Chicago mayor asks banks to cut off gun makers

Chicago Mayor Rahm Emanuel wants banks to stop lending to gun makers.

WASHINGTON (CNNMoney)

Emanuel, mayor of the nation's third-largest city and former chief of staff to President Obama, wrote the CEOs of Bank of America (BAC, Fortune 500) and TD Bank (TD), since they finance gun makers that lobby against federal and local efforts to toughen gun control laws.

Bank of America gives Sturm, Ruger & Company Inc. (RGR) a $25 million line of credit and TD Bank gives Smith & Wesson (SWHC) a $60 million line of credit, according to the letter.

"I ask you to use your influence to push this company to find common ground with the vast majority of Americans who support a military weapons and ammunition ban, and comprehensive background checks," Emanuel wrote to Bank of America CEO Brian Moynihan. He wrote a similar letter to TD Bank CEO Bharat Masrani.

Both Bank of America and TD declined to comment.

Smith & Wesson and Sturm, Ruger make a wide variety of firearms, including the semiautomatic rifles that are known variously as assault weapons or modern sporting rifles.

Related: Gun industry thrives in face of ban proposal

Emanuel pushed for tougher gun control measures long before the slayings of children and teachers at a Newtown, Conn., elementary school last month. Two years ago, the Supreme Court overturned the city's handgun ban, forcing the city to rewrite its laws. Chicago maintains some of the nation's toughest gun control laws, including registration of any kind of gun and a ban on assault weapons.

"Doing business with gun manufacturers might benefit the banks' bottom line, but they put our police officers, our children, and our communities at risk," Emanuel said in a Friday statement.

His office has also ordered city pension and retirement funds to divest shares in gun makers. This week, the Chicago Municipal Employees Annuity and Benefit Fund agreed to shift $1 million from manufacturers of assault rifles, including Freedom Group, Smith and Wesson and Sturm, Ruger.

- CNN's Todd Sperry contributed to this report.

First Published: January 25, 2013: 2:56 PM ET

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Boeing keeps building Dreamliners it can't fly

Boeing hasn't slowed production of its 787 Dreamliner despite the federal probe that has grounded the jet.

NEW YORK (CNNMoney)

A federal probe into electrical fires has grounded all 50 Boeing 787 Dreamliners around the world. But Boeing has little choice but to keep its assembly lines in South Carolina and Washington State running at their normal pace, building five jets a month. A significant slowdown in production, let alone a full shutdown, would be too costly for both Boeing and its suppliers who are counting on making parts for the aircraft.

"Stopping production is not going to happen," said Carter Leake, an aerospace analyst with BB&T Capital Markets. A halt in production or even a slow down would risk crucial suppliers going out of business. "They need to keep the lines running to support the supply chain. They can't do that to suppliers that barely survived the three year delay in producing the first plane."

National Transportation Safety Board Chairman Deborah Hersman said Thursday that investigators have yet to determine what caused the two lithium battery fires earlier this month that led the FAA to ground all Dreamliners. So even though Boeing has no idea what kind of fix to the aircraft will eventually be required, it continues to make the planes as if there is no problem.

Related: What's wrong with the Dreamliner?

"If it stopped it would be very difficult to start production again," said Chris DeNicolo, aerospace credit analyst for Standard & Poor's. And Boeing still has 800 Dreamliner orders left to fill for airlines.

Related: Dreamliner - Where the parts come from

Boeing spokeswoman Kate Bergman confirms the manufacturer hasn't changed its production schedule since the Dreamliners were grounded. Indeed, the manufacturer still plans to double production by year's end. The company would not say how many planes have been built since the FAA grounded the jets on Jan. 16, or what it will do with the completed aircraft since it can't fly them off Boeing's property.

NTSB's Hersman said the probe is only in the very early stages and suggested it could take a long time to resolve.

"This is not something we expect will be solved overnight," she said. "We are prepared to be methodical."

Related: United: Passengers will 'flock' back to Dreamliner

Leake said he is worried that the relatively quick fix that many investors were hoping for is becoming less and less likely. Airlines eager for the jet's improved fuel economy have yet to cancel any orders due to the grounding. But that won't necessarily be the case forever.

"It does sound like we're in the first inning," Leake said. "I don't know what the tipping point is. If it's three months, they'll be no cancellations, six months, some cancellations, Nine months, it's a big problem."

Working in Boeing's favor is the fact that it has more than $11 billion in cash and short-term investments on its balance sheet.

"There's an ability [for it] to absorb the additional costs," said DeNicolo. "The rest of its commercial airplane business is doing quite well."

