Chastened banks cuts tens of thousands of jobs
NEW YORK (AP) — Banks aren’t the big jobs machines they used to be.
One after another, major financial firms are trimming their payrolls. In first-quarter earnings announcements this month, Bank of America, Citigroup, JPMorgan Chase, Goldman Sachs and Morgan Stanley revealed that they have slashed more than 31,000 jobs, or 3.5 per cent of their combined workforce, in the past year. For three of those banks, it was the second straight year of cutbacks. And the pattern is being repeated at banks around the world.
Layoffs in the depths of the financial crisis were to be expected. But four years later, and at a time when many banks are reporting higher or even record earnings, the cuts are unsettling to an entire industry.
Exxon 1Q earnings rise but production slips again
NEW YORK (AP) — Growing is hard for a company as big as Exxon.
Exxon Mobil Corp. managed to increase earnings slightly in the first quarter thanks to surging profits from its chemical business and lower taxes.
But Exxon’s makes the bulk of its profit by producing oil and natural gas. And that business slumped — again — in the first three months of the year as production and revenue declined. It was the seventh straight quarter in which production declined compared with the year earlier.
US applications for unemployment aid drop to 339,000
WASHINGTON (AP) — The number of Americans seeking unemployment benefits fell last week to a seasonally adjusted 339,000, the second-fewest in more than five years. The drop suggests that layoffs have declined and that job growth may pick up from last month’s sluggish pace.
Applications for benefits dropped 16,000, the Labor Department said Thursday. The four-week average declined 4,500 to 357,500.
Applications are a proxy for layoffs. When they decline, it signals that companies are cutting fewer jobs.
US rate on 15-year loan at record-low 2.61 per cent
WASHINGTON (AP) — The average U.S. rate on the 15-year fixed mortgage fell last week to its lowest level on record, making refinancing and home-buying more attractive to those who can qualify.
Mortgage buyer Freddie Mac said Thursday that the average rate for the 15-year fixed loan fell to 2.61 per cent. That’s down from 2.64 per cent last week and the lowest rate on records dating back to 1991. The previous record low of 2.63 per cent was reached in November.
The average rate on the 30-year fixed mortgage also moved closer to its record low, dropping to 3.40 per cent. That’s down from 3.41 per cent last week and just above the previous record of 3.31 per cent, also reached in November.
Higher fares help Southwest Airlines’ profit
DALLAS (AP) — Higher fares helped Southwest Airlines Co. make more money than Wall Street expected in the first quarter, but the company said Thursday that automatic federal spending cuts could hurt revenue in April.
The average passenger fare on Southwest is now more than $150 one-way, 4 per cent higher than a year ago.
The airline also gave details on a new policy for no-shows, and it outlined changes for its operation in Atlanta, where it competes with Delta Air Lines Inc.
After 1Q loss, United sees operations improving
United Airlines says it’s on the way to fixing the reliability problems that have driven away travellers. Now it needs to reliably make money.
The airline’s parent company reported a $417 million first-quarter loss on Thursday. CEO Jeff Smisek was disappointed with the financial result, but said the airline is making strides in customer service that will eventually help the bottom line.
United is giving customer service training to airport workers and flight attendants worldwide, including those who fly on regional airlines hired by United. New software is supposed to make it easier for gate agents and ticket counter workers to manage flights. United is spending more on maintenance and has changed how it handles spare parts to make its planes more reliable.
Amazon reports lower 1Q earnings, higher revenue
NEW YORK (AP) — Amazon.com Inc.’s net income declined in the first three months of the year even though revenue increased 22 per cent, as the online retailer continued to spend heavily on order fulfilment and rights to digital content.
Amazon, the world’s largest online retailer and the seller of Kindle devices and services, said Thursday that it earned $82 million, or 18 cents per share, in the first quarter. That’s down 37 per cent from $130 million, or 28 cents per share, in the same period a year earlier. But it’s higher than the 7 cents expected by analysts polled by FactSet.
Revenue rose 22 per cent to $16.07 billion, from $13.19 billion. Analysts expected $16.14 billion.
Starbucks raises outlook but sales miss estimates
NEW YORK (AP) — Starbucks Corp. says its profit rose in its second fiscal quarter as the world’s biggest coffee company saw sales increase in the U.S. and Asia.
The Seattle-based company, which has more than 18,000 locations around the world, raised its outlook for the year. But total sales came in shy of Wall Street expectations and its shares fell in afterhours trading.
Starbucks is facing more competition from restaurant chains that have been expanding their coffee menus to include more lattes and frozen drinks. But the company has nevertheless managed to keep growing by evolving its drinks and food offerings. For example, it recently started rolling out Evolution bottled juices in stores and new baked goods from a San Francisco bakery chain are on the way.
Boeing: Cause of 787 battery fires remains mystery
NAIROBI, Kenya (AP) — A Boeing engineer said Thursday that the cause of the battery problems that have grounded the company’s 787 Dreamliners may never be known.
The engineering leader for the 787, Richard J. Horigan, said the root cause of smouldering batteries experienced by the two different 787s may never be known because the evidence was destroyed by heat.
Horigan also said that all potential causes of the battery fire have been eliminated with the new redesigned battery system. He said it was not the first incident where a problem that caused a malfunction in an aircraft has not been identified definitively, but a solution covering the problem had been found.
Yahoo chairman joins recent boardroom exodus
SAN FRANCISCO (AP) — Yahoo Chairman Alfred Amoroso is joining what has become a mass exodus from the Internet company’s boardroom.
The departure announced Thursday will make Amoroso the seventh member of Yahoo’s board to leave since early last year. He plans to give up his seat when Yahoo Inc. holds its annual shareholders meeting on June 25. His resignation as chairman is effective immediately.
Maynard Webb. Jr. will be interim chairman.
By The Associated Press(equals)
The Dow Jones industrial average rose 24.50 points, or 0.2 per cent, to 14,700.80. The S&P 500 rose 6.37 points, or 0.4 per cent, to 1,585.16. The Nasdaq composite index rose 20.33, or 0.6 per cent, to 3,289.99.
Benchmark oil for June delivery rose $2.21 to close at $93.64 on the New York Mercantile Exchange. Brent crude, which is used to price oil used by many U.S. refiners, rose $1.68 to $103.41 a barrel on the ICE futures exchange in London.
Gasoline rose 6 cents to $2.81 per gallon. Heating oil added 6 cents to $2.90 a gallon. Natural gas was flat at $4.17 per 1,000 cubic feet.