BC-Business News Digest

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Associated Press

Posted on December 19, 2013 at 4:00 AM

Business News at 6:00 p.m.

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All times EST.

New this digest:

Adds: OBAMA-NSA SURVEILLANCE; INSIDER TRADING ARREST; FEDERAL RESERVE; FORD-HINRICHS; FED FORECASTS; FEDERAL RESERVE-COMPARING STATEMENTS

Updates: WALL STREET; HOLIDAY SHOPPING; FORD OUTLOOK; EARNS-ORACLE; SMALLBIZ-SMALL TALK-2013 REVIEW; ON THE MONEY-MINIMIZING MOVING COSTS; GULF OIL SPILL INDICTMENT; OIL PRICES

TOP STORIES:

FEDERAL RESERVE

WASHINGTON — The Federal Reserve has sent its strongest signal of confidence in the U.S. economy since the Great Recession struck six years ago: It's decided the economy is finally strong enough to withstand a slight pullback in the Fed's stimulus. Yet the Fed also made clear it's hardly withdrawing its support for an economy that remains below full health. Chairman Ben Bernanke stressed that the Fed would still work to keep borrowing rates low to try to spur spending and growth and increase very low inflation. By Martin Crutsinger. SENT: 940 words.

With:

— FED FORECASTS — After years of struggling to reduce high unemployment, the Federal Reserve is grappling with another tough challenge: How to raise very low inflation. SENT: 510 words.

— FEDERAL RESERVE-COMPARING STATEMENTS — SENT: 315 words.

WALL STREET

NEW YORK — The stock market had a swift and clear reaction to the Federal Reserve's decision to trim its stimulus efforts: This wasn't so bad after all. Stocks surged, lifting the Dow Jones industrial average nearly 300 points to another record, after the Fed decided the economy was strong for it to begin a modest reduction in its program to boost America's growth and stock market. Because the market had grown accustomed to stimulus, some investors had worried about a decline once the Fed took its foot off the gas. SENT: 690 words, photos

HOLIDAY SHOPPING

NEW YORK — This is shaping up to be the most discount-driven holiday shopping season since the country was deep in recession. It's also one of the most disappointing. Sales are up just 2 percent so far as the season enters its final days, according to ShopperTrak data obtained by The Associated Press. That's below the 2.4 percent pace the firm that tracks store spending expects for the two-month stretch. The modest growth comes as other data shows that stores are offering 13 percent more sales events than they did last year — the highest level of discounting since 2008. By Anne D'Innocenzio. SENT: 1,000 words.

BUDGET ECONOMY

WASHINGTON — The U.S. Congress is on the verge of doing something it hasn't done during three years of partisan warfare: Passing a budget deal that won't likely hurt the economy. The two-year spending plan the Senate is expected to approve Wednesday all but removes the threat of another government shutdown like the one that slowed the economy in October. Economists say the U.S. economy has a good chance to accelerate at its fastest pace since before the Great Recession struck six years ago. By Josh Boak. SENT: 750 words, photo.

FORD-OUTLOOK

Ford Motor Co., a darling of the auto industry's comeback, is facing its biggest test since CEO Alan Mulally charted its successful course out of the Great Recession. The company said profits will slow next year, largely because its North American cash machine is facing intense price competition and higher costs due to new model rollouts. Ford's stock tumbled 6.3 percent, and analysts wondered more broadly about whether the U.S. auto industry, which consistently has been a leader in the economy, could be headed for a period of slower growth in sales and profits. By Tom Krisher. SENT: 820 words, photo.

WITH:

FORD-HINRICHS

Joe Hinrichs is getting set to preside over one of Ford's most ambitious U.S. product launches ever — 16 new cars and trucks in 2014. The company's head of North and South America operations sat down with AP to discuss the big rollout, quality issues that have plagued Ford and other topics. By Dee-Ann Durbin. SENT: 800 words, photos.

