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Wall Street’s Sell-off Continues

Business Roundup for Monday, January 27

Traders work on the floor of the New York Stock Exchange
Traders work on the floor of the New York Stock Exchange (Spencer Platt/Getty Images)

NEW YORK (AP) – The sell-off continues on Wall Street, though today’s losses were not as drastic as last week’s. Industrial stocks were among the few winners after heavy-equipment maker Caterpillar reported a surge in earnings for the fourth quarter. The Dow Jones industrial average fell 41 points, to 15,837.88. The Standard & Poor’s 500 fell more than eight points to 1,781.56. The Nasdaq composite fell 44 points, or 1.1 percent, to 4,083.61.

SAN FRANCISCO (AP) — Apple sold a record number of iPhones and iPads during its latest quarter. But the company’s fiscal first-quarter earnings look to be a disappointment when measured against Wall Street expectations. Apple sold 51 million iPhones during the three months ending Dec. 28, but analysts had predicted sales of about 55 million. Management’s revenue forecast for the current quarter is also below analysts’ predictions.

LONDON (AP) — Hopes for a turnaround in Royal Bank of Scotland have taken a hit. The nationalized U.K. bank says it set aside an additional $5 billion to cover U.S. legal costs and customer compensation claims in Britain. The British government rescued RBS in 2008 with a $71 billion capital injection after former CEO Fred Goodwin brought the bank to near-collapse with an aggressive global expansion strategy.

WASHINGTON (AP) — The Associated Press has learned that the U.S. is funding research to prevent anyone from spying on the National Security Agency’s surveillance of Americans’ phone records. The Obama administration is considering ending the NSA’s storage of phone records, so it is looking for a high-volume, encrypted search technique that would keep phone companies or others from seeing who the U.S. is spying on. The Director of National Intelligence has paid at least five research teams across the country to develop the coded search capability.

LOS ANGELES (AP) — Quentin Tarantino is suing Gawker. The two-time Oscar winner says the news and gossip website posted a link to his 146-page script for his latest project called “The Hateful Eight.” Tarantino’s lawsuit accuses Gawker Media of copyright infringement.
DALLAS (AP) — Southwest Airlines is expanding beyond the continental United States. The airline began selling tickets this morning for flights to the Caribbean, starting in July. Southwest will fly to Aruba, the Bahamas and Jamaica from three U.S. airports: Atlanta, Baltimore and Orlando.

LONDON (AP) — Google says that it has purchased a British startup called DeepMind. The artificial intelligence company specializes in algorithms and machine learning. Google’s London office confirmed a deal has been made, but it’s not revealing for how much. The purchase price is reportedly in the neighborhood of $500 million.

REDMOND, Wash. (AP) — Microsoft is renaming its cloud storage service “OneDrive.” British broadcaster BSkyB took issue with the former name, “SkyDrive.” The rebranding brings the name more in line with other company brands. Last July, Microsoft re-organized its corporate structure to focus on providing both devices and services in a strategy it called “One Microsoft.” Its latest game console is called “Xbox One.”

WASHINGTON (AP) — The Supreme Court says steelworkers do not have to be paid for time they spend putting on and taking off protective gear. The court was unanimous in ruling in favor of United States Steel over workers’ claims. Justice Antonin Scalia says the labor agreement between the company and the union does not call for workers to be paid for time spent changing clothes, and most of the safety gear, such as earplugs, glasses and respirators, count as clothing.

WASHINGTON (AP) — Sales of new homes slipped again in December. The Commerce Department reports a 7 percent drop to a seasonally adjusted annual rate of 414,000. That followed a drop of nearly 4 percent in November. Despite those declines, however, 2013 turned out to be the best year for new home sales since 2008, with a sales gain of more than 16 percent. (f0076)

NEW YORK (AP) — Caterpillar’s shares are up nearly 5 percent in morning trading after the company’s fourth-quarter profit and 2014 forecast both beat Wall Street’s expectations. For the period ended Dec. 31, Caterpillar Inc. earned $1 billion, or $1.54 per share. That compares with $697 million, or $1.04 per share, a year earlier. (f0046)

NEW YORK (AP) — Royal Caribbean’s latest financial report comes as a sign that the cruise industry may finally be rebounding. Royal Caribbean posted a fourth-quarter profit of $7 million. That’s pushing the company’s stock higher on Wall Street, despite yesterday’s cancellation of a Caribbean cruise after hundreds of passengers and crew members were sickened with a gastrointestinal illness. (f0063)

NEW YORK (AP) — An Associated Press–GfK Poll finds American shoppers expressing worries about the safety of their personal information following a massive security breach at Target. Nearly half of those surveyed said they are now extremely concerned about their personal data when shopping in stores, while 58 percent worried about online spending and 62 percent worried about using mobile phones for purchases. At the same time, only 37 percent says they’ve tried to use case rather than plastic since the Target breach.

HONG KONG (AP) — International stock markets were pummeled today by the possibility of slowing growth in China and a further reduction in U.S. central bank stimulus. The dollar fell against the euro and the yen. Benchmark crude oil rose above $97 a barrel.

WASHINGTON — The Commerce Department will release new home sales figures for December today. It’s the only government report due out. But there are plenty of corporate financial results for investors to study. Before the market opens, Caterpillar and Royal Caribbean Cruises will report quarterly earnings. After the closing bell, it’s Apple and US Steel. Also LG Electronics reports today.

UNDATED (AP) — The latest survey finds businesses are optimistic about 2014 performance, but it’s not translating into plans for more hiring. The National Association for Business Economics survey finds only 37 percent expect to create jobs in the next six months, and 43 percent expect their companies to modestly hike selling prices this year.

WASHINGTON (AP) — A data analysis done for The Associated Press finds that the face of food stamp recipients is changing. For the first time, working-age people, not children and the elderly, make up the majority in U.S. households that rely on food stamps. The analysis by economists at the University of Kentucky finds it’s due in part to the slow recovery, high unemployment, stagnant wages and an increasing gulf between low-wage and high-skill jobs.


(Copyright 2014 The Associated Press. All Rights Reserved)

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