Five questions for Mary Barra on GM's recall

NEW YORK (CNNMoney)

Tuesday she'll have to answer some very tough questions from the House Energy and Commerce Committee about why it took GM 10 years to order a recall after it learned about a problem with some ignition switches getting knocked out of the "Run" position.

These are some of the questions she'll probably face:

Were the company's financial troubles in the years before the bankruptcy a factor in its decision not order a recall?

GM documents submitted to House investigators show that its engineers came up with a possible fix for the cars as early as March 2005. But the automaker failed to order a recall to put it in place because "tooling cost and piece price are too high," and "none of the solutions represents an acceptable business case," according to the documents.

Related: GM recall - 10 things you need to know

This raises red flags as to whether GM's deteriorating financial condition was behind its failure to act. While the company was still four years away from bankruptcy, it was already losing money and its debt had been downgraded to junk bond status.

Why won't the company release the list of serious accidents and deaths that GM believes were tied to the ignition problems?

GM says that at least 13 deaths have been tied to the ignition problem. But Barra admitted two weeks ago that GM has not told the families of the deceased that their family member's fatal crash is tied to the problem.

It is quite possible that some of the family members don't realize that they lost someone due to the ignition flaw. Police reports at the time of the accidents likely did not highlight the fact that the key was turned into the "accessory" position, or that this was why the airbags did not deploy.

Will GM compensate those victims, even if its bankruptcy protects it from liability?

When GM went through bankruptcy in 2009, it became shielded from having to pay accident victims for any crash that happened before the bankruptcy. That's because the current GM is technically a new company, leaving victims and their families to sue a shell company that had been left holding closed factories and other liabilities but few assets.

Related: GM - Steps to a recall nightmare

Barra and GM spokespeople have thus far refused to address reporters' questions as to whether the company will accept legal responsibility for these deaths in spite of the liability shield.

How could GM have reports of airbags not deploying in this many fatal accidents and not see the need for a recall?

It's clear that GM was aware of the problems with the ignition system, as well as the mounting reports of serious accidents and deaths, as early as 2004.

But neither GM nor the National Highway Traffic Safety Administration ordered a recall until GM acted in February of this year. So far the company has not detailed what led it to believe there was no pattern of crashes tied to the ignition problem until recently, and what changed to prompt the recall.

What changes can GM point to, besides its promises and apologies, to assure the public this kind of delay in ordering a recall won't happen again?

GM has promoted a long-time employee to a new position as head of safety. And it seems to be rushing to order other recalls at the first signs of problems. There have been 2.2 million vehicles recalled this year for problems other than the ignition problem.

But the company has not yet explained how it will prevent its internal review process from going awry again.

First Published: March 31, 2014: 10:19 AM ET

21.29 | 0 komentar | Read More

Swiss target 8 banks in forex probe

Credit Suisse said it was "astonished" to be included in the probe, describing the allegations against it as "inappropriate and harmful."

LONDON (CNNMoney)

The Competition Commission said there were ''indications" that the banks had manipulated currency rates by exchanging confidential information and coordinating foreign exchange transactions.

"Based on the information currently available, the competition authorities believe that the most important currencies were affected by this behavior," the commission said in a statement.

Swiss banks UBS (UBS), Credit Suisse (CS), Julius Baer (JBARF) and Zurcher Kantonalbank are under scrutiny, as are four global banks -- JP Morgan Chase (JPM, Fortune 500), Citigroup (C, Fortune 500), Barclays (BCS), and Royal Bank of Scotland (RBS).

And it may not end there.

"The competition authorities cannot exclude at this stage that other banks and financial intermediaries (brokers) were involved in the alleged agreements," authorities said.

Related: Michael Lewis: Markets are 'rigged'

Financial regulators around the world have been investigating whether banks tried to rig the $5 trillion-a-day foreign currency market.

In addition to the banks targeted by the Swiss, other regulators are looking at Deutsche Bank (DB), Goldman Sachs (GS, Fortune 500) and HSBC (HSBC). The Bank of England has also been caught up in the allegations -- one employee has been suspended.

Regulatory and related legal action could drag on for years, and lawyers have said it may end up costing banks more in fines, settlements and damaged reputations than the Libor-rigging scandal.

The industry has paid about $6 billion in Libor-related penalties so far, and several former bankers and brokers are facing criminal charges.

Related: FDIC sues big banks over Libor

Most of the banks named in the Swiss probe declined to comment, or said only that they would cooperate with the investigation.

But Credit Suisse said it was "astonished" by the announcement, adding it had not been included in the commission's preliminary inquiry late last year.

"[It] contains incorrect references to Credit Suisse, and these allegations are both inappropriate and harmful to our reputation," the bank said in a statement, adding that it would cooperate fully.

Private bank Julius Baer said its own internal investigations had found "no evidence of market abuse," but it too would work with the commission.

First Published: March 31, 2014: 10:23 AM ET

21.29 | 0 komentar | Read More

Janet Yellen wants you to get a raise

NEW YORK (CNNMoney)

Those are the words of Federal Reserve Chair Janet Yellen, who said Monday that the central bank's goal "is to help Main Street, not Wall Street." And she hopes to do that primarily by boosting the job market.

Yellen's comments are important because they emphasize her focus on many important economic indicators, rather than just the unemployment rate. Among her top concerns, Yellen specifically mentioned these six signs of a weak job market.

1) Wages are rising too slowly: Since the recession, worker compensation has increased an average of 2% per year -- very low by historical standards.

"The low rate of wage growth is, to me, another sign that the Fed's job is not yet done," Yellen said. (In other words, she wants you to get a raise.)

2) Long-term unemployment is high: About 3.8 million workers have been out of work for six months or more -- high by historical standards.

3) Too many part-time jobs: About 7 million people are working part-time but would rather work full-time.

4) Employers are reluctant to create new jobs: Layoffs are low, but new hiring has been slow.

5) Few people are quitting their jobs: The number of people who voluntarily quit their jobs is below levels before the recession. When workers voluntarily quit jobs, it's seen as a sign that workers are confident they'll be able to find a new job. This is one sign of a healthy job market.

6) Labor force participation is low: Only 63% of adult Americans participate in the job market -- meaning they have a job or are looking for one. That's "the same level as in 1978, when a much smaller share of women were in the workplace," Yellen noted.

While the labor force is declining partly due to baby boomers retiring, Yellen believes many of these workers are not retiring voluntarily. Given the choice, some of these older workers would be happy to re-join the job market.

First Published: March 31, 2014: 10:25 AM ET

21.29 | 0 komentar | Read More

Tesla reaches deal to keep selling in New York

NEW YORK (CNNMoney)

Tesla (TSLA) and the New York Automobile Dealers Association have reached a compromise in their battle over Tesla's existing five stores in New York City and surrounding suburbs.

The dealers had been pushing to shut down the stores, charging that they violated dealership laws that prohibit selling directly to customers. All other automakers rely on independently-owned dealers to sell cars.

The dealers are a powerful political lobby in most states and seek to prohibit direct sales.

As part of the compromise announced late Friday, Tesla can continue to operate its existing stores but new ones will be allowed only through dealerships.

Tesla said it is happy with the agreement, an indication that it plans dealerships in the future.

Tesla has argued that it needs direct sales to consumers so its own sales people can explain the advantages of electric cars. It says that if it had to use dealers who also sell cheaper, gas powered cars, the dealers would neglect the Tesla Model S, which has a starting price of $69,000.

Tesla is aiming to introduce a cheaper electric car in about three years. It hopes to sell about 500,000 cars per year by 2020, up from 35,000 expected in 2014. Tesla's own company filings concede that the lack of an outside dealership network would limit increased sales of the car.

The agreement in New York comes days after Tesla got a delay on a ban on sales in neighboring New Jersey.

New Jersey had been set to prohibit the two Tesla stores from selling cars starting April 1, but this past week it agreed to delay that ban on sales until at least April 15. And legislators and members of the New Jersey dealership association are talking about a compromise that would allow Tesla sales to continue long-term, if not indefinitely.

Interactive map: Where you can buy a Tesla

First Published: March 29, 2014: 3:49 PM ET

21.29 | 0 komentar | Read More

3 measures of Obamacare's success

NEW YORK (CNNMoney)

No question it is a big rebound from the disastrous launch last October, though short of the initial projection of 7 million.

Still, experts say that the national figures aren't that important, be it overall enrollment or the share of young adults. Insurance is based on local markets, so what matters is how many enrollees sign up in each area and what share of them are healthy.

"There definitely is no magic number," said Drew Altman, chief executive of the Kaiser Family Foundation. "It will vary a lot around the country."

But there are ways to gauge how well the Affordable Care Act is doing. CNNMoney looks at three measures of Obamacare's success:

Insurers:

Despite the rough start, many insurers aren't complaining about Obamacare. That's important because 2015 premiums will be based in part on how well this year's enrollees track with insurers' projections.

Executives at WellPoint, the Blue Cross Blue Shield behemoth that is a big player in the exchanges, said this month that its enrollment is right where it expected, as is the age of those signing up and the types of plans they selected.

"I'm very optimistic as to where we are," Wellpoint executive Ken Goulet recently told investors.

Other insurers also say enrollment is coming along as planned, though some are depending on the little-known off-exchange market to broaden their base.

