How did America's banks do on the Federal Reserve's annual stress tests? Read about this and more of the day's top business news stories.
America's Banks Pass Stress Test
Twenty-nine of America’s 30 largest banks would be better able to withstand a severe U.S. recession and global downturn than at any time since the economic collapse, the Federal Reserve announced Thursday. Only Zions Bancorp failed to meet the Fed’s minimum level of capital to withstand a crisis as part of its annual “stress tests,” Bank of America, Citigroup, JPMorgan Chase and Wells Fargo were among the bank’s tested. The Fed has conducted stress tests of the largest U.S. banks every year since 2009, when the country was mired in the worst economic downturn since the Great Depression seven decades earlier. Under the stress tests' "severely adverse" scenario, the U.S. would undergo a recession in which unemployment - now at 6.7 percent - would reach 11.25 percent, stocks would lose nearly half their value and home prices would plunge 25 percent, USA TODAY reports. Under the test, the losses projected for each bank are compared with the capital each holds as a buffer.
Mt.Gox Finds 200,000 Missing bitcoins
Embattled Tokyo-based exchange Mt.Gox announced Friday it has found 200,000 bitcoins worth $116 million at current prices in a "forgotten" digital wallet, CNN reports. MT.Gox was one of the world's largest bitcoin exchanges until last month when it filed for bankruptcy with debts totaling $64 million. At the time it closed, the exchange said it could not account for 850,000 bitcoins, most of which belonged to customers.
Slam Funk: Dayton Squashes Billion Dollar Dream
It was fun while it lasted, and it did not last long for more than 80 percent of March Madness watchers participating in Warren Buffet’s billion-dollar perfect bracket challenge. Four-out-of-five would be winners had picked Ohio State to defeat Dayton, but Dayton upset the 6-seed team. According to one estimate, at least 95 percent of the 100 million or so brackets filled out all across America were busted by the time the NCAA tournament was barely 12 hours old, CBS News reports.
Li & Fung Spinning Off its Brands
Li & Fung, the Hong-Kong-based company which supplies large retailers like Wal-Mart and Target with many of its big-ticket goods like clothing and home furnishings, announced plans to spin-off its brands and licensing unit as a newly created entity called Global Brands Group. The news sent stock prices for the company up 20 percent Friday. “When we looked at our businesses, we realized that the brands business – where we control and license brands – is quite different from the supply chain business,’’ said Bruce Rockowitz, CEO of Li & Fung. “For that to grow up and maximize its potential it’s better as a separate listed company.” Li & Fung hopes to list the new company on the Hong Kong Stock Exchange this year. If Hong Kong regulators sign off on the deal, Li & Fung shareholders will own shares in both companies.
Darden Still Plans to Rid Itself of Red Lobster
With third-quarter results in line with analysts’ low expectations, Darden Restaurants said again it will divest itself of its Red Lobster restaurant chain. Darden, the Orlando-based company that owns Olive Garden and Longhorn Steakhouses as well as Red Lobster, says the severe winter weather hurt both sales and profit. The company’s net income fell to $109.7 million, or 82 cents per share in the quarter ended Feb. 23, from $134.4 million, or $1.02 per share, a year earlier. Same restaurant sales at Red Lobster fell 8.8 percent and fell 5.4 percent at Olive Garden. They rose by 0.3 percent at Longhorn Steakhouse. Analysts’ predictions for the third quarter report were on line with actual results.
Tiffany Expects Single-Digit Sales Increases
Tiffany & Co. Friday reports expectations for worldwide sales to rise in the high single digits in percentage terms this year, with positive results in all regions. The New York-based jeweler reported a loss of $103.6 million, or 81 cents per share, in the fourth quarter ended Jan. 31, due primarily to losing an arbitration ruling against The Swatch Group. A year earlier, it recorded a profit of $179.6 million, or $1.40 a share. Excluding the loss related to the Swatch transaction, Tiffany earned $1.47 per share last quarter. The company said it expected a profit of $4.05 to $4.15 per share this fiscal year.
“Starbucks Evenings” with Beer and Wine in Store
Starbucks is looking to expand alcohol sales to thousands of its select stores over the next several years, the Seattle-based company announced Thursday. “Starbucks Evenings,” in which beer and wine are served after 4 p.m., was first offered in one of Starbucks’ Seattle cafes in 2010. It is now available in 26 cafes with plans to expand to 40 by the end of the year, the Associated Press reports. In addition to alcohol, the cafes also serve small dishes such as flatbreads ranging in price from $3 to $5. “Starbucks Evenings” expands the chain’s initiative to boost sales in the afternoon by adding new sandwiches and salads in its approximately 11,000 stores.