Updated at: 01/29/2015 10:21 PM
By The Associated Press
For traders, oil's plunge takes a toll on egos and accounts
NEW YORK (AP) â€” The plunge in oil has crushed the Russian ruble, erased $80 billion from Exxon Mobil's market value and pushed Venezuela to the brink of economic collapse.
But to Justin Thomas, the real drama in oil unfolds on a smaller scale, a story told in tiny, second-by-second moves in prices on his computer screen. Lately, most of the moves have been down, taking a toll on him and other traders who believe oil should have turned up by now.
Thomas is one of thousands of oil traders who have helped turn market fundamentals â€” lots of oil, not enough demand â€” into a plunge of nearly 60 percent in the price of crude in seven months, a drop with few precedents.
McDonald's new CEO faces onslaught of competition
NEW YORK (AP) â€” McDonald's new boss must feel like a freshly crowned king under siege.
The world's biggest hamburger chain is facing an onslaught of competition, from better-burger chains like Five Guys to brands like Chipotle that tout the superior quality of their ingredients.
Supermarkets and convenience stores are selling more on-the-go food, too. Last year, visits to convenience stores for prepared foods rose 3 percent, while visits to supermarkets were up 1 percent, representing millions of visits, according to The NPD Group.
Alibaba run-in with China regulator signals tougher scrutiny
BEIJING (AP) â€” For years, Alibaba faced complaints it failed to stamp out sales of counterfeit goods on its e-commerce websites. But Chinese regulators stayed silent, apparently reluctant to disrupt the rise of an Internet star even as they accused foreign automakers, dairies and others of violating anti-monopoly or consumer protection rules.
That honeymoon ended this week. In a stinging report, a Cabinet agency accused Alibaba Group Ltd. of allowing sales of fake goods and hurting consumers. It was a warning that Alibaba and other private Chinese companies face tougher scrutiny at a time when they are moving into new markets from retailing to banking to taxi hailing.
Google delivers another earnings letdown, stock sinks
SAN FRANCISCO (AP) â€” Google has gotten into the habit of missing analysts' earnings targets, frustrating investors who believe the online search leader would be more profitable it wasn't pouring so much money into far-flung projects such as Internet-connected eyewear and driverless cars.
The latest letdown came Thursday with the release of Google's fourth-quarter earnings report. The earnings were well below analysts' predictions, marking the fifth consecutive quarter that Google Inc. hasn't cleared a key hurdle for publicly held companies.
Amazon's big spending pays off in 4th quarter
NEW YORK (AP) â€” It was a Prime quarter for Amazon.
Amazon surprised investors on Thursday with a fourth-quarter profit that soundly beat expectations, despite a continued increase in spending and a slight sales miss, partly linked to the strong dollar. Investors drove shares up over 8 percent in aftermarket trading.
The results seem to indicate that areas in which Amazon has been investing in heavily for years, its $99 annual loyalty program and its Amazon Web Services cloud computing offerings for businesses, are finally helping out its bottom line.
Almost half of US households exhaust their salaries
WASHINGTON (AP) â€” Despite signs that the economy is returning to health, two new reports suggest that most Americans are walking a dangerous financial tightrope.
An analysis of Fed survey data by the Pew Charitable Trusts finds 47 percent of U.S. households say they spend all of their income, go into debt or dip into savings to meet their annual expenses.
The Pew analysis found that if a typical middle-class household had to weather a period of joblessness without any income, its available savings would be exhausted within 21 days. And if that same family also cashed in all their retirement investments to get by, they would burn through those assets within four months.
US unemployment benefit applications plunge to 15-year low
WASHINGTON (AP) â€” The number of people seeking unemployment aid plunged last week to the lowest level in almost 15 years, a sign hiring will likely remain healthy.
Weekly applications dropped 43,000 to a seasonally adjusted 265,000, the Labor Department said Thursday. That is the lowest level since April 2000. It is also the biggest decline in two years. The four-week average, a less volatile measure, fell 8,250 to 298,500.
The latest drop may have been exaggerated by the federal holiday, which likely slowed the processing of some claims.
Still, applications are a proxy for layoffs, so the sharp decline means companies are probably cutting fewer jobs. The four-week average has fallen 11 percent in the past year. At the same time, hiring has picked up. Employers added almost 3 million jobs last year, the most since 1999. Strong economic growth has encouraged companies to add more workers.
US pending home sales tumble in December
WASHINGTON (AP) â€” Fewer Americans signed contracts to buy homes in December, a sign that low mortgage rates have yet to coax more buyers into the market.
The National Association of Realtors said Thursday that its seasonally adjusted pending home sales index fell 3.7 percent last month to 100.7. The index ended the year below its 2013 average. But the Realtors project sales of existing homes will rebound in 2015 to 5.26 million, a 6.6 percent increase from last year.
Pending sales are a barometer of future purchases. A one- to two-month lag usually exists between a contract and a completed sale.
Average US rate on 30-year mortgage rises to 3.66 pct.
WASHINGTON (AP) â€” Average long-term U.S. mortgage rates rose slightly this week after four straight weeks of declines, while remaining near historically low levels.
Mortgage company Freddie Mac said Thursday the nationwide average for a 30-year mortgage edged up to 3.66 percent from 3.63 percent last week. The new average rate is still at its lowest level since May 2013.
The rate for the 15-year loan, a popular choice for people who are refinancing, increased to 2.98 percent from 2.93 percent last week.
A year ago, the average 30-year mortgage stood at 4.32 percent and the 15-year mortgage at 3.40 percent. Mortgage rates have remained low even though the Federal Reserve in October ended its monthly bond purchases, which were meant to hold down long-term rates.
Oil producers push to export US crude even as prices drop
Dropping oil prices aren't slowing a push from U.S. producers to ship their crude oil overseas and change a decades-long ban on exports.
The cost incentive may not be obvious, with oil prices are as low as they've been since 2009 and with some analysts predicting they'll drop further. But oil producers are confident of long-term demand and believe that new markets will eventually offer big profits.
Backers see a changing landscape that includes a Congress controlled by Republicans generally viewed as more receptive to oil exports, and some signs the Obama administration will consider modifications to the longstanding policy that bans exports of raw crude.
Obama calls for spending surge, buoyed by rising economy
WASHINGTON (AP) â€” Declaring an end to "mindless austerity," President Barack Obama called for a surge in government spending Thursday, and asked Congress to throw out the sweeping budget cuts both parties agreed to four years ago when deficits were spiraling out of control.
Obama's proposed $74 billion in added spending â€” about 7 percent â€” would be split about evenly between defense programs and the domestic side of the budget. Although he's sought before to reverse the "sequester" ''spending cuts, Obama's pitch in this year's budget comes with the added oomph of an improving economy and big recent declines in federal deficits.
By The Associated Press=
The Dow Jones industrial average rose 225.48 points, or 1.3 percent, to close at 17,416.85. The S&P 500 index gained 19.09 points, or 1 percent, to 2,021.25. The Nasdaq composite added 45.41 points, or 1 percent, to 4,683.41.
The price of U.S. crude rose 8 cents to $44.53 a barrel in New York. Brent crude, a benchmark for international oils used by many U.S. refineries, gained 66 cents to $49.13 a barrel in London. Wholesale gasoline rose .09 cent to close at $1.354 a gallon. Heating oil fell 1.3 cents to $1.618 a gallon. Natural gas dropped 12.3 cents to $2.719 per 1,000 cubic feet.
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