Stocks Continue to Push Lower
Business Roundup for Wednesday, January 29
WASHINGTON D.C. (AP) – Stock investors had plenty to dislike on Wednesday. Disappointing earnings from some big U.S. companies, ongoing jitters in emerging markets, as well as a further reduction to the Federal Reserve’s economic stimulus all combined to push stocks lower for a fourth day out of the last six.
The stock market opened lower after companies including Boeing and AT&T gave weak earnings outlooks and investors worried about developments in countries like Turkey and South Africa. The market added to its declines after the Fed’s announcement at 2 p.m. Eastern time.
WASHINGTON D.C. (AP) – The Federal Reserve says it’s cutting monthly bond purchases by an additional $10 billion to $65 billion because of a strengthening U.S. economy. The Fed is also reaffirming its plan to keep short-term rates at record lows. The announcement comes after Chairman Ben Bernanke’s final policy meeting. He will step down Friday after eight years as chairman.
WASHINGTON (AP) — The House has passed a $100 billion-a-year, compromise farm bill. It cuts the food stamp program by about 1 percent and preserves most crop subsidies. Some subsidies are being eliminated in favor of more politically defensible insurance programs. For instance, in place of guaranteeing dairy farmers a certain price for milk, they’ll be eligible for subsidized insurance to pay them when the difference between milk and feed prices becomes too small to cover their other expenses.
DETROIT (AP) — Chrysler and Fiat will now be known as Fiat Chrysler Automobiles NV. Fiat’s board of directors agreed on the name today and says the company will be headquartered for tax purposes in the United Kingdom. The board sidestepped a thorny political issue of whether the automakers’ true headquarters will be in the United States or Italy. It plans to keep significant operations in both. Meanwhile, Chrysler reported another quarter of strong profits today, propping up the parent company, which otherwise would have lost money.
LONDON (AP) — Chobani has lost a court fight in Britain. An appeals panel upheld a lower court ruling today that the U.S. yogurt brand cannot label its products “Greek” in the U.K. because they are made in America. Chobani’s rival Fage maintains the “Greek yogurt” label is misleading to consumers if the yogurt is not made in Greece. Greek yogurt is strained to achieve a thick and creamy texture.
WASHINGTON (AP) — President Barack Obama has been promoting higher minimum wages with a visit to a Costco warehouse in Maryland this morning. In his State of the Union address last night, Obama announce an executive order raising minimum wages for new federal contracts to $10.10. He’s calling on Congress to raise the federal minimum wage for all workers to the same amount, saying nobody who works fulltime should ever have to raise a child in poverty.
LONDON (AP) — Central banks in some emerging markets are hiking interest rates in an effort to keep the value of their currencies from falling. Turkey and South Africa today joined India in taking such action. Their currencies have been battered in recent days by a number of factors, including concern over global growth, local political issues and the U.S. Federal Reserve’s decision to rein in its money-creating stimulus. But one strategist warns that using interest rates to defend a currency “usually ends in tears.”
UNDATED (AP) — Boeing’s stock has taken a bit of a nosedive this morning. Boeing reports its profit jumped 26 percent in the fourth-quarter as it delivered more commercial airplanes, and it says that speedup will continue this year. But Boeing’s revenue and profit forecasts for 2014 have come in lower than analysts had been expecting, and that’s pushed share prices down nearly 5 percent.
INDIANAPOLIS (AP) — WellPoint’s earnings took a big hit in the fourth-quarter, as customers of the nation’s second largest health insurer raced to use their coverage before it lapsed due to the health care overhaul. WellPoint says earnings tumbled 68 percent to a little more than $148 million. That compares with $464 million the year before. However, per share earnings and revenue were more or less in line with expectations, and WellPoint’s stock is up in morning trading.
MANILA, Philippines (AP) — Most Asian stock markets have risen Wednesday as jitters about emerging economies have been soothed by the Turkish central bank’s aggressive interest rate hike to stabilize its currency. China has also infused funds into its banking system. Markets have gained ground in Tokyo, Hong Kong and Shanghai.
WASHINGTON (AP) — The Federal Reserve is expected to further reduce its stimulus for the U.S. economy even though that prospect has unsettled global financial markets. It announced last month that it would trim its monthly bond purchases from $85 billion to $75 billion. The two-day Fed meeting that ends today will be the last to be presided over by Ben Bernanke. Vice Chair Janet Yellen will take the reins next week.
WASHINGTON (AP) — The Senate could vote to approve bipartisan legislation to hold back flood insurance rate increases for hundreds of thousands of people. Higher premiums based on new flood maps are set to phase in next year. The measure that could receive a vote today would delay whopping premiums up to four years. Higher premiums for frequently flooded properties and on 1.7 million second homes would remain in place.
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