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Stocks slide on Wall Street; Volatile biotechnology sector takes another plunge; eBay down
NEW YORK (AP) — Stocks have turned lower after a mixed batch of corporate earnings reports.
The Nasdaq composite is down more than 2 percent, while the S&P 500 index is off more than one percent. The Dow has been as much as 170 points lower.
Biotechnology companies, including Biogen Idec and Gilead, continue to fall. The sector has become volatile in recent weeks as biotechs come under pressure to lower prices for their drugs.
EBay is down after Carl Icahn abandoned an effort to shake up the company and Bed Bath & Beyond also has fallen after reporting weak sales figures.
Applications for US jobless aid dip 32K to 300,000
WASHINGTON (AP) — The number of people seeking U.S. unemployment benefits dropped to the lowest level in almost seven years, falling 32,000 last week to a seasonally adjusted 300,000.
The Labor Department says that the four-week average of applications, a less volatile measure, fell 4,750 to 316,250.
Fewer Americans sought benefits last week than at any point since the Great Recession began at the end of 2007. Applications are at their lowest level since May of that year.
Applications are a proxy for layoffs. The decrease suggests that employers expect stronger economic growth in the coming months and are holding onto their workers.
Employers added 192,000 jobs in March and 197,000 in February, the Labor Department said last week. Hiring has picked up after a slowdown caused by harsh winter weather.
Average US 30-year mortgage rate down to 4.34 pct.
WASHINGTON (AP) — Average U.S. rates on fixed mortgages declined this week, edging closer to historically low levels as the spring home-buying season begins.
Mortgage buyer Freddie Mac says the average rate for the 30-year loan fell to 4.34 percent from 4.41 percent last week. The average for the 15-year mortgage eased to 3.38 percent from 3.47 percent.
Mortgage rates have risen about a full percentage point since hitting record lows about a year ago.
Going into the spring buying season, the housing market faces a dilemma: Too few people are selling homes. Yet too few buyers can afford the homes that are for sale.
A double-digit jump in the average price of a home sold last year hasn't managed to coax more homeowners to sell.
IMF official: Bold actions needed for recovery
WASHINGTON (AP) — The head of the International Monetary Fund says the global economy is finally turning the corner after a deep recession but the recovery remains too weak.
IMF Managing Director Christine Lagarde says governments need to pursue bolder programs to spur economic growth to help the millions of people who remain unemployed.
Lagarde's comments to reporters came as finance officials began three days of talks in Washington at the spring meetings of the 188-nation IMF and its sister-lending agency, the World Bank.
The discussions on how to boost growth and fight poverty were likely to be overshadowed by rising tensions over Russia's actions in Ukraine. Finance officials from the world's seven major economies were to meet Thursday to discuss whether to increase sanctions against Russia.
Putin warns Europe about Ukraine gas debt
MOSCOW (AP) — Russia's President Vladimir Putin has sent a letter to 18 European leaders urging them to offer a quick financial assistance to Ukraine to prevent a shutdown of Russian natural gas to much of Europe.
In a letter released Thursday by the Kremlin, Putin warned that Ukraine's mounting gas debt is forcing Moscow to start demanding advance payments for Russian gas supplies. He warned that if Ukraine fails to make such payments, Russia's state-controlled gas giant Gazprom will "completely or partially cease gas deliveries."
Putin told the leaders that a possible shutdown of Russian gas supplies will increase the risk of Ukraine siphoning off gas that intended for Europe and will make it difficult to accumulate sufficient reserves for next winter.
Greek bond issue raises 3 billion euros
ATHENS, Greece (AP) — Greece's finance ministry says its first return to the markets in four years has seen strong demand, with the country raising 3 billion euros through five-year bonds at a coupon rate of 4.75 percent.
The ministry said in a statement that nearly 90 percent of the sale was to international investors.
Thursday's bond sale is Greece's first since 2010, when it became locked out of the international debt market by excessively high interest rates due to a severe financial crisis. It has been relying on international bailout funds ever since.
EBay, Icahn settle proxy fight
SAN JOSE, Calif. (AP) — Ebay and billionaire activist investor Carl Icahn have settled their proxy fight ahead of the company's annual meeting.
Icahn and eBay had been in an acrimonious tussle over PayPal. The e-commerce company's mobile payment arm has been growing faster than the rest of the company.
Icahn owns about 2 percent of eBay's shares. He has said repeatedly that the company should spin off all or part of PayPal, while eBay has said the company is better as a whole. Icahn has also criticized the company's directors including CEO John Donahoe.
