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.
Under the agreement, which Justice Department officials say includes a previous court-ordered reduction of as much as nine years, Skilling's original sentence will be reduced to somewhere between 14 and 17.5 years.
The agreement still has to be approved by U.S. District Judge Sim Lake, who is set to hold a June 21 hearing in Houston to make the final decision on the length of Skilling's sentence.
Daniel Petrocelli, Skilling's attorney, says the agreement "brings certainty and finality to a long, painful process."
Justice Department spokesman Peter Carr said the agreement will allow victims of Enron's collapse to finally receive more than $40 million in restitution. The ongoing status of the case has so far prevented the government from distributing Skilling's seized assets to victims, according to the agreement.
Wrigley to take caffeinated gum off market as FDA investigates
Wrigley says it is taking a new caffeinated gum off the market temporarily as the Food and Drug Administration investigates the safety of added caffeine.
The company said Wednesday that it has stopped new sales and marketing of Alert Energy Caffeine Gum "out of respect" for the agency, which said it would investigate the health effects of added caffeine in foods just as Wrigley rolled out Alert late last month. A stick of the gum is equivalent to half a cup of coffee.
"After discussions with the FDA, we have a greater appreciation for its concern about the proliferation of caffeine in the nation's food supply," said Wrigley North America President Casey Keller in a statement. "There is a need for changes in the regulatory framework to better guide the consumers and the industry about the appropriate level and use of caffeinated products."
Wrongful foreclosure victims to get additional compensation
Some 96,000 borrowers who received checks to compensate them for wrongful foreclosures on their mortgages will be getting an additional check to correct for errors in the initial payment, the Federal Reserve announced Wednesday.
The Fed said the affected borrowers received initial compensation amounts that were too low because of errors made by Rust Consulting, the company handling the payments.
The new checks will make up the difference between the amounts that should have been paid and the lower amount paid by Rust. Borrowers are being told to cash both the original check and the new checks, which will be mailed around May 17. The borrowers affected had loans serviced by former subsidiaries of Goldman Sachs and Morgan Stanley.
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