CoOportunity Health, a new insurer operating in Iowa and Nebraska, has had 63,000 people sign up for its policies, more than it expected. But the applicants picking its individual policies outside of the exchanges and its group policies are younger than those signing up on the federal exchange, said Cliff Gold, CoOportunity's chief operating officer.

Young adults are considered a proxy for healthy consumers, who will balance out older, costlier policy holders.

In the case of CoOportunity, only 19% of Iowa exchange applicants and 30% of Nebraska ones are under age 30. But about 40% of enrollees in group and off-exchange policies are young adults.

"We're very glad we didn't rely exclusively on the exchanges," Gold said. "It would have skewed the business older and sicker and caused higher rate increases."

Related: Obamacare's amazing comeback

For Molina Healthcare, which is offering exchange policies in nine states, Obamacare signups are tracking fairly well with its projections. The company has seen a surge this month, with one-third of its exchange enrollment coming in March.

"We are pleased with how things have gone," said J. Mario Molina, chief executive of the Long Beach, Calif.-based insurer. "The big issue was would the websites work and would people sign up. The answer is yes. People signed up and the website problems are mostly behind us."

Consumers:

Some people love it. Some people hate it.

Initial reviews on Obamacare are mixed. Hundreds of people wrote to CNNMoney to relay their experiences using their new benefits.

Many people, particularly the uninsured who could not get coverage because of pre-existing conditions or outrageous premiums, are thankful for Obamacare.

A 56-year-old woman from Illinois who works three part-time jobs to make ends meet said she was able to get her first mammogram in five years.

A La Jolla, Calif., resident saw his monthly premiums drop to $105, from $1,100.

And a small business owner in Greenwood Village, Colo., is thrilled to be able to move to any state for work since she no longer has to worry she'll be rejected for her pre-existing hip condition.

But there are also loads of complaints.

A North Carolina resident said the deductibles are so high that his family won't be able to use the policy. "We are no better off than before," this person said. "We couldn't afford doctor visits then and we still can't."

In New York City, a woman who is nearly halfway through her pregnancy has yet to find an ob-gyn doctor who will accept her insurance plan. After calling numerous providers, she said she'd be better off had she and her husband put their $1,241 monthly premium in the bank since she's had to pay for care at an out-of-network provider.

And a resident of Bakersfield, Calif., writes that he's now paying $300 more a month for coverage, in part to pay for pediatric dental coverage, though his children are in their 30s, and for maternity benefits that his wife will never use.

Ultimately, what matters for Obamacare's long-term health is what Americans think of the plans on the exchanges, said Altman, of the Kaiser Family Foundation.

"Do people who get coverage think it's a good deal," he said. "More than anything else, that's the most important factor."

Share your story: Have you begun using your Obamacare benefits?

Society:

The real question is whether Obamacare will meet its overarching goal of reducing the number of uninsured in the United States.

No one knows how many people signing up on the exchanges lacked coverage in 2013 because the federal and most state exchanges don't ask enrollees about it.

In New York, one of the few that does, more than 70% of applicants did not have insurance last year, though the metric includes those signing up for Medicaid and the state exchange.

There are some early indications that Obamacare is chipping away at this problem. The uninsured rate fell to 15.6% in February, down from an all-time high of 18% in the third quarter of 2013, according to the Gallup-Healthways Well-Being Index.

McKinsey & Co. recently released a survey showing 27% of respondents who picked new individual plans were previously uninsured.

An initial official measure will likely come in the fall when the Centers for Disease Control and Prevention releases its National Health Interview Survey. The report will show how many Americans were uninsured in early 2014.

Even when Obamacare is in full swing in 2018, with 25 million people projected to obtain insurance through the exchanges and 55 million via Medicaid, there will still be 30 million Americans uninsured, according to the Congressional Budget Office. Many of these folks will be undocumented immigrants or low-income residents of states that did not expand Medicaid.

First Published: March 30, 2014: 9:10 AM ET

21.29 | 0 komentar | Read More

March stocks: In like a lion, out with whiplash

Stocks have been on a wild ride during the first quarter of 2014.

NEW YORK (CNNMoney)

Trading was choppy in the first three months of the year, with the crisis in Ukraine and questions about when the Fed will hike interest rates taking center stage.

On top of that, unusually harsh winter weather in many parts of the country made it difficult for investors to figure out if the economy is really losing steam or not.

Are the winter blues gone? Investors will get a slew of data about the U.S. economy this week. There's manufacturing, construction spending, and auto sales numbers due out on Tuesday and the all-important March jobs report Friday.

"This week we expect to see more evidence that the economy is recovering from the temporary weakness triggered by the unusually severe weather," said Capital Economics analysts in a research note.

A 200,000 increase in payrolls "would show that the freezing in jobs growth has continued to thaw," the analysts added.

Hiring surprisingly picked up in February, with the economy adding 175,000 jobs. The unemployment rate ticked up to 6.7% from 6.6% the prior month as more Americans attempted to join the labor force.

Despite the bad weather, construction was a bright spot in the economy last month. But the same can't be said for the automotive sector, as sales have cooled off in early 2014.

Rough seas from across the pond? Europe is also likely to be a big story. It's possible that further volatility could arise as European Central Bank Chief Mario Draghi makes his monetary policy announcement Thursday.

Low inflation in the Eurozone has led to speculation that the ECB will further stimulate the economy. Meanwhile, the Federal Reserve is scaling back its economic stimulus.

Comments by Draghi last week on the importance of fighting deflation only fueled speculation about some sort of action. It caused the euro to fall sharply against the dollar. Any additional stimulus measures would likely weaken the euro and boost exports and the EU economy.

Related: Germany challenges Europe's crisis bond plan

But Andrew Milligan, head of global strategy for Standard Life Investments in Edinburgh, doesn't think the ECB will actually announce more stimulus on Thursday. Rather, he thinks Draghi was using the power of words to impact the market. Draghi was essentially able to drive down the euro without actually having to take material action.

The ECB will also announce on Thursday whether it's cutting interest rates, which are already near zero, even further.

GM to get grilled: The most anticipated corporate news event will come Tuesday when General Motors (GM, Fortune 500) CEO Mary Barra testifies before Congress over her company's handling of a flawed ignition switch for the Chevy Cobalt, among other vehicles.

Related: Lawyer wants recalled GM cars off the road

GM has been criticized because it has admitted that some employees were aware of problems with the ignition switch in small cars at least as early as 2004. But the company did not recall 1.6 million cars with the problematic switch until last month. General Motors now says the recall covers 2.2 million vehicles sold in the U.S.

The switch flaw led to at least 31 frontal accidents and at least 13 deaths, according to statistics released by GM. That number could rise as further investigations take place.

Google shares aplenty: If you own Google (GOOG, Fortune 500) stock, don't panic Thursday when the price drops in half, because that's the day when the tech giant's long anticipated 2-for-1 stock split goes into effect. Shareholders will get another share for each one they own currently.

The stock split was first announced two years ago, but was held up by a legal battle in which some shareholders raised objections.

The dual share system essentially gives CEO Larry Page, Chairman Eric Schmidt and co-founder Sergey Brin even more say in the company's management decisions.

But Google's management team has rewarded its shareholders. The stock has soared about 40% in the past 12 months.

First Published: March 30, 2014: 9:21 AM ET

21.29 | 0 komentar | Read More

GM adds 824,000 vehicles to recall

NEW YORK (CNNMoney)

Until today the recall included the Chevrolet Cobalt and HHR, the Pontiac G5 and Solstice, and Saturn Ion and Sky through model year 2007. Now the company is including all model years of those vehicles because faulty switches could have been installed as a repair after owners purchased one of the newer models.

About 95,000 faulty switches were sold to dealers and wholesalers and about 90,000 of those were used to make repairs, the company said.

The new recall adds to the 1.4 million vehicles already recalled in the United States.

In affected vehicles, the ignition can switch the car off while it is running, disabling the power steering and air bags. At least 12 deaths have been attributed to the issue. Although GM has recalled the vehicles, it has said they are still safe to drive if owners remove any extra weight from key rings.

Related: GM's steps to a recall nightmare

"Trying to locate several thousand switches in a population of 2.2 million vehicles and distributed to thousands of retailers isn't practical," said CEO Mary Barra in statement. "Out of an abundance of caution, we are recalling the rest of the model years," she said.

GM has been criticized for how it has handled the recall because it has admitted that some employees were aware of problems with the ignition switch in small cars at least as early as 2004. Barra will testify before a U.S. congressional subcommittee on April 1 as part of an investigation into the automaker's handling of the flawed ignition switch.

Owners who may have had a suspect part installed in their cars will receive a letter the week of April 21, according to the company. GM (GM, Fortune 500) dealers will replace the ignition switch for free and customers who had paid to have the switch replaced previously will be eligible for a reimbursement.

The National Highway Traffic Safety Commission urges impacted drivers to have their vehicles repaired promptly after receiving the notification from GM. In the meantime, the group advises them to follow GM's recommendation to use only the ignition key with nothing else on the key ring when driving the vehicle.

First Published: March 28, 2014: 6:16 PM ET

21.29 | 0 komentar | Read More

S&P downgrades Target for data breach

Last year's data breach keeps hurting Target. S&P downgraded it one notch.

