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WICS Newschannel 20 :: News - Business News

Business News

Last Update on July 02, 2015 17:44 GMT

UNEMPLOYMENT BENEFITS

WASHINGTON (AP) -- More people sought U.S. unemployment benefits last week, but the level of applications is still low and points to an improving job market.

The Labor Department says weekly applications rose 10,000 to a seasonally adjusted 281,000. The four-week average, a less volatile figure, ticked up 1,000 to 274,750.

Applications are a proxy for layoffs. Even with the increase, they remain far below 300,000, a historically low level that indicates companies are confident enough in the economy to hold onto their workers. That confidence can also cause them to hire more people.

Consumers have stepped up spending on clothing, furniture and cars, spurring faster growth. Home sales have also accelerated and are now running at the highest level in eight years.

FACTORY ORDERS

WASHINGTON (AP) -- Orders to U.S. factories fell in May by the largest amount in three months, while a key category that signals business investment plans dropped for a second month.

The Commerce Department says factory orders declined 1 percent in May from April, when orders retreated 0.7 percent. Orders in a category that serves as a proxy for business investment were down 0.4 percent after a 0.7 percent decline in April.

Much of the weakness in May reflected a big 35.3 percent fall in demand for commercial aircraft.

But even outside of the volatile transportation category, orders were up only a tiny 0.1 percent. The weak showing suggests that manufacturing is still struggling with challenges such as lower energy prices and a strong dollar, which dampens exports.

GULF OIL SPILL

NEW ORLEANS (AP) -- Officials in Florida, Alabama, Mississippi, Louisiana and Texas have announced an $18.7 billion settlement with BP that resolves years of litigation over the 2010 Gulf of Mexico oil spill.

Thursday's settlement announcement comes as a federal judge was preparing to rule on how much BP owed in federal Clean Water Act penalties after well over 125 million gallons of oil spewed into the Gulf.

BP has said its spill-related costs already exceed $42 billion -- even without the Clean Water Act fine. It's also unclear how much BP will end up paying under a 2012 settlement with individuals and businesses claiming spill-related losses.

The spill resulted from the April 20, 2010, explosion of the Deepwater Horizon rig, which killed 11 workers.

GREECE-BAILOUT

IMF blames Greece govt for predicament; says nation needs debt relief, $56 billion

ATHENS, Greece (AP) -- The International Monetary Fund says Greece needs $56 billion in new financing from October through 2018 because Athens has been slow to enact economic reforms.

The analysis was made before Greece closed its banks and defaulted on IMF loans earlier this week. The outlook is worse now.

Greece's government plans to put austerity measures to voters on Sunday after European creditors rejected its latest proposal for a new aid program.

In Athens today, reporters asked Finance Minister Yanis Varoufakis (YAH'-nihs vah-roo-FAH'-kihs) whether Greeks can expect banks to reopen after Sunday's referendum. He resonded, "Of course!" and when asked when said: "On Tuesday."

He called a deal between Greece and its creditors "a certainty," adding: "Doesn't Europe know what is in its best interest?"

European leaders have said if the vote goes Varuoufakis' way and Greeks reject creditors' demands, Greece will face financial chaos and eventually be pushed out of the 19-nation eurozone.

FIAT CHRYSLER-RECALL HEARING

WASHINGTON (AP) -- A top U.S. auto safety regulator says that Fiat Chrysler failed to provide timely and accurate recall information to her agency and that customers also have problems getting accurate information.

Jennifer Timian, acting director of the National Highway Traffic Safety Administration's defect investigation office, made the remarks Thursday to start a public hearing on the company's recall performance.

She says the problems are widespread and involve slow response to vehicle defects that have caused deaths and injuries.

The agency called the rare hearing to listen to evidence that Fiat Chrysler misbehaved on 23 recalls involving more than 11 million vehicles. NHTSA alleges that the company didn't notify car owners quickly enough, failed to make replacement parts or repairs fast enough, and didn't file paperwork on time in numerous instances.

FORD-RECALL

NEW YORK (AP) -- Ford is recalling 433,000 vehicles, including 2015 Focus, C-MAX and Escape models, because of a software problem that could keep their engines running after drivers try to shut them down.

Ford Motor Co. says there is a flaw in the body control module software in the vehicles. As a result of the problem, the engine could keep running after the key is turned to "off" and removed, or after the start/stop button is pressed to turn the engine off.

The company says no injuries or accidents have been associated with the problem. Ford says dealers will update the software at no cost to consumers.

The recall affects about 375,000 cars in the U.S., 52,000 in Canada and 5,000 in Mexico.