FEDEX-DRONES

The CEO of FedEx doesn't see drones taking over the delivery business anytime soon. Fred Smith says FedEx has several drone studies underway, but calls the idea of delivering items by drone "almost amusing." Smith spoke on a conference call after FedEx reported lower than expected earnings for the second quarter. By Joshua Freed. SENT: 285 words under EARNS-FEDEX. UPCOMING: 500 words, photos will incorporate EARNS-FEDEX.

MARKETS & ECONOMY:

HOUSING STARTS

WASHINGTON — U.S. builders broke ground on homes at the fastest pace in more than five years, evidence the housing recovery is accelerating despite higher mortgage rates. By Christopher S. Rugaber. SENT: 430 words, photo.

JPMORGAN-FDIC LAWSUIT

JPMorgan is suing the Federal Deposit Insurance Corp. to recover more than $1 billion. It says the FDIC failed to make good on the promises it made to induce the bank to buy Washington Mutual when it failed in 2008. SENT: 400 words.

Also:

— CREDIT SUISSE SECURITIES-LAWSUIT — The state of New Jersey is accusing Credit Suisse Securities and two affiliates of misrepresenting the risks involved in the sale of more than $10 billion in residential mortgage-backed securities. SENT: 250 words.

GOLDMAN SACHS-JAIL PROGRAM

NEW YORK — About 1,500 incarcerated New York City teens have received behavioral therapy aimed at lowering their chances of returning to jail in the first year of a Goldman Sachs-funded program that's the first U.S. effort to lure private investors to finance public social programs. Nonprofit research group MDRC'S novel approach to social welfare, called a social impact bond, lets companies foot the bill and profit if the program is a success. By Jake Pearson. SENT: 500 words.

INSIDER TRADING ARREST

NEW YORK — A portfolio manager for one of the nation's largest hedge funds who was accused by the government of cheating to boost sagging results in 2007 was convicted of insider trading charges. By Larry Neumeister.

— OIL PRICES —The price of oil bounced around but closed with a gain, just below $98 a barrel, as the U.S. Federal Reserve decided to start to reduce its monetary stimulus and U.S. oil supplies fell for a third straight week. SENT: 280 words.

EARNINGS:

— EARNS-ORACLE — Oracle's fiscal second-quarter net income edged down slightly, hurt by flat revenue from new software licenses and cloud software subscriptions, but still managed to beat Wall Street predictions. SENT: 280 words.

INDUSTRY:

CELLPHONES ON PLANES-DELTA

MINNEAPOLIS — Delta Air Lines says it won't allow passengers to make voice calls from its planes. CEO Richard Anderson says the airline's frequent fliers believe that voice calls in the cabin would disrupt the travel experience. By Joshua Freed. SENT: 280 words.

SMALLBIZ-SMALL TALK-2013 REVIEW

NEW YORK — Between the new health care rules, the government shutdown and massive federal spending cuts, 2013 presented its fair share of hurdles and worries for small business owners. But in the end, owners fought inertia and began hiring again as small business lending began to ease. By Joyce M. Rosenberg. SENT: 740 words, photos.

DISABLED CRUISE SHIP

McALLEN, Texas — Carnival Cruise Lines knew about the risk of leaks from engine fuel hoses and recommended taking precautions on the ill-fated Carnival Triumph that later caught on fire at sea, according to court documents. By Christopher Sherman. SENT: 720 words, photo.

— AMC ENTERTAINMENT-IPO — Shares of movie theater operator AMC Entertainment are rising in its first day as a public company. SENT: 250 words.

— BRITAIN-BP — Oil company BP says it has made a significant discovery in the Gulf of Mexico in a well it co-owns with ConocoPhillips. SENT: 130 words.

— GULF OIL SPILL-INDICTMENT — The first criminal trial produced by the Justice Department's sweeping probe of BP's massive 2010 oil spill in the Gulf of Mexico ended Wednesday with a jury convicting a drilling engineer of trying to obstruct investigators by deleting text messages from his cellular phone. SENT: 1,120 words.

