Apple to dole out $100 billion to shareholders
NEW YORK (AP) — Apple is opening the doors to its bank vault, saying it will distribute $100 billion in cash to its shareholders over two years. At the same time, the company said it expects sales for the current quarter to fall from the year before, which would be the first decline in many years.
Apple Inc. on Tuesday said it will buy back $60 billion in shares — the largest buyback authorization in history. It is also raising its dividend by 15 per cent.
Investors have been clamouring for Apple to give them access to its cash hoard, which ended March at an unprecedented $145 billion. Apple’s tight grip on its cash has been blamed for the steep decline in its stock price over the winter.
Airline service improves but delays still possible
NEW YORK (AP) — A day after flight delays plagued much of the nation, air travel was smoother Tuesday, but the government warned passengers that the situation could change by the hour as thousands of air-traffic controllers are forced to take furloughs because of budget cuts.
Meanwhile, airlines and members of Congress urged the Federal Aviation Administration to find other ways to reduce spending. Airlines are worried about the long-term costs late flights will have on their budgets and on passengers.
The delays are the most visible effect yet of Congress and the White House’s failure to agree on a long-term deficit-reduction plan.
Stocks gain on earnings; fake tweet shakes stocks
NEW YORK (AP) — Companies that do the best when the economy is improving led the market higher Tuesday after several of them reported strong quarterly earnings.
Coach, a maker of luxury handbags, and Netflix, which streams TV shows and movies over the Internet, were winners after announcing profits that impressed investors. Financial stocks rose after Travelers’ earnings beat the expectations of financial analysts who follow the company.
That’s a change from earlier this year. The stock market’s surge in 2013 has been led by so-called defensive industries such as health care, consumer staples and utilities. Investors buy those stocks when they’re unsure about the direction of the economy and want to own companies that make products people buy in bad times as well as good. Until now, they’ve been less enthusiastic about stocks of companies that provide discretionary goods and services and do best in good times.
Stocks closed higher even after all financial markets were shaken in the early afternoon when a fake tweet on The Associated Press Twitter account prompted a sudden sell-off.
FAA followed Boeing’s lead on 787 battery testing
WASHINGTON (AP) — Federal regulators let Boeing help write the safety conditions for the problematic battery system in its beleaguered 787 “Dreamliner,” prescribe how to test it and carry out those tests itself, according to testimony and documents released at a hearing Tuesday.
As airlines prepare to resume flying the 787 after a three-month grounding, the National Transportation Safety Board is looking at how the Federal Aviation Administration, Boeing and the company’s subcontractors tested and approved the 787’s lithium ion batteries, and whether the government grants aircraft makers too much leeway when it comes to safety.
Batteries aboard two 787s failed less than two weeks apart in January, causing a fire aboard one plane and smoke in another. The root cause of those incidents is still unknown.
US seeks voluntary limits on car touch screens
DETROIT (AP) — The government is asking automakers to put stronger limits on drivers’ interaction with in-car touch screens in an effort to curb distracted driving.
U.S. traffic safety regulators unveiled guidelines Tuesday that would restrict the amount of time it takes to perform both simple and complex functions on a car’s entertainment and navigation systems.
Regulators also want to ban manual text entry and display of websites, social media, books and other text distractions while the car is moving.
New-homes sales rise 1.5 per cent in March to 417,000
WASHINGTON (AP) — U.S. sales of new homes rose in March to a seasonally adjusted annual rate of 417,000. The increase added to evidence of a sustained housing recovery at the start of the spring buying season.
The Commerce Department said Tuesday that sales of new homes increased 1.5 per cent. The gain brought the level higher than February’s pace of 411,000, though below January’s 445,000 — the fastest pace since July 2008.
New-home sales are still below the 700,000 pace considered healthy by most economists. But the pace has increased 18.5 per cent from 352,000 a year ago.
MF Global’s trustee sues former CEO Corzine
NEW YORK (AP) — The trustee in the MF Global Holdings bankruptcy case has sued ex-CEO Jon Corzine and other former executives, alleging that they pushed the company into risky practices that ultimately led to its collapse.
The lawsuit, filed Monday in bankruptcy court in New York, says Corzine and two other top executives “dramatically changed” the company’s business plan after he became CEO in 2010. They then failed to update controls and other systems that were already weak, the lawsuit says. Corzine pushed the company into making big bets on bonds issued by European countries, the lawsuit says, a move that proved disastrous during the implosion of the debt crisis the following summer. MF Global collapsed in October 2011.
Tuesday, a spokesman for Corzine called the lawsuit “a clear case of Monday morning quarterbacking.” The spokesman, Steven Goldberg, said the lawsuit intentionally ignored the fact that some of MF Global’s trading partners failed and didn’t pay what they owed to MF Global.
Delta posts small 1Q profit; sees April slowdown
MINNEAPOLIS (AP) — Delta Air Lines got a little carried away with fare increases and had to adjust its pricing during the first quarter. It worked, allowing the airline to eke out a narrow profit.
Delta has been aggressive about boosting ticket prices. Sometimes it rolls out broad-based fare increases. Other times, it simply offers fewer cheap seats on a given flight.
Travel demand was strong heading into 2013, so tickets were priced accordingly, said CEO Richard Anderson. But automatic government spending cuts, higher Social Security taxes, and other factors kept some people from flying, so Delta filled seats with sales and promotions.
AT&T loses contract phone subscribers in 1Q
DALLAS (AP) — AT&T Inc. says that it added a net 296,000 devices to its contract-based plans in the first quarter, but the gain was due entirely to tablets, which carry lower monthly fees.
Excluding tablets, the carrier lost a net 69,000 devices from its contract-based plans, the first such loss.
The figures were announced Tuesday as the company reported a 3 per cent gain in net income to $3.7 billion, or 67 cents per share.
Montana Democrat Baucus rules out 7th Senate term
WASHINGTON (AP) — Senate Finance Committee Chairman Max Baucus of Montana announced plans Tuesday to retire at the end of his term after a career of enormous power and notable independence, producing both collaboration and conflict with fellow Democrats on major tax and health care legislation.
He became the eighth senator to announce retirement plans for 2014, and the sixth Democrat. One public poll recently suggested he would have faced a difficult challenge if he had sought a seventh term.
Republicans must gain six seats in 2014 to win a majority, and they said the retirement enhanced their prospects.
By The Associated Press(equals)
The Dow Jones industrial average closed up 152.29 points at 14,719.46. The S&P 500 ended 16.28 points higher at 1,578.78. The Nasdaq composite rose 35.78 points, or 1 per cent, to 3,269.33.
Benchmark oil for June delivery fell 1 cent to finish at $89.18 a barrel on the New York Mercantile Exchange. Brent crude, which is used to price oil used by many U.S. refiners, on Tuesday fell 8 cents to end at $100.31 a barrel on the ICE Futures exchange in London.
Gasoline fell 5 cents to finish at $2.72 per gallon. Heating oil was flat at $2.81 a gallon. Natural gas fell 3 cents to end at $4.24 per 1,000 cubic feet.