Banks agree to Fed penalties
WASHINGTON — Goldman Sachs and Morgan Stanley will pay a combined $557 million to settle federal complaints that they wrongfully foreclosed on homeowners who should have been allowed to stay in their homes. The agreements announced Wednesday with the Federal Reserve were similar to deals the Fed struck earlier this month with 10 other major banks and mortgage lenders. Combined, the 12 firms will pay more than $9 billion. Goldman will pay $330 million. Morgan Stanley is paying $227 million.
Consumer price levels stay flat
WASHINGTON — Lower gas costs offset more expensive food and higher rents to keep a measure of U.S. consumer prices flat last month. The Labor Department said Wednesday that food prices increased 0.2 percent in December from November. Rents and airline fares also rose. Gasoline prices fell a seasonally adjusted 2.3 percent. The flat reading of the December consumer price index caps a year when inflation slowed. Consumer prices rose only 1.7 percent in 2012, down from 3 percent in 2011.
Factor production rises again
WASHINGTON — U.S. factory production rose in December for the second straight month, buoyed by more output of autos, electronics and business equipment. The Federal Reserve said Wednesday that factory output increased 0.8 percent last month compared with November. That followed a 1.3 percent rise in November, which partly reflected a rebound from Superstorm Sandy. Total industrial production increased 0.3 percent in December from November. That followed a 1 percent rise in November. Production slowed last month mostly because utility output dropped 4.8 percent, reflecting unseasonably warm weather.
Builder confidence is steady
LOS ANGELES — Confidence among U.S. homebuilders held steady in January at the highest level in nearly seven years, but builders are feeling slightly less optimistic about their prospects for sales over the next six months. The National Association of Home Builders/Wells Fargo builder sentiment index released Wednesday held at 47, the same as in December and the highest reading since April 2006, just before the housing bubble burst. Readings below 50 suggest negative sentiment about the housing market. The last time the index was at that level or higher was in April 2006 when the reading was 51. It began trending higher in October 2011, when it stood at 17.
Demand for securities grows
WASHINGTON — Foreign demand for U.S. Treasury securities rose to a record level in November, further evidence that overseas investors remained confident in U.S. debt despite looming budget battles in Washington. The Treasury Department says foreign holdings of U.S. Treasurys rose 0.6 percent in November from October to $5.56 trillion. It was the 11th consecutive monthly gain. China, the top foreign holder, increased its portfolio by $200 million to $1.17 trillion. Japan, the second-largest holder, boosted its investments by $900 million to $1.13 trillion.
United Airlines plans price hike
DALLAS — United Airlines is trying again to raise prices after a similar move failed earlier this month. United said Wednesday that it raised prices for travel within the U.S. by up to $20 per round trip. United Continental Holdings Inc. said it raised prices $2 each way for flights under 500 miles, $3 for 501 to 1,000 miles, $5 for 1,001 to 2,000 miles, and $10 each way for flights longer than 2,000 miles or involving Hawaii or Alaska. United tried to raise prices by up to $10 per round trip on Jan. 3 but rolled back the increase after others, notably Southwest Airlines Co., kept their fares unchanged. JPMorgan analyst Jamie Baker, who spotted Wednesday's increase shortly after United entered it in ticket-distribution systems, said he expected some other big airlines to raise prices too but that Southwest's support would be needed for the increase to stick.
Bikes get a role in auto show
DETROIT — Transportation of the two-wheeled variety is sharing the floor at the Detroit auto show with the latest cars, trucks and concept vehicles. Some are shown as accessories on vehicles. At Subaru's display, for example, bikes are shown with the Outback wagon aimed at outdoor enthusiasts. An electric-powered bicycle at Smart's display is sold by the mincar maker in Europe. Bikes weren't the focus of presentations during this week's press previews, but they're often used in marketing cars. Other prominent bike displays in Detroit this year include the Prius X Parlee concept bicycle among Toyota's vehicles. And at Hyundai's spot, a bike is shown perched out the rear and rooftop of a Veloster coupe.
Cirque du Soleil lays off 400
MONTREAL — The world-renowned Cirque du Soleil circus troupe is laying off 400 people — most of them at its Montreal headquarters. A company spokeswoman announced the layoffs Wednesday after Cirque executives met with employees in Montreal. Increased production costs and expenses are being blamed for the layoffs, which will begin by the end of the month. The Cirque employs about 5,000 people worldwide, including 2,000 in Montreal. It still has 19 productions being presented worldwide and is currently working on a new show that will open in May in Las Vegas.
N. Korea blamed in cyberattack
SEOUL, South Korea — South Korea said Wednesday that North Korea was behind a cyberattack last year against a conservative Seoul newspaper critical of Pyongyang. North Korean hackers distorted the website of the mass-circulation JoongAng Ilbo newspaper and deleted some data from the paper's news filing and production system last June, the National Police Agency said in a statement. The paper quickly restored the system and its newspaper production was done without any major problem.
From Wire Reports