Not a good day for the stock market, Robin Thicke or Montel Williams. Read about these and more of the day's top business news stories.
Lender Endorsed by Montel Williams Agrees to $2.1M Penalty
MoneyMutual, a unit of marketing company SellingSource, has agreed to pay a $2.1 million penalty and cease its payday loan lead generation activities in the New York, where such loans are illegal. Benjamin Lawsky, superintendent of New York's Division of Financial Services, blasted the lender for wrongfully marketing loans with sky-high interest rates — some exceeding 1,000% — to struggling New Yorkers. Former day-time talk show host Montel Williams, who appeared on the company’s behalf in commercials, has agreed to withdraw his endorsement. Payday loans offer small amounts of money at high interest rates on the condition that it will be repaid when the borrower receives their next paycheck.
Fed Fears Send Stocks Tumbling
The stock market suffered its worst day in two months on Tuesday as U.S. stocks losses wiped out this year’s gains for the Dow Jones industrial average and the Standard & Poor's 500 index. All 10 industry sectors in the S&P 500 closed lower. The Dow sank 332.78 points to 17,662.94. The S&P 500 fell 35.27 points to end at 2,044.16. The Nasdaq composite lost 82.64 points to 4,859.79. The Nasdaq is still up nearly 3 percent so far this year. The prospect of the Federal Reserve raising interest rates for the first time in nine years is unnerving investors, the Associated Press reports.
Apple’s Year One to Watch
One day after he unveiled Apple’s new smartwatch, CEO Tim Cook cited company milestones in an “unbelievable” year at his company’s annual shareholder meeting Tuesday. Apple shares are up 65 percent from a year ago, the company has a market value of more than $700 billion - making it the most valuable U.S. company in history, and will soon join the benchmark Dow Jones industrial average. Apple sold an unprecedented 200 million iPhones in 2014, which provided the bulk of the company's $200 billion in revenue. Cook also said Apple returned $57 billion to shareholders through dividends and stock buybacks last year. Apple stock fell 1.7 percent Tuesday, amid a broader market decline.
Can I Get a Witness—Marvin Gaye’s Family Prevails in “Blurred Lines” Suit
Mercy, mercy me; a jury Tuesday awarded Marvin Gaye’s children $7.3 million after determining singers Robin Thicke and Pharrell Williams copied their father's music to create "Blurred Lines," the biggest hit song of 2013. An attorney for Thicke and Williams has said a decision in favor of Gaye's heirs could have a chilling effect on musicians who try to emulate an era or another artist's sound. The Gayes’ lawyer countered that Williams and Thicke, who told jurors he didn’t write the song, copied Gaye’s “Got to Give It Up” outright.
Target Announces 1,700 Layoffs
Target Corp. said Tuesday that it is laying off 1,700 workers and eliminating another 1,400 unfilled positions as part of a restructuring aimed at saving $2 billion over the next two years, the Associated Press reports. The company said the cuts would fall primarily on headquarters locations in Minneapolis. The layoffs would amount to about 12 1/2 percent of the 13,500 workers there. "Today is a very difficult day for the Target team, but we believe these are the right decisions for the company," Target said in a statement. A plan by new chief executive Brian Cornell calls for spending up to $2.2 billion on capital expenditures in the current fiscal year. About half would go toward technology as Target seeks to grow its online sales. Earlier this year Target said it would end its close all 133 of its stores in Canada, laying off about 17,000 workers.
U.S. Wholesale Inventories Surge to 5 1/2-Year High
The Commerce Department said on Tuesday that U.S. wholesale inventories unexpectedly rose 0.3 percent in January as sales recorded their biggest decline since 2009, pushing the number of months it would take to clear warehouses to its highest level in more than 5-1/2 years. Sales at wholesalers fell 3.1 percent in January, the largest drop since March 2009, after slipping 0.9 percent in December. At January's sales pace it would take 1.27 months to clear shelves, the most since July 2009, up from 1.22 months in December.