The Dreamliner was supposed to be a major profit driver for Boeing, but that won't be the case as long as it's building planes that it can't deliver.

First Published: January 25, 2013: 4:44 PM ET

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RIM to advertise BlackBerry 10 during Super Bowl

NEW YORK (CNNMoney)

It's RIM's (RIMM) first-ever Super Bowl commercial, and while the company didn't say how much it spent, Super Bowl broadcaster CBS (CBS, Fortune 500) previously told CNNMoney that 30-second spots are going for a record high of at least $4 million.

RIM will unveil the BlackBerry 10 platform at events on Wednesday, as well as the first two devices to run on the new platform. It's been a long time coming: The software had previously been slated for release in early 2012, which was pushed to late 2012, and again to the first quarter of 2013.

While delays in tech do happen, the news was damning for the struggling RIM because BlackBerry 10 is meant t to be the crown jewel of the company's turnaround plan. Critics wondered if RIM would even survive long enough to launch the OS.

Now that launch day is nearly upon us, RIM is doing all it can to market BlackBerry 10. In addition to the Super Bowl ad, RIM said it will push BlackBerry via online ads and on social networks before and after the game. Launch day on Wednesday includes BlackBerry events around the globe.

Related story: RIM's fate hangs on BlackBerry 10

So RIM will survive to see BlackBerry 10 launch, but the delay has left the company stuck in a holding pattern. Everyone from Apple (AAPL, Fortune 500) to Nokia (NOK) to Microsoft (MSFT, Fortune 500) released new gadgets in the fall, but RIM was essentially forced to wait for the BlackBerry 10 software before selling any significant new hardware.

The company has said BlackBerry 10 will run on a smaller number of devices with essential smartphone features: a much-improved camera, a modern Web browser and social-networking integration. The software will allow customers to access e-mail with one swipe from any app, and it will shift automatically between personal and corporate modes.

RIM's main problem is its lost stronghold in the corporate market, where it once dominated. Rather than issuing company BlackBerries, many employers now have workers bring their own devices into work, usually Apple's (AAPL, Fortune 500) iPhone and Google's (GOOG, Fortune 500) Android devices.

First Published: January 25, 2013: 5:32 PM ET

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Say goodbye to more bank branches

Banks are closing more branches as they look to cut costs and shift customers to online and mobile banking instead.

NEW YORK (CNNMoney)

Overall, banks closed 2,267 branches last year and opened only 1,149, according to research firm SNL Financial. That resulted in a total loss of 1,118 branches nationwide -- the highest level since 2005, when the firm began tracking closures.

Looking to cut costs, many banks are aggressively shuttering branches they deem unnecessary and encouraging customers to shift to online and mobile banking instead, said Nancy Bush, a bank analyst and contributing editor at SNL.

"All the costs of regulation are pressing on banking as a whole, and with a low interest rate environment it's harder and harder to make money," Bush said. "They have to look for a way to offset that."

Related: New ATMs dispense $1 and $5 bills

Plus, a growing number of customers are becoming so comfortable with going online or mobile banking that they have no desire to visit branches, so weeding out branches in low-growth areas is a natural step.

Bank of America (BAC, Fortune 500) has been the most aggressive in closing branches, shuttering 256 and opening only 12 last year, according to SNL. A spokeswoman said the bank is always updating its network to meet customer needs, and this includes consolidating some branches, selling others and buying "where there is a high growth opportunity." Capital One (COF, Fortune 500), Wells Fargo (WFC, Fortune 500), Citi (C, Fortune 500) and BB&T (BBT, Fortune 500) also closed more branches than they opened last year.

"You're just not going to have a branch on every corner anymore from here on out," Bush said.

To encourage customers to shift from branch banking to online and mobile banking, many banks are using pricing incentives like lower fees on online checking accounts. They're also adding more advanced features to ATMs, like bank statements and mobile deposit capabilities and improving their online and mobile platforms.

Related: Hawaii is no paradise for the megabanks

There will always be some customers who won't want to convert to online banking, however. And if their local branch closes, they may dump that bank altogether and head to a community bank instead, Bush said.

But branches aren't going to disappear entirely. While the downsizing is likely to continue for the next couple years, banks will leave many branches in big cities and areas with large populations and lots of money.

Some banks are even opening more branches than they're shutting to try to capitalize on high-growth parts of the country, where they have yet to establish a big presence. Chase, for example, opened 166 branches last year -- 66 of which were in California, which is considered an attractive market. But it closed 77 branches in less desirable markets.

"We will never have a branch-free banking industry, it's just that they're going to be more concentrated and less present in non-urban markets," Bush said.