But in a deal announced today, Icahn says he is dropping the PayPal strategy and withdrawing his proposal to put two nominees on the board.
In return, eBay will make David Dorman an independent director, the 10th on the 12-member board.
In a statement, Icahn says he still believes eBay should spin off PayPal and he and Donahoe have agreed to meet regularly to talk about eBay's strategic options.
GM puts 2 engineers on paid leave in recall case
DETROIT (AP) — General Motors is taking its first disciplinary action connected to its delayed recall of thousands of small cars for a deadly ignition switch problem.
In a statement, the company says it has suspended two engineers with pay.
The action comes after allegations during congressional hearings last week that at least one engineer tried to cover up the switch problem by fixing it without changing the part number. GM CEO Mary Barra calls the suspensions are an "interim step" as the company investigates what happened.
GM has hired a former federal prosecutor to investigate why the company took more than a decade to issue the recall.
GM says at least 13 people have been killed in crashes linked to the problem. The company is recalling 2.6 million cars to replace the switches.
Energy regulator: Steps underway to protect grid
WASHINGTON (AP) — The top federal energy regulator says her agency is taking steps to improve handling of classified national security information, following a report that officials improperly allowed widespread access to a document that outlined specific physical threats to the nation's electric grid.
Cheryl LaFleur is the acting chairwoman of the Federal Energy Regulatory Commission. She told the Senate Energy Committee Thursday that employees are "wiping and scrubbing all databases" among steps to protect sensitive information.
The commission also has directed a nonprofit entity that oversees electric reliability to develop physical security standards for the grid by early June.
The Wall Street Journal reported last month that a secret federal analysis indicated that a coordinated terrorist strike on just nine key electric transmission substations could cause power outages across the country.
TAX REFUND FRAUD
$4 billion: Tax refund fraud a growing problem
WASHINGTON (AP) — An Internet connection and a bunch of stolen identities are all it takes for crooks to collect billions of dollars in bogus federal tax refunds. And the scam is proving too pervasive to stop.
The crime is attracting more attention as the April 15 tax-filing deadline approaches.
Attorney General Eric Holder says the "scale, scope and execution of these fraud schemes" has increased. In the past year, the Justice Department has charged 880 people.
A November watchdog report says the IRS issued $4 billion in fraudulent tax refunds over the previous year to criminals using other people's personal information. The Internal Revenue Service says it's making a dent in the problem, opening more criminal investigations and strengthening controls designed to detect the fraud.
NY judge sentences SAC Capital in $1.8B fraud deal
NEW YORK (AP) — A New York judge has sentenced Connecticut-based SAC Capital on criminal fraud charges according to terms reached with the government in a $1.8 billion deal.
Judge Laura Taylor Swain formally administered the sentence Thursday on SAC Capital LP and three related entities based on pleas to wire fraud and securities fraud.
Both sides had asked Swain to follow the terms of the agreement announced in November. And she did.
The government said in court papers that most of the money managed by the defendants during a decade-long fraud that began in 1999 belonged to the hedge fund's owner and founder, Steven A. Cohen. It noted eight employees were convicted of insider trading.
The corporate defendants say they are "deeply remorseful" for the misconduct of each individual who broke laws.
Ally Financial stock skids in initial trading
Ally Financial may have held the largest initial public offering of the year, but its shares failed to shine as the stock made its market debut.
The Detroit-based company is the former financing arm of General Motors and received a $17.2 billion bailout by the U.S. government during the financial crisis. Ally has since transformed itself into a company focused on U.S. auto lending and banking.
Its offering of 95 million shares priced at $25 each raised $2.38 billion - the largest offering thus far in 2014. But investors showed little enthusiasm for the stock, sending it down 2 percent to $24.45 by midday.
The money from Ally's offering goes to the federal government to help make taxpayers whole.
Family Dollar to cut jobs, close about 370 stores
MATTHEWS, N.C. (AP) — Family Dollar says it will be cutting jobs and closing about 370 underperforming stores as it looks for ways to improve its financial performance. It says it will also cut prices on about 1,000 basic items.
The announcement came as Family Dollar reported its profit and revenue declined in the second quarter as it dealt with bad winter weather.
The discounter said the store closings and job cuts should lower annual operating expenses by $40 million to $45 million, starting with the fiscal third quarter. Family Dollar Stores Inc. currently has more than 8,100 stores in 46 states.
The Matthews, N.C., company says it will also slow new store openings beginning in fiscal 2015 to bolster its return on investment.
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