NEW YORK (CNNMoney)

The breach compromised credit card numbers and personal information of tens of millions of customers during the 2013 holiday season. Target (TGT, Fortune 500) has said the hack cost the company as much as $61 million in the final months of 2013.

S&P expects the breach to have a "somewhat lingering effect" on traffic at the retailer's stores through at least August of this year. Sales slowed in the most recent quarter, which ended Feb. 1.

Target recently said its ongoing investigation of the breach could turn up "additional information that was accessed or stolen."

But the agency also said Target's outlook is stable. Although the retailer lost $723 million in Canada last year, S&P expects those losses to narrow in 2014. The agency also considers costs due to the data breach to be "significant but manageable."

First Published: March 28, 2014: 5:22 PM ET

21.29 | 0 komentar | Read More

GM's recall problems grow

NEW YORK (CNNMoney)

Late in the day, GM said it had recalled 172,000 Chevrolet Cruzes "to replace a right front axle half shaft that can fracture and separate without warning during normal driving."

Hours earlier, the automaker said it had told dealers to stop selling those Cruzes but did not disclose what the problem was.

The recall covers some 2013 and 2014 models with the 1.4-liter turbo engine, the most popular version of the compact car.

The Cruze is GM's best selling car model in the United States, and is also sold internationally.

Even more seriously, General Motors is contending with a damaging recall of millions of other cars because of an ignition switch flaw linked to fatal crashes.

In fact, GM expanded its ignition switch recall on Friday to add 824,000 cars sold in the United States between 2008 and 2011. Until then, that recall had included cars only through model year 2007.

GM also said Friday that it had confirmed that one more death had been caused by the ignition switch problem, meaning it now believes 13 people have died in accidents related to the faulty switch.

GM Chief Executive Mary Barra said the switch recall now covers 2.2 million cars sold in the United States.

In affected vehicles, the ignition can switch the car off while it is running, disabling the power steering and air bags.

Although GM has recalled the vehicles, it has said they are still safe to drive if owners remove any extra weight from key rings. GM has said it will begin the repairs on April 7.

Congress and federal prosecutors are investigating why GM did not recall the cars for a decade after it discovered the problem.

Barra, who has apologized repeatedly for the delays in the recall, is due to testify before Congress on Tuesday and Wednesday.

She explained the expansion of the ignition switch recall in a statement Friday, noting faulty switches could have been installed as a repair after owners purchased one of the newer models

"Trying to locate several thousand switches in a population of 2.2 million vehicles and distributed to thousands of retailers isn't practical," Barra said. "Out of an abundance of caution, we are recalling the rest of the model years."

She added: "We are taking no chances with safety."

--CNNMoney's Chris Isidore, Katie Lobosco and Peter Valdes-Dapena contributed to this report.

Related: Wheels video series - BMW 535d

First Published: March 29, 2014: 8:41 AM ET

21.29 | 0 komentar | Read More

McDonald's fights back with free coffee

McDonald's announced Friday that it will offer customers nationwide a free cup of McCafe coffee for two weeks.

NEW YORK (CNNMoney)

The nation's largest fast-food chain said the campaign, which kicks off on Monday, will give breakfast customers at its participating locations a free 12-ounce small coffee. And it will be up to each McDonald's location to decide if customers get just one cup or refills on the free coffee.

McDonald's (MCD, Fortune 500) coffee gimmick immediately follows competitor Taco Bell's highly-anticipated rollout this week of its first-ever breakfast menu, which it dubbed as the "largest menu expansion in Taco Bell's 50-year history."

Taco Bell's move could take a big bite out of Mickey D's breakfast sales. Taco Bell said its breakfast ambition is aimed at making the quick-service chain standout in the crowded breakfast market by introducing items other than the usual breakfast sandwiches to customers.

Taco Bell's breakfast menu includes the Waffle Taco -- a warm waffle wrapped around a sausage patty or bacon, with scrambled eggs and cheese and served with sweet syrup -- and the A.M. Crunchwrap. The Crunchwarp is a tortilla wrap filled with scrambled eggs, hash browns, melted cheese and bacon or sausage.

Related Story: McDonald's and Taco Bell rethink breakfast

Facing a sales slump, McDonald's recently said it was also considering expanding its breakfast hours. Breakfast at the restaurant typically ends in the late morning, aggravating some customers.

"We know that breakfast on the weekend cut off at 10:30 doesn't go very well," said Jeff Stratton, the chain's U.S. head. He said the company is "just beginning" to reconsider how to best serve up the meal.

McDonald's said the free coffee is its way of encouraging new guests to try McCafe Coffee and "surprising them in unexpected ways all year long."

The company said that starting in mid-April, it will surprise a Twitter (TWTR)follower every day for the year with McCafe coffee and prizes.

Breakfast wraps and sandwiches are already on the menu at Burger King, but the company said earlier this month it is testing a Chicken and Waffle Sandwich.

First Published: March 28, 2014: 9:12 AM ET

21.29 | 0 komentar | Read More

TGIF as stocks up ahead of weekend

NEW YORK (CNNMoney)

After two consecutive down days and a shaky week overall, the Dow, the S&P 500 and Nasdaq opened higher.

Helping lift the mood: better news on the U.S. economy. Consumer spending rose 0.3% in February, the biggest gain in three months. Personal income also gained 0.3% last month.

Economist Peter Cardillo of Rockwell Global Capital also pointed to positive signs overseas, "There seems to be increasing hope that the European Central Bank next week will take action because deflation risks continue to increase in the eurozone."

Related: Russia looks to Asia for trade cushion

Shares of Blackberry (BBRY) are surging, after the mobile device maker reported a narrower-than-expected loss for its fiscal fourth quarter. New CEO John Chen is trying to reverse the company's fortunes, and said in a statement that BlackBerry is "on sounder financial footing today with a path to returning to growth and profitability.".

Blackberry has been recovering since the start of the year on hopes the company's CEO can revive the struggling smartphone maker. However, shares have declined over the past few days as investors worry about the company's turnaround plans and Societe Generale (SCGLF) downgraded the stock to "sell".

Shares of Restoration Hardware (RH)are climbing after the furniture goods seller reported better than expected fourth quarter earnings.

Investors will be watching the stock of CBS Outdoor Americas (CBSO). The outdoor advertising arm of CBS Corp. (CBS, Fortune 500) begins trading on the New York Stock Exchange today. The initial public offering was priced last night at $28 a share valuing the company at more than $3 billion. It's another test for the value of "old media".

Also on the radar, Wal-Mart (WMT, Fortune 500) has sued Visa (V, Fortune 500) for $5 billion in a price fixing case related to credit card swipe fees. Retailers and credit card companies have been fighting over these fees for years, but this latest move comes with a potentially hefty price tag.

Banks, especially Citigroup (C, Fortune 500), were among the biggest losers Thursday, but Citigroup edged up slightly in early trading. The Fed said Citi failed its stress test, but for "qualitative" reasons.

The first three months of 2014 have been bumpy, and it's possible all the major indexes could end the quarter in the red. The Dow Jones industrial average has declined by more than 1% since the start of the year. The S&P 500 is up just around 0.7% and the Nasdaq is essentially flat over the same period.

Related: Fear & Greed Index continues backslide into fear

European markets were up, and most Asian markets closed out the trading day with gains, though the Shanghai Composite dipped by 0.2%.

First Published: March 28, 2014: 9:51 AM ET

21.29 | 0 komentar | Read More

Tesla installs fire shields under Model S

Tesla is installing underbody fire shields to its Model S electric cars, though CEO Elon Musk insists the risk of fire is much less than with gas cars.

NEW YORK (CNNMoney)

Musk wrote in a blog post that Tesla has been installing the underbody shields on new Model S cars since March 6, in response to some highly publicized fiery accidents.

Tesla (TSLA) received a lot of attention for three fires involving its Model S. Musk, who founded the electric car company, said concerns about fire problems with his vehicles are overblown.

"It is important to note that there have been no fire injuries (or serious, permanent injuries of any kind) in a Tesla at all," he wrote. "The odds of fire in a Model S, at roughly 1 in 8,000 vehicles, are five times lower than those of an average gasoline car and, when a fire does occur, the actual combustion potential is comparatively small."

Related: Fuggetabout it! Tesla sales back on in New Jersey

Two of the three fires occurred from road debris, while the third fire occurred last year in Mexico "after the vehicle impacted a roundabout at 110 mph, shearing off 15 feet of concrete curbwall and tearing off the front wheel, then smashing through an eight foot tall buttressed concrete wall on the other side of the road and tearing off the right front wheel, before crashing into a tree," Musk wrote.

The driver walked away "with no permanent injuries" and the fire started several minutes later, according to Musk.

A National Highway Safety Administration probe of the fires was closed this week.

"Telsa's revision of vehicle ride height and addition of increased underbody protection should reduce both the frequency of underbody strikes and the resultant fire risk," the agency wrote in a report. "A defect trend has not been identified."

Related: Where you can buy a Tesla

After the crash, one of the drivers announced he intended to buy a new Tesla.

There were 25,442 Model S cars sold worldwide through the end of last year. Tesla expects to double sales this year.

Tesla stock took a temporary hit from the publicity about the fire although the stock has since recovered and is up 40% so far this year.

