Business News You Need Today: Aug. 23, 2010
More Americans Tapping Retirement Savings: Mutual-fund giant Fidelity Investments reports the number of Americans seeking to withdraw money from savings set aside for retirement is rising. More households are tapping employer-sponsored 401(k) plans to pay bills or fend off delinquencies, resulting in hefty fees and penalties. The trend is troublesome, reports DailyFinance's Daniel Solin. As the nation's No. 1 provider of such plans, there's much that Fidelity could do to improve the system, but isn't.
Oil Spill Victims May Be Able To Sue: Kenneth Feinberg, the former executive-pay czar, today begins dispensing money from the $20 billion fund set up by BP (BP) to help victims of the Gulf oil spill. But Feinberg hasn't yet decided whether acceptance of payment eliminates victims' ability to sue the oil giant and other parties, including rig operator Transocean (RIG) and Anadarko Petroleum (APC), which had a stake in the doomed Deepwater Horizon rig.
Investing In Bargain Homes: Home buyers in search of a bargain can turn to a new report to help them flesh out communities with the best deals. Published by North Carolina-based Local Market Monitor, the Investor Suitability Report ranks the best and worst housing markets for conservative real-estate investors. The study utilizes data through July from 315 U.S. markets and focuses on single-family homes. Regions where home prices are unlikely to fall further rank highly as potential investments.
Crude Prices Continue Decline: Oil prices held below $74 a barrel Monday in Asian trading as concern about the flagging economic recovery overtook concerns about possible production disruptions caused by hurricanes in the Gulf of Mexico. Crude prices initially rose Monday after news that Tropical Storm Danielle is strengthening in the Atlantic and could become a hurricane by late Tuesday. Forecasters, however, don't expect the storm to threaten major land areas.
BP 'Fishing' For Drill Pipe: BP (BP) is on the hunt for a section of pipe containing the blowout preventer mechanism that failed to prevent the April explosion on the Deepwater Horizon rig, killing 11 workers and sending millions of barrels of oil into the Gulf of Mexico. The Obama administration ordered the oil giant to remove the preventer, which will be used as evidence in pending investigations, prior to the installation of a final plug in the well, which isn't expected until after Labor Day.
BofA Says Cuomo's Charges Unfounded: Bank of America (BAC) is taking New York State Attorney General and gubernatorial candidate Andrew Cuomo to task for allegations he made in a lawsuit. Cuomo charged the banking giant failed to disclose during its takeover of Merrill Lynch the precarious shape the brokerage firm was in before shareholders voted on the deal. As DailyFinance legal-expert Abigail Field explains, BofA argues there is no evidence of misconduct, and the Securities and Exchange Commission agrees.
Earnings Season Winds Down: Though most of the companies within the S&P 500 index have already reported earnings results for the most-recent quarter, several familiar names remain. They include medical-device maker Medtronic (MDT) and networking-giant Novell (NOVL), which analysts expect will report earnings on par with last year's 7 cents a share. Also reporting, network-instrument maker JDS Uniphase (JDSU), dental-products supplier Patterson Cos. (PDCO) and Tiffany (TIF), which analysts expect to report higher earnings than last year's comparable quarter, when the luxury-goods maker earned 41 cents a share.
'Places' Could Struggle, CEO Says: Last week social-media giant Facebook jumped on the location tool bandwagon by introducing "Places," which allows user to "check-in" at restaurants, stores, movie theaters, etc., à la Foursquare, thereby advising friends and followers of their location. But as Foursquare CEO Dennis Crowley tells DailyFinance's Sam Gustin, Facebook may struggle in its effort to get users to embrace its new geo-location service.
Stocks Stuck Until Midterm Elections: Though the market might toss and turn over this week's data on home sales, durable goods orders and gross domestic product, the months-long pattern of sleepy, range-bound trading is likely here to stay -- at least until the midterm elections, says Jason Weisberg, a trader and senior vice president with Seaport Securities. For more on Weisberg's view from the floor of the New York Stock Exchange (NYX), watch the video.
Smartphone Payments Coming To NYC: Bank of America (BAC) will start testing a system next month that allows people to pay New York-area merchants through their mobile phones instead of swiping plastic credit or debit cards, WalletPop reports. New York City taxis, Walgreen (WAG) drugstores, Home Depot (HD) and McDonald's (MCD) are among merchants in the test program, which may be expanded if it goes well.
Super Celebrities Borrow Super Yachts: Madonna, the eternal Material Girl, recently borrowed a Russian oligarch's 377-foot super yacht to film the new Duke of Windsor movie she's directing in the south of France. As Luxist reports, however, the aging pop star isn't the only celebrity these days borrowing such lavish, buoyant transportation. Everyone from Brad Pitt and Angelina Jolie to David and Victoria Beckham are living it up on the high seas, though some are paying their way.