Yellen to investors: Expect continuity at the Fed
WASHINGTON (AP) — Federal Reserve Chair Janet Yellen sought Tuesday to reassure investors that she will embrace the approach to interest-rate policy that her predecessor, Ben Bernanke, pursued before he stepped down as chairman last month.
Yellen told Congress that if the economy keeps improving, the Fed will take “further measured steps” to reduce the support it’s providing through bond purchases.
In her first public comments since taking over the top Fed job last week, Yellen said she expects a “great deal of continuity” with Bernanke. She signalled that she supports his view that the economy is strengthening enough to withstand a pullback in stimulus but that rates should stay low to further improve a still-lacklustre economy.
Yellen’s remarks to a House committee suggested that the Fed will keep its key short-term rate near zero for a prolonged period. Her message of continuity at the Fed was a reassuring one for investors, and it contributed to a major rally on Wall Street.
Widest earnings gap for college grads in 48 years
WASHINGTON (AP) — The earnings gap between young adults with and without bachelor’s degrees has stretched to its widest level in nearly half a century. It’s a sign of the growing value of a college education despite rising tuition costs, according to an analysis of census data released Tuesday.
Young adults with just a high-school diploma earned 62 per cent of the typical salary of college graduates. That’s down from 81 per cent in 1965, the earliest year for which comparable data are available.
The analysis by the Pew Research Center shows the increasing economic difficulties for young adults who lack a bachelor’s degree in today’s economy that’s polarized between high- and low-wage work. As a whole, high-school graduates were more likely to live in poverty and be dissatisfied with their jobs, if not unemployed.
Wiggle room for big firms under new coverage rule
WASHINGTON (AP) — Big stores, hotels, restaurants and other companies with lots of low-wage and part-time workers will be among the main beneficiaries of the Obama administration’s latest tweak to health care rules.
Consultants and government officials say companies with 100 or more workers can avoid the biggest of two potential employer penalties in the Affordable Care Act if they offer coverage to 70 per cent of their full-timers.
That target is a lot easier to hit than the administration’s previous requirement of 95 per cent.
But the wiggle room is only good for next year.
Treasury officials say the goal is to create an easier path for employers already covering many of their workers.
The administration said Monday that medium-size companies with 50 to 99 workers will have an extra year to comply.
House passes debt ceiling increase
WASHINGTON (AP) — House Republicans backed away from a battle over the government’s debt cap on Tuesday and permitted President Barack Obama’s Democratic allies to drive quick passage of a measure to increase the government’s borrowing cap without any concessions from the White House.
The move risks more displeasure from the tea party but came after most Republicans in the House made clear they had no taste for another high-stakes fight with President Barack Obama over the nation’s debt ceiling, which must be raised so the government can borrow money to pay all of its bills.
The bill would permit the Treasury Department to borrow normally for another 13 months, diffusing the chance of a debt crisis well past the November elections and providing time for a newly elected Congress to decide how to handle the issue.
FDA wants more info on female libido pill
WASHINGTON (AP) — A drugmaker working to develop a pill to boost sexual desire in women says regulators are demanding more studies on the experimental drug.
Sprout Pharmaceuticals said Tuesday that the Food and Drug Administration wants to see more data on how the company’s drug, flibanserin, interacts with other medications and how it affects driving ability. Nearly 10 per cent of women studied in company trials reported sleepiness while taking the daily pill.
The FDA’s request represents another hurdle in the pharmaceutical industry’s 15-year search for a female equivalent to Viagra. But in a news release, Sprout Pharmaceuticals President Cindy Whitehead described the development as a “significant step toward the approval of flibanserin.”
The three studies requested by the FDA are relatively small, involving 25 to 50 patients each. The company says it plans to resubmit its drug application to FDA in the third quarter.
Barclays critics line up after bonus pool increase
LONDON (AP) — Barclays PLC faced widespread criticism Tuesday after the scandal-plagued bank announced plans to slash up to 12,000 jobs this year while also setting aside more money to pay bonuses.
The bonus pool rose by 210 million pounds ($345 million) in 2013 — a move Chief Executive Antony Jenkins defended despite his mission to improve trust in the institution following a string of scandals including its involvement in the rigging of the Libor interbank lending rate.
Graco recalling nearly 3.8M child car seats
DETROIT (AP) — Graco is recalling nearly 3.8 million car safety seats because children can get trapped by buckles that may not unlatch. But the company has drawn the ire of federal safety regulators who say the recall should include another 1.8 million rear-facing car seats designed for infants.
The recall covers 11 models sold from 2009 through 2013 by Graco Children’s Products Inc. of Atlanta.
The National Highway Transportation Safety Administration criticized Graco, saying the recall improperly excludes infant car seats with the same buckles. Both the company and NHTSA have received complaints about stuck buckles on the infant seats, the agency said.
The agency wants Graco to identify the total number of seats that potentially have the defect and explain why it is pushing for the smaller recall.
US job openings fall in December from 5-year high
WASHINGTON (AP) — U.S. employers posted fewer job openings in December and hiring slowed, adding to evidence that the job market weakened that month.
The Labor Department said Tuesday that openings slipped 1 per cent to 3.99 million in December, from 4.03 million in the previous month. Still, the number of available jobs remained near a five and a half-year high.
Total hiring fell to 4.4 million from 4.5 million in November, according to Tuesday’s report. While job openings are mostly back to pre-recession levels, hiring is below the roughly 5 million a month that’s typical for a healthy market.
Nestlé exchanges stake in L’Oreal for Galderma
GENEVA (AP) — Swiss food and drink group Nestle is creating a new unit for medical skin treatments via a deal that reduces its stake in French cosmetics company L’Oreal.
The Vevey, Switzerland-based company said Tuesday it would take full ownership of Swiss dermatology pharmaceuticals company Galderma, which had been a 50/50 joint venture with L’Oreal. It will use Galderma’s management to form a new unit called Nestle Skin Health SA.
Nestle is striving to reposition its food-and-beverage business more into the nutrition and wellness fields.
Galderma, a Swiss company created in 1981, sells products in 70 countries that treat skin diseases including acne, psoriasis and cancer. The deal is subject to regulatory approval.
By The Associated Press=
The Dow Jones Industrial average rose 192.98 points, or 1.2 per cent, to close at 15,994.77. The Standard & Poor’s 500 index rose 19.91 points, or 1.1 per cent, to 1,819.75 and the Nasdaq Composite rose 42.87 points, or 1 per cent, to 4,191.04.
Benchmark U.S. crude for March delivery fell 12 cents to $99.94 a barrel on the New York Mercantile Exchange. Wholesale gasoline gained 3 cents to $2.75 a gallon. Heating oil rose 3 cents to $3.03 a gallon. Natural gas jumped 25 cents to $4.82 per 1,000 cubic feet. Brent crude, which is used to set prices for international varieties of crude, gained 22 cents to $108.18 a barrel on the ICE Futures exchange in London.