First Published: March 28, 2014: 9:56 AM ET

21.29 | 0 komentar | Read More

Economy continues its sub par recovery

The economic recovery slowed in the fourth quarter, according to the government.

NEW YORK (CNNMoney)

Gross Domestic Product (GDP) -- the broadest measure of economic activity -- grew at a 2.6% annual pace in the fourth quarter, according to revised data released by the Commerce Department on Thursday.

The growth rate is slightly better than the 2.4% estimate published in February, but it was still down from 3.2% originally reported in January. The final revision matched economists' expectations.

The report said consumer spending and exports helped growth in the fourth quarter, but the overall economy was hindered by a big drop in federal and local government spending, as well as declines in private inventory investment.

Related: Yellen blames it on the weather.

The fourth quarter was dominated by federal spending cuts and the government shutdown in October. But the headwind in the first quarter is likely to come from Mother Nature rather than Uncle Sam.

Economists say colder-than-normal weather has put a damper on growth during the winter months. Government data have pointed to weak job growth, as well as declines in retail sales, new home construction and manufacturing.

Still, many experts expect the economy to regain momentum in the spring.

The economy had been picking up steam before uncertainty in Washington put the breaks on growth. In the third quarter, GDP expanded at 4.1%.

First Published: March 27, 2014: 9:09 AM ET

21.29 | 0 komentar | Read More

McDonald's seeks to supersize its growth

McDonald's is struggling to add new menu items that sell well enough to boost same-store sales.

(Money Magazine)

Over the past 12 months, McDonald's (MCD, Fortune 500) stock has returned less than 3%. That compares with an average 21% return for restaurant stocks. Part of the problem is that growth is always harder for a big, mature business -- and with a market value of $93 billion, McDonald's is larger than its two biggest rivals -- Starbucks (SBUX, Fortune 500) and Yum Brands (YUM, Fortune 500) -- combined.

Share of profits by region

McDonald's	4%	96%
Yum Brands	35%	65%

Source: Analyst estimate

But the company has found ways to boost sales before. Job No. 1: Freshen up the menu.

Want wings with that?

McDonald's has had trouble finding new menu items that diners want.

McDonald's is no longer the basic burger, fries, and soda joint you remember from your childhood. Facing new upscale competitors, it responded by adding salads, wraps, and specialty coffees to the menu. This worked for a while: U.S. same-store sales climbed an annual average of 5% from 2003 to 2011, according to the brokerage Raymond James.

Related: McDonald's workers sue for wage theft

But lately the Oak Brook, Ill., company has struggled to find "the next big thing," says Edward Jones analyst Jack Russo. Recent new items like chicken wings haven't been a hit. (And until McDonald's settles on the right mix, the added complexity in the kitchen from new items "slows down the drive-thru," says Russo.)

U.S. same-store sales, though high at an average $2.5 million, have plateaued.

A partial bet on China

The country is important to the chain but still not the main event.

The U.S. market is well saturated, leaving McDonald's stuck fighting for share with both fancier brands like Chipotle and low-cost Taco Bell fare. So an obvious avenue for future growth is the vast new Chinese market. Last year, 20% of the chain's store openings were in China.

But China remains a "smaller piece of a much bigger business," says Morgan Stanley analyst John Glass. He estimates the country represents up to 4% of profits.

Related: McDonald's and Taco Bell rethink breakfast

Competitor Yum Brands, which owns Taco Bell, KFC, and Pizza Hut, gets a third of its earnings from China. That makes McDonald's a less risky play -- Yum saw a 4% drop in revenues last year in part because of a bird flu outbreak, for example -- but also means there's less potential for fast profit gains.

No shortage of cash

A steady flow helps the company pay back its investors.

Since 1976, McDonald's has consistently delivered cash back to shareholders in the form of dividends or share repurchases. Today the stock offers an attractive dividend yield of 3.4%. And there's every reason to think that the business will keep delivering a strong income.

McDonald's is built to generate consistent cash. When a franchisee launches a new store, the company often purchases the land and collects rent on top of franchise fees. So even in tough times, the "downside is relatively limited," says Westwood Holdings portfolio manager Matthew Lockridge.

If management can find that elusive new hit product and deliver improved growth, that plus a reliable payout may satisfy value-minded investors.

First Published: March 27, 2014: 9:28 AM ET

21.29 | 0 komentar | Read More

Citi and other banks drag down stocks

Click on chart to track premarkets

NEW YORK (CNNMoney)

The Dow, S&P 500 and Nasdaq all fell in early trading.

On Wednesday, the Federal Reserve rejected Citigroup's capital plan, saying it was troubled by the bank's inability to predict how much it could lose in a severe economic downturn. It banned the bank from any dividend hikes or share repurchases for the next year.

Citigroup (C, Fortune 500) shares dropped 5% Thursday.

Citi was among 30 large banks required to submit capital plans for an annual stress tests. The Fed approved 25 plans. Citi and four other smaller banks were turned down.

Related: Fear & Greed Index backslides into fear

But Bank of America (BAC, Fortune 500) shares were up Thursday after it announced an increase in its dividend and a new stock buyback plan. The bank also unveiled a $9.5 billion settlement with the Federal Housing Finance Agency. The deal settles all litigation between Bank of America and the agency over the use of mortgage-backed securities in the run up to the housing meltdown.

On the earnings front, Lululemon (LULU) popped after the yogawear maker reported quarterly increases in revenue and net income. But it also had a slide in same-store sales.

Brian Sozzi of Belus Capital Advisors, wrote that this decline was a "once unthinkable development."

GameStop (GME, Fortune 500) shares fell nearly 8% after the video game retailer missed earnings missed estimates and gave a lackluster outlook for the current quarter.

Accenture (ACN) dropped about 7% after reporting a decline in quarterly net income. The technology services company was recently hired to work on the Obamacare website.

BlackBerry (BBRY) was downgraded to a "sell" by an analyst at Société Générale. Shares slumped on the news. The stock has had a rough go of it in recent years, but has rallied around 20% this year on hopes of a turnaround. The company will report its latest quarterly results on Friday morning.

King Digital Entertainment (KING) shares fell again. The maker of online game Candy Crush Saga took a beating in its initial public offering on Wednesday.

Related: CNNMoney's Tech 30

European markets were mostly lower in afternoon trading. The International Monetary Fund said it was throwing Ukraine an $18 billion lifeline.

Asian markets ended with mixed results. Shares in tech company Tencent (TCEHY) fell by nearly 6% in Hong Kong. Investors and traders have been growing concerned that valuations have become too rich in the Asian tech sector ... much like investors in the U.S. have regarding the likes of Facebook (FB, Fortune 500) and Twitter (TWTR).

First Published: March 27, 2014: 9:55 AM ET

21.29 | 0 komentar | Read More

Recession warning for Russia

LONDON (CNNMoney)

The world's 8th largest economy was already slowing rapidly due to a dearth of reforms, and recent events have exposed the weakness of a model based on using oil wealth to fund big projects and pay higher wages, it said in a report.

Europe and the U.S. imposed sanctions on several top Russian officials, and one Russian bank, in response to Moscow's annexation of Crimea. They have also warned of tougher measures to come if it destabilizes other parts of Ukraine. Russia's membership of the G8 has been suspended and a summit canceled.

Investors have pulled billions out of Russian markets in response to the crisis, and the country's central bank was forced to jack up interest rates and draw on reserves earlier this month to try to stabilize the currency.

"Recent events around the Crimea crisis have compounded the lingering confidence problem into a confidence crisis," the World Bank said in a report on the Russian economy.

Related: Visa, MasterCard resume service at two Russian banks

The bank's said its forecast for growth this year depends on how relations with the West unfold, and whether business and consumer confidence can recover. Assuming the Crimea crisis is contained, and resolved peacefully, the economy should continue to grow -- by 1.1% in 2014, down from 1.3% last year.

But if tensions escalate, leading to further uncertainty about economic sanctions, the outlook is much bleaker. Russian GDP -- worth about $2 trillion -- could shrink by 1.8% this year.

"Yet, this scenario assumes that the international community would still refrain from trade sanctions," the World Bank said.

Even so, companies and banks would find it increasingly hard to borrow from global markets, leading to reduced investment and higher financing costs, and the flight of foreign capital could intensify. Exchange rate volatility would only add to the risks for Russian companies and foreign investors, it added.

Russian stocks and the ruble plunged earlier earlier this month, but both have recovered slightly since as it became clear that Western punishment would be limited to freezing the assets and limiting the travel of some senior officials and a handful of oligarchs.

Related: Western banks lend billions to Russia

Still, the Moscow stock exchange MICEX index has lost 10% so far this year, compared with a 3% slide on emerging markets more broadly, and the ruble is 8% weaker against the dollar. Inflation is rising sharply as the devaluation makes imports more expensive.

And the rising tension with the West is slamming confidence among Russian businesses, wiping out any positive impact from the Sochi Olympics.

A monthly survey of about 200 companies in manufacturing, service, construction and agriculture found confidence in March at a 3-month low, with expectations for exports at their lowest level since last August. Production and new orders were also down.

"Growth was already extremely weak, with Russia badly needing to change its growth model and rebalance the economy away from consumption to investment. With capital flowing out of the country they've made that job an awful lot harder," said Philip Uglow, chief economist at MNI Indicators.

