A judgement against Merrill Lynch, declining eurozone new car sales, and a new crop of Apples. Learn more about these and other top business stories of the day.
Better-Than-Expected Corporate Earnings Buoy Stocks
U.S. stocks ended higher on Tuesday on strong corporate earnings from several Fortune 500 firms and a better-than-expected increase in industrial production, CNN Money reports. The Dow Jones Industrial Average rose 0.9 percent, while the Standard & Poor’s 500 and Nasdaq increased more than 1 percent, according to CNN Money. Companies beating analysts’ predictions included Goldman Sachs, Johnson & Johnson and Mattel. UnitedHealth reported strong third-quarter earnings and raised its outlook for the year. A surprising shakeup of Citigroup’s top management pushed Citi shares up 1.6 percent. Industrial production also beat expectations with 0.4 percent September increase reported by the Federal Reserve on Tuesday.
Merrill Lynch Must Pay Florida Couple over Fannie Mae Shares
A Florida couple who alleged that Merrill Lynch misrepresented the risks of Fannie Mae preferred shares in 2009 will receive $1.34 from the brokerage firm, The Chicago Tribune reports. Robert and Michele Billings of Naples, Florida invested $2.3 million in Fannie Mae preferred shares in July, 2008. The couple, long time Merrill Lynch clients, alleged that the move was "strongly recommended" by their broker, according to a statement of claim filed with the Financial Industry Regulatory Authority's arbitration unit in 2011. The broker, Miles Pure, allegedly told the Billings that the investment was "safe," had an attractive yield and that the U.S. government "stands behind" Fannie Mae preferred shares, according to the statement of claim. But Fannie Mae was losing billions of dollars at the time because of its exposure to the collapsing residential real estate market, the investors said. As the stock's price slid, the broker also discouraged the couple from selling shares. Then, just over a month later, Fannie Mae entered government conservatorship and the Billings' investment was rendered worthless, according to the statement of claim cited by the Tribune.
EU Car Sales in the Slow Lane
New car sales in the European Union have fallen for the 12th month in a row in September, according to the region's biggest carmakers, the BBC reports. Demand for new cars across the 27 European Union countries fell 10.8 percent from last year. The UK is the only of the EU’s major markets to post sales growth, up 8.2 percent from September 2011.Last month, the recession-plagued eurozone’s major car markets fell sharply.Germany, Europe’s largest economy and one of the world’s biggest car manufacturers, saw is car sales drop 10.9 percent. France fell by 17.9 percent, Italy fell by 25.7 percent and Spain declined by 36.8 percent from the same period last year, the BBC noted. The overall EU 10.8 percent drop in September is the steepest thus far in the past year.
Alternative Battery-Maker Files for Bankruptcy
A123 Systems filed for bankruptcy protection yesterday in Delaware, three years after the lithium-ion battery maker received a federal grant for more than $249 million under the 2009 American Recovery and Reinvestment Act, USA Today reports. The company had promised to create 38,000 U.S. jobs, but failed on weak demand for plug-in hybrid electric vehicles, USA today. A123 automotive-related assets will be purchased by Johnson Controls, a global auto supplier, which made its offer conditional on the bankruptcy filing. In its Chapter 11 filing, A123 assets are listed as $459.8 million, and liabilities as $376 million.
American Airlines Seeks to Extend Bankruptcy Plan
American Airlines is bidding for more time to file a restructuring plan and exit bankruptcy, Bloomberg News reports. The company, which has been in bankruptcy for 11 months, requested a one-month extension of its Dec. 28th deadline in a filing yesterday in U.S. Bankruptcy Court in Manhattan. Extending the deadline to Jan. 28th will allow the restructuring progress to continue in an orderly and efficient manner, a company spokesman told Bloomberg. A committee representing the airline’s unsecured creditors supports the request, according to Bloomberg.
A New Crop of Apples
Multiple web sources are reporting that next week Apple will announce its iPad mini as well as a new version of its Mac mini computer. The new Mac mini will feature USB 3.0 ports and newer chipsets according to Nine to 5 Mac. The iPad Mini, a 7.85-inch tablet, is reported to be Apple’s answer to the Amazon Kindle Fire and Google Nexus 7, which are smaller and less expensive than the Apple iPad. The new models will be shipping immediately. Next Tuesday’s press launch coincides coincides with Microsoft’s launch of its Windows 8 operating system, which is designed to work across tablets and PCs, Financial Times reports.