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WICS Newschannel 20 :: News - Business News

Business News

Last Update on January 29, 2015 08:36 GMT

ECONOMY-THE DAY AHEAD

WASHINGTON (AP) -- The Labor Department will report today on the number of people who applied for unemployment benefits last week. In last Thursday's report, the number of Americans seeking jobless benefits fell for the first time in a month, a sign that layoffs remain low and hiring is probably still healthy.

Also today, Freddie Mac will release its report on average mortgage rates. Last week, the benchmark 30-year rate fell to 3.63 percent, the lowest level since May 2013.

The National Association of Realtors will also issue its December report on pending home sales, which are seen as a barometer of future purchases. In November, the number of Americans signing contracts to buy homes rose modestly as a strengthening economy helped nudge some would-be homebuyers

A number of companies will release their quarterly financial results today. Ford and Alibaba Group will release earnings before the market opens and Amazon, Google and Visa report after the closing bell.

FEDERAL RESERVE

WASHINGTON (AP) -- The Federal Reserve's outlook for the U.S. economy is steadily brightening. Yet the Fed will be "patient" in raising interest rates from record lows.

That was the dual message the central bank sent Wednesday in a statement it issued after its latest policy meeting.

Why is no rate hike likely soon? The main reason, the Fed suggested in its statement, is that inflation remains well below the central bank's target rate.

And it said the pressures holding down inflation -- mainly plunging oil prices -- have intensified. The Fed said it thinks inflation will decline further before eventually reaching the central bank's 2 percent target rate.

SKOREA-EARNS-SAMSUNG ELECTRONICS

SEOUL, South Korea (AP) -- Samsung lost the battle of the big phones last quarter as Apple's copycat large iPhone lured buyers in the crucial Chinese market.

The South Korean company said Thursday its profit sank last quarter, with an improvement in its semiconductor business insufficient to mask its mobile problems.

It was in China, the world's largest market for smartphones, where Samsung's dramatic decline was most evident.

Samsung accounted for nearly one third of global smartphone sales in 2013, twice as much as Apple. This year, it has dropped to about one quarter.

Apple Inc. was behind Samsung's latest reversal in fortune, launching iPhones with bigger screens that robbed Samsung's Galaxy phones of a key selling point. The company was already battling competition in low-end phones from upstart manufacturers such as China's Xiaomi.

OBAMA-GREECE

WASHINGTON (AP) -- President Barack Obama says the U.S. will work closely with Greece's new government and help Greece pursue long-term prosperity.

Obama spoke by phone Wednesday with new Greek Prime Minister Alexis Tsipras to congratulate him on his party's victory in Greece's recent elections.

Tsipras' new radical left government has vowed to scrap austerity budget cuts, tax hikes and reforms that Greece had promised in exchange for rescue loans from Europe. That's prompted a renewed clash with other eurozone countries about whether to cut Greece off.

The White House says Obama told Tsipras he looks forward to working closely with the new Greek government. Obama and Tsipras also discussed cooperation on security in Europe and counterterrorism.

S&P-Mortgage Rate Settlement

S&P close to $1.37B deal over risky mortgage bond ratings

WASHINGTON (AP) -- Standard & Poor's is close to a $1.37 billion settlement with the Obama administration and U.S. states over allegations it knowingly inflated its ratings of risky mortgage investments that helped trigger the financial crisis.

A person familiar with the matter says the credit rating agency is expected to sign an agreement to settle with the Justice Department and about 20 state attorneys general. The person spoke on condition of anonymity because the settlement isn't finalized and hasn't been announced. It may be completed next week, the person said.

John Piecuch, a spokesman for New York-based S&P, a division of McGraw Hill Financial Inc., says the company is declining to comment.

The settlement would resolve civil charges filed nearly two years ago accusing S&P of failing to warn investors that the housing market was collapsing in 2006 because doing so would hurt its ratings business.

PHILIPPINES-ECONOMY

MANILA, Philippines (AP) -- Philippine economic growth slowed to 6.1 percent last year, hampered by natural disasters, but still good enough to outpace most other countries in Asia.

