Real Estate Daily News Buzz is designed to give news snippets to readers that our (yet to be award winning) editors thought you could use to start your day. They come from various business perspectives, real estate, government, the Fed, local news, and the stock markets to save you time. Here you will find the headlines and what the news buzz for the day will be.
Wednesday, the Dow Jones industrial average edged up 6.62 points, less than 0.1%, to 17,673.02. The Standard & Poor’s 500 index fell 8.52 points, or 0.4%, to 2,041.51. The NASDAQ sank 11.03 points, or 0.2%, to 4,716.70.
The price of U.S. crude oil plunged $4.60, or 8.7 per cent, to settle at $48.45 a barrel in New York. Brent crude, a benchmark for international oils used by many U.S. refineries, declined $3.75, or 6.5 per cent, to close at $54.16 a barrel in London. Wholesale gasoline fell 12 cents to $1.482 a gallon. Heating oil fell 8 cents to close at $1.767 a gallon. Natural gas fell 9.2 cents to close at $2.662 per 1,000 cubic feet.
AMAZON EYEING RADIO SHACK 4,000+ STORES
(Bloomberg) -- Amazon.com Inc., aiming to bolster its brick-and-mortar operations, has discussed acquiring some RadioShack Corp. locations after the electronics chain files for bankruptcy, two people with knowledge of the matter said. Amazon has considered using the RadioShack stores as showcases for the Seattle-based company’s hardware, as well as potential pickup and drop-off centers for online customers, said one of the people, who asked not to be named because the deliberations are private. The possible move, discussed as part of RadioShack’s looming trip to bankruptcy court, would represent Amazon’s biggest push into traditional retail. Amazon joins other potential bidders, including Sprint Corp. and the investment group behind Brookstone, in evaluating RadioShack stores, people familiar with the situation said. RadioShack has more than 4,000 U.S. locations and is moving toward a deal to sell a portion and close the rest, according to some of the people. Sprint has discussed buying 1,300 to 2,000, they said.
STAPLES AIMS TO BUY OFFICE DEPOT FOR $6.3 BILLION IN STOCK
Staples announced Wednesday that it will acquire Office Depot for $6.3 billion, a move that underscores how much harder it’s getting to make a big-box store viable in the e-commerce era. The deal comes as the retailers are seeing massive upheaval in their industry: Demand for paper-based office supplies is dwindling as more business functions become digital, and a diverse array of competitors, including Amazon and Wal-Mart, are selling these kinds of goods. With their sprawling square footage, big-box stores typically have very expensive leases and require a large staff, expenses that are harder to grapple with as more shoppers move online. The math eventually didn’t work for onetime big-box giants such as Circuit City, Linens ‘N Things and Borders. Even giants such as Wal-Mart and Target, while sticking with their big-box formats, are looking to smaller-format versions of their stores for future growth. Staples chief executive Ron Sargent said Wednesday that a merger would help the brands compete more effectively. “I think this is kind of a historic opportunity to reset pricing,” Sargent said Wednesday morning on a conference call with investors, a signal that the merged companies would aim to compete more aggressively on price with Amazon. Together, the brands would have about $39 billion in annual sales and about 4,000 stores.
RAPIDLY GROWING ASIAN AIRLINES RACE TO FINS QUALIFIED PILOTS
NEW YORK (AP) — The deadly crash of a TransAsia plane into a river in Taiwan is again focusing the world’s attention on the safety challenges facing fast-growing Asian airlines. TransAsia has been adding new routes rapidly since the Taiwanese carrier went public in 2011. TransAsia and others like it are rushing to keep up with a travel boom driven by the region’s growing middle class. The ease and increasing affordability of flying helps fuel economic growth and a better lifestyle for Asian consumers. But as airlines carry more passengers across increasingly crowded skies, they are also racing to train enough pilots.
NO FAST OR SLOW LANES FOR INTERNET? NEW RULES PROPOSED
WASHINGTON (AP) — Declaring the Internet critical for the nation, a top U.S. regulator on Wednesday proposed an unprecedented expansion of federal power to ensure providers don’t block or slow web traffic for America’s countless users. The proposal by Federal Communications Commission Chairman Tom Wheeler was a victory for advocates of “net neutrality,” the idea that Internet providers must allow data to move across their networks without interference. The idea has been the subject of heavy lobbying and millions of dollars in advertising in the past year.
INVESTORS’ APPETITE FOR STARTUPS FED BY STOCK MARKET GAINS
NEW YORK (AP) — Some entrepreneurs looking for startup funding got a wad of money near the end of last year, but there are concerns the boom may not last. Startup iFunding is a beneficiary of the surge. The website focused on real estate investing raised nearly $2 million in just a month. Typically, it would take at least six months to raise that kind of cash, says William Skelley, the New York company’s CEO. Investors whose portfolios swelled as the Standard & Poor’s 500 index rose more than 11% last year had more money for alternative investments like small businesses and felt more confident about taking risks on young companies.
