subsidiary pleads guilty
WASHINGTON — A subsidiary of Goldman Sachs pleaded guilty on Thursday and agreed to pay more than $2.9 billion in a foreign corruption probe tied to the Malaysian 1MDB sovereign wealth fund, which was looted of billions of dollars in a corruption scandal. In addition, several current and former top executives at Goldman will have to return millions of dollars in pay and bonuses to the company, a financial penalty for those in charge when the scandal unfolded.
Goldman Sachs Malaysia entered the plea in federal court in Brooklyn. As part of its plea, the company admitted that it “knowingly and willfully” conspired to violate U.S. anti-bribery laws.
U.S. airlines still piling up losses
DALLAS — The losses are building at U.S. airlines as the coronavirus pandemic cuts into air travel. American Airlines said Thursday that it lost $2.40 billion in the third quarter, and Southwest Airlines reported a loss of $1.16 billion.
Those losses came in the July-through-September quarter that is normally a strong one for airlines, taking in most of the peak summer vacation season. But most travelers were grounded this summer by fear and travel restrictions intended to curb the spread of the new coronavirus.
Santa Claus won’t be coming to Macy’s
NEW YORK — Macy’s said Santa Claus won’t be greeting kids at its flagship New York store this year due to the coronavirus, interrupting a holiday tradition started nearly 160 years ago.
More than a quarter of a million people come to see Santa at Macy’s in New York each year, the company said. That makes it hard to create a safe environment during a pandemic. Santa also won’t be making in-person visits this year at its Chicago and San Francisco stores, which have similar Santalands.
Gap Inc. to shutter 350 stores by 2024
NEW YORK — Gap Inc. is moving away from the nation’s malls. The San Francisco-based brand was for decades a fixture at shopping malls around the country. Now it says it’s closing 220 stores by early 2024. The parent company is also shuttering 130 Banana Republic stores.
The moves announced Thursday are part of a three-year plan that will see Gap focus on outlets and its e-commerce business. Gap joins other clothing retailers in trying to reinvent themselves during the COVID-19 pandemic. The outbreak forced many non-essential stores to temporarily close in the spring and early summer.
Long-term mortgage rates hit new low
WASHINGTON — U.S. long-term mortgage rates slipped this week as the key 30-year loan marked a new all-time low for the 11th time this year. Home loan rates have notched a year-long decline amid economic anxiety in the recession set off by the coronavirus pandemic.
Mortgage buyer Freddie Mac reports that the average rate on the 30-year benchmark loan edged down to 2.80% from 2.81% last week. The average rate on the 15-year fixed-rate mortgage declined to 2.33% from 2.35%. The low borrowing rates have bolstered demand from prospective homebuyers.
CHARLOTTE, N.C. — Sales of existing homes climbed 9.4% in September, the National Association of Realtors said Thursday, the latest sign that the housing market remains red hot despite the coronavirus pandemic.
On a seasonally-adjusted rate, the selling pace of existing homes climbed to 6.54 million annualized units. That is the highest level for that metric since February 2006, at the peak of the previous housing bubble. The figure was well above economists’ expectations as well.
The median selling price of a home also climbed to $311,800, up 15% from a year earlier, according to NAR. This is largely because of low inventory of existing homes. Housing inventory fell to only 2.7 months of home inventory on the market. That’s a record low for that metric since NAR started tracking that data in 1982.
Stocks shake slow start to end higher
NEW YORK — Stocks shook off a wobbly start and ended higher on Wall Street. The S&P 500 climbed 0.5% Thursday. Several earnings reports from big U.S. companies came in better than analysts had expected, which helped put investors in a buying mood.
Also, House Speaker Nancy Pelosi said progress was being made on talks to deliver more stimulus to the economy. The back-and-forth moves were typical of the market’s recent meandering trading in recent weeks as investors try to gauge the chances of whether Washington will reach a deal on more economic aid. Treasury yields and oil prices ended higher.
ATLANTA — Coca-Cola measured gradual improvement in the third quarter as it focused on emerging leaner from the global pandemic.
Revenue fell 9% to $8.7 billion, topping Wall Street expectations of $8.4 billion, according to analysts polled by FactSet. It was far better than the 28% drop in revenue in the second quarter.
Net income was $1.7 billion. Earnings, adjusted for one-time items, fell 2% to 55 cents per share. That also outpaced analyst forecasts of 46 cents.
Coke has been decimated with the closure of arenas, restaurants, theaters and other public places where it books about half of its revenue. Soda fountains at such venues normally make up 30% of Coke’s U.S. sales, for example.
The company has been making up for some of that damage as people buy more beverages, like orange juice, at home.
SOUTH BEND, Ind. — Auto parts supplier Tenneco plans to cut about 350 jobs at a northern Indiana plant in a move the company attributes to the challenging global business for its piston product line.
Tenneco officials told workers at its South Bend plant on Wednesday that about 350 employees involved in piston manufacturing would lose their jobs over the next year.
That work will be shifted to other Tenneco plants around the world, said Steve Blow, director of corporate communications for the Lake Forest, Illinois-based company. The South Bend plant’s 125 assembly jobs will remain, the South Bend Tribune reported.
Blow said the company made the “difficult, but necessary” decision due to the challenging global business for its piston products line.
NEW YORK — The pandemic continued to hit AT&T through the third quarter as closed theaters, wary U.S. moviegoers and the Hollywood shutdown hurt its WarnerMedia movie and TV business.
The Dallas company’s largest division, wireless, was stable. It added 131,000 prepaid phone customers and 645,000 postpaid phone customers, those who pay a regular monthly bill. Analysts on Thursday saw the key postpaid phone figure was a strong result.
But customers continued to drop their DirecTV service as TV watching shifts online. AT&T is reportedly interested in selling the division it bought for $49 billion in 2015, because it’s been bleeding customers for years. It lost 590,000 “premium” video customers, which includes DirecTV, in the latest quarter, and also dropped 37,000 customers of its streaming service, AT&T TV Now.
Overall net income fell 24% to $2.82 billion, or 39 cents per share. Adjusted earnings were 76 cents per share, a penny shy of Wall Street expectations, according to Zacks Investment Research.
OMAHA, Neb. — Union Pacific’s profit and revenue slumped by double digits, though the volume of shipments it handled rebounded from the previous quarter as the economy emerged from the worst of the virus-related shutdowns earlier this year.
The railroad earned $1.36 billion, or $2.01 per share in the third quarter, down 12% from $1.56 billion, or $2.22 per share, a year ago. The per-share earnings from the most recent quarter were 2 cents short of Wall Street expectations, according to a survey of analysts by Zacks Investment Research.
Revenue fell 11% to $4.92 billion, also shy of analyst expectations for $4.98 billion.