Biggest bank closers

Bank of America	256	12	244
Wells Fargo	80	19	61
Royal Bank of Scotland	66	7	59
PNC	82	32	50
M&T Bank	51	3	48
Capital One	41	2	39

Source: SNL Financial

First Published: January 25, 2013: 6:38 AM ET

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Europe on the mend, but eurozone still shaky - Draghi

ECB president Draghi says Europe's economy has made substantial progress in recovering from the credit crisis, but the jury is still out on the eurozone.

Davos, Switzerland (CNNMoney)

Hailed as the euro's savior for his bond-buying plan that calmed markets last year, Draghi said European governments deserved credit for reducing borrowing and beginning to reform their economies.

Describing 2012 as the year the euro was relaunched, the central banker said the positive market sentiment had yet to work through to the real economy.

"It turned out to be very helpful in removing the risk for the euro as such," Draghi said at the World Economic Forum in Davos, Switzerland, referring to the bond-buying plan. "But we haven't seen an equal momentum on the real side of the economy, that's where we will have to do much more."

His comments came two days after the International Monetary Fund cut its forecast for the eurozone, predicting the region's gross domestic product would contract for a second year running.

Related: Europe must push on with reform - Merkel

Southern European states such as Greece, Spain and Italy are stuck in recession, France and Germany are stagnating, and unemployment across the region has hit record levels.

Draghi said market indexes were pointing to a substantial improvement in financing conditions, and there was evidence of positive financial contagion in the eurozone.

"We don't see this being transmitted into the real economy just yet," he said. "The level of economic activity is stabilizing at very low levels and we see a recovery in the second half of the year."

"We can have a positive development if national governments persevere in their actions both in fiscal consolidation but also on the front of structural reforms," Draghi added.

German Chancellor Angela Merkel said Thursday that Europe must press ahead with economic reform, and become more competitive to restore stability and achieve sustainable growth.

First Published: January 25, 2013: 7:03 AM ET

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Lew: What the would-be Treasury chief is worth

Treasury Secretary nominee Jack Lew is worth between $748,000 and $1.7 million, putting him among the least wealthy Treasury Secretaries in recent history.

WASHINGTON (CNNMoney)

That's partly due to the fact that, as an investor, he's quite conservative.

Lew is worth between $748,000 and $1.7 million according to financial disclosures filed with the Office of Government Ethics, which requires government officials to declare ranges of assets and liabilities. Lew reported no debt.

President Obama nominated Lew to the post earlier this month. Treasury Secretary Tim Geithner's last day on the job is Friday.

Lew spent two days meeting this week meeting with senators on Capitol Hill, including New York Democrat Charles Schumer and Utah Republican Orrin Hatch. Congressional aides said that a confirmation hearing have yet to be scheduled, but Washington insiders say the Senate is likely to confirm Lew.

Related: How House Republicans would defuse debt ceiling

Lew's net worth is not far off from Geithner, who is worth somewhere between $239,000 and $6 million. The wide range is due to his four mortgages that he reported to be worth a total of between $1.35 million and $2.75 million.

But Lew's net worth doesn't compare to that of Treasury Secretaries who served during President George W. Bush's administration. Henry Paulson was worth at least $91 million, John Snow was worth about $62 million and Paul O'Neill was worth about $63 million.

What the three had in common was that they left lucrative jobs as the heads of prominent companies -- Paulson from Goldman Sachs (GS, Fortune 500), Snow from CSX Corp (CSX, Fortune 500)., and O'Neill from Alcoa (AA, Fortune 500) -- to run Treasury.

The Treasury Secretary runs U.S. fiscal policy and is charged with collecting federal taxes and managing public debt, among other duties. The job pays $199,700 a year.

Related: How much is a Treasury Secretary worth?

Lew has spent most of his career working in the federal government in Washington. But he also spent three years working for Citigroup (C, Fortune 500), first as the chief operating officer of wealth management and later as chief operating officer at Citi Alternative Investments.

In his 2009 financial disclosure, Lew reported making $945,000 in salary and restricted stock payouts from his work at Citigroup.

His move to public service prompted Lew to get rid of some stock at a bad time. He sold Citigroup (C, Fortune 500) shares in April 2009 at between $50,000 and $100,000, more than 90% below the peak during his tenure at the economy.

In 2011, the most recent disclosure available, Lew reported that most of his retirement money is in TIAA-CREFF managed assets and much of the rest of his investments are in index funds. He also has less than $1,000 in U.S. Treasuries and at least $50,000 in State of Israel bonds.

Lew lives in the Riverdale neighborhood of New York's borough of The Bronx. He also reports owning an apartment in Queens worth up to $250,000.

