Update on the latest business
Stocks move higher
NEW YORK (AP) — Stocks are mostly higher in midday trading on Wall Street as health care companies rise and chipmakers and other technology companies bounce back from Wednesday losses.
Airlines continue to take steep losses as investors worry about rising costs and the possibility of falling fares.
The dollar is weakening further. The U.S. currency remains at three-year lows.
NEW HOME SALES
US new home sales tumbled 9.3 percent in December
WASHINGTON (AP) — Americans cut back their purchases of new homes in December as sales fell from November’s 10-year high.
The Commerce Department says new-home sales skidded 9.3 percent last month to a seasonally adjusted annual rate of 625,000. It was the biggest drop since August 2016. November sales were revised lower — to 689,000 from an originally reported 733,000, but were still the strongest since October 2007.
Sales are volatile from month to month, but 2017 was a strong year overall: New-home sales rose 14.1 percent from December 2016.
The median price of a new home hit a record $335,400 in December, up 2.6 percent from a year earlier.
US mortgage rates rise for 3rd straight week
WASHINGTON (AP) — U.S. mortgage rates rose this week for a third week in a row, lifted by investors’ expectations for faster economic growth, which has pushed up borrowing costs.
Mortgage giant Freddie Mac said Thursday that the rate on 30-year, fixed-rate mortgages rose to 4.15 percent this week from 4.04 percent. That is the highest since March. The rate on 15-year fixed-rate mortgages, which is popular with homeowners who are refinancing, rose to 3.62 percent, also the third straight increase.
Signs of faster economic growth have also lifted concerns that inflation may quicken and the Federal Reserve will raise short-term interest rates more quickly to keep price increases in check. That has driven up the yield on the 10-year Treasury note. Mortgage rates track the yield on the 10-year.
Home Depot to give one-time bonus of up to $1,000
ATLANTA (AP) — Home Depot is paying out one-time bonuses of up to $1,000 in cash to its hourly workers in the U.S., citing the recent tax overhaul.
The home improvement retailer follows others doing the same, including Disney, Starbucks and Walmart.
Home Depot Inc. said Thursday that the one-time bonus will be distributed in the current quarter. Existing bonuses will be paid out as well.
The Atlanta company anticipates an approximately $150 million fourth-quarter charge mostly tied to taxes on unremitted offshore earnings. It expects the charge, plus the one-time bonus, to trim its fiscal 2017 earnings outlook by about 19 cents per share.
Southwest profit soars on tax bump
DALLAS (AP) — Southwest Airlines says its fourth-quarter profit jumped to $1.89 billion as the recent tax law reduced the company’s deferred tax liability and should boost 2018 earnings, too.
Dallas-based Southwest said earnings soared from $522 million a year earlier. Much of that was due to a $1.15 billion reduction in Southwest’s liability for deferred taxes because of the new tax law. The law cut the corporate income-tax rate from 35 percent to 21 percent.
The nation’s fourth-biggest airline also said that travel bookings so far in 2018 appear solid, and it gave a cautiously upbeat forecast of revenue in the first quarter.
The report indicated, however, that Southwest continues to be dogged by rising costs for labor and fuel. Overall, costs are rising nearly twice as fast as revenue.
Strong demand for travel is boosting Southwest and other carriers, although investors worry that the airlines are undercutting their ability to raise fares by adding too many flights and seats.
American, Delta revive deal to handle stranded passengers
DALLAS (AP) — American Airlines and Delta are reviving a deal that lets them put passengers on each other’s planes when travelers are stranded by disruptions like winter storms and computer outages.
The new deal took effect on Wednesday. The airlines aren’t disclosing financial terms such as how much they charge to accommodate the other’s passengers.
American and Delta are the nation’s two largest carriers. They stopped cooperating to handle each other’s stranded passengers in September 2015. Delta complained that it was taking far more passengers who were rebooked from American than it sent the other way.
The previous agreement went further. It let passengers book trips with flights on both airlines under the same itinerary — with their baggage being transferred too — but that is not included in the new deal.
DAVOS FORUM-SOUTH KOREA
South Korea to refer US tariffs to WTO
DAVOS, Switzerland (AP) — South Korea says it will refer a dispute with the U.S. administration of President Donald Trump over tariffs on solar panels and washing machines to the World Trade Organization.