SURVEY: US BUSINESSES POST STEADY JOB GAIN IN JANUARY
WASHINGTON (AP) — U.S. companies hired at a solid pace last month, a private survey found, the latest sign of steady improvement in the job market. Payroll processor ADP said Wednesday that companies added 213,000 jobs last month, a decent increase though also the smallest in four months. The figure suggests Friday’s government report will also show a solid burst of hiring. Economists surveyed by FactSet expect the government’s report will show that employers added 230,000 jobs. The ADP numbers cover only private businesses and sometimes diverge from the government’s more comprehensive report, which includes government agencies.
US SERVICES FIRMS GREW AT SLIGHTLY FASTER PACE IN JANUARY
WASHINGTON (AP) — U.S. services firms grew at a slightly faster pace in January, led by hotels, restaurants and financial firms. The Institute for Supply Management said Wednesday that its services index rose to 56.7 in January, up a small amount from a revised reading of 56.5 in December. Both months were below a revised November reading of 58.8, which was the best showing since last May. The November level was revised substantially lower from a previous estimate of 59.3, which had been near an eight-year high. Any reading over 50 indicates expansion.
OBAMA PLAN WOULD MERGE 6 US TRADE, DEVELOPMENT AGENCIES
WASHINGTON (AP) — A little-noticed proposal in President Barack Obama’s $4 trillion budget would eliminate the Overseas Private Investment Corporation, which has been the subject of an Associated Press investigation into its overseas loans, and merge it for efficiency with five other U.S. business and trade agencies. His plan faces long odds and an uncertain reception in Congress. Under the proposal, the combined agencies would fold into a single new department with a name focused on economic growth and job development. It would affect the Commerce Department’s core business and trade functions — the Small Business Administration, Office of the U.S. Trade Representative, the Export-Import Bank and U.S. Trade and Development Agency.
US BANK TO PAY $18M TO CUSTOMERS OF COLLAPSED IOWA BROKERAGE
IOWA CITY, Iowa (AP) — U.S. Bank will pay $18 million to settle a lawsuit alleging that its lax oversight enabled the founder of one of the nation’s largest brokerages to embezzle $215 million from customers, a judge ruled Wednesday. The payment will go to customers who had accounts to trade domestic commodities futures through the now-collapsed Peregrine Financial Group, Inc., under the settlement approved by U.S. District Judge Linda Reade. The agreement settles a civil enforcement action filed by the U.S. Commodity Futures Trading Commission alleging that U.S. Bank improperly allowed Peregrine founder Russell Wasendorf Sr. to misuse customer funds.
WOMEN’S CLOTHING RETAILER CACHE SEEKS BANKRUPTCY PROTECTION
Women’s clothing retailer Cache has filed for Chapter 11 bankruptcy protection after running out of time and money to complete a turnaround. The New York company said Wednesday that it will keep running its business, but it also will continue to close stores and sell or renegotiate some of its leases. Cache sells dresses, sportswear and accessories and runs 218 stores, or 20 fewer than it operated in December. The retailer has secured up to $22 million in financing from Salus Capital Partners to keep operating during the bankruptcy proceeding. That financing is subject to court approval.
FORD TO TRANSITION UP TO 500 WORKERS TO HIGHER PAY
DETROIT (AP) — Ford Motor Co. is moving several hundred U.S. hourly workers into a higher pay bracket after surpassing a cap on the number of lower-wage workers it can hire. Ford said Wednesday that up to 500 workers will transition from an entry-level wage of $19.28 per hour to a top-tier wage of $28.50 per hour over the next two months. The first workers will get word this week. The majority of the workers affected are at plants in Chicago; Kansas City, Missouri; and Louisville, Kentucky.
SOME GOP WANT TAX CREDITS IN HEALTH ALTERNATIVE
WASHINGTON (AP) — A small, influential group of Republicans, in search of a replacement health care law, will propose tax credits to help lower-income individuals and families purchase insurance, officials said Wednesday. The GOP lawmakers would jettison the controversial coverage requirement in the current “Obamacare” law. The proposal is part of an outline that Sen. Orrin Hatch, Sen. Richard Burr and Rep. Fred Upton plan to make public on Thursday. It’s an early marker among the competing recommendations likely to be floated in advance of an expected Supreme Court ruling in June on the constitutionality of a key part of President Barack Obama’s health insurance overhaul.
PETROBRAS SAYS CEO STEPPING DOWN AMID CORRUPTION SCANDAL
RIO DE JANEIRO (AP) — Embattled Brazilian oil company Petrobras said Wednesday the company’s chief executive officer and five other top figures stepped down amid a long-running and massive kickback scandal at the firm. Government-run Petrobras said in a one-line statement on its website that CEO Maria das Gracas Foster and five other executive directors were out. None of the top officials are facing charges of wrongdoing, but prosecutors have said the investigation is still in its early stages.