— UNION POSTERS — A prominent business group is challenging government rules that require federal contractors to display posters telling workers they have a legal right to form a union. SENT: 130 words.

— IMG WORLDWIDE-ACQUISITION — Talent agency William Morris Endeavor Entertainment is teaming with investment firm Silver Lake Partners to buy sports marketing firm IMG Worldwide, combining a powerful force in entertainment with one of the powerhouses in sports marketing. SENT: 230 words.

— BOEING-COO — Boeing is promoting Dennis A. Muilenburg to president and chief operating officer. SENT: 170 words.

— VALASSIS-ACQUISITION — Harland Clarke Holdings Corp. plans to take the coupon distributor Valassis private for approximately $1.31 billion in a move that will help diversify its business and expand its client base. SENT: 230 words.

— DENMARK-VESTAS-ENEL — Denmark's troubled turbine maker Vestas A/S says it has received a U.S. order for 175 wind turbines from Enel Green Power North America, Inc. SENT: 130 words.

— BRITAIN-OBIT-MACKAY — SABMiller, one of the world's biggest brewers, says its chairman, Graham Mackay has died after suffering from a brain tumor. SENT: 140 words.

TECHNOLOGY & MEDIA:

SMART BICYCLE

CAMBRIDGE, Mass. — A Massachusetts startup is launching a new device that transforms almost any bicycle into an electric-hybrid vehicle using an app on a smartphone. The device, called the Copenhagen Wheel, is installed as part of a rear hub of a bike wheel and is packed with a proprietary computer, batteries and sensors that monitor how hard a rider is pedaling and activate an onboard motor whenever support is needed. By Rodrique Ngowi. SENT: 580 words, photos, video.

DIGITAL LIFE-TECH TEST-MAKER GIFT GUIDE

ATLANTA — It's easy to pick a holiday present, stick a bow on it and simply say "enjoy." It's tougher to give a gift that keeps on giving and challenges the mind. Luckily, there are plenty of gift projects for "makers." From robot kits to programmable microcontrollers to musical instruments, the time is right to give the gift of making. Ron Harris. SENT: 1,030 words, photos.

— CHINA-BITCOIN BAN — The biggest Bitcoin exchange in China says it's no longer accepting yuan deposits, dealing another setback to the virtual currency. SENT: 290 words.

— OBAMA-NSA SURVEILLANCE — A presidential advisory panel recommends sweeping limits on the government's surveillance programs, including requiring a court to sign off on individual searches of phone records and stripping the National Security Agency of its ability to store that data from Americans.

PERSONAL FINANCE:

ON THE MONEY-MINIMIZING MOVING COSTS

Whether it's relocating for a new job across the country or trading up into a nicer home in the suburbs, moving can be a challenge for even the most organized households. And the costs that go into preparing and safely transporting all of one's belongings can add up fast. Here are some tips on how to save money on your next big move. By Alex Veiga. SENT: 800 words.

WASHINGTON:

BUDGET BATTLE

WASHINGTON — A modest, bipartisan budget pact designed to keep Washington from lurching from fiscal crisis to fiscal crisis and ease the harshest effects of automatic budget cuts is on the brink of passing the Senate. The Senate is on track to clear the bill for President Barack Obama's signature after a 67-33 vote Tuesday in which it easily hurdled a filibuster threshold. By Andrew Taylor. SENT: 1,030 words, photo, audio.

With: BUDGET BATTLE-GLANCE

And:

BUDGET BATTLE-PENSIONS

WASHINGTON — Employers that still offer workers traditional pension plans are in line for hefty insurance premium increases under the budget agreement struck in Congress, the second time in two years that lawmakers have turned to them to help finance spending deals. By Sam Hananel. SENT: 900 words.

INTERNATIONAL:

HAITI-OLDE GOOD THINGS

PORT-AU-PRINCE, Haiti — At the Olde Good Things antique store on Manhattan's Upper West Side, a French crystal chandelier can go for tens of thousands of dollars. The store's Christian missionary owners tell their well-heeled customers that part of the proceeds pay for the group's orphanage in Haiti, one of the poorest countries in the world. What they don't say is that even though they claim in IRS filings to be spending around $2.5 million annually, the home for boys and girls was so dirty and overcrowded that the government said it shouldn't remain open. By Ben Fox. SENT: 1,500 words, photos.

