Cheap oil buoys consumers, shakes up global governments
Cheap oil will be sticking around for a while.
That reality is wreaking havoc and causing uncertainty for some governments and businesses, while creating financial windfalls for others. Less expensive crude is delighting consumers in some regions, while leading to widespread job losses elsewhere.
Oil has fallen from $107 to around $30 in the past 19 months. Furious production by the U.S. and OPEC led to an oversupply. Recently, a sluggish global economy has spurred concerns about demand.
Yahoo to cut 1,700 workers as CEO tries to save her own job
SAN FRANCISCO (AP) — Yahoo is laying off about 1,700 employees and shedding some of its excess baggage in a shake-up likely to determine whether CEO Marissa Mayer can save her own job.
The long-anticipated purge, announced Tuesday, will jettison about 15 per cent of Yahoo’s workforce along with an assortment of services that Mayer decided aren’t worth the time and money that the Internet company has been putting into them.
Mayer hopes to sell some of Yahoo’s unwanted services for about $1 billion, though she didn’t identify which ones. In an apparent concession to some shareholders, Mayer also said Yahoo’s board will mull “strategic alternatives” that could result in the sale of all the company’s Internet operations. Analysts have speculated that Verizon, AT&T and Comcast might be interested in buying Yahoo’s main business, despite years of deterioration.
Super Bowl ads this year might be a snooze
NEW YORK (AP) — No GoDaddy. Not a bikini in sight. Service messages instead of crotch or fart jokes. As the Super Bowl turns 50 and faces middle age, will this be the year that advertisers stick to — gasp — good taste?
The Super Bowl remains advertising’s biggest stage, especially as the broadcast TV audience fragments further thanks to Netflix and other on-demand TV services. Advertisers are spending as much as an estimated $5 million per 30 seconds to capture more than 114 million viewers expected to tune in. Debate over the game-day ads will start on social media before the game and carry over to work the next day, so it’s crucial to stand out, without going so far as to offend.
But this year, amplifying a trend seen the past few years, advertisers seem to be playing it extra safe. And that might mean a repeat of last year’s “Somber Bowl,” when viewers were turned off by too-serious ads.
Chipotle says criminal investigation widens
NEW YORK (AP) — Chipotle says the scope of a previously disclosed federal criminal investigation has widened beyond a single restaurant in California.
The Denver company says it has been served with another subpoena requiring it produce documents related to companywide food safety dating back to the start of 2013. Previously, it had said it was served a subpoena in relation to a California restaurant, where there was a norovirus outbreak over the summer.
Chipotle Mexican Grill Inc. also confirms its sales sank 14.6 per cent at established locations for the fourth quarter after an E. coli outbreak and a separate norovirus incident sickened dozens of people. That’s the first sales drop since the company went public a decade ago.
Congress: Drugmakers planned price hikes to boost profits
Two drugmakers have made a practice of buying and then dramatically hiking the prices of low-cost drugs given to patients with life-threatening conditions including heart disease, AIDS and cancer, according to excerpts from thousands of documents released by federal lawmakers.
A congressional review of more than 300,000 pages from Turing Pharmaceuticals and Valeant Pharmaceuticals reveals how executives planned to maximize profits while fending off negative publicity over the price hikes.
Rep. Elijah Cummings, D-Maryland, released the information Tuesday ahead of a hearing Thursday to examine exorbitant price spikes. Cummings has used his position atop the House Committee on Oversight and Government Reform to investigate several companies that have bought previously low-cost drugs and jacked up their prices many times over.
Exxon’s 4Q and annual profit plunge with oil prices
DALLAS (AP) — The big plunge in crude prices is taking a toll on Big Oil.
Exxon Mobil Corp. said Tuesday that fourth-quarter profit fell 58 per cent to $2.78 billion. It was the oil giant’s smallest profit since the third quarter of 2002.