First Published: March 26, 2014: 9:53 AM ET

21.29 | 0 komentar | Read More

Tech companies take center stage

NEW YORK (CNNMoney)

Facebook (FB, Fortune 500) shares edged higher after the company announced a $2 billion acquisition of virtual reality firm Oculus VR late Tuesday. Oculus makes a headset for "immersive gaming" that Facebook plans to develop in to a communications and education platform.

The move helped boost shares of Himax Technologies (HIMX), a Taiwan-based company that makes components used in so-called wearable technology. Shares of Sony (SNE), which recently unveiled a similar virtual reality headset for its PlayStation gaming system, were little changed.

Shares in King (KING), maker of the popular online game Candy Crush Saga, begin trading after its initial public offering on the New York Stock Exchange was priced at $22.50 a share, raising nearly $500 million and valuing the company at about $7.6 billion.

Related: Candy Crush maker to begin trading

In other tech news, International Game Technology (IGT) didn't have the luckiest morning. Shares fell after the company, which makes casino games such as slot machines, said it is planning to cut 7% of its staff and lowered its earnings guidance for the year. The stock has lost 18% so far this year.

Meanwhile, the broader market was drifting higher in early trading. The Dow Jones industrial average, the S&P 500 and the Nasdaq were all up in early trading, further cementing the momentum from yesterday.

Related: CNNMoney's Tech30

U.S. stocks made gains Tuesday, breaking a two-day losing streak. Investors were feeling optimistic after a new report showed consumer confidence reached its highest level in six years. On Wednesday, the government said new orders for long-lasting goods rose 2.2% in February, bouncing back from a decline in January.

Related: Fear & Greed Index still idling in neutral

European markets were moving up in morning trading, likely tied to comments from European Central Bank officials that the bank is prepared to take more aggressive action if the Eurozone economy weakens. Most Asian markets gained ground Wednesday.

First Published: March 26, 2014: 9:49 AM ET

21.29 | 0 komentar | Read More

Colleges that offer the best return on your investment

Art majors can get the most bang for their buck at Columbia University.

NEW YORK (CNNMoney)

Harvey Mudd College, a private college in Claremont, Calif., offers students the biggest bang for their higher-education buck, according to the report from PayScale, a website that tracks pay data. During the first 20 years after getting a degree, graduates can expect to come out $1.1 million ahead of peers who skipped college and went straight to work after high school.

But return on investment depends a lot on a student's major.

For computer science majors, Stanford University offers the best deal, with a return of $1.7 million over the first 20 years of their career.

Related: Graduate student loans are ballooning

Education majors, on the other hand, may not make as much as computer scientists after graduation, but they can get the most for their money at Montclair State University in New Jersey. Education alums can expect a $189,000 return on their investment during the first 20 years after earning a degree.

"We need people to be teachers and social workers," said Katie Bardaro, an economist at PayScale. "But if you want to go into those fields, you need to understand the income potential so you can make the right choice about taking out loans and where you go to school."

Related: 529 college savings hits record high

Majors in liberal arts programs also can enjoy much better income potential if they pick the right school. Political science majors at Texas A&M University, for example, earn a 20-year return of almost $600,000 on average. At Columbia University, art graduates can expect to earn a return of about $478,000 on their investment.

In general, students who get the best bang for their buck major in science, technology, engineering or math (STEM) -- and attend schools with well-known programs that help with job placement.

"When it comes to earnings, yes, it's all about STEM," said Bardaro.

PayScale's study looked at how much a college grad earned over the first 20 years of their career, minus the cost of tuition, room, board and books, taking financial aid into account. PayScale then compared that number to the pay of a high school grad who worked for 24 to 26 years.

First Published: March 26, 2014: 9:52 AM ET

21.29 | 0 komentar | Read More

Google Glass getting a stylish makeover

Google Glass is partnering with the company behind the much-loved Ray-Ban brand.

LONDON (CNNMoney)

Google (GOOG, Fortune 500) announced late Monday that it is joining forces with eyewear giant Luxottica (LUX) to design, develop and distribute a new generation of Glass.

Glass, Google's experimental gadget that places a notification screen above your eye, initially launched in 2013 as an exciting futuristic product. Since then, it has become an overhyped niche gadget with a public relations problem. By appearing more stylish, Google is hoping Glass may gain broader market appeal before it releases the product to the broader public toward the end of 2014.

Luxottica and Google will establish a team of experts devoted to working on new Glass products "that straddle the line between high-fashion, lifestyle and innovative technology," the eyewear company says.

The frames firm -- the largest eyewear company in the world -- manufactures glasses for Oakley, Persol, Prada, Ray-Ban and Versace. It also owns retailers including LensCrafters, Sunglasses Hut and Pearle Vision, giving Google the ability to showcase its new designs in brick-and-mortar stores.

Related: Smartphones are fading. Wearables are next.

Both companies have been working towards combining fashion and technology for some time.

Luxottica has a 10-year history in incorporating wearable technology into its Ray-Ban and Oakley glasses. Its Oakley Thump sunglasses are outfitted with headphones for listening to music on the go.

And in late January, Google released four new versions of Glass in a bid to appeal to fashion-conscious consumers. It also added options for prescription glasses, its most requested feature since it launched the face-mounted computers last year.

Related: Google Glass may save firms $1 billion

Cantor Fitzgerald analyst Allegra Perry said this latest move "should put to rest any concern that had arisen recently that Google Glass would create a competitive threat [to Luxottica marketshare]."

Kenny Stoltz, a London-based entrepreneur working on developing an app for Google Glass said he expects the partnership with popular brands like Ray-Ban to "soften the high tech edge" of Glass.

Shares in the Italian frame maker were surging by just over 3% Tuesday morning. Google shares were up 1%.

First Published: March 25, 2014: 10:03 AM ET

21.29 | 0 komentar | Read More

Stocks bounce back from Monday's tech rout

NEW YORK (CNNMoney)

The Dow Jones industrial average was up more than 100 points in early trading Tuesday while the tech-heavy Nasdaq rose about 0.8%. The broader S&P 500 was solidly higher as well.

But a sense of caution prevails. The Nasdaq has fallen by nearly 2% this month. The Dow and S&P 500 are only down slightly for the month.

Economic news continues to be mixed. U.S. home prices slipped 0.1% in January reflecting the frigid winter. It was the third month that the S&P/Case-Shiller 20-city composite index declined. But year over year, the index is up 13.2%.

Related: Fear & Greed Index slips into neutral

In corporate news, Walgreen Co. (WAG, Fortune 500) shares are gaining even though the drugstore chain said that it will close 76 stores. Walgreen's also said earnings fell slightly from a year ago, but the company had positive things to say about its joint venture with European drugstore chain Alliance Boots.

Shares of Walt Disney (DIS, Fortune 500) were up after it said it would buy Maker Studios, a leading producer and distributor of videos on YouTube. Its vast array of online channels total 5.5 billion YouTube views per month, according to Maker, which makes it one of the most successful online video companies of its kind.

Shares of Sonic (SONC) are higher after the drive-in restaurant operator reported earnings that beat Wall Street's expectations.

Carnival (CCL) shares fell after the cruise company reported a first quarter loss.

Related: CNNMoney's Tech 30

European markets were higher.. The London FTSE 100 index was leading the way with a 1.1% gain. Asian stock markets mostly ended lower, though the moves down were modest.

First Published: March 25, 2014: 9:54 AM ET

21.29 | 0 komentar | Read More

Winter hits housing recovery

Home prices fell in January, but held up better in many warm-weather markets.

NEW YORK (CNNMoney)

The S&P/Case-Shiller index of prices in 20 major markets dipped 0.1%.

"The housing recovery may have taken a breather due to the cold weather," said David Blitzer, chairman of the index committee at S&P Dow Jones Indices.

Five cities bucked the trend and saw price gains of 0.4% or more, and all of them -- Las Vegas, Miami, San Diego, San Francisco and Tampa -- are in warm-weather states. Four of the five cities that posted the sharpest drop in prices were cities hit hard by the cold weather -- Chicago, Detroit, Minneapolis and Boston. Seattle prices also saw a significant drop.

Related: Subprime mortgages making a comeback

Home prices are still bouncing back from the bust. On a year-over-year basis, prices gained 13.2% nationally. But gains are slowing; January's annual rise is the lowest 12-month gain posted since August. The high point of the current recovery, the 13.7% increase in November, was generally seen an unsustainable by housing experts.

Home values over the last year have been helped by a drop in foreclosures, a decline in the unemployment rate and a relatively tight supply of homes available for sale in the face of pent-up demand from buyers. But beyond the cold weather, prices are facing a headwind of higher mortgage rates. Rates are up from a year ago, when they hit a record low.

Related: Renters want to buy a home

Also on Tuesday, the Census Department reported that the pace of new home sales in February fell 3% from January, and also dipped below year-ago levels. January's estimate was also revised lower.

The Northeast suffered by far the biggest decline in new home sales, falling more than 30% from to both January and year-earlier levels, indicating that they were also hurt by the bad weather.

First Published: March 25, 2014: 9:24 AM ET

21.29 | 0 komentar | Read More

Stocks mixed in a March market malaise

Click on chart to track premarkets

NEW YORK (CNNMoney)

The Dow, and S&P 500 were up slightly Monday, while Nasdaq fell modestly in early trading.