But the country’s foreign minister, Kang Kyung-Wha, said Thursday that while “disappointed” by the U.S. stance, it won’t affect Seoul’s wider security alliance with America.
Her comments came while speaking to reporters on the fringes of the World Economic Forum in Davos, Switzerland, where Trump arrived Thursday.
Draghi pushes back against US weak dollar view
FRANKFURT, Germany (AP) — European Central Bank head Mario Draghi is pushing back against statements by U.S. Treasury Secretary Steven Mnuchin that a weaker dollar benefits the U.S.
Draghi was asked about recent U.S. administration statements on the dollar at a news conference Thursday and while not mentioning Mnuchin by name, he reiterated statements agreed by global financial issues that they will “refrain from competitive devaluations.”
A weaker dollar also means a stronger euro, and that’s a headache for Draghi. A stronger currency can hurt exporters, and makes it harder for the ECB to reach its goal of pushing inflation up from 1.4 percent annually to its goal of just under 2 percent.
Mnuchin said Wednesday that “obviously a weaker dollar is good for us as it relates to trade and opportunities.”
FCA net profits nearly doubles in 2017 on higher-margin mix
MILAN (AP) — Automaker Fiat Chrysler saw net profit nearly double last year as a more profitable model mix helped overcome a sales decline in North American markets.
Fiat Chrysler Automobiles on Thursday said net profit for last year hit 3.5 billion euros ($4.3 billion), compared with 1.8 billion a year earlier, as the company cut its industrial debt nearly in half to 2.4 billion euros.
The carmaker delivered 4.7 million vehicles globally, in line with the previous year. U.S. sales fell 8 percent to 2.1 million vehicles due to a decline in fleet sales to the lowest level since 2001. FCA has been making efforts to reduce fleet sales in favor of high-profit generators, and declines were partially offset by sales of Ram trucks, the premium Alfa Romeo brand and Jeep brand SUVs.
SMUGGLED CIRCUITS-SPACE PROGRAMS
Texas man sentenced for smuggling circuits to China, Russia
DALLAS (AP) — A suburban Dallas man has been sentenced to nearly four years in prison for smuggling circuits out of the U.S. for use by space programs in China and Russia.
Sixty-two-year-old Peter Zuccarelli of Plano was sentenced Wednesday after pleading guilty in August to charges that include conspiring to smuggle and illegally export from the U.S.
Prosecutors say that starting in 2015, Zuccarelli used his company to place orders with U.S. suppliers for the circuits, known as radiation hardened integrated circuits. He repackaged them as “touch screen parts” and shipped them out of the U.S.
The circuits have space and military applications so their export is strictly controlled by federal law.
Authorities say he created fake paperwork and made false statements to regulators in an attempt to conceal the smuggling.
HEATED TOBACCO-FDA MEETING
US expert panel doubts benefits of heated tobacco device
SILVER SPRING, Md. (AP) — U.S. government experts have rejected a proposal from Philip Morris International to sell its “heat-not-burn” tobacco device as a lower-risk alternative to cigarettes that reduces disease.
But the panel of advisers to the Food and Drug Administration endorsed a lesser claim that the product reduces exposure to harmful chemicals in cigarettes. The mixed review suggests Philip Morris will be able to market its device to U.S. smokers, but on limited terms.
The FDA is reviewing the closely watched device, iQOS (EYE-kose), which is already sold in more than 30 countries. The penlike device heats sticks of tobacco, but stops short of burning them.
The panel’s opinion is nonbinding and the FDA will make a final decision in coming months on the device and how it could be marketed.
17 universities oppose anti-smoking group with tobacco ties
BOSTON (AP) — Seventeen public health schools in the U.S. and Canada are pledging not to accept research money from a new anti-smoking group backed by the tobacco industry.
The Foundation for a Smoke-Free World was created in September with nearly $1 billion from the Philip Morris Tobacco company and says it will support research to help end smoking worldwide.
The head of the foundation said at the time it’s “fully insulated” from industry influence, but officials at schools, including Harvard and Johns Hopkins, say it’s too closely tied to a harmful industry.
A letter issued by the schools Thursday says if Philip Morris wants to end smoking, it would stop selling cigarettes.
The group hasn’t issued research grants but says it will make funding decisions after February.