Exxon’s core exploration and production business lost money in the U.S. and international earnings plummeted by nearly two-thirds. One of the few bright spots, Exxon’s refining operation, was more profitable than a year ago. That helped Exxon avoid the fate of rival Chevron Corp., which lost money in the fourth quarter.
Pfizer earnings fall but tops Street 4Q forecasts
Pfizer Inc.’s fourth-quarter profit fell by half due to higher costs for production, administration and restructuring, but new revenue from an acquisition helped the world’s second-biggest drugmaker beat Wall Street expectations.
The New York-based company’s revenue rose by 7 per cent, ending a long stretch of declining sales due to generic competition to one-time blockbusters. For the first time in five years, Pfizer posted higher revenue, excluding the impact of unfavourable exchange rates, as its 2015 sales rose 3 per cent.
In the latest quarter, Pfizer benefited from rising sales of its newer medicines, including its nascent portfolio of cancer drugs, as well as the addition of injectable medicines made by Hospira, which Pfizer acquired last September.
Takata panel finds problems with its quality processes
DETROIT (AP) — Embattled air bag maker Takata Corp. lacks processes that would improve the quality of its products, including air bag inflators that have been blamed for at least 11 deaths and 139 injuries, an outside panel hired by the company has found.
The panel chaired by former U.S. Transportation Secretary Samuel Skinner determined that Takata has no program in place to find quality problems once its products are installed in cars and trucks. It also faults the company for letting products move through the design process with unresolved problems and says Takata needs to develop its own standards for testing quality and safety rather than relying on automakers and regulators.
The group, which includes three former heads of the U.S. National Highway Traffic Safety Administration, was formed a year ago in the midst of a crisis with Takata air bag inflators. The company uses the chemical ammonium nitrate to create a small explosion that instantly fills air bags in a crash. But the chemical can deteriorate over time when exposed to humidity and heat, burning too fast and blowing apart a metal canister designed to contain the explosion. That can send shards of metal into drivers and passengers.
January US auto sales fall slightly due to storm
DETROIT (AP) — U.S. auto sales fell slightly in January because of the East Coast snowstorm, but analysts say demand remains strong and buyers will likely head back into dealerships this month.
Sales fell less than 1 per cent to 1.1 million, according to Autodata Corp. The mid-January storm, which buried New York and Washington D.C. under more than 2 feet of snow, cost automakers around 15,000 vehicle sales, said John Humphrey, J.D. Power’s senior vice-president of automotive. But automakers said sales volumes returned to normal levels in the last weekend of the month.
Ford, Toyota, Honda and Volkswagen all saw sales decline from last January. General Motors’ sales were flat. Fiat Chrysler, Nissan and Hyundai posted sales increases.
Microsoft recalls power cords for Surface Pro tablets
Microsoft is recalling about 2.44 million AC power cords for its Surface Pro, Surface Pro 2, and Surface Pro 3 computers sold before March 15, 2015, because of a potential fire hazard.
The U.S. Consumer Product Safety Commission says users have reported 56 incidents of the cords overheating and emitting flames, and five incidents where the cords gave users an electric shock.
Microsoft is offering free replacements for the cords.
The Dow Jones industrial average lost 295.64 points, or 1.8 per cent, to 16,153.54. The Standard & Poor’s 500 index fell 36.35 points, or 1.9 per cent, 1,903.03 and the Nasdaq composite fell 103.42 points, or 2.2 per cent, to 4,516.95.
Benchmark U.S. oil slumped $1.74, or 5.5 per cent, to close at $29.88 a barrel on the New York Mercantile Exchange, a day after it plunged nearly 6 per cent. Brent crude lost $1.52, or 4.4 per cent, to $32.72 a barrel in London. Heating oil fell 2.6 cents to $1.011 a gallon, wholesale gasoline fell 8.2 cents to $1.001 a gallon, and natural gas fell to 12.7 cents, or 6 per cent, to $2.025 per thousand cubic feet.