But despite the quiet trading in the early going, there were some big name individual stocks on the move.

Related: Fear and Greed index shifts into 'neutral'

Apple (AAPL, Fortune 500) shares popped after the Wall Street Journal reported that the computing giant is exploring a partnership with Comcast (CMCSA, Fortune 500) for an Apple-branded TV service.

Shares of Nu Skin (NUS) surged after the company said it was fined around $540,000 for its business practices in China. The beauty products marketer had previously disclosed that it was being investigated by Chinese regulators, but the relatively small penalty seems to be a relief to investors who had feared a more major regulatory blow.

Herbalife (HLF), the nutritional supplements distributor that uses a similar multi-level marketing sales model as Nu Skin, also rallied on the news. Herbalife revealed earlier this month that it is being probed by the Federal Trade Commission.

Related: CNNMoney's Tech 30

The company has been in the crosshairs of hedge fund manager Bill Ackman, who has publicly called it a pyramid scheme and unveiled a large bet that its stock price would fall. He also recently disclosed what he says are more shady tactics by the company in China.

Lions Gate (LGF) shares jumped after the studio's film "Divergent" had a strong opening at the box office. Many analysts expected a weaker showing for the movie.

Investors were also gearing up for some high profile initial public offerings in the days ahead.

King Digital Entertainment, the company behind the popular Candy Crush Saga online game is one of 14 companies currently scheduled to go public this week.

The IPO mania is part of a global trend, as more and more companies seek to go public in order to take advantage of increased demand for stocks.

Related: Candy Crush mania coming to Wall Street

European stock markets were all lower in midday trading as the Russian takeover of Ukraine's Crimean peninsula continues to dominate sentiment.

Asian markets ended with some significant gains though, despite HSBC data that showed Chinese manufacturing activity fell to an eight-month low in March. The Hang Seng in Hong Kong shot up by 1.9% and the Shanghai Composite rose by 0.9%.

First Published: March 24, 2014: 9:51 AM ET

21.29 | 0 komentar | Read More

Top JPMorgan banker to resign amid hiring probe

JPMorgan's office in the heart of Hong Kong's central business district.

HONG KONG (CNNMoney)

Fang Fang, a 12-year employee, was one of JPMorgan's top China dealmakers and most recently served as vice chairman of the firm's Asia investment banking group.

Therese Esperdy, JPMorgan's co-head of banking for Asia-Pacific, wrote in an internal company memo circulated Monday that Fang had informed the bank of his "desire to retire."

Fang had come under scrutiny for his reported ties to a program at JPMorgan that is now the subject of a U.S. investigation.

The program, called "Sons and Daughters" and run out of JPMorgan's Hong Kong office, is thought to have tracked the children of top Communist Party officials hired by the bank.

Documents obtained by investigators list the hires and their ability to win new business for the bank in China, according to The New York Times.

If there is an explicit link between the hiring decisions, new deals and increased revenue for the bank, investigators could make the case that JPMorgan was in violation of the Foreign Corrupt Practices Act. The FCPA makes it illegal for American companies to pay bribes as a part of doing business.

Investigators have not accused any JPMorgan employees of wrongdoing.

Marie Cheung, a spokeswoman for the bank, said that Fang's decision to retire was a personal one, and she added that JPMorgan is cooperating with regulators.

Related: Snowden documents show NSA hacked Huawei

Investigators have secured emails in which senior employees discuss the program. Fang, a Chinese citizen, sent some of the messages.

"You all know I have always been a big believer of the Sons and Daughters program -- it almost has a linear relationship" with winning assignments to advise Chinese companies, Fang wrote in an email published by The Times.

In another email, Fang suggested that JPMorgan should extend the contract of Tang Xiaoning, a bank employee whose father is the chairman of China Everbright, a state-backed financial services company.

"Given where we are on China Everbright, I think we may need another contract for Xiaoning," Fang said. JPMorgan had been hired to work on a share offering for a subsidiary of China Everbright.

First Published: March 24, 2014: 8:37 AM ET

21.29 | 0 komentar | Read More

Visa and MasterCard resume service at two Russian banks

Card services are working again for customers at SMP Bank and InvestCapitalBank in Russia.

LONDON (CNNMoney)

Visa (V, Fortune 500) and MasterCard (MA, Fortune 500) cards at both SMP Bank and InvestCapitalBank are working again, according to the banks.

Meanwhile, card services at two other banks -- Rossiya and a subsidiary, Sobinbank -- continue to be blocked.

"Now everything is working fine," said a representative at InvestCapitalBank, noting that services resumed Sunday.

Card services had been blocked after the U.S. issued sanctions against two major shareholders in the banks, Arkady Rotenberg and Boris Rotenberg.

MasterCard said it worked closely with U.S. regulators before resuming services at SMP Bank.

"This is not an unusual situation when sanctions are issued. Questions are raised, and refinements are made by the regulators from time to time," Mastercard said in a statement. "We will continue our active dialogue with regulators and our efforts to minimize the impact on the Russian payments market."

Visa did not immediately respond to requests for comment.

Related: U.S. sanctions on Russia begin to bite

The U.S. sanctions against Bank Rossiya and individuals within Russian President Vladimir Putin's inner circle were designed to put economic pressure on Russia for taking control of Crimea, a southern area in Ukraine.

That pressure continued to build at Bank Rossiya Monday after the bank asked customers to stop making foreign exchange payments out of their accounts until further notice.

Bank Rossiya is Russia's 17th biggest bank, with $10 billion in assets, according to a senior U.S. administration official. It has substantial interests in oil and gas.

--CNN's Zahra Ullah contributed to this report.

First Published: March 24, 2014: 9:12 AM ET

21.29 | 0 komentar | Read More

No winners for $1 billion NCAA challenge

NEW YORK (CNNMoney)

The $1 billion prize for a perfect NCAA bracket that his Berkshire Hathaway (BRKA, Fortune 500) was backing will go unclaimed.

None of the fans who signed up for the perfect bracket challenge sponsored by Quicken Loans and Yahoo Sports made it out of the first round of 32 games played without at least one mistake. The two firms would not say how many fans entered the free contest.

Buffett sold an insurance policy to Quicken Loans and Yahoo (YHOO, Fortune 500) which would have compensated them if they had to pay out the 10-figure sum.

One estimate puts the odds of picking a perfect bracket at 9.2 quintillion to one -- an awkward, rarely-used number that can also be thought of as 9.2 billion-billion. Those odds are longer than the likelihood of winning Powerball and Mega Millions in the same weekend.

Related: College basketball's real billion dollar winner

But the 9.2 quintillion estimate assumes each team has a 50% chance of winning every game, which is probably not the case. Others have put the odds at a marginally better 7.4 billion to 1. That's 42 times worse than your chance of winning Powerball.

"There is no perfect math...There are no true odds, no one really knows," Buffett told CNN in January when the challenge was announced.

The odds became even longer with upsets this week. In Thursday's opener, 84% of fans picked Ohio State to win, only to see the University of Dayton upset its rival. Then on Friday upstart Mercer University knocked off perennial powerhouse Duke, which was the choice of 98% of fans with Yahoo brackets.

The tournament is so popular partly because of the history of first-round upsets that play havoc with fans' brackets.

Related: More billionaires pledge to give away fortunes

CBS Sports, which runs one of the bigger bracket challenges, says that in the past two years its final perfect brackets were eliminated in the 22nd and 23rd games of the tournament, or about two-thirds of the way through the first round.

ESPN reports that of the roughly 30 million entrants it's had over the 13 years, no one has come close to a perfect bracket, and that only one person has had a perfect first round in the last seven years.

"I don't want to say it's impossible, but it's basically impossible," said John Diver, director of product development for ESPN Fantasy.

First Published: March 22, 2014: 9:51 AM ET

21.29 | 0 komentar | Read More

Are Netflix users ripping off the rest of us?

Reed Hastings says Netflix is "reluctantly" paying for faster connections to broadband networks.

NEW YORK (CNNMoney)

Hastings sounded off Thursday on the likes of Verizon (VZ, Fortune 500), Comcast (CMCSA, Fortune 500) and others, accusing them of "sacrific[ing] the interests of their own customers" in demanding fees to ensure quick delivery of content from Netflix (NFLX) and other data-intensive services.

The dispute flared up earlier this year following news that Netflix streaming speeds for customers of major ISPs were slowing, as these firms attempted to extract a fee from Netflix in exchange for connecting directly to their networks and resolving the issue.

Netflix announced an agreement with Comcast last month under which it will indeed pay for a connection, and has been in talks with Verizon as well.

Hastings said his company was engaging in these talks "reluctantly." He accused the ISPs of abusing their market power and short-changing customers.

Related: New chapter begins in net neutrality fight

But the ISPs tell a very different story. They point to the fact that Netflix generates a massive amount of data consumption -- around a third of traffic online during peak hours -- while sticking them with the ever-increasing delivery costs.

The National Cable and Telecommunications Association says just one percent of broadband subscribers -- primarily heavy streaming-video users -- consume nearly 40% of bandwidth going into homes.

