World Bank downgrades its forecast for 2016 global economy
WASHINGTON (AP) — The World Bank is reducing its forecast for the global economy this year — again.
The aid agency predicted Tuesday that the world economy will expand 2.4 per cent this year, down from the 2.9 per cent it expected in January and unchanged from a tepid 2015.
“The global economy is fragile,” said World Bank economist Ayhan Kose, who helped produce the forecast. “Growth is weak.”
In the years since the world began recovering from the 2008 financial crisis, the World Bank and the International Monetary Fund have repeatedly proved too optimistic about the world economy and have had to downgrade their previous forecasts.
Adviser’s serial firings show ‘big problem’ at brokerages
SCOTRUN, Pa. (AP) — He was fired from one company, then another, then another. And still Anthony Diaz continued handling other people’s money.
A financial adviser who was fired from five companies for misconduct is now facing federal fraud charges. The case illustrates what can go wrong when investment firms hire problem brokers. Diaz has pleaded not guilty.
It happens with alarming frequency: nearly half of financial advisers fired for misconduct find a new job in the industry within a year — and are at greater risk of reoffending.
GM CEO sticks to strategy despite falling sales and shares
DETROIT (AP) — Despite tumbling U.S. sales and a falling stock price, General Motors CEO Mary Barra says she’ll stay the course with a strategy of cutting low-profit sales to rental car companies and keeping resale prices strong.
GM’s sales fell 18 per cent last month compared with a year ago. Its 15.7 per cent market share was the lowest since at least 1980, according to Ward’s Automotive. The company’s stock price is down more than 10 per cent for the year. But the company’s first-quarter profit doubled, to $1.95 billion, and it posted record earnings last year of $9.7 billion.
Late sell-off leaves US stocks barely higher; oil rises
NEW YORK (AP) — Stock indexes inched upward Tuesday, led by gains in energy companies as the price of oil closed above $50 a barrel for the first time in almost a year.
The market had been on track for its highest close since last July, but an afternoon stumble erased most of the early rally, leaving broad indicators with meagre gains for the day. Slumping bond yields increased the appeal of high-dividend stocks, sending prices for phone companies higher. Health care stocks sank as a series of poor results from clinical trials knocked drugmakers lower.
US worker productivity slumped again in 1Q
WASHINGTON (AP) — American workers were less productive again in the January-March quarter, although the decline wasn’t as severe as first thought. Meanwhile, labour costs climbed at a faster pace than initially estimated.
The Labor Department said Tuesday that productivity declined at an annual rate of 0.6 per cent in the first quarter after a 1.7 per cent drop in the fourth quarter. The government first estimated that productivity fell at a 1 per cent rate. Labor costs for employers rose at a 4.5 per cent rate in the first quarter, even faster than the 4.1 per cent gain first reported.
Puerto Rico left without air ambulance service over debt
SAN JUAN, Puerto Rico (AP) — Puerto Rico’s only active air ambulance company announced Tuesday that it has suspended its services, blaming a multimillion-dollar government debt amid a deepening economic crisis that has affected basic services in the U.S. territory.
Aeromed said in a statement that it has been negotiating with Puerto Rico’s government for nearly three years, but that health officials last week rejected a deal to make a minimum payment of $4.4 million, a portion of a much larger overall debt.
“We acknowledge the government’s fiscal situation … but there is no way we can continue to offer our services with inconsistent payments and fees that are unsustainable,” said Aeromed director Jose Hernandez.
Ralph Lauren is closing stores, cutting jobs as sales slump
NEW YORK (AP) — Ralph Lauren is closing stores, cutting jobs and focusing more on its most popular brands to try to reverse its declining fortunes.
The changes are the first big moves from CEO Stefan Larsson, who replaced company founder Ralph Lauren in the role late last year. Lauren is still executive chairman and chief creative officer of the fashion and home decor business he created.
The company plans to close more than 50 stores, or about 10 per cent of its total retail stores. It will let go approximately 1,000 of its 15,000 full-time employees, or almost 7 per cent.
TSA chief says progress being made on shortening lines
WASHINGTON (AP) — Significant progress has been made on shortening screening lines since earlier this spring when airlines reported thousands of frustrated passengers were missing flights, the head of the Transportation Security Administration said Tuesday.
Over the busy Memorial Day weekend, 99 per cent of passengers at U.S. airports waited less than 30 minutes and 93 per cent waited less than 15 minutes in regular security lines, Peter Neffenger told a hearing of the Senate Homeland Security and Governmental Affairs Committee. The agency said it is reducing lines partly by adding more lanes and increasing staffing at peak periods.
Consumer borrowing slowed in April
WASHINGTON (AP) — Consumers slowed their borrowing in April after pushing up their debt levels by a record amount in March.
The Federal Reserve said Tuesday that total borrowing increased by $13.4 billion in April. That’s down from a revised March increase of $28.4 billion, which had been the largest monthly increase on record.
Borrowing in the category that contains auto loans and student debt rose $11.8 billion in April, a solid increase but smaller than the $17.9 billion surge in March. Borrowing in the category that includes credit cards rose $1.6 billion in April compared to a rise of $10.4 billion in March.
Keurig nixes Kold machine, will lay off 130 employees
NEW YORK (AP) — Keurig Green Mountain, which made its name as a maker of single-cup coffee machines, is laying off more than 100 workers after its Keurig Kold home soda machine system fizzled out after less than a year on the market.
The company said Tuesday it’s discontinuing the first generation of Kold and offering customers refunds for the full purchase price. The home soda-making machine debuted last fall to questions about its affordability for the average consumer. The suggested retail price of the bulky countertop units was $369.99, with each soda pod costing more than a dollar.
The Dow Jones industrial average added 17.95 points, or 0.1 per cent, to 17,938.28. The S&P 500 picked up 2.72 points, or 0.1 per cent, to 2,112.13. The Nasdaq composite dipped 6.96 points, or 0.1 per cent, to 4,961.75.
Benchmark U.S. crude oil added 67 cents, or 1.3 per cent, to $50.36 a barrel in New York. Brent crude, which is used to price international oils, added 89 cents, or 1.8 per cent, to $51.44 a barrel in London. In other energy trading, wholesale gasoline held steady at $1.59 a gallon. Heating oil added 4 cents to $1.54 a gallon. Natural gas gained 1 cent to $2.47 per 1,000 cubic feet.