Banks see record earnings, as revenue declines slightly
JPMorgan Chase and Wells Fargo, bellwethers for the banking industry, reported record earnings Friday, but those numbers masked troubling declines in revenue.
Revenue fell slightly at both banks, and the earnings gains came largely from slashing expenses and related measures. JPMorgan socked way less to cover potential lawsuits and released some of the money set aside for bad loans. Wells cut back on office space and branches.
The results show that in an era of sluggish loan demand and increased government regulations, banks must stay lean if they want to boost earnings.
As price of crude oil drops, pain at the pumps lessens
Signs that the global economy isn’t strong enough to quickly burn through the world’s ample supplies of oil and gasoline sank crude oil prices for a second straight day.
Weak U.S. economic reports Friday followed reduced forecasts for oil demand. Oil dropped 2 percent.
The falling prices will help extend a long, slow slide in retail gasoline prices, forecasters say. The average price of a gallon of gas in the U.S. fell a penny overnight to $3.56. That’s 23 cents lower than the high for the year, set on Feb. 27. And gas is now 36 cents cheaper than a year ago at this time.
Drivers in Wyoming, Montana, Missouri and South Carolina may even see a few stations selling gas for under $3 this weekend, said Tom Kloza of Gasbuddy.com.
Starbucks to cut retail price of bagged coffee in stores
Starbucks is cutting the suggested retail price of its bagged coffee sold in supermarkets, following similar moves by competitors amid falling commodity costs.
The Seattle-based chain said 12-ounce bags of its whole and ground coffee will be $8.99, down from $9.99. The list price of its Seattle’s Best coffee will also be slashed to $6.99 a bag, from $7.99. The new prices go into effect May 10.
Six retailers recalling brand of desktop toy magnet sets
Six retailers have agreed to a voluntary recall of a brand of potentially dangerous high-powered magnet sets after the manufacturer refused to participate.
The Consumer Product Safety Commission said Friday that Barnes & Noble, Bed Bath & Beyond, Brookstone, Marbles the Brain Store, ThinkGeek and Hallmark retailers are recalling “Buckyballs” and “Buckycubes” after the CPSC received 54 reports of children and teens ingesting the product.
The tiny, powerful magnets are sold as a desktop toy that can be molded into different shapes. If accidentally swallowed or inhaled, the magnets can pinch internal tissue, causing infection or even death.
The CPSC filed a rare legal complaint against the company that manufactured the products, New York-based Maxfield & Oberton, in July after negotiations over a recall failed. The company has since gone out of business. The CPSC says 3 million sets of the magnets have been sold since 2010.
Judge: CEO’s $20 million in severance exceeds limits
A federal bankruptcy judge has at least temporarily blocked a proposed $20 million severance payment for the CEO of American Airlines as part of the company’s merger with US Airways.
The judge ruled Thursday that the proposal for CEO Tom Horton exceeded limits that Congress set for bankruptcy cases in 2005.
A spokesman for American said Friday that the airlines would push ahead with their merger and deal with Horton’s compensation later.
The U.S. trustee’s office, part of the Department of Justice, had objected to Horton’s compensation. Judge Sean Lane declined to approve the payment during a hearing on March 27, but he didn’t issue a ruling until Thursday.
Although Lane denied the severance under bankruptcy law, he left open the possibility of a payment as part of American’s final reorganization plan.
– From news service reports