BC-Business News Digest


Associated Press

Posted on July 20, 2013 at 6:00 AM

Business News at 5:30 p.m.

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DETROIT — America's Big Three automakers mortgaged all they owned or went into bankruptcy court to keep from going broke a few years ago. Since then, General Motors, Chrysler and Ford have all rallied, and big profits have returned. Why can't the Motor City do the same? It's not that simple. GM could shed all its problems in bankruptcy court. Detroit can only get rid of its debts. By Auto Writer Tom Krisher.

AP photos.



DETROIT — Michigan's governor and Detroit's emergency manager promise better city services in 30 to 60 days for residents a day after Detroit's unprecedented bankruptcy filing. Residents have heard for decades that the city would tear down more vacant houses, beef up the number of police and place more buses on city streets. Once Detroit sheds its debt, will it mean improvements in everyday life? By Corey Williams and David Eggert.

AP photos, video.



DETROIT — I didn't live through Detroit's "Golden Years." By the time I was born, the Arsenal of Democracy, Motor City and Motown had grown tired. My hometown aged very badly, and at 4:06 p.m. Thursday, it became the largest city in U.S. history to go belly-up. The Detroiter in me wonders why it took so long. An AP Column by Corey Williams.

AP photos.

— DETROIT BANKRUPTCY-NEWS GUIDE: A Q&A about bankruptcy in Detroit.

— DETROIT BANKRUPTCY-THE CREDITORS: A look at who Detroit owes payments to and why.

— DETROIT BANKRUPTCY-WHAT'S NEXT: A look at the bankruptcy process.


WASHINGTON — The Securities and Exchange Commission files civil charges against Steven A. Cohen, accusing the billionaire hedge-fund manager of failing to prevent insider trading at the fund he founded. Cohen founded and runs SAC Capital Advisors, among the largest hedge funds that at one point managed assets of more than $15 billion. The government has called the SAC Capital case one of the biggest insider-trading fraud cases in history. By Business Writer Marcy Gordon.


— SEC-HEDGE FUND MANAGER — The Securities and Exchange Commission rejects an $18 million settlement that would have banned billionaire hedge fund manager Philip Falcone from the securities industry for two years.


NEW YORK — A fiery and fatal train derailment earlier this month in Quebec, near the Maine border, highlighted the danger of moving oil by rail. But while the practice could be made safer, it won't be stopped in its tracks. U.S. and Canadian drillers are producing oil faster than new pipelines can be built. As a result, more trains carrying crude will chug across North America this year than ever before — nearly 1,400 carloads a day. In 2009, there were just 31 carloads a day. Refineries in California, Delaware, New Jersey, Oregon, Pennsylvania and Washington have completed or started projects to receive oil by rail. By Energy Writer Jonathan Fahey.

AP photos, video, graphic.


— OIL ON THE RAILS-GLANCE: Shows annual increase in oil shipments by rail.


An improving outlook for the U.S. economy and signs of stabilization in Europe sent General Electric shares to their highest level since 2008 despite modest quarterly results. CEO Jeff Immelt described the U.S. economic environment as "mixed," but that was a step up from his more cautious view of the U.S. market in recent quarters. By Energy Writer Jonathan Fahey.

AP photos.


NEW YORK — Bulgaria, the United Arab Emirates and Pakistan: an itinerary for a traveler with a flair for languages or a list of scenes for a spy thriller set in the Cold War? Neither. It turns out that they're among the countries with the best-performing stock markets in the world over the last year. And the success of these so-called frontier markets, a group mostly in Africa and the Middle East, is starting to attract U.S. investors eager to find the next hot area. Thanks to rapid economic growth, the MSCI Frontier Market index has gained 22 percent over the past year. That compares with 3 percent growth for MSCI's emerging market index. By Business Writer Matthew Craft.


WASHINGTON — As Congress scrambles to pull back a messy student loan increase, it raises the question: Why did Uncle Sam get into the college loan business, anyway? The short answer: Because the Russians launched Sputnik. By Connie Cass.

AP photos, graphic.


DEARBORN, Mich. — Police could soon be getting some extra backup — from their cars. Ford has a new surveillance system for police cars that automatically sounds a chime, locks the doors and rolls up the windows if it detects someone approaching from behind. The system — which Ford is patenting — is the first of its kind. By Auto Writer Dee-Ann Durbin.

AP photos.



MIAMI — The Securities and Exchange Commission is charging Miami and its former budget director with securities fraud, saying the city marketed bonds to investors while hiding the true reason for moving around about $37.5 million in city funds.


NEW YORK — It is a bad day for technology stocks. Major stock indexes, which are still at or close to record highs, are held back by a slump in the technology sector after Microsoft and Google report disappointing earnings. Outside of the weakness in tech, the broader market is mixed. By Markets Writer Steve Rothwell.

AP photo.

— OIL PRICES — The price of oil falls back after crossing $109 a barrel for the first time since early last year.


WASHINGTON — Another year, another round of exaggeration from President Barack Obama and his administration about health insurance rebates. In his speech defending his health care law Thursday, Obama said rebates averaging $100 are coming from insurance companies to 8.5 million Americans. In fact, most of the money is going straight to employers who provide health insurance, not to their workers, who benefit indirectly. By Calvin Woodward.

AP photos

— IMMIGRATION — Immigration backers, under pressure to do more, plan campaign to pressure House to pass bill.