PHILADELPHIA-AIRBNB TAX

PHILADELPHIA (AP) -- Philadelphia has legalized and plans to tax Airbnb and other short-term rentals ahead of Pope Francis' visit in September and next year's Democratic National Convention.

Airbnb says the city on Wednesday became the nation's largest to legalize rentals through online marketplaces. It joins San Francisco and Portland, Oregon, among cities authorizing the transactions.

Philadelphia also changed zoning rules to allow rentals in residential areas and is subjecting them to an 8 1/2 percent hotel tax. The rentals had been operating tax free.

City Councilman William Greenlee says Airbnb-type rentals are essentially short-term hotels and should be made to follow the same rules.

A permit is required for rentals lasting more than 30 days. The city says homes can't be rented out for more than 180 days per year.

MORTGAGE RATES

WASHINGTON (AP) -- Average long-term U.S. mortgage rates rose this week, reaching high levels for the year.

Mortgage giant Freddie Mac says the average rate on a 30-year fixed-rate mortgage rose to 4.08 percent this week from 4.02 percent a week earlier. The rate on 15-year fixed-rate mortgages increased to 3.24 percent from 3.21 percent.

Mortgage rates have increased in recent weeks, in the midst of the spring home buying season, as the economy has shown signs of improvement.

TRUMP-FALLOUT

LOS ANGELES (AP) -- The Reelz channel is coming to the rescue of Donald Trump's Miss USA pageant.

Reelz said Thursday it will carry the pageant that was dropped by NBC after Trump made critical comments about immigrants from Mexico.

In a statement, Reelz chief executive Stan E. Hubbard said the company believes the Miss USA pageant and its contestants are an "integral" part of American tradition.

Reelz, an independent cable and satellite network, decided to exercise its own voice and bring the pageant to viewers, Hubbard said.

He made no mention of Trump, who has faced criticism and lost business deals since making his comments during his presidential campaign announcement last month.

Reelz said Miss USA will be televised Sunday, July 12, the originally scheduled date.

CENTENE-HEALTH NET ACQUISITION

UNDATED (AP) -- Medicaid coverage provider Centene is spending about $6.3 billion to buy fellow insurer Health Net, as managed care companies look to bulk up while adjusting to the federal health care overhaul.

St. Louis-based Centene Corp. said Thursday it will pay a combination of cash and stock valued at $78.57, based on Wednesday's closing price, for each Health Net share. That's a premium of about 21 percent over Health Net's closing price of $65.06. The deal totals about $6.8 billion counting debt.

Both companies' boards have approved the acquisition, which is expected to close early next year.

Health Net Inc., based in Woodland Hills, Calif., gives Centene a chance to increase its enrollment in Medicaid coverage, the state and federal program for the poor and people with disabilities. The overhaul expands Medicaid coverage for millions of people.

CYSTIC FIBROSIS DRUG-FDA

WASHINGTON (AP) -- Federal health officials have approved a new combination drug for the most common form of cystic fibrosis, the debilitating inherited disease that causes internal mucus buildup, lung infections and early death.

The Food and Drug Administration approved the twice-a-day pill from Vertex Pharmaceuticals for a variation of cystic fibrosis that affects about 8,500 people in the U.S. who are 12 years and older. The approval notice was posted to the agency's website.

The new drug, to be sold as Orkambi (or-KAM-bee), is Vertex's follow-up to its breakthrough pill Kalydeco (kuh-LYE-deh-koh), which became the first drug to treat the underlying cause of cystic fibrosis in 2012. Orkambi combines Kalydeco with another new drug ingredient.

Kalydeco is only approved for a cluster of rare forms of cystic fibrosis.

TESLA-RECORD DELIVERIES

PALO ALTO, Calif. (AP) -- Tesla's second-quarter deliveries surged 52 percent to set a company record exceeding 11,000 vehicles.

The Palo Alto, California, electric car maker surpassed 10,000 vehicles for the first time in the first three months of the year and on Thursday said it had broken that record, delivering 11,507 vehicles.

Tesla makes only one car, the Model S sedan, but CEO Elon Musk said last month he expects to begin deliveries of an SUV, the Model X, in three or four months.

Tesla cautioned Thursday that record deliveries are not an indicator of overall financial results. The company has consistently lost money as it ramps up production. Despite record sales in the first quarter, the company lost $154 million.

Shares of Tesla Motors, Inc. are up 2 percent before the opening bell.

Business Stories

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Business News

Applications for US jobless aid rise to still-low 281,000

WASHINGTON (AP) -- More people sought U.S. unemployment benefits last week, but the level of applications is still low and points to an improving job market.

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