Chinese Premier Wen Jiabao said the government will focus more on bolstering growth, indicating policies may be loosened further as inflation moderates.
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Three high-ranking executives at JPMorgan Chase are expected to leave their jobs this week after a trading blunder cost the bank $2 billion, The Wall Street Journal reported Sunday.
The Journal, citing people familiar with the situation, reported that one of the executives is Ina Drew, who for seven years has run the risk-management division at the bank responsible for the loss.
The other two identified by the newspaper are an executive in charge of the London desk that placed the trades and a managing director on that team. The bank did not immediately return a message from The Associated Press.
The $2 billion loss, disclosed on Thursday by CEO Jamie Dimon, has been an embarrassment for the bank and led lawmakers and critics of the banking industry to call for tougher regulation of Wall Street.
Drew, one of the highest-ranking women on Wall Street, is the bank’s chief investment officer. She was paid $15.5 million last year and almost $16 million the year before, according to a regulatory filing.
The Journal reported that Bruno Iksil, the JPMorgan trader identified as the “London whale” because of the giant bets he placed, was also likely to leave, but the paper reported that it was not clear when that would happen.
On Friday, investors shaved almost 10 percent off JPMorgan’s stock price. Dimon said in a TV interview aired Sunday that he was “dead wrong” when he dismissed concerns about the bank’s trading last month.
“We made a terrible, egregious mistake,” Dimon said in an interview that was taped Friday and aired on NBC’s “Meet the Press.” “There’s almost no excuse for it.”
Dimon said he did not know the extent of the problem when he said in April that the concerns were a “tempest in a teapot.”
The loss came in the past six weeks. Dimon has said it came from trading in so-called credit derivatives and was designed to hedge against financial risk, not to make a profit for the bank.
Dimon said the bank is open to inquiries from regulators. He has also promised, in an email to the bank’s employees and in a conference call with stock analysts, to get to the bottom of what happened and learn from the mistake.
Dimon told NBC that he supported giving the government the authority to dismantle a failing big bank and wipe out shareholder equity. But he stressed that JPMorgan, the largest bank in the United States, is “very strong.”
A piece of financial regulation known as the Volcker rule would prevent banks from certain kinds of trading for their own profit. Dimon has said the trading involved in the $2 billion loss would not have fallen under the rule.
Rep. Barney Frank, D-Mass., told ABC’s “This Week” that he hopes the final version of the Volcker rule will prevent the type of trading that led to the massive loss at JPMorgan.
Dimon conceded to NBC that the bank “hurt ourselves and our credibility” and expects to “pay the price for that.” Asked what the price should be, Sen. Carl Levin, D-Mich., said that banks will lose their fight to weaken the rule.
“This was not a risk-reducing activity that they engaged in. This increased their risk,” Levin told NBC.
“So we’ve got to be very, very careful that the regulators here are not undermined by this huge effort to weaken the rule by putting in a huge loophole” that includes the trading involved in the JPMorgan loss, he said.
Addressing public anger toward Wall Street, Dimon said he wants a more equitable society and does not mind paying higher taxes. But he said attacking all of business is “very counterproductive.”
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Charter Communications cut its losses in the first quarter, while managing to reverse a long decline in customers subscribing to cable TV.
The company, by far the largest Internet and TV provider in St. Louis, reported a loss of $94 million, or 95 cents per share. A year earlier, the company lost $110 million or 97 cents per share.
Charter is gradually becoming less of a cable TV company and more of an Internet service and phone provider. Still, cable TV provides the biggest piece of its revenue, and the slow drop off of cable video customers has long vexed the company.
That trend changed in the March quarter as Charter added 20,000 video customers, bringing the total to 4.16 million, compared to a loss of 24,000 in the same period a year earlier. That was the first quarterly video growth in five years, said CEO Tom Rutledge in an investor conference Tuesday.
Rutledge said the company has been improving the quality of its TV picture signal and the number of channels. It will be offering 100 high definition channels by mid-year, he said. It’s also been raising prices; about 40 percent of its video customers saw a 3 percent price increase recently.
