Business Highlights

 

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House lawmakers heap blistering criticism on Wells Fargo CEO

WASHINGTON (AP) — Angry lawmakers heaped another round of blistering criticism on Wells Fargo’s CEO, pressing Thursday for details about what senior managers knew about allegedly illegal sales practices and when any concerns were disclosed.

Chief Executive John Stumpf, newly stripped of tens of millions in compensation, told the House Financial Services Committee that the bank is expanding its review of accounts and will evaluate executives’ roles. But as during the grilling he received last week from a Senate panel, Stumpf remained on the defensive.

Several lawmakers alleged that Wells Fargo’s sales practices may have violated federal laws, including the federal racketeering laws, which would constitute a criminal offence.

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OPEC deal shows cartel’s resolve — and desperation

ALGIERS, Algeria (AP) — OPEC’s unexpected agreement to trim production shows the cartel still has the resolve — and even desperation — to try to guide oil prices higher. But don’t expect triple-digit crude anytime soon.

Ministers from the oil cartel reached a preliminary deal to cut production for the first time since the global financial crisis eight years ago. The reduction was modest — to between 32.5 million and 33 million barrels per day from just below current levels of around 33.2 million. Still, decision came as something of a surprise and sent oil prices upward.

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US economy grew at 1.4 per cent rate in spring

WASHINGTON (AP) — The U.S. economy expanded at a slightly faster pace in the spring than previously reported, aided by new-found strength in business construction.

The Commerce Department said Thursday the gross domestic product, the broadest measure of the economy, expanded at an annual pace of 1.4 per cent in the April-June quarter. That is up from a previous estimate of 1.1 per cent growth. Much of the upward revision reflected an increase in spending on structures such as office buildings.

The modest second-quarter gain followed weaker readings of 0.8 per cent GDP growth in the first quarter and 0.9 per cent in the final three months of last year.

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Stocks skid as drugmakers fall, then bank woes deepen losses

NEW YORK (AP) — U.S. stocks skidded Thursday as drug companies and banks absorbed large losses. Drugmakers faced scrutiny over price increases, while banks fell as investors worried about the stability of Deutsche Bank and other financial institutions.

Stocks were slightly lower in morning trading, and they fell hard at 12:30 p.m. Eastern time on renewed concerns about Germany’s largest bank. EpiPen maker Mylan fell after legislators called for an investigation of the company. The price of oil continued to rise, which sent oil drilling and equipment companies higher. Stocks gave up most of their gains from the last two days.

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Applications for US unemployment aid tick higher to 254,000

WASHINGTON (AP) — More Americans sought unemployment benefits last week but the number of applications remained low, the latest sign that layoffs are scarce.

The Labor Department said Thursday that weekly applications for jobless aid rose 3,000 to a seasonally adjusted 254,000. The four-week average, a less volatile measure, ticked down to 256,000, matching a 43-year low first reached in April.

The number of people receiving aid dropped 46,000 to 2.1 million, the smallest number since July, 2000. Even in a healthy economy some people lose jobs as companies restructure.

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US pending home sales slump in August

WASHINGTON (AP) — Fewer Americans signed contracts to buy homes in August, as a shortage of properties for sale is weighing on the market.

The National Association of Realtors said Thursday its seasonally adjusted pending home sales index fell 2.4 per cent last month to 108.5, its lowest reading since January. The number of signed contracts slumped sharply in the South, the nation’s largest housing market. But pending sales improved in the Northeast, Midwest and West.

Home purchases and prices have risen much of this year but a slowdown surfaced in August as a lack of inventory has hurt the market.

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Average US 30-year mortgage rate slips to 3.42 per cent

WASHINGTON (AP) — Long-term U.S. mortgage rates slipped this week to the lowest level since mid-July.

Mortgage giant Freddie Mac says the average for a 30-year fixed-rate mortgage dropped to 3.42 per cent, down from 3.48 per cent last week. The benchmark rate is down from 3.85 per cent a year ago and is close to its all-time low of 3.31 per cent in November 2012. The 15-year fixed-rate mortgage, popular with homeowners who are refinancing, slipped to 2.72 per cent from 2.76 per cent.

The rates tumbled after the Federal Reserve decided against raising short-term rates at its meeting last week.

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PepsiCo’s drinks, snacks boost sales in North America

PURCHASE, N.Y. (AP) — PepsiCo sold more of its beverages and Frito-Lay snacks in North America during the third quarter, helping it deliver a profit that beat Wall Street expectations.

The food and beverage company also raised its full-year earnings forecast.

PepsiCo earned $1.99 billion, or $1.37 per share, for its most recent quarter. After excluding the impact of one-time costs and restructuring changes, it said it earned $1.40 per share. Revenue declined to $16.03 billion from $16.33 billion, hurt by foreign currency exchange translation and the Venezuela deconsolidation.

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Economic growth in sub-Saharan Africa to fall to 1.6 per cent

KAMPALA, Uganda (AP) — A new World Bank report says economic growth across sub-Saharan Africa is projected to fall to 1.6 per cent in 2016, the lowest level in more than two decades. Growth was 3 per cent last year.

The report released Thursday says the weak growth mainly reflects the deteriorating performance of the continent’s largest economies, Nigeria and South Africa. Together, they account for half the region’s economic output.

The report notes, however, that some countries such as Senegal and Ethiopia are posting annual growth rates surpassing 6 per cent.

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Volvo recalls 127K vehicles; leak can cause air bag problem

DETROIT (AP) — Volvo is recalling about 127,000 cars and SUVs worldwide because the air conditioning can leak water into the vehicles and cause air bags to malfunction.

The recall covers 2016 and 2017 XC90 SUVs, S90 sedans and V90 wagons. Volvo says in documents filed with U.S. safety regulators that a drain hose may have been installed incorrectly at the factory.

The moisture may stop the air bags from deploying in a crash and may affect the engine management system. Volvo discovered the problem after getting reports from the field.

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Senator: Education Dept. mishandling Corinthian student debt

WASHINGTON (AP) — Sen. Elizabeth Warren accused the Education Department on Thursday of moving forward with debt collection against nearly 80,000 former students of Corinthian Colleges, despite federal and state findings that the now-defunct for-profit chain defrauded students.

The Massachusetts senator sent a letter to Education Secretary John B. King Jr. reporting the findings of an investigation by members of her staff. “It is unconscionable that instead of helping these borrowers, vast numbers of Corinthian victims are currently being hounded by the Department’s debt collectors,” she said.

The seven-page letter described the department’s approach as backward and anemic.

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The Dow Jones industrial average slid 195.79 points, or 1.1 per cent, to 18,143.45. The Standard & Poor’s 500 gave up 20.24 points, or 0.9 per cent, to 2,151.13. The Nasdaq composite fell 49.39 points, or 0.9 per cent, to 5,269.15.

U.S. crude picked up 78 cents, or 1.7 per cent, to $47.83 a barrel in New York. Brent crude, the international benchmark, added 55 cents, or 1 per cent, to $49.24 a barrel in London. In other energy trading, wholesale gasoline fell 1 cent to $1.47 a gallon. Heating oil rose 2 cents to $1.51 a gallon. Natural gas shed 4 cents to $2.96 per 1,000 cubic feet.

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