May 9, 2013

Briefcase

Dow climbs above 15,000 again, buoyed by earnings reports

The Dow Jones industrial average rose, closing above 15,000 for a second day after breaching the landmark level for the first time Tuesday.

On Wednesday, a day without any major economic releases, investors focused on company earnings as reporting for the first quarter draws to a close. Although earnings growth has slowed from last quarter, profits are at record levels and projected to rise throughout the year.

Internet company AOL plunged as its subscription revenue fell, and hamburger chain Wendy's slumped after it reported revenue that fell short of Wall Street's expectations. On the positive side, high-end grocer Whole Foods and the video game publisher Electronic Arts rose sharply after predicting full-year profits that were higher than analysts were expecting.

Scott Wren, a senior equity strategist at Wells Fargo Advisors, predicted more gains in the short term, but he also said a pullback was likely at some point because the rise in the market is beginning to overstate the improvement in the economy.

"We're still going to keep grinding higher," Wren said. But, he added: "I do think the market is ahead of itself."

Delta Air Lines to pay dividends after three-year profit record

Delta Air Lines will start paying a quarterly dividend and buy back some of its shares -- investor-friendly moves common in other industries but rare for airlines.

For years, the industry repelled long-term investors with high debt, losses, labor strife, bankruptcies, and roller-coaster stock prices. Now, airline bosses are eager to show that those days are over and their companies are good investments.

"Airlines used to be boom and bust companies, extremely risky. More airlines went out of business than earned a profit," said S&P Capital IQ analyst Jim Corridore. "I think what Delta did today is they made a huge statement that, at least for them, it's a different story."

Delta said Wednesday that the dividend and stock buyback will return $1 billion to shareholders. The airline has posted a profit for three straight years, while trimming its debt by $5 billion.

Republicans lead House measure to trade overtime pay for time off

The Republican-led House on Wednesday approved a measure that would give private sector workers the option of trading overtime pay for extra time off weeks or months later.

The bill, approved on a 223-204 vote, would allow employees who work more than 40 hours a week to save up to 160 hours of earned time off for future use. GOP lawmakers say they want to give busy working parents at private firms the same flexibility that public sector workers have to take time off to spend with their children or care for aging parents.

Democrats and worker advocacy groups say it opens the door for employers to pressure workers not to take overtime pay. And they warn there is no guarantee workers would be able to take the extra time off when they want.

The bill has little chance of success in the Democratic-controlled Senate. President Barack Obama has threatened a veto, saying the bill would not prevent employers from slashing overtime hours and doesn't offer enough protection for workers who may not want to receive compensatory time off instead of overtime pay.

Former Enron CEO may get reduction in prison sentence

Convicted ex-Enron Corp. CEO Jeffrey Skilling's more than 24-year prison sentence for his role in the once mighty energy giant's collapse could be reduced by as many as 10 years if a federal judge approves an agreement reached Wednesday between prosecutors and defense attorneys.

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