Loss of video customers is common story in the cable TV business, which is facing more competition as telecom companies role out video services, such as AT&T’s U-verse, in a broader geographic area. Charter’s strongest competition is from satellite TV companies, Rutledge said. Internet streaming services, such as Netflix, aren’t a big factor in cable TV subscriber losses, he said.
“Our video competitors often offer more channels, including more HD channels, and typically only offer digital services which have a better picture quality compared to our analog product,” the company said in a filing Tuesday with the SEC. Charter offers both analog and digital services. People using older TVs without a digital converter box receive an analog signal.
Despite the rise in customers, revenues from video dropped 2 percent, in part because fewer people are paying for premium channels or using its pay video-on-demand service.
Overall, Charter’s revenue grew 3 percent as demand for Internet and phone service increased. Charter added 141,000 residential Internet customers compared a 90,000 gain a year earlier. It added 31,000 phone customers, up from 24,000 last year.
While making money on its basic operations, Charter remains burdened by $12.8 billion in debt and faces continuing costs to upgrade its systems.
Who wouldn’t want to get paid to go shopping? That’s partly the allure behind “mystery shopper” scams.
While they aren’t new, these phony “we’ll-pay-you-to-shop”-type ads sprouted like online weeds during the recession as job-hungry Americans hunted for employment.
Law enforcement and some financial institutions say they’re spotting mystery shopping scam attempts — which involve phony checks deposited into a victim’s bank account — several times a week.
“We’ve been seeing it pretty frequently since 2005,” said Vanessa Oddo, finance loss prevention manager for SAFE Federal Credit Union in North Highlands, Calif. She said 200 to 300 suspect checks get brought in to SAFE branches every year.
Similarly, the Northeast California Better Business Bureau office said it gets two or three calls a day from consumers asking about mystery shopper checks they’ve received in the mail.
The losses can be anywhere from a few hundred to several thousand dollars, depending on how much was deposited into the unsuspecting shopper’s bank account.
There are plenty of legitimate mystery shopping companies, which hire individuals to drop in unannounced at retailers, hotels, fast food outlets, restaurants and other businesses to secretly evaluate customer service.
But the fraudulent kind typically operate as fake check scams.
Making contact by mail, email or phone, a fraudster posing as a mystery shopping company “hires” an unsuspecting consumer, who is promised payment after completing a “first assignment totally free credit score.” That assignment often involves sending a phony check to the consumer’s home, with instructions to deposit it in a bank account, keep a small amount as reimbursement, then wire the remainder to Western Union, ostensibly to report on the wire company’s “customer service.”
Ultimately, the phony check bounces, leaving the victim’s bank account dinged for the total amount, as well as wire transfer charges and potential bank fees.
“You see more of these during a recession, when people are searching for jobs or ways to (make) more money. Scammers plan on that,” said Dan Denston, executive director of the North America Mystery Shopping Providers Association, or MSPA, based in Louisville, Ky.
Even legitimate companies that hire mystery shoppers are not immune from scammers. National Shopping Service in Rocklin, Calif., one of at least 16 mystery shopper firms in California, said it, too, has been victimized by scammers who used the company’s name in fake-check scams.
“The majority of people getting these letters and falling for the scams were not even our shoppers. Unfortunately, they got scammed,” said Katy Gravatt, National’s operations manager.
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U.S. stocks finished near the highs of the day Wednesday, as investors digested comments from Federal Reserve chairman Ben Bernanke and cheered strong corporate results from big companies including Apple and Boeing.
All three major indexes rallied right out of the gate, on the back of stronger-than-expected financial results, but pulled back slightly leading up to Bernanke’s news conference.
The indexes regained momentum after the Fed chief said that the central bank remains "entirely prepared to take additional balance sheet actions…should the economy require additional support."
But the Fed was also more positive with its outlook, boosting its economic growth projection for the year and lowering its unemployment rate target.
"The Fed sounded a bit more upbeat on the economy than I was expecting," said Frank Fantozzi, CEO and President of Planned Financial Services. "It doesn’t have evidence to take any further stimulus action, and wants the economy to keep healing and improving on its own. But it also reserves the right to step in if the economy stalls or reverses course."
