Stocks surge as tensions in the Ukraine ease, Moody's downgrades Chicago and Radio Shack pulls the plug on more than 1,000 stores. Read about these and more of the day's top business news stories.
Stocks Gain, Gold Drops as Tensions in the Ukraine Ease
Stocks surged Tuesday after Russia pulled its troops back from the border of Ukraine. The Dow Jones industrial average surged 227 points to close at 16,395. The Standard & Poor’s 500 index rebounded from its Monday slump to close at another record high, 1,873. The Nasdaq composite rose 74 points to 4,351. Gold reversed its gains from Monday, when it jumped to a four-month high as investors sought safe assets as tensions escalated over Russia sending troops into Ukraine. Gold for April delivery fell $12.40 to $1,337.90 an ounce.
The President’ Unveils $3.9 Trillion Budget Proposal
President Barack Obama's $3.9 trillion budget proposal projects that the budget would drop from $649 billion in the fiscal year that ends Sept. 30 to $564 billion in fiscal 2015 and $458 billion in 2017, the Associated Press reports. The administration forecasts an unemployment rate, currently at 6.6 percent, of 6.7 percent for 2015 and projects it will stabilize at 5.4 percent by 2018. The forecasts are based on congressional approval of all of the administration’s budget tax and spending proposals, which is unlikely. "After years of fiscal and economic mismanagement, the president has offered perhaps his most irresponsible budget yet," Republican House Speaker John Boehner said in a statement. "Spending too much, borrowing too much, and taxing too much, it would hurt our economy and cost jobs."
Chicago Not Moody’s Kind of Town
Citing Chicago’s “massive and growing” pension problems, Moody's Investors Service rating agency downgraded Chicago's creditworthiness Tuesday. The latest hit to the city's general obligation and sales tax ratings puts that debt only a few notches away from junk status, CNN reports. Moody's said its outlook remains negative, which means additional downgrades could come. The city is facing a massive spike in its annual bill for the pensions it promised current and retired workers. Next year, the city's required contribution will more than double to $1.07 billion. Chicago’s pension system is one of the country’s most troubled. In total, the city's four pension funds -- for firefighters, police officers, and two for other city workers -- face funding holes of nearly $20 billion, CNN states.
China Sets 7.5 Percent Growth Target for 2014
China has set an official economic growth target of 7.5 percent for this year, according to a work report to be delivered Wednesday by the country's premier, The Associated Press reports. The official growth target is the same original target for last year, although real economic growth for 2013 came in at 7.7 percent, a two-decade low. The inflation target for 2014 will be kept at about 3.5 percent, the report said. It also reportedly said the government would work to increase personal incomes while targeting the urban unemployment rate at a maximum of 4.6 percent.
Radio Shack Pulling Plug on 1,100 Stores
More than 90 percent of the U.S. population lives or works within minutes of a Radio Shack location, but that is about to change, the company announced Tuesday. The electronics retailer plans to close as many as 1,100 stores -- or nearly 20% of its locations. The move will leave them with more than 4,000 stores. Sales at Radio Shack stores open at least one year fell 19 percent in the last quarter, the company reported. The number of jobs that will be lost nor which locations would be closed was not disclosed. Radio Shack produced one of the most memorable commercials of last year’s Super Bowl, in which employees were told that “the 80s called” wanting their store back, a self-deprecating admission that its current stores were not in step with the times. Brick and mortar electronics retailers have faced stiff competition in recent years from online retailers. Shares of Radio Shack dropped more than 13 percent in midday trading Tuesday on the news.
"Mint Condition” Takes on New Meaning in Story of Discovered Gold Coins
A more than century-old heist of gold coins from the U.S. Mint may hold the key to solving the mystery behind the stash of gold coins discovered by a California married couple on their property. The couple, who remain anonymous, are facing the possibility that their unearthed treasure, valued at $10 million, may be property of the government, which would make them eligible only for a finder’s fee. The coins were discovered in a can poking out of the ground by the couple while walking their dog. Nearly all of the 1,427 coins, dating from 1847 to 1894, are in uncirculated, mint condition. The couple would like to sell most of the coins. They have loaned some to the American Numismatic Association for its National Money Show, which opens Thursday in Atlanta. They have told newspapers they would like to use the proceeds for the needy in their community.