BRITAIN-ECONOMY

LONDON — Britain's unemployment rate has fallen to its lowest rate in about four years, official figures show, in a development that's reinforced expectations that the Bank of England will start raising interest rates sooner than previously thought. By Danica Kirka. SENT: 520 words.

QATAR-LABOR

DUBAI, United Arab Emirates — Dozens of migrant workers hired to do construction work on a prominent skyscraper in Qatar are running low on food after working for almost a year without pay, a leading rights group says. By Adam Schreck. SENT: 580 words, photo.

—GREECE-FINANCIAL CRISIS — The Greek government says it will partially lift protection for distressed mortgages in the crisis-hit country to protect banks from a rising number of unpaid loans. SENT: 140 words.

— BRITAIN-PLASTIC MONEY — The Bank of England says it will start issuing plastic bank notes for the first time in its 300-year history. SENT: 130 words, photos.

— UKRAINE — Ukraine's leadership praises a Russia-financed bailout as a guarantee of financial stability, while opposition activists claimed the deal is likely to worsen economic troubles as the country's dependence on Moscow increases. By Maria Danilova and Gary Peach. SENT: 330 words, photos.

— EUROPEAN CENTRAL BANK — Germany is to nominate a top Bundesbank official to fill a vacant seat on the European Central Bank's executive board, an appointment that would make her the only woman at the top table. SENT: 220 words.

— EUROPE-FINANCIAL CRISIS — European finance ministers appear to have made a breakthrough in their long-standing efforts to deal with failing banks. But other tough issues remain to be resolved. By John-Thor Dahlburg. SENT: 470 words.

— GERMANY-FINANCIAL CRISIS — Chancellor Angela Merkel is renewing a push for European countries to make binding agreements to carry out economic reforms as she underlines continuity in her new government's approach to the continent's debt crisis. SENT: 150 words, photos.

— GERMANY-ECONOMY — German business confidence edges higher amid hopes of faster economic growth in the new year, a closely watched survey shows. SENT: 210 words.

— INDIA-ECONOMY — India's central bank surprises many by keeping its key interest rate unchanged despite a worrying rise in inflation, citing concerns over sluggish economic growth. SENT: 460 words, photos.

— GERMANY-EU-ENERGY PROBE — Chancellor Angela Merkel is vowing to defend German jobs as the European Union's executive investigates whether German companies that use large amounts of electricity get unfair discounts. SENT: 260 words, photos.

— TURKEY-CORRUPTION PROBE — Istanbul police leading a major corruption and bribery investigation targeting allies of Prime Minister Recep Tayyip Erdogan seize shoe boxes stashed with $4.5 million at the home of a state-owned bank's chief executive, a Turkish news agency reports. SENT: 530 words.

_____

A sampling of Money & Markets modules is below. The full digest for AP's Money & Markets service can be found at markets.ap.org. For questions about Money & Markets content, please contact Trevor Delaney (800-845-8450, ext. 1807). For technical support: Todd Balog (816-654-1096). After 6 p.m., contact the AP Business News desk (800-845-8450, ext. 1680) for content questions; 1-800-3AP-STOX for technical support and 212-621-1905 for graphics help.

COMPANY SPOTLIGHT

CVS Caremark sees growth in 2014

CVS Caremark issued guidance for 2014 that includes anticipated growth in earnings per share of more than 10 percent.

CENTERPIECE

Heavy rotation

Investors poured $198 billion into stock mutual funds through November of this year. That's the largest total since 2000, according to Morningstar. At the start of this year, many strategists were predicting a "great rotation" of money toward stocks and away from bonds. But it hasn't been that simple. Although investors have moved into stock funds, they've been selective about the bond funds they're exiting.

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