The Dow Jones industrial average () rose 89 points, or 0.7%, with a 5.3% jump in shares of Boeing (, Fortune 500) leading the gains. The aerospace and defense company reported earnings that trounced Wall Street’s expectations. Caterpillar (, Fortune 500) was the biggest loser on the blue-chip index, after it reported revenue that fell short of forecasts.
The S&P 500 () gained 19 points, or 1.4%, and the Nasdaq () added 68 points, or 2.3%.
Apple’s (, Fortune 500) nearly 9% pop made it one of the biggest gainers on both indexes Wednesday. The world’s most valuable company reported that its net income nearly doubled, on much stronger-than-expected iPhone sales.
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Apple shares had been struggling ahead of its quarterly results, losing nearly 12% over an 11-day stretch. But Wednesday’s rally helped push the stock back above $600 a share, and just 5% away from its all-time high.
"Apple’s earnings are certainly having a big impact," said Dave Hinnenkamp, CEO of KDV Wealth Management. "Apple is a bellwether for the technology industry, and investors are influenced by positive reports from market leaders."
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Shares of companies that make chips or accessories for iPhones also rode the good-news wave, including Cirrus Logic (), Skyworks Solutions () and Triquint (). ARM () and Qualcomm (, Fortune 500), two semiconductor companies, also gained traction.
Shares of Omnivision (), which makes camera sensors for the iPhone, jumped, while Zagg (), a popular maker of iPhone accessories like cases and screen protectors, also rallied.
U.S. stocks finished mixed Tuesday. Better-than-expected earnings boosted the Dow and S&P, while Netflix () weighed down the Nasdaq.
Economy: The Fed also left its key interest rate unchanged near zero and reiterated that low rates are likely to remain through late 2014.
The central bank also expects the economy to grow between 2 business card.4% and 2.9% in 2012, which would be an improvement over 1.7% growth last year. The Fed also revised its forecasts for the labor market, predicting the unemployment rate will fall to between 7.8% and 8% by the end of the year.
Before the market open, the Commerce Department’s durable goods report came in weaker than expected, with new orders for big-ticket items falling 4.2% — worse than the 1.7% drop forecast by economists surveyed by Briefing.com.
New orders for nondefense capital goods, excluding aircraft, fell 8.9%. That reading in the report is taken as a barometer of business investment.
The Mortgage Bankers Association also reported a 3.8% decline in new mortgage applications for last week, despite the exceptionally low rates on home loans.
Companies: In addition to Apple and Boeing, Wednesday also brought more strong corporate results for investors to consider, including telecom giant Sprint Nextel (, Fortune 500), health insurer Wellpoint (, Fortune 500), and glass-maker and tech supplier Corning (, Fortune 500).
Sprint shares were slightly lower even after the wireless provider posted a loss that was narrower than forecasts. Wellpoint’s were higher than expected, while Corning, whose Gorilla glass is used in Apple’s iPhones and iPads, also topped expectations.
Harley-Davidson (, Fortune 500) shares jumped after the motorcycle maker boosted its full-year production forecast.
DuPont (, Fortune 500) shares rose after the company boosted its dividend by 5%.
Shares of Tyson Foods (, Fortune 500), one of the biggest U.S. beef processors, dipped slightly after at least one major South Korean retailer suspended the sale of U.S. beef Wednesday, one day after after authorities confirmed a case of "mad cow disease" in the carcass of a dairy cow in central California. But Korean authorities have not halted imports of U.S. beef. South Korea is the No. 2 importer of U.S. beef.
World markets: European stocks finished higher, despite a reading on gross domestic product in the United Kingdom that indicated Britain has fallen back into recession. London’s FTSE 100 () edged up 0.1%, while the DAX () in Germany added 1.6% and France’s CAC 40 () gained 2.2%.
Germany’s auction of €3 billion worth of 30-year bonds was under-subscribed Wednesday morning, with only €2.7 billion in bids being received. That sent yields on the German debt higher.
