How a phoney tweet and computer trades sank stocks
NEW YORK (AP) — For a few surreal minutes, a mere 12 words on Twitter caused the world’s mightiest stock market to tremble.
No sooner did hackers send a false Associated Press tweet reporting explosions at the White House on Tuesday than investors started dumping stocks — eventually unloading $134 billion worth. Turns out, some investors are not only gullible, they’re impossibly fast stock traders.
Except most of the investors weren’t human. They were computers, selling on autopilot beyond the control of humans, like a scene from a sci-fi horror film. Markets quickly recovered after Tuesday’s plunge. But the incident rattled traders and highlighted the danger of handing control to the machines. It also raised questions about whether regulators should be doing more to monitor the relationship between social media and the markets.
Boeing sees early-May restart of 787 deliveries
CHICAGO (AP) — Boeing reported a better-than-expected first-quarter profit even as it scrambled to fix its grounded 787.
The company said on Wednesday that deliveries of the 787 should resume in early May. Most of the 50 planes that have been delivered to airlines will be fixed by the middle of the month, Chairman and CEO Jim McNerney said on the company’s quarterly earnings conference call.
Resuming deliveries and passenger flights would cap a notable turnaround for Boeing. The three-month grounding over battery problems frustrated airlines and turned a spotlight onto the way commercial planes are designed and regulated. Putting the problem behind it will let Boeing focus on building new versions of its bestselling 737 and 777.
Air safety authorities around the world grounded 787s after two different planes suffered from smouldering batteries — one of them including a fire, one of them in-flight — in January. The Federal Aviation Administration has approved Boeing’s redesigned battery system, which the company says should sharply reduce the risk of a fire.
Orders for US durable goods fall 5.7 per cent in March
WASHINGTON (AP) — Orders for long-lasting U.S. factory goods fell in March by the most in seven months. The drop reflected a steep decline in commercial aircraft demand and little growth in orders that signal future business investment.
The Commerce Department said Wednesday that orders for durable goods declined 5.7 per cent in March. That followed a 4.3 per cent gain in February, which was revised lower.
Weaker economies overseas and the impact of across-the-board government spending cuts have made businesses more cautious. That’s reduced demand for manufactured goods. Spending on defence equipment also fell sharply last month.
Under criticism, GOP puts off its health care bill
WASHINGTON (AP) — An effort by House Republicans to highlight problems with President Barack Obama’s health care law by bailing out a program for people with pre-existing medical conditions appeared to backfire Wednesday.
GOP leaders postponed a scheduled vote after the measure met strong opposition from two directions: from conservative groups resistant to any federal role in health care and from Democrats who objected that the Republicans planned to pay for the high-risk patient program by raiding a disease prevention provision the administration says is essential to the overhaul.
The legislation, a departure from the usual GOP efforts to kill the Affordable Health Care Act outright, also faced a White House veto threat.
Ford’s first quarter profit up 15 pct to $1.6 billion
DEARBORN, Mich. (AP) — Ford Motor Co.’s first-quarter profit rose 15 per cent to a $1.6 billion thanks to record earnings in North America and strong sales in China. The automaker lost money again in Europe, although it sees some hints of improvement there.
Ford earned 40 cents per share, up from 35 cents in the same quarter a year ago. Without one-time charges, including restructuring costs in Europe, Ford would have earned 41 cents. That beat Wall Street’s forecast of 37 cents, according to analysts polled by FactSet.
Ford earned $2.4 billion in North America, the highest quarterly total since the company began reporting results regionally in 2000.
Health insurer WellPoint’s 1Q profit rises 3 per cent
INDIANAPOLIS (AP) — WellPoint shares hit their highest level since the summer of 2011 on Wednesday after the nation’s second largest health insurer trumped first-quarter earnings expectations, raised its 2013 forecast and said it could profit immediately from a key health care overhaul coverage expansion next year.
The Indianapolis company’s performance to start 2013 followed a year marked by slumping earnings, a forecast cut and the abrupt departure of former CEO Angela Braly. Analysts say the net income and higher forecast WellPoint reported Wednesday helped improve investor sentiment.
Stifel Nicolaus analyst Thomas Carroll added that investors came into the quarter with relatively low expectations for the Blue Cross Blue Shield insurer, and left happy to see some upside in the stock.
P&G 4th-quarter outlook expectations, shares fall
NEW YORK (AP) — Procter & Gamble’s turnaround is still a work in progress.
The world’s largest consumer product maker said Wednesday that its third-quarter net income rose 6 per cent, helped by cost cuts and improvement in North America.
But P&G’s fourth-quarter outlook came in short of Wall Street’s expectations thanks to a mixed response to its new product introductions and what the company called “choppy” market conditions that led to modest revenue gains.
Fed says redesigned $100 bill ready by October
WASHINGTON (AP) — The Federal Reserve announced Wednesday that it will begin circulating a redesigned $100 bill this fall, more than two years after its initial target.
The Fed has set a new target date of Oct. 8. The redesigned note incorporates added security features, such as a blue, 3-D security ribbon and a disappearing Liberty Bell in an inkwell. The features are designed to thwart counterfeiters.
The revamped bill had been expected to go into circulation in February 2011. But in December 2010, officials announced an indefinite delay. They said they needed more time to fix production issues that left unwanted creases in many of the notes.
Obama administration missed clues on Fisker
WASHINGTON (AP) — The Energy Department did not realize for four months that troubled automaker Fisker Automotive Inc. had missed a crucial production target that was required as part of a half-billion dollar government loan, documents released Wednesday show. The mistake allowed Fisker to obtain an additional $32 million in government funding before the loan was suspended in June 2011.
The Obama administration did not make the suspension of the $529 million loan public until early last year, nearly eight months after it stopped making payments to Fisker and long after the Energy Department first warned that Fisker was not meeting milestones to protect taxpayers.
The administration’s actions — or failure to act — came under sharp criticism from Republicans Wednesday at a hearing before the House Oversight and Government Reform Committee. GOP lawmakers accused the Obama administration of negligence and worse while Democrats dismissed the hearing as a “show trial” intended to embarrass the president.
By The Associated Press(equals)
The Dow Jones industrial average closed down 43.16 points, or 0.3 per cent, at 14,676.30. The Standard & Poor’s 500 index — the market’s most widely used barometer —was flat at 1,578.79. The Nasdaq composite edged up 0.32 point at 3,269.55.
Benchmark oil for June delivery rose $2.25, or 2.5 per cent, to finish at $91.43 a barrel Wednesday on the New York Mercantile Exchange. Brent crude, which is used to price oil used by many U.S. refiners, rose $1.42 to end at $101.73 a barrel on the ICE Futures exchange in London.
Gasoline rose 3 cents to finish at $2.75 per gallon. Heating oil added 3 cents to end at $2.84 a gallon. Natural gas fell 7 cents to finish at $4.17 per 1,000 cubic feet.