Consumer spending and home sales boost economy, and other top business stories of the day. Click here to learn more.
Federal Reserve Survey Finds Improved Economic Growth
An increase in consumer spending and consistent home sales lifted economic growth in October and early November in most of the United States, according to a Federal Reserve report, called the Beige Book. Growth improved in nine of the Fed's 12 regional banking districts, but was weaker in New York, Philadelphia and Boston, the areas where superstorm Sandy caused widespread disruptions, The Associated Press reports. Hiring increased in more than half of the districts, but manufacturing shrank or slowed in seven regions and was mixed in two others. Many economists say concerns about the fiscal cliff could be among a number of factors that keep growth in the October-December quarter below an annual rate of 2 percent, the AP observes.
No New Government Contracts for BP
Citing a “lack of business integrity,” the Environmental Protection Agency (EPA) announced that BP has been temporarily suspended from new contracts with the US government, the BBC reports. The ban follows BP’s record fine levied earlier this month over the 2010 oil spill in the Gulf of Mexico. "The BP suspension will temporarily prevent the company and the named affiliates from getting new federal government contracts, grants or other covered transactions until the company can provide sufficient evidence to EPA demonstrating that it meets federal business standards," the EPA said in a statement. The temporary ban does not affect BP’s existing agreements with the government.
SAC Faces Charges From SEC
SAC informed investors Wednesday that it had been informed last week that the Securities and Exchange Commission was planning to bring civil fraud charges against the company. The procedure is known as a Wells Notice. During a phone call to investors, SAC's billionaire founder, Steven A. Cohen said he was confident that the firm had acted appropriately, the Financial Times reports. SAC President Tom Conheeney led the call and said the firm would re-examine its compliance procedures and bear all legal costs. The charges are the latest step in an investigation into Wall Street insider trading.
Kill Bill – the $1 Bill – to Save Billions
A 22-year campaign to switch from dollar bills to $1 coins will be taken up today by the House Financial Services Committee, CNN Money reports. The Government Accountability Office continues to call for the change, which they claim would save the U.S. government $4.4 billion over a period of 30 years.
The coins are more expensive to produce than dollars but they last for more than six times longer and would ultimately produce savings, according to the GAO, a nonpartisan investigative unit of Congress. The main argument against the switch is weak demand among the public for $1 coins.
Disney Joins Corporations Boosting Dividends
Walt Disney Co. yesterday announced it would boost its annual dividend by 25 percent in a 75-cent-a-share payment to investors who owned Disney stock as of Dec. 10, Bloomberg News reports.
The previous annual dividend of 60 cents a share was paid to shareholders in January of this year, Bloomberg reports. Disney is one of more than 70 Russell 3000 companies to announce a one-time cash payment. The move is designed to protect investors should the dividend tax rate increase at the end of the year upon the expiration of Bush-era tax cuts. Dividends are currently taxed at 15 percent, but the rate could go as high as 39.6 percent next year, according to Bloomberg.
Shifting Field for SEC Director Candidates
The field of candidates to succeed Mary L. Schapiro, who on Monday resigned as the chair of the Securities Exchange Commission, has shift with the withdrawal of Mary Miller, a senior official at the U.S. Treasury Department , The New York Times reports, citing unnamed sources. According to The Times, Miller, a leading contender removed her name from consideration because she was not interested in the job.
That leaves Sallie L. Krawcheck as a potential front-runner. According to The Times, Krawcheck is viewed as a compromise candidate because the long-time Wall Street executive is also known for consumer advocacy. Elisse B. Walter, an SEC commission since 2008, is filling in as chief until a new appointment is made.