $19.6 billion, exceeding analysts’ forecasts of $21.2 billion.
The bank’s profits got a big boost because Bank of America was able to significantly reduce the amount of money it holds on its balance sheet to protect itself from bad loans. The bank’s provision for credit losses fell to $336 million from $2.2 billion in the same period a year earlier. Even BofA’s mortgage division, which took huge losses after the housing bubble popped, improved.
J.C. Penney to cut 2,000 jobs, close 33 stores
Struggling department-store operator J.C. Penney announced it will cut 2,000 jobs and close 33 stores as it tries to get back on the path to profitability.
The news raises concerns that Penney’s holiday season sales were not what the company hoped for and that the chain needs to do even more to recover from a turnaround plan that has had disastrous results.
J.C. Penney Co., based in Plano, Texas, said earlier this month said it was pleased with its holiday results but declined to give sales figures, raising worries among Wall Street analysts about how the season actually fared.
The cuts announced Wednesday should save more than $65 million annually. The company will take $26 million in pretax charges in the third quarter and $17 million in future quarters. Penney has 116,000 staffers and operates more than 1,100 stores. All the job cuts are related to the store closings.
SolarCity turns to retail investors for cash
NEW YORK (AP) — Solar panel installer SolarCity is turning to retail investors for cash. The company said Wednesday that it plans to sell securities directly to individuals and others interested in investing in its rooftop solar systems.
The move is a novel way for the San Mateo, Calif., company to finance the enormous cost of installing panels on thousands of roofs — a typical residential system costs $25,000 — while appealing to retail investors who are on the hunt for better rates of return than they can find in savings accounts and government bonds.
The securities will likely be similar to bonds or certificates of deposit. But instead of being backed by SolarCity, they would be backed by hundreds or thousands of contracts with rooftop solar customers. Wall Street has long created such products, called securitizations, which bundle assets such as mortgages or other loans into securities that can then be bought and sold.
Now SolarCity wants to offer its own version through its website.
SolarCity Corp. CEO Lyndon Rive said in an interview that he expects the company will offer several types of products that investors could hold for different lengths of time, or even trade. He expects eventually to raise “billions” of dollars this way.
US wholesale costs rose last month on gas prices
WASHINGTON (AP) — U.S. wholesale prices increased in December, pushed up by rising gasoline prices and energy costs. But overall inflation remained mild.
The Labor Department said Wednesday that the producer price index, which measures costs before they reach the consumer, rose 0.4 per cent last month from November. That ends three straight months of falling wholesale prices.
Gas prices increased 2.2 per cent after recent declines. Home heating oil costs grew at the fastest pace in 10 months, while diesel fuel prices increased at the biggest clip in almost four years. Excluding volatile energy and food costs, so-called core prices increased 0.3 per cent in December. That was partly because of a one-time bump in tobacco costs.
Over the past 12 months, overall prices have risen a modest 1.2 per cent and core prices are up just 1.4 per cent. Both are well below the Federal Reserve’s 2 per cent inflation target.
Businesses have struggled to raise prices because of historically high levels of unemployment and meagre wage growth. Low inflation has also allowed the Fed to pursue extraordinary stimulus programs to try and boost economic growth.
Fed: US economic growth healthy over holidays
WASHINGTON (AP) — A Federal Reserve survey shows economic growth remained healthy in most U.S. regions in late November and December, helped by gains in consumer spending and factory output.
Nine of the Fed’s 12 banking districts described growth as moderate, according to the Beige Book survey released Wednesday. That’s up from seven districts in October through early November. And two of those districts said growth had accelerated since the previous report.
The Beige Book survey is based on anecdotal reports from businesses and will be considered along with other data when the Fed meets next Jan. 28-29.
The report showed little signs of the slowdown in hiring that the government reported last week. The Labor Department said Friday that employers added only 74,000 jobs last month, down from an average of 214,000 in the preceding four months.
Gov’t charges Wal-Mart with labour violations
WASHINGTON (AP) — Federal officials have filed a formal complaint charging that Wal-Mart violated the rights of protesting and striking workers last year.
The National Labor Relations Board says Wal-Mart illegally fired, disciplined or threatened more than 60 employees in 14 states for participating in legally protected activities to complain about wages and working conditions.
The labour board’s general counsel first laid out the charges last November, but held off on filing a complaint while trying to work out a settlement with Wal-Mart. The company has insisted its actions were legal and justified.
The complaint will go before an administrative law judge. If Wal-Mart is found liable, it could be required to award workers back pay, reinstatement and reverse any disciplinary action.
Apple will refund at least $32.5M in app case
WASHINGTON (AP) — Apple will refund at least $32.5 million to consumers to settle a federal case involving purchases that kids made without their parents’ permission while playing on mobile apps, the government announced Wednesday.
The Federal Trade Commission said Apple will make full refunds for any such in-app purchases made by kids using mobile phones and other devices, and incurring charges by accident or without parents’ permission.
Apple will have to change its billing practices to make it more obvious that an actual purchase is taking place during the course of the game or app.
The commission said it had received tens of thousands of complaints about unauthorized charges.
By The Associated Press=
The Dow Jones Industrial average closed
Benchmark U.S. crude oil for February delivery rose $1.58, or 1.7 per cent, to $94.17 a barrel on the New York Mercantile Exchange. In other energy futures trading in New York, natural gas fell 4 cents to $4.33 per 1,000 cubic feet (28.32 cubic meters). Brent crude, used to set prices for international varieties of crude, rose 67 cents at $106.27.
The Dow Jones industrial average closed up 108.08 points, or 0.66 per cent, to 16,481.94. The S&P 500 gained 9.50 points, or 0.52 per cent, to 1,848.38. The Nasdaq composite rose 31.87 points, or 0.76 per cent, to 4,214.88.