First Published: January 25, 2013: 8:12 AM ET

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Stocks: Investors await earnings, home sales

Click on chart for more premarket data.

NEW YORK (CNNMoney)

U.S. stock futures edged higher ahead of quarterly reports from several major corporations, and fresh data on the housing market.

Before the bell, firms including Halliburton (HAL, Fortune 500), Honeywell (HON, Fortune 500) and Procter & Gamble Co (PG, Fortune 500) will report quarterly earnings. Overall, S&P 500 companies are expected to report earnings growth of 4.45% for the last three months of 2012, according to S&P Capital IQ.

Of the 142 companies that had reported results as of Thursday evening, 94 beat analysts' expectations.

Investors will also get another look at the strength of the housing recovery on Friday, with the Census Bureau set to release data on new home sales for December at 10 a.m. ET.

Extreme greed drives market higher

U.S. stocks ended Thursday mixed, with Apple (AAPL, Fortune 500) weighing on the Nasdaq. The tech giant's shares fell more than 12% after it said sales in the current quarter would come in below analysts' expectations, even though earnings in the most recent quarter rose to a record $13.1 billion.

Starbucks (SBUX, Fortune 500) shares rose 2% in premarket trading Friday, after the company reported earnings late Thursday that were in line with analysts' estimates.

Meanwhile, Microsoft (MSFT, Fortune 500) shares sank after hours as the firm reported quarterly sales that fell short of expectations. And AT&T (T, Fortune 500) shares were flat after the wireless carrier beat on sales but missed on earnings.

Overseas, European markets were higher in morning trading, with the DAX (DAX) in Germany adding more than 1%. London's FTSE 100 (UKX) edged higher early Friday, despite data showing the U.K. economy shrank 0.3% in the fourth quarter. The weaker-than-expected performance raised concerns that Britain could slide back into recession.

Asian markets ended mixed. Shares in Shanghai and Hong Kong fell sightly, but the Nikkei (N225)in Japan surged more than 2%. Japanese stocks have rallied as investors bet recent moves by the Bank of Japan and newly-elected prime minister Shinzo Abe will revive the nation's economy.

First Published: January 25, 2013: 6:19 AM ET

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Say goodbye to more bank branches

Banks are closing more branches as they look to cut costs and shift customers to online and mobile banking instead.

NEW YORK (CNNMoney)

Overall, banks closed 2,267 branches last year and opened only 1,149, according to research firm SNL Financial. That resulted in a total loss of 1,118 branches nationwide -- the highest level since 2005, when the firm began tracking closures.

Looking to cut costs, many banks are aggressively shuttering branches they deem unnecessary and encouraging customers to shift to online and mobile banking instead, said Nancy Bush, a bank analyst and contributing editor at SNL.

"All the costs of regulation are pressing on banking as a whole, and with a low interest rate environment it's harder and harder to make money," Bush said. "They have to look for a way to offset that."

Related: New ATMs dispense $1 and $5 bills

Plus, a growing number of customers are becoming so comfortable with going online or mobile banking that they have no desire to visit branches, so weeding out branches in low-growth areas is a natural step.

Bank of America (BAC, Fortune 500) has been the most aggressive in closing branches, shuttering 256 and opening only 12 last year, according to SNL. A spokeswoman said the bank is always updating its network to meet customer needs, and this includes consolidating some branches, selling others and buying "where there is a high growth opportunity." Capital One (COF, Fortune 500), Wells Fargo (WFC, Fortune 500), Citi (C, Fortune 500) and BB&T (BBT, Fortune 500) also closed more branches than they opened last year.

"You're just not going to have a branch on every corner anymore from here on out," Bush said.

To encourage customers to shift from branch banking to online and mobile banking, many banks are using pricing incentives like lower fees on online checking accounts. They're also adding more advanced features to ATMs, like bank statements and mobile deposit capabilities and improving their online and mobile platforms.

Related: Hawaii is no paradise for the megabanks

There will always be some customers who won't want to convert to online banking, however. And if their local branch closes, they may dump that bank altogether and head to a community bank instead, Bush said.

But branches aren't going to disappear entirely. While the downsizing is likely to continue for the next couple years, banks will leave many branches in big cities and areas with large populations and lots of money.

Some banks are even opening more branches than they're shutting to try to capitalize on high-growth parts of the country, where they have yet to establish a big presence. Chase, for example, opened 166 branches last year -- 66 of which were in California, which is considered an attractive market. But it closed 77 branches in less desirable markets.

"We will never have a branch-free banking industry, it's just that they're going to be more concentrated and less present in non-urban markets," Bush said.