Asian markets ended mixed, with the Shanghai Composite () rising 0.8% and Japan’s Nikkei () up nearly 1%, while the Hang Seng () in Hong Kong slid 0.2%.
Currencies and commodities: The dollar lost ground against the euro, but rose versus the Japanese yen and the British pound.
Oil for June delivery rose 57 cents to settle at $104.12 a barrel.
Gold futures for June delivery lost $1.50 to settle at $1,642.30 an ounce, but trading amount is up from earlier lows.
Bonds: The price on the benchmark 10-year U.S. Treasury slipped, pushing the yield up to 1.99% from 1.96% late Tuesday.
Lamborghini could have made a four door sedan instead of an SUV, but that wouldn’t have been cool enough, said the Italian automaker’s chief executive in a telephone interview from Beijing, where the Urus SUV concept vehicle was being unveiled.
Sedans are "less emotional" than SUV’s, Stephan Winkelmann said and, therefore not as good a fit for the maker of extreme performance vehicles. "What we want to build is a real Lamborghini in any market segment we enter," he said.
Still, Lamborghini also wants to create a vehicle that can be used for more than just occasional high-speed drives.
"Today, we are not building cars which are meant to driven on a daily basis from ‘point a’ to ‘point b,’" Winkelmann said, "and this car is exactly that."
Lamborghini’s current line-up consists of two models, the V-12 powered Aventador, available at prices starting at about $375,000, and the V-10 powered Gallardo, which starts at about $180,000 and is available in numerous hard-top and convertible variations.
Gallery: Lamborghini Urus SUV
The Italian automaker has been considering something with broader appeal for years, Winkelmann said. In 2008, Lamborghini showed off a four-door sedan concept vehicle called the Estoque. But he said the global economic crisis put a stop to any further consideration of that vehicle.
Meanwhile, the SUV market has continued to expand, despite higher gas prices, as more sizes and variations of the high-riding vehicles have come to market.
Today, SUVs range from the traditional large truck-based vehicles to very small, sporty models personal loan for poor credit. According to a recent analysis by Ford Motor Co. (, Fortune 500), one in three vehicles sold in the United States last year was some sort of SUV.
"Even outside the U.S., the segment is growing," Winkelmann said.
Should Lamborghini decide to make the Urus available for sale — something Winkelmann said hadn’t been decided yet — it would cost roughly the same as the Gallardo.
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Producing a vehicle like the Urus is "over 95% feasible," Winkelmann said.
Much of the concept SUV is made from expensive, but very lightweight, carbon fiber, and instead of actual side mirrors, it has video cameras.
Currently, Lamborghini sells only about 2,000 cars but is prepared to produce as many of the 3,000 of the Urus SUV alone.
That would still leave the supercar maker selling just 5,000 vehicles a year, a number that wouldn’t endanger the brand’s valued exclusivity, Winkelmann said.
Lamborghini is part of Germany’s Volkswagen Group () which also owns Audi, Bentley and Bugatti. Bentley also unveiled an SUV concept vehicle at an auto show earlier this year.
The 600 horsepower Urus would primarily be intended for on-road use, said Winkelmann, where it would offer strong acceleration and cornering without, perhaps, the top speed of a Lamborghini sports car.
Off road, it would perform about as well as other high-performance luxury crossovers. In other words, it will be able to drive in the mud and on rocks but not all that well.
The Philippines central bank will gauge the impact of two interest rate cuts this year when it assesses monetary policy at this week
A potential $4.3 billion deal between the Boeing’s defense unit and the Brazilian government that has bounced on and off the table for years is back in play.
And a Boeing Co. official said this week that the company expects to learn by June if it finished atop the process that has pitted aerospace makers from three nations in a bid to supply state-of-the-art fighter jets to the Brazilian Air Force.
Tom DeWald, the regional director for Latin American business development is optimistic that Boeing will prevail.
“There’s no question the Air Force down there loves our product,” he said.
Missouri Gov. Jay Nixon is expected to remind Brazilian officials of that fact when he visits the country on a trade mission later this month.