Other big tech companies, including Microsoft (MSFT, Fortune 500), Google (GOOG, Fortune 500) and Facebook (FB, Fortune 500), already have paid-connection deals with big ISPs. Comcast vice president David Cohen said in response to Hastings that these arrangements "have been an essential part of the growth of the Internet for two decades."

Dan Rayburn, an industry analyst at Frost & Sullivan, says it's not clear that the ISPs are to blame for customers' lagging Netflix speeds. In a blog post Friday, he noted that Netflix has the option of rerouting the traffic it sends to ISPs when congestion occurs at one connection point.

The heart of the problem is that high-speed Internet networks are extremely expensive to deploy. There aren't many companies with the resources to do it, and there isn't enough competition in most regions to push ISPs to quickly upgrade their infrastructure.

Paid-connection deals like the one between Comcast and Netflix are part of the way the broadband industry wants to address this issue. But Hastings says this cost-sharing doesn't make sense if the ISPs aren't also willing to share subscription revenue.

"When an ISP sells a consumer a 10 or 50 megabits-per-second Internet package, the consumer should get that rate, no matter where the data is coming from," Hastings wrote in his blog post.

Related: Court strikes down net neutrality rules

ISPs have accused Netflix of "dumping" data onto their networks, a characterization that Hastings rejected.

"Netflix isn't 'dumping' data; it's satisfying requests made by ISP customers who pay a lot of money for high speed Internet," Hastings wrote. "If this kind of leverage is effective against Netflix, which is pretty large, imagine the plight of smaller services today and in the future."

Going forward, broadband providers would like to move to a tiered pricing structure for customers depending on how much data they consume, similar to those offered by mobile carriers.

"[I]t's unfair to ask lighter users to subsidize super-user activity," the NCTA says.

But part of that formula will likely involve letting content providers subsidize consumer data consumption that goes toward their services. AT&T announced this kind of "sponsored data" program earlier this year for the mobile Web. The worry with this system is that it favors established companies that can pay up for speedy delivery of their content, putting smaller firms at a disadvantage and potentially stifling innovation.

"On a tiered Internet controlled by the phone and cable companies, only their own content and services -- or those offered by corporate partners that pony up enough 'protection money' -- will enjoy life in the fast lane," the advocacy group Free Press says.

First Published: March 21, 2014: 5:34 PM ET

21.29 | 0 komentar | Read More

Candy Crush mania coming to Wall Street

The game is addictive, will the stock be too?

NEW YORK (CNNMoney)

King Digital Entertainment, which makes the popular Candy Crush Saga online game, is one of 14 companies set to go public this week.

The U.K. based company, which will list on the New York Stock Exchange under the ticker symbol 'KING', plans to sell about 22 million shares at a price somewhere between $21 and $24 per share.

Based on the midpoint of that range, King would have a market value of about $7 billion. King had annual revenue of $1.9 billion and a profit of about $568 million in 2013, according to its prospectus.

Compared with some of its rivals, such as Zynga (ZNGA) and Activision (ATVI), King's stock may be "fairly valued," said Tim Keating, chief executive of Keating Capital, a fund that specializes in making pre-IPO investments but does not own a stake in King. Zynga is worth about $4 billion while Activision has a market value of around $15 billion.

Keating said some investors are concerned that King's profits are too closely tied to the success of one game. But he added that King's profit margins are strong and its revenue growth over the past year has been an "eye popping" 1000%.

Related: European IPOs boom as bull market runs

Even though stocks have been volatile lately due to geopolitical concerns, the Nasdaq is still all up more than 2% so far this year. And that's helped fuel strong demand for IPOs.

There have been 53 new listings in the United States so far this year, according to IPO research and investment firm Renaissance Capital. In the same period last year, there were just 30 companies that went public.

At that rate, the number of IPOs this year could rival last year's total of 222, which was the highest number since 2000.

Most of the stocks that have debuted this year have outperformed the broader market. The average IPO has increased 35% from its offering price so far this year, according to Renaissance.

Related: Candy Crush company founder left $1 billion on the table

Healthcare software company Castlight Health (CSLT), which debuted earlier this month, has doubled from its offering price. Biotech Dicerna Pharmaceuticals (DRNA), which went public in late January, is up nearly 180%. So is Auspex Pharmaceuticals (ASPX), which started trading in early February.

And on Friday, biotech Versartis (VSAR) surged about 50% from its offering price.

In fact, the healthcare sector has been by far the most popular in the IPO market. So far this year, 29 healthcare companies have gone public.

The robust IPO market is a continuation of last year's bumper crop. Keating said much of the boom in IPO activity is linked to the JOBS Act, which removed some obstacles for smaller companies to go public.

More broadly, investors have been drawn to IPOs for the strong growth that newly public companies promise.

Still, Keating noted that roughly three-quarters of the companies that have gone public recently have not been profitable, which is up from the long-term average of about 50%.

That could be a sign of some froth in the market, though the IPO boom could continue for some time, Keating added.

First Published: March 23, 2014: 8:42 AM ET

21.29 | 0 komentar | Read More

Are Netflix users ripping off the rest of us?

Reed Hastings says Netflix is "reluctantly" paying for faster connections to broadband networks.

NEW YORK (CNNMoney)

Hastings sounded off Thursday on the likes of Verizon (VZ, Fortune 500), Comcast (CMCSA, Fortune 500) and others, accusing them of "sacrific[ing] the interests of their own customers" in demanding fees to ensure quick delivery of content from Netflix (NFLX) and other data-intensive services.

The dispute flared up earlier this year following news that Netflix streaming speeds for customers of major ISPs were slowing, as these firms attempted to extract a fee from Netflix in exchange for connecting directly to their networks and resolving the issue.

Netflix announced an agreement with Comcast last month under which it will indeed pay for a connection, and has been in talks with Verizon as well.

Hastings said his company was engaging in these talks "reluctantly." He accused the ISPs of abusing their market power and short-changing customers.

Related: New chapter begins in net neutrality fight

But the ISPs tell a very different story. They point to the fact that Netflix generates a massive amount of data consumption -- around a third of traffic online during peak hours -- while sticking them with the ever-increasing delivery costs.

The National Cable and Telecommunications Association says just one percent of broadband subscribers -- primarily heavy streaming-video users -- consume nearly 40% of bandwidth going into homes.

Other big tech companies, including Microsoft (MSFT, Fortune 500), Google (GOOG, Fortune 500) and Facebook (FB, Fortune 500), already have paid-connection deals with big ISPs. Comcast vice president David Cohen said in response to Hastings that these arrangements "have been an essential part of the growth of the Internet for two decades."

Dan Rayburn, an industry analyst at Frost & Sullivan, says it's not clear that the ISPs are to blame for customers' lagging Netflix speeds. In a blog post Friday, he noted that Netflix has the option of rerouting the traffic it sends to ISPs when congestion occurs at one connection point.

The heart of the problem is that high-speed Internet networks are extremely expensive to deploy. There aren't many companies with the resources to do it, and there isn't enough competition in most regions to push ISPs to quickly upgrade their infrastructure.

Paid-connection deals like the one between Comcast and Netflix are part of the way the broadband industry wants to address this issue. But Hastings says this cost-sharing doesn't make sense if the ISPs aren't also willing to share subscription revenue.

"When an ISP sells a consumer a 10 or 50 megabits-per-second Internet package, the consumer should get that rate, no matter where the data is coming from," Hastings wrote in his blog post.

Related: Court strikes down net neutrality rules

ISPs have accused Netflix of "dumping" data onto their networks, a characterization that Hastings rejected.

"Netflix isn't 'dumping' data; it's satisfying requests made by ISP customers who pay a lot of money for high speed Internet," Hastings wrote. "If this kind of leverage is effective against Netflix, which is pretty large, imagine the plight of smaller services today and in the future."

Going forward, broadband providers would like to move to a tiered pricing structure for customers depending on how much data they consume, similar to those offered by mobile carriers.

"[I]t's unfair to ask lighter users to subsidize super-user activity," the NCTA says.

But part of that formula will likely involve letting content providers subsidize consumer data consumption that goes toward their services. AT&T announced this kind of "sponsored data" program earlier this year for the mobile Web. The worry with this system is that it favors established companies that can pay up for speedy delivery of their content, putting smaller firms at a disadvantage and potentially stifling innovation.

"On a tiered Internet controlled by the phone and cable companies, only their own content and services -- or those offered by corporate partners that pony up enough 'protection money' -- will enjoy life in the fast lane," the advocacy group Free Press says.

First Published: March 21, 2014: 5:34 PM ET

19.34 | 0 komentar | Read More

Taxpayers hit with fewer audits

NEW YORK (CNNMoney)

The agency audited 1.4 million people last year, down 5% from 2012 and the lowest number of audits conducted since 2008, according to IRS statistics released Friday.

The IRS blamed its shrinking budget for the drop-off, saying "an ongoing decline in appropriate funding presented challenges."

Related: 10 tax audit red flags

Since 2010, the agency's budget has been reduced by almost $1 billion and around 10,000 employees have been cut. Under the 2014 budget, the IRS will receive $11.3 billion -- nearly $2 billion less than the White House had requested for the agency and a $526 million drop from 2013.

Meanwhile, government spending cuts last year forced the IRS to furlough workers without pay for three days, making it even harder for the agency to keep up with its workload.