SANTA ANA, Calif. — A California judge said Friday that he's finalizing a settlement worth more than $1 billion in cases where motorists say the value of their Toyota vehicles plunged after recalls over claims they unexpectedly accelerated. The deal, announced in December, will affect 22 million consumers.


PITTSBURGH — A landmark federal study on hydraulic fracturing, or fracking, shows no evidence that chemicals from the natural gas drilling process moved up to contaminate drinking water aquifers at a western Pennsylvania drilling site, the Department of Energy told The Associated Press. After a year of monitoring, the researchers found that the chemical-laced fluids used to free gas trapped deep below the surface stayed thousands of feet below the shallower areas that supply drinking water, geologist Richard Hammack says. By Kevin Begos.


WASHINGTON — The government is expanding the ways airline passengers can enroll in an expedited screening program that allows travelers to leave on their shoes, light outerwear and belts and keep laptop computers in cases at security checkpoints. About 12 million people are currently enrolled in the program. Another 3 million people are expected to enroll before the end of the year.

— VIVUS-SETTLEMENT — Obesity drug maker Vivus agrees to a settlement with its biggest shareholder, which has been fighting for greater control of the company. A long-time drug executive backed by the shareholder will become CEO and the board will be reconfigured.

— GULF OIL SPILL-SETTLEMENT — A federal judge rejects BP's bid to temporarily halt all settlement payments to Gulf Coast businesses and residents who claim they lost money after the company's 2010 oil spill.

— NUCLEAR PLANT CLOSING — The Japanese company that built corrosion-plagued steam tubes for California's San Onofre nuclear power plant says it will fight allegations of wrongdoing by the plant's operator.

— JPMORGAN CHASE-BOARD — JPMorgan Chase & Co. says two directors who served on the bank's risk policy committee at the time of its $6 billion "London whale" trading loss are stepping down from the board.



LONDON — Vodafone, one of the world's largest mobile phone companies, reports that its revenue declined 3.5 percent to $15.5 billion amid increasing competition in many parts of Europe. The British wireless provider that is thought to be mulling options for its 45 percent stake in the U.S.'s Verizon Wireless, said that regulation, competitive pressures and the weakness of the economies in southern Europe weighed on its revenues.

— MICROSOFT-STOCK — Microsoft's stock is taking a hit after the software giant behind Windows, the Xbox and Surface tablets reported disappointing results for the latest quarter.

— VENTURE-FUNDING — A new report says funding for U.S. startups declined in the April-June period from a year ago, as venture capitalists funneled less money into fewer deals.

— VATICAN-TWEETING INDULGENCES — The Vatican is offering indulgences for Facebook fans, Twitter lovers and other "virtual" participants of the upcoming World Youth Day in Rio de Janeiro. AP photos.

— FINLAND-NOKIA — Moody's Investors Services says Nokia's second-quarter earnings are credit negative, citing a continued drop in sales.



BEIJING — China has ended controls on bank lending rates in a move toward making its financial system more market-oriented. The change announced by the central bank comes amid promises by the ruling Communist Party to make the economy more efficient and productive. Reform advocates see an overhaul of China's interest rate policy as one of the most important changes required to keep its growth strong. By Business Writer Joe McDonald.

AP photo.


PARIS — Stashing profits offshore may soon get tougher for companies, thanks to an ambitious plan released by the finance chiefs of leading world economies aimed at forcing multinationals to pay more taxes. The plan was designed by the Organization for Economic Cooperation and Development and introduced at a meeting of the Group of 20 finance ministers in Moscow. By Angela Charlton.

AP photos.

— CHINA-SOLAR DUTIES — China has fired a new salvo in a global trade battle over solar panels by raising import duties on U.S.- and Korean-made polysilicon that is used to manufacture them.

— EUROPE-FINANCIAL CRISIS — German Chancellor Angela Merkel is warning that a second debt writedown for Greece could undo much of the recent work done to stabilize the euro area.

— INDIA-ECONOMY — India's prime minister touts his record and promises to turn economy around ahead of elections

— BRITAIN-EGYPT — The British government revokes five export licenses for equipment destined for Egypt's military and police in light of recent unrest in the country that has led to the deaths of civilians. AP photo.

— FINLAND-EARNS-STORA ENSO — Stora Enso, Europe's largest paper maker by sales, reports a 70 percent plunge in second-quarter earnings due to sluggish European demand and ongoing restructuring costs.

— SWEDEN-EARNS-ELECTROLUX — Home appliance maker Electrolux reports an 8 percent fall in second-quarter earnings amid continued economic weakness in Europe and unfavorable exchange rate fluctuations.



Being on the receiving end of phone calls demanding that you pay a long-overdue bill can be unpleasant business. But it's big business — $12.2 billion a year — for the more than 4,000 firms chasing down borrowers who owe money on credit cards, auto loans and other accounts. Laws on the books and recent initiatives by the federal government's consumer watchdog agency offer borrowers some protection and ways to push back. Here are six tips for dealing with debt collection firms. By Alex Veiga.



Emerging opportunity

Some of the largest emerging markets -- Brazil, India and China -- are among the worst performers this year. Investors have nevertheless stuck with emerging-market stock mutual funds. They invested $2.1 billion last month. But their interest isn't uniform. Investors are taking a pass on index funds and instead focusing on funds where active managers can pick consumer stocks that stand to benefit from the rising middle class in emerging markets.


Whirlpool raises outlook

Whirlpool lifted its full-year profit outlook after reporting a surge in second-quarter net income.