The Associated Press
Friday, March 18, 2011; 6:01 PM
Investors cheer dividend increases at large banks
NEW YORK (AP) - Bank shareholders got a long-awaited gift from the U.S. Federal Reserve on Friday when the central bank cleared the way for major lenders to increase their dividends.
It was the last hurdle left on the path to recovery for banks and signified a return to health for the industry. Banks were forced to cut their dividends to preserve cash after the financial crisis that peaked in September 2008, when the industry was propped up by a U.S. government bailout package totaling $700 billion.
Banks that received clearance to raise their dividends wasted little time in doing so. JPMorgan Chase & Co. said it would increase its quarterly dividend to 25 cents a share from 5 cents. Wells Fargo & Co. raised its dividend to 12 cents, while U.S. Bancorp increased its dividend to 12.5 cents a share.
Yen rise curbed after G-7 pledges to support Japan
TOKYO (AP) - The yen backed away from historic highs and Japanese shares rose Friday after the Group of Seven major industrialized nations promised coordinated intervention in currency markets to support Japan's recovery from a catastrophic earthquake and tsunami.
The G-7 pledge came a day after the yen soared to an all-time high against the dollar, possibly threatening Japan's exports and hampering its economic recovery from the March 11 quake that triggered an unfolding nuclear crisis.
NY Fed confirms intervention in currency markets
WASHINGTON (AP) - The New York Federal Reserve Bank confirmed that it intervened in currency markets on Friday for the first time in more than a decade.
The disclosure came a day after the Group of Seven major industrialized nations pledged in a statement to join in a coordinated effort to weaken the Japanese yen. The yen has surged in the last week to postwar record levels following the Japanese earthquake and tsunami.
Cisco announces first dividend
NEW YORK (AP) - Cisco Systems Inc., the world's largest maker of computer networking gear, on Friday said its first-ever cash dividend will amount to 6 cents per share and will be paid on April 20.
The company has said since last year that it would start paying a dividend equating to an annual yield of 1 percent to 2 percent, but had not specified the amount or precise timing.
Goldman will pay Berkshire $5.65B to redeem shares
OMAHA, Neb. (AP) - The Goldman Sachs Group Inc. said Friday it has received regulators' permission to spend $5.65 billion to repurchase Berkshire Hathaway's preferred shares in the banking giant.
Goldman said the Federal Reserve has approved its plan to repay Warren Buffett's company for the $5 billion investment it made at the height of the financial crisis in the fall of 2008.
Goldman was eager to repay Berkshire because it had been paying 10 percent interest on the preferred shares, which translated into an annual expense of $500 million.
The repurchase will weigh down Goldman's first-quarter earnings by $2.80 per share because it includes a one-time preferred dividend of about $1.65 billion.
The Federal Reserve also approved Goldman's overall capital spending plan for 2011, including the repurchase of common stock and a possible increase in the bank's quarterly dividend. But Goldman did not announce any stock purchase or dividend plans on Friday.
Unemployment rises in nearly all metro areas
WASHINGTON (AP) - Unemployment rose in nearly all of the 372 largest U.S. cities in January compared to the previous month, mostly because of seasonal changes such as the layoff of temporary retail employees hired for the holidays.
The Labor Department said Friday that the unemployment rate rose in 351 metro areas, fell in only 16, and was unchanged in 5. That's worse than December, when the rate fell in 207 areas and increased in 122.
Other seasonal trends, such as the layoff of construction workers due to winter weather, also contributed to the widespread increase.
Nationwide, the unemployment rate dropped to 9 percent in January from 9.4 percent in December. It ticked down to 8.9 percent in February. But the national data is seasonally adjusted, while the metro data isn't, which makes it more volatile. The metro data also lags the national report by one month.
The report shows that metro areas hit hard by the housing crisis are still struggling with high unemployment. At the same time, a strong recovery in the manufacturing sector, particularly among U.S. auto companies, has bolstered many smaller cities in the Midwest.
General Mills in exclusive talks with Yoplait
General Mills Inc. has entered into exclusive negotiations to buy a majority stake in French yogurt company Yoplait, the company said Friday.
Yoplait is the world's second-largest yogurt maker and is owned by French investment firm PAI partners and French cooperative dairy group Sodiaal. If successful, General Mills would acquire the roughly 50 percent stake held by PAI partners and work with Sodiaal, which is retaining its stake.
General Mills did not disclose the value of the offer but the Wall Street Journal, citing a personal familiar with the situation, has placed it at $2.2 billion.
Netflix locks up rights to its first TV series
LOS GATOS, Calif. (AP) - Netflix Inc.'s Internet video streaming service will be the only place to watch an upcoming TV series with a high-powered pedigree that includes Academy Award-winning actor Kevin Spacey and the director of an Oscar-nominated film about Facebook.
The deal announced Friday illustrates Netflix's growing clout in Hollywood as its mines revenue from its 20 million subscribers to create new home entertainment options. In this instance, Netflix will be showing a series that won't have a scheduled broadcast time. Episodes could be released in bunches instead of just one per week.
Borders outlines additional 28 store closings
NEW YORK (AP) - Borders Group Inc. plans to close an additional 28 stores, bringing the total closings to 228, as it tries to reorganize in bankruptcy protection.
The additional closings would bring the remaining store total to about 400.
The closings are set for a wide variety of states, including seven in California. Stores previously on the list are expected to be closed by the end of April and the 28 additional stores by the end of May.
Starbucks raises prices on packaged coffee
Starbucks Corp. is raising prices it charges retailers for packaged coffee by up to 12 percent to cope with higher costs for beans.
The world's largest coffee chain said that it informed grocery customers Friday of the increase for Starbucks and Seattle's Best Coffee brands. It's up to the grocers and other retailers to decide if they want to pass along that increase to consumers.
Starbucks also raised the price it suggests stores charge to $9.99 from $8.99 for a 12-ounce package of Starbucks coffee and to $7.99 from $6.99 for Seattle's Best.
By The Associated Press
The Dow Jones industrial average gained 83.93 points, or 0.7 percent, to 11,858.52. The Standard & Poor's 500 index rose 5.49, or 0.4 percent, to 1,279.21. The Nasdaq composite index gained 7.62, or 0.3 percent, to 2,643.67.
Benchmark West Texas Intermediate crude for April delivery fell 35 cents to settle at $101.07 per barrel.
In other Nymex trading for April contracts, heating oil fell 4.06 cents to settle at $3.0243 per gallon and gasoline futures were flat, settling at $2.9494 per gallon. Natural gas added a penny to settle at $4.168 per 1,000 cubic feet