To cut costs, the IRS has been conducting more audits by mail than in person. Last year, more than three-quarters of examinations were correspondence audits, and the rest were field audits -- meaning they were conducted at an IRS office or a taxpayer's home.

Related: Quiz - 7 surprising 2014 tax facts

And while the overall number of audits was low, at around 1% of all taxpayers, there are still certain groups that aren't getting a break.

One of those groups is the rich: About 9% of taxpayers with income between $1 million and $5 million were audited last year, and that rate rose to 16% for those with income between $5 million and $10 million. For the nation's top earners, with income over $10 million, the audit rate was 24%.

Business owners are also more likely to be audited, and so are taxpayers who claim a home office deduction or the Earned Income Tax Credit. Reporting -- or failing to report -- a foreign bank account could also lead to additional scrutiny, as the IRS continues to crackdown on people hiding offshore income.

Related: Tax season unleashes cyberscams

In addition to being unable to conduct as many audits, the agency's taxpayer assistance has been deteriorating, the National Treasury Employees Union said in a statement Friday.

"We are seeing the results of these reductions in staffing, particularly in customer service, all across the country," NTEU president Colleen Kelley said. "Both taxpayers and employees are frustrated by the lengthy lines at Taxpayer Assistance Centers and the long telephone hold times for those who call the IRS with a question."

First Published: March 21, 2014: 4:58 PM ET

19.34 | 0 komentar | Read More

No winners for $1 billion NCAA challenge

NEW YORK (CNNMoney)

The $1 billion prize for a perfect NCAA bracket that his Berkshire Hathaway (BRKA, Fortune 500) was backing will go unclaimed.

None of the fans who signed up for the perfect bracket challenge sponsored by Quicken Loans and Yahoo Sports made it out of the first round of 32 games played without at least one mistake. The two firms would not say how many fans entered the free contest.

Buffett sold an insurance policy to Quicken Loans and Yahoo (YHOO, Fortune 500) which would have compensated them if they had to pay out the 10-figure sum.

One estimate puts the odds of picking a perfect bracket at 9.2 quintillion to one -- an awkward, rarely-used number that can also be thought of as 9.2 billion-billion. Those odds are longer than the likelihood of winning Powerball and Mega Millions in the same weekend.

Related: College basketball's real billion dollar winner

But the 9.2 quintillion estimate assumes each team has a 50% chance of winning every game, which is probably not the case. Others have put the odds at a marginally better 7.4 billion to 1. That's 42 times worse than your chance of winning Powerball.

"There is no perfect math...There are no true odds, no one really knows," Buffett told CNN in January when the challenge was announced.

The odds became even longer with upsets this week. In Thursday's opener, 84% of fans picked Ohio State to win, only to see the University of Dayton upset its rival. Then on Friday upstart Mercer University knocked off perennial powerhouse Duke, which was the choice of 98% of fans with Yahoo brackets.

The tournament is so popular partly because of the history of first-round upsets that play havoc with fans' brackets.

Related: More billionaires pledge to give away fortunes

CBS Sports, which runs one of the bigger bracket challenges, says that in the past two years its final perfect brackets were eliminated in the 22nd and 23rd games of the tournament, or about two-thirds of the way through the first round.

ESPN reports that of the roughly 30 million entrants it's had over the 13 years, no one has come close to a perfect bracket, and that only one person has had a perfect first round in the last seven years.

"I don't want to say it's impossible, but it's basically impossible," said John Diver, director of product development for ESPN Fantasy.

First Published: March 22, 2014: 9:51 AM ET

19.34 | 0 komentar | Read More

Taxpayers hit with fewer audits

NEW YORK (CNNMoney)

The agency audited 1.4 million people last year, down 5% from 2012 and the lowest number of audits conducted since 2008, according to IRS statistics released Friday.

The IRS blamed its shrinking budget for the drop-off, saying "an ongoing decline in appropriate funding presented challenges."

Related: 10 tax audit red flags

Since 2010, the agency's budget has been reduced by almost $1 billion and around 10,000 employees have been cut. Under the 2014 budget, the IRS will receive $11.3 billion -- nearly $2 billion less than the White House had requested for the agency and a $526 million drop from 2013.

Meanwhile, government spending cuts last year forced the IRS to furlough workers without pay for three days, making it even harder for the agency to keep up with its workload.

To cut costs, the IRS has been conducting more audits by mail than in person. Last year, more than three-quarters of examinations were correspondence audits, and the rest were field audits -- meaning they were conducted at an IRS office or a taxpayer's home.

Related: Quiz - 7 surprising 2014 tax facts

And while the overall number of audits was low, at around 1% of all taxpayers, there are still certain groups that aren't getting a break.

One of those groups is the rich: About 9% of taxpayers with income between $1 million and $5 million were audited last year, and that rate rose to 16% for those with income between $5 million and $10 million. For the nation's top earners, with income over $10 million, the audit rate was 24%.

Business owners are also more likely to be audited, and so are taxpayers who claim a home office deduction or the Earned Income Tax Credit. Reporting -- or failing to report -- a foreign bank account could also lead to additional scrutiny, as the IRS continues to crackdown on people hiding offshore income.

Related: Tax season unleashes cyberscams

In addition to being unable to conduct as many audits, the agency's taxpayer assistance has been deteriorating, the National Treasury Employees Union said in a statement Friday.

"We are seeing the results of these reductions in staffing, particularly in customer service, all across the country," NTEU president Colleen Kelley said. "Both taxpayers and employees are frustrated by the lengthy lines at Taxpayer Assistance Centers and the long telephone hold times for those who call the IRS with a question."

First Published: March 21, 2014: 4:58 PM ET

21.29 | 0 komentar | Read More

Are Netflix users ripping off the rest of us?

Reed Hastings says Netflix is "reluctantly" paying for faster connections to broadband networks.

NEW YORK (CNNMoney)

Hastings sounded off Thursday on the likes of Verizon (VZ, Fortune 500), Comcast (CMCSA, Fortune 500) and others, accusing them of "sacrific[ing] the interests of their own customers" in demanding fees to ensure quick delivery of content from Netflix (NFLX) and other data-intensive services.

The dispute flared up earlier this year following news that Netflix streaming speeds for customers of major ISPs were slowing, as these firms attempted to extract a fee from Netflix in exchange for connecting directly to their networks and resolving the issue.

Netflix announced an agreement with Comcast last month under which it will indeed pay for a connection, and has been in talks with Verizon as well.

Hastings said his company was engaging in these talks "reluctantly." He accused the ISPs of abusing their market power and short-changing customers.

Related: New chapter begins in net neutrality fight

But the ISPs tell a very different story. They point to the fact that Netflix generates a massive amount of data consumption -- around a third of traffic online during peak hours -- while sticking them with the ever-increasing delivery costs.

The National Cable and Telecommunications Association says just one percent of broadband subscribers -- primarily heavy streaming-video users -- consume nearly 40% of bandwidth going into homes.

Other big tech companies, including Microsoft (MSFT, Fortune 500), Google (GOOG, Fortune 500) and Facebook (FB, Fortune 500), already have paid-connection deals with big ISPs. Comcast vice president David Cohen said in response to Hastings that these arrangements "have been an essential part of the growth of the Internet for two decades."

Dan Rayburn, an industry analyst at Frost & Sullivan, says it's not clear that the ISPs are to blame for customers' lagging Netflix speeds. In a blog post Friday, he noted that Netflix has the option of rerouting the traffic it sends to ISPs when congestion occurs at one connection point.

The heart of the problem is that high-speed Internet networks are extremely expensive to deploy. There aren't many companies with the resources to do it, and there isn't enough competition in most regions to push ISPs to quickly upgrade their infrastructure.

Paid-connection deals like the one between Comcast and Netflix are part of the way the broadband industry wants to address this issue. But Hastings says this cost-sharing doesn't make sense if the ISPs aren't also willing to share subscription revenue.

"When an ISP sells a consumer a 10 or 50 megabits-per-second Internet package, the consumer should get that rate, no matter where the data is coming from," Hastings wrote in his blog post.

Related: Court strikes down net neutrality rules

ISPs have accused Netflix of "dumping" data onto their networks, a characterization that Hastings rejected.

"Netflix isn't 'dumping' data; it's satisfying requests made by ISP customers who pay a lot of money for high speed Internet," Hastings wrote. "If this kind of leverage is effective against Netflix, which is pretty large, imagine the plight of smaller services today and in the future."

Going forward, broadband providers would like to move to a tiered pricing structure for customers depending on how much data they consume, similar to those offered by mobile carriers.

"[I]t's unfair to ask lighter users to subsidize super-user activity," the NCTA says.

But part of that formula will likely involve letting content providers subsidize consumer data consumption that goes toward their services. AT&T announced this kind of "sponsored data" program earlier this year for the mobile Web. The worry with this system is that it favors established companies that can pay up for speedy delivery of their content, putting smaller firms at a disadvantage and potentially stifling innovation.

"On a tiered Internet controlled by the phone and cable companies, only their own content and services -- or those offered by corporate partners that pony up enough 'protection money' -- will enjoy life in the fast lane," the advocacy group Free Press says.

First Published: March 21, 2014: 5:34 PM ET

21.29 | 0 komentar | Read More