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Business Highlights

Created: 10/17/2014 5:52 PM
By: The Associated Press

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Europe's top powers deadlocked as economy sinks

FRANKFURT, Germany (AP) — Europe's economy needs help — fast. Yet the two powers that could take action, the European Central Bank and Germany, don't see eye to eye about what to do.

That leaves Europe's currency union stuck in a dangerous policy limbo that has investors worried as it risks falling into recession for a third time in six years.

Concern that the 18-country currency union, which accounts for 17 percent of the world economy, has no clear path out of its economic trouble is among the key factors in this week's global market turmoil. The Stoxx 50 index of top eurozone stocks fell as much as 6.3 percent this week before recovering somewhat Friday. It is down 5.7 percent over the past three months.

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Rules vary about travel to countries hit by Ebola

Demands are rising in Washington for the U.S. to ban travelers from countries in West Africa, but the Obama administration is resisting and says the screening measures already in place for travelers are more effective.

There are no direct flights from Liberia, Guinea or Sierra Leone to the U.S. Officials say that about 150 passengers a day arrive in the U.S. from those countries after making a connecting flight, usually in Europe. Most arrive at one of five airports, where screening for fever — a symptom of the disease — began this week.

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Yellen: Greatly concerned by widening inequality

WASHINGTON (AP) — Federal Reserve Chair Janet Yellen sounded an alarm Friday about widening economic inequality in the United States, suggesting that America's longstanding identity as a land of opportunity was at stake.

The growing gap between the rich and everyone else narrowed slightly during the Great Recession but has since accelerated, Yellen said in a speech at a conference in Boston on economic opportunity. And robust stock market returns during the recovery helped the wealthy outpace middle-class America in wages, employment and home prices.

Yellen's extensive comments on economic inequality marked an unusual public departure for a Fed chair. Her predecessors as head of the U.S. central bank tended to focus exclusively on the core Fed issues of interest rates, inflation and unemployment. Indeed, the Fed's mandate doesn't explicitly include issues like income or wealth disparities.

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Apartments pushed up US homebuilding in September

WASHINGTON (AP) — Construction firms broke ground on more apartment complexes in September, pushing up the pace of U.S. homebuilding.

Housing starts rose 6.3 percent to a seasonally adjusted annual rate of 1.017 million homes, the Commerce Department said Friday. Almost all of the gains came from apartment construction — a volatile category — which increased 18.5 percent after plunging in August.

The sluggish recovery and meager wage growth has left more Americans renting instead of owning homes. Apartment construction has surged 30.3 percent over the past 12 months.

Starts for single-family houses rose just 1.1 percent in September, contributing to an 11 percent gain during the past 12 months.

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Judge voids Taj Mahal casino union contract

ATLANTIC CITY, N.J. (AP) — The Trump Taj Mahal Casino Resort may survive after all, but it's likely to do so with angry employees.

A federal bankruptcy judge in Delaware on Friday voided the struggling casino's contract with its union workers, giving owner Trump Entertainment Resorts a big part of its plan to keep the casino open and save its 3,000 jobs.

But those workers were seething after Judge Kevin Gross granted the company's request to terminate its contract with Local 54 of the Unite-HERE union. Trump Entertainment said if the ruling went against it, it would close the Taj Mahal on Nov. 13. The company and billionaire investor Carl Icahn had said the casino can't survive without shedding costly pension and health care obligations.

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Chimerix gets FDA OK to test drug for Ebola

WASHINGTON (AP) — A North Carolina drugmaker plans to test its experimental antiviral drug in patients who have Ebola, after getting authorization from regulators at the Food and Drug Administration.

Chimerix Inc. said that it has received FDA clearance to proceed with a trial examining the safety and effectiveness of its brincidofovir tablets in patients who have the virus. The company said in a statement that the drug is available for immediate use in testing.

With the FDA's permission, the Durham, North Carolina, drugmaker previously made the drug available to the first Ebola patient diagnosed in the U.S., who died in Dallas last week. Chimerix did not immediately return requests for comment.

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GE sees strong US economy as profit rises

NEW YORK (AP) — General Electric Co. posted strong third-quarter results, issued an upbeat forecast for the fourth quarter and said U.S. industrial activity is at its highest level since the financial crisis.

CEO Jeff Immelt said there is uncertainty in the global economy, but that nations around the world are still going ahead with large infrastructure projects and companies are buying equipment.

GE reported an 11 percent jump in third-quarter profit Friday due to cost reductions and strong performance from its aviation and oil and gas divisions.

The company reported net income of $3.54 billion for the quarter on sales of $36.17 billion. Last year during the same period the company earned $3.19 billion on revenue of $35.66 billion.

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Obama announces plan to tighten card security

WASHINGTON (AP) — Saying more must be done to stop data breaches affecting consumers, President Barack Obama announced on Friday a government plan to tighten security for the debit cards that transmit federal benefits like Social Security to millions of Americans.

Cards issued by the federal government will now have an internal chip replacing magnetic strips to reduce the potential for fraud. Concern is growing over the security of Americans' financial data, with an estimated 100 million people having been affected by breaches in the past year, including at big retailers like Target and Home Depot.

In addition, the government will apply the security chips and personal identification numbers, called PINS, that replace signatures to all existing and newly issued government credit cards, Obama said. Payment terminals at federal government facilities will be equipped to handle cards with the new technology.

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Bank of England chief economist: rates to stay low

LONDON (AP) — The Bank of England's chief economist signaled Friday that interest rates could remain at record lows for longer than expected due to weaker wage growth and global economic uncertainties.

Andrew Haldane told business leaders he had become "gloomier" because real wages are falling, productivity is stagnant and savings interest rates are at their lowest since the 1970s, even as Britain's economic growth rate remains the envy of other G-7 nations.

The comments helped boost British stocks, which had fallen on investor concern that the Bank of England would increase interest rates. Haldane's remarks came after James Bullard, president of the St. Louis Federal Reserve, said U.S. central bankers should consider delaying plans to wind down bond purchases this month.

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By The Associated Press=

The Dow Jones Industrial average advanced 263.17 points, or 1.6 percent, to 16,380.41 Friday. The Standard & Poor's 500 index rose 24 points, or 1.3 percent, to 1,886.76. The Nasdaq composite rose 41.05 points, or 1 percent, to 4,258.44.

Benchmark U.S. crude rose 5 cents to close at $82.75 a barrel on the New York Mercantile Exchange. Brent crude, a benchmark for international oils used by many U.S. refineries, rose 34 cents to close at $86.16 on the ICE Futures exchange in London. Wholesale gasoline rose 2.2 cents to close at $2.233 a gallon. Heating oil rose 2.8 cents to close at $2.498 a gallon. Natural gas fell 3 cents to close at $3.766 per 1,000 cubic feet.

(Copyright 2014 by The Associated Press. All Rights Reserved.)

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