Socio-Economic Planning Secretary Arsenio Balisacan said Thursday that the 2014 performance ranks the Philippines as the second fastest growing Asian country behind China, which posted 7.3 percent growth, and ahead of Vietnam's 6.0 percent growth.

The Philippine economy grew 7.2 percent in 2013.

National Statistician Lisa Bersales says the "robust performance" of industry, particularly manufacturing and construction, lifted growth in the fourth quarter to 6.9 percent from 6.3 percent a year earlier.

She says services contributed 3.4 percentage points, industry 2.5 percentage points and agriculture 0.2 percentage points to the 2014 GDP growth of 6.1 percent.

FTC-TRACFONE SETTLEMENT

WASHINGTON (AP) -- The nation's largest prepaid mobile provider, TracFone Wireless, will pay $40 million to settle government claims that it misled millions of smartphone customers with promises of unlimited data service.

The Federal Trade Commission said Wednesday that TracFone's advertising promised unlimited data, but the company then drastically slowed down consumers' data speeds -- a practice known as throttling -- when they had used a certain amount of data within a 30-day period. In some cases, the FTC said, the company cut off customers' data service when they ran over the limit.

TracFone's prepaid wireless service is sold under various brands, including Straight Talk, Net10, Simple Mobile and Telcel America.

Throttling will slow down the ability to open Web pages or stream video. According to the commission, TracFone generally throttled the data flow when a customer used about 1 gigabyte to 3 gigabytes. Data service was sometimes suspended at 4 gigabytes to 5 gigabytes, the FTC said.

MCDONALD'S-CEO

NEW YORK (AP) -- McDonald's CEO Don Thompson is stepping down as the world's biggest hamburger chain fights to hold onto customers and transform its image.

The company says that Thompson, who's been CEO for two-and-a-half years, will be replaced by Steve Easterbrook. He's a company veteran who rejoined McDonald's as its chief brand officer in 2013.

McDonald's Corp. has more than 36,000 locations around the world. But it's struggling amid intensifying competition and changing attitudes about food. Customer traffic at established locations in the U.S. fell 4.1 percent last year, following a 1.6 percent decline in 2013. It's also trying to recover after a supplier scandal in China that damaged its reputation.

On Wednesday, McDonald's said Thompson will retire March 1 after nearly 25 years with the company. The 51-year-old Thompson was the first African-American to head the company since it was founded in 1955.

WHITE CASTLE-VEGAS

LAS VEGAS (AP) -- A 24-hour White Castle location on the Las Vegas Strip that opened to long lines of the burger chain's fans had to close for more than two hours to restock after its grand opening.

The Las Vegas Sun reports the restaurant reopened at about 3:15 p.m. Wednesday.

The burger slider chain's first location in Las Vegas opened to much fanfare Tuesday afternoon. The nearest location had been more than 1,500 miles away in Missouri.

White Castle is in the Best Western Plus Casino Royale on the Las Vegas Strip between The Venetian and Harrah's Las Vegas.

NORTH DAKOTA SALTWATER SPILL

BISMARCK, N.D. (AP) -- A pipeline that ruptured recently in North Dakota and spilled nearly 3 million gallons of saltwater produced during oil drilling wasn't inspected by the state before being installed, according to state regulators.

Alison Ritter, a spokeswoman for the North Dakota Industrial Commission, which oversees the state's oil and gas industry, says it's common for officials not to inspect such small gathering pipelines before they become operational.

Ritter says the state has struggled to find qualified installation inspectors because candidates are often drawn to lucrative jobs in the oil industry. Instead, the state has to rely on the word of companies, which are required to file an affidavit stating that they've followed state-mandated procedures when implementing the smaller pipelines, which typically run from one well pad to another.

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Business News

Major business and economic reports scheduled for today:

WASHINGTON (AP) -- The Labor Department will report today on the number of people who applied for unemployment benefits last week. In last Thursday's report, the number of Americans seeking jobless benefits fell for the first time in a month, a sign that layoffs remain low and hiring is probably still healthy.

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