Biggest bank closers

Bank of America	256	12	244
Wells Fargo	80	19	61
Royal Bank of Scotland	66	7	59
PNC	82	32	50
M&T Bank	51	3	48
Capital One	41	2	39

Source: SNL Financial

First Published: January 25, 2013: 6:38 AM ET

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Europe on the mend, but eurozone still shaky - Draghi

Davos, Switzerland (CNNMoney)

Hailed as the euro's savior for his bond-buying plan that calmed markets last year, Draghi said European governments deserved credit for reducing borrowing and beginning to reform their economies.

Describing 2012 as the year the euro was relaunched, the central banker said the positive market sentiment had yet to work through to the real economy.

"It turned out to be very helpful in removing the risk for the euro as such," Draghi said at the World Economic Forum in Davos, Switzerland, referring to the bond-buying plan. "But we haven't seen an equal momentum on the real side of the economy, that's where we will have to do much more."

His comments came two days after the International Monetary Fund cut its forecast for the eurozone, predicting the region's gross domestic product would contract for a second year running.

Related: Europe must push on with reform - Merkel

Southern European states such as Greece, Spain and Italy are stuck in recession, France and Germany are stagnating, and unemployment across the region has hit record levels.

Draghi said market indexes were pointing to a substantial improvement in financing conditions, and there was evidence of positive financial contagion in the eurozone.

"We don't see this being transmitted into the real economy just yet," he said. "The level of economic activity is stabilizing at very low levels and we see a recovery in the second half of the year."

"We can have a positive development if national governments persevere in their actions both in fiscal consolidation but also on the front of structural reforms," Draghi added.

German Chancellor Angela Merkel said Thursday that Europe must press ahead with economic reform, and become more competitive to restore stability and achieve sustainable growth.

First Published: January 25, 2013: 7:03 AM ET

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Great credit score? Think again

Depending on the credit score, a 790 could mean your credit is excellent or just mediocre.

NEW YORK (CNNMoney)

While a generic FICO score of 790 out of 850 is considered excellent, it's merely mediocre on the VantageScore model -- which tops out at 990 -- meaning it won't necessarily qualify you for the very best credit deals.

Overall, the eight most common credit scores used by lenders and consumers range from as low as 150 to as high as 990, according to a new Credit Sesame diagram created by John Ulzheimer, president of consumer education at SmartCredit.com and a former manager at FICO.

The three major credit bureaus, TransUnion, Experian and Equifax each have their own scores. TransUnion's TransRisk score ranges from 300 to 850 and the Equifax Credit Score ranges from 280 to 850. Meanwhile, one Experian score ranges from 360 to 840 and another ranges from 330 to 830. And then there's the score the bureaus created together, the VantageScore, which ranges from 501 to 990.

All of these different scoring models can make it hard to know how you're actually being assessed by a lender. While most lenders look at a FICO score to gauge an applicant's risk, consumers typically attain non-FICO scores from consumer websites and credit reporting agencies, said Ulzheimer.

Related: Your credit score isn't what you think it is

"We've been raised with an A through F, 0 to 100 system for everything, and now we have all these weird ranges that don't make a lot of sense, so it can be confusing," said Ulzheimer. "I have people calling me, saying 'I have a fantastic score of 800, and then I find out it's a VantageScore and all of a sudden it's not so good.'"

Other consumers see a score of 900 and think it must be wrong since they know the FICO score maxes out at 850. What they don't realize is that they received the higher-ranging VantageScore instead, he said.

Related: You have 49 FICO credit scores

Aside from the VantageScore, most scoring models don't veer too far from FICO's 300 to 850 range, so it's generally safe to assume that a non-FICO score will at least be in the same ballpark, said Ulzheimer. "But if they get a VantageScore and assume it's the same as their FICO score, then they'll be disappointed when they apply with a lender," he said.

All scores are based solely on information in credit reports and consider payment history, balances relative to credit limits, credit inquiries and the length of credit.

To get a sense of where you stand relative to other credit applicants, look at where you fall in terms of national percentile, said Ulzheimer. To qualify for the best credit terms, you typically need to fall in at least the 50th percentile, which translates to a FICO score of 720 or higher. While lenders don't use peer ranking to make decisions, this information is often provided to consumers with their scores.

Adding to the confusion, lenders aren't always looking at the same scores either. Within the FICO category alone, lenders look at more than 49 different FICO scores to assess risk -- but consumers generally only receive the generic FICO score. And one out of five consumers is likely to receive a score that is "meaningfully" different from the score used by a lender to make a credit decision, a recent study from the Consumer Financial Protection Bureau found.

First Published: January 24, 2013: 8:00 AM ET

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