Should Boeing capture the bid, Brazil would eventually take possession of 36 F/A-18 Super Hornets along with a wealth of spare parts and other materials.
The Super Hornets would be designated “FX-2” fighter jets by the Brazilian Air Force.
The French aircraft manufacturer Dassault Aviation and Sweden’s Saab Defence and Security are the other two bidders.
DeWald said Brazil initially broached the prospect of replacing an already aging fleet of Dassault Mirage fighters in the mid-1990s.
An initial request for bids wasn’t floated until shortly after the turn of the 21st century.
After years of political wrangling, the arms sale competition re-surfaced in 2009 with Boeing, Dassault and Saab as the finalists.
For a country that last engaged in meaningful conflict on its own soil over a century ago, the move to bolster its Air Force has more to do with acquiring technology than adding firepower.
“The end game is for Brazil to develop their own abilities to produce, train, and maintain defensive aircraft systems from what they learn by purchasing these foreign aircraft. In essence, they want to create a South American defense industry base,” Michael Blades, senior aerospace industrial analyst with Frost & Sullivan in San Antonio, wrote in an email response to questions about the Boeing deal.
In a 2010 white paper prepared for the Brookings Institution, foreign policy analyst Kevin Casas-Zamora criticized the uptick in the purchases of military hardware by Brazil and other South American nations.
“The absolute increase in military expenditure, and of acquisitions in particular, hinders the region’s economic and political development. Even the security benefits of such expenditures are debatable at best,” Casas-Zamora wrote.
A deal would, however, bode well for the thousands of local employees of the Boeing Defense, Space and Security unit who build that fighter jet, not to mention countless suppliers here and throughout the U.S.
The company’s 2010 contract to supply 124 fighters to the U.S. Navy is expected to wind down around mid-decade. Likewise, the clock is ticking on a 2011 pact to provide 84 military aircraft to Saudi Arabia. Production on the Saudi contract could run through 2020 if not beyond.
But looming Pentagon budget cuts and the Pentagon’s shift toward unmanned aircraft darken the long-term prospects for continued fighter production in Hazelwood.
For those reasons alone, Blades says much rests on Boeing’s ability to wrest the contract with Brazil.
“If they don’t take advantage of foreign military sales avenues that are open to them they are facing limited growth,” he said. “And if they let other companies like Dassault or Saab (in the case of the Super Hornet) make sales to countries like Brazil not only do they lose growth prospects they strengthen those foreign competitors.”
U.S. service companies expanded at a healthy pace last month and stepped up hiring, though growth slowed a bit from the previous month.
The Institute for Supply Management, a private trade group, said Wednesday that its index of non-manufacturing activity dropped to 56 in March, down from February’s 57.3. Any reading above 50 indicates expansion.
The trade group of purchasing managers surveys roughly 90 percent of U.S. companies in all sectors outside of manufacturing. That includes retail, construction, financial services, health care, and hotels.
A measure of employment rose as more companies said they plan to add workers.
Separately, payroll processor ADP said the economy added 209,000 private-sector jobs in March. The ADP survey does not include government jobs.
Both reports are encouraging signs ahead of the government’s report on March job growth, which will be released Friday. Economists are predicting that employers added 210,000 jobs, which would be the fourth straight month of strong hiring.
More jobs have helped service companies grow. As hiring picks up, Americans are more willing to spend. Consumer spending jumped in February by the most in seven months, the government said last week payday loans no teletrack.
Department stores, electronics chains and other merchants are seeing more business. Retail sales increased in February by the most in four months. Department store sales rose in February by the most since November 2010.
Big job gains at service firms are necessary to reduce the unemployment rate. The service sector includes low-paying positions in retail and restaurants. But it also has higher-paying jobs in professions such as information technology, accounting and financial services.
The job gains have come as growth has picked up. The economy expanded at an annual rate of 3 percent in the final three months of last year.
Still, the hiring gains have not resulted in bigger paychecks for most people. Income grew just 0.2 percent last month, matching January’s weak increase. And when taking inflation into account, income after taxes fell for a second straight month.