TODAY

– April 1, 2015

Indexes mixed after FedEx gives a glum outlook

After FedEx reported a stalled worldwide economy the Dow Jones industrial average rose a tad; the S&P 500 and Nasdaq dropped.After FedEx reported a stalled worldwide economy the Dow Jones industrial average rose a tad; the S&P 500 and Nasdaq dropped.Stocks ended the day with mixed results after discouraging economic news from FedEx.

The Dow Jones industrial average posted a slight gain, but other indexes fell. Declining stocks outnumbered those that advanced. And seven of the 10 industries tracked by the Standard & Poor's 500 index declined.

European stocks fell. So did oil prices.

FedEx said it sees a worldwide economy that has stalled. Investors pay close attention to the company's forecasts because its package delivery business spans the globe and offers a window into how the economy is doing.

FedEx reduced its fiscal-year profit forecast sharply because its customers used its express air delivery service less in favor of slower and cheaper ground service. FedEx's stock fell $2.73, or 3.1 percent, to close at $86.55.

Apple climbed above $700 for the first time, rising $2.13 to close at $701.91. Apple shares have risen more than 19 percent in the past three months. The recent gain has been driven by strong sales of the company's iPhone and related gadgets.

Stocks broadly have been on a strong run. The S&P 500 is up 14 percent since June 1.

"The market is at high levels, certainly due for a pullback, and I suspect we'll probably see one," said Peter Cardillo, chief market economist at Rockwell Global Capital.

The S&P 500 index fell 1.87 points to close at 1,459.32. The Nasdaq closed down 0.87 point at 3,177.80. The Dow rose 11.54 points to 13,564.64.

Markets had rallied sharply last week after the Federal Reserve announced aggressive measures intended to kick-start the economy. This week, investors appear more focused on the weak growth that caused the Fed to act in the first place.

The Fed's announcement was for open-ended asset purchases, noted Charlie Smith, chief investment officer for Fort Pitt Capital Group in Pittsburgh.

"The feeling on the Street is, 'OK, what can they do next?' and by definition there's nothing more they can do than what they announced," he said. That means investors may feel that they've gotten all of the gains they're going to get after the Fed's announcement, he said.

Ed Hyland, managing director at JP Morgan Private Bank, said it's noteworthy that the market hasn't pulled back more after its recent run-up.

"It will be interesting to see, as we move into earnings season, how the market will react to what we think will be a little bit weaker earnings and macro data," he said.

Also on Tuesday, the Commerce Department reported that the current account deficit, the broadest measure of American trade, dropped 12.1 percent in the second quarter. That's down from a record high in the January-through-March quarter.

The deficit shrank because of an increase in American exports and cheaper oil. But economists are predicting it will grow again because of the global slowdown.

In other corporate news:

— Energizer Holdings Inc. jumped $7.30, or 10.7 percent, to $75.22 after the battery and flashlight maker said it will cut jobs and reduce its overhead.

— Advanced Micro Devices plunged 39 cents, or 9.7 percent, to $3.62 after the world's second-largest maker of microprocessors for personal computers announced unexpectedly that its chief financial officer was leaving.

— Clearwire Corp. fell 16 cents, or 10.4 percent, to $1.38 after Time Warner Cable Inc. said it would sell its 7.8 percent stake in the wireless infrastructure company.

The price of oil fell $1.33 to $95.29 per barrel on the New York Mercantile Exchange. Oil had hit $100 per barrel in recent days but dropped sharply late Monday as concerns about the lethargic economy persisted.

Stocks fell in Europe, too, after signs that it will take longer than expected to set up a new authority to supervise European banks.

The CAC-40 in France was down 1 percent, the FTSE-100 in Britain fell 0.4 percent, and the DAX in Germany was down 0.8 percent.

The yield on the 10-year U.S. Treasury note fell to 1.82 percent from 1.84 percent late Monday.

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Latest Local News

Written on 04/01/2015, 4:58 pm by Business Journal staff
The City of Fresno is asking the public to vote for one of three local parks to receive a $20,000 grant as part of a national revitalization...
Written on 04/01/2015, 3:22 pm by Business Journal staff
Momentum Broadcasting's 106.7 KJUG Country has announced that this year's JugFest will be held May 30 at the International Agri-Center in Tulare.  The festival is currently in its ninth year and is one of the largest music events in the Central Valley. JugFest will announce its line-up during the American Country Music Awards show on April 19 on CBS 47 and Good Day on KMPH April 20.  The concert has had multiple locations in the past, including the Tulare Fairground with 5,000 concertgoers and Twilight Park with 10,000 attendees. Last year, Momentum Broadcasting brought the festival back to Visalia's Plaza Park with headliner Justin Moore and the festival saw its largest attendance ever at 20,000.  The new venue was selected to help prepare for more growth and can accommodate more than 30,000 attendees.  "We are so excited to be able to bring JugFest to more country music lovers than ever with a larger venue. Every year, we plan on getting bigger and better to continue bringing unprecedented country music talent to the Central Valley," said Rik McNeil, KJUG program director.  KMPH Fox 26 is the main media sponsor for JugFest 2015 and the station will be hosting contests leading up to the event. For more information on the festival visit www.KJUG.com.
Written on 04/01/2015, 1:46 pm by The Associated Press
(AP) — A woman walking on the airfield at a Silicon Valley airport probably jumped a fence, said authorities, who are now investigating their fifth security breach there in less than a year. A UPS employee spotted Deanna Predoehl, 20, in a secure area at Mineta San Jose International Airport, and she resisted arrest when approached by officers around 5:15 p.m. Tuesday, San Jose police said. She was ultimately subdued and arrested. She had no identification, and police say their investigation indicates she had jumped a fence to get into the secure area. The airport's overall security has faced scrutiny and criticism since Santa Clara teen Yahya Abdi climbed the fence last April, stowed away in a jet's wheel well and survived a five-hour flight to Hawaii. Security was breached again last August when a woman without a boarding pass bypassed a checkpoint inside the airport and got on a plane to Los Angeles before she was caught. In November, a man was spotted near a restricted loading ramp and tried to flee, commandeering an airport work truck before being caught. In January, a security guard spotted a man walking on the tarmac side of the airport fence at night. When they tried to grab him, Mendoza tried to climb over the fence to get out of the secure area. San Jose beefed up its security after Abdi hopped the fence, adding video camera coverage and testing other alarm systems. Serving the Silicon Valley, San Jose's airport has two terminals serving about 9.4 million passengers last year. While the Transportation Security Administration is largely responsible for screening passengers inside the airport, local police, federal authorities and the airport share joint responsibility for the perimeter security.
Written on 04/01/2015, 1:33 pm by Business Journal staff
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Written on 04/01/2015, 1:27 pm by RYAN NAKASHIMA, AP Business Writer
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Written on 04/01/2015, 1:23 pm by Associated Press
(AP) — U.S. stocks are closing modestly lower, continuing a downward trajectory from the day before. The Dow Jones industrial average fell 77 points, or 0.4 percent, to 17,698 Wednesday. The Dow slumped 200 points on Tuesday. The Standard & Poor's 500 index lost eight points, or 0.4 percent, to 2,059. The Nasdaq composite declined 20 points, also 0.4 percent, to 4,880. Five of the 10 industry sectors in the S&P 500 fell, led by health care. Energy stocks were among the winners as the price of oil rose sharply. Oil soared on signs that U.S. production growth is slowing and anticipation that a delay in talks with Iran over its nuclear program could keep Iranian oil off the world market. U.S. crude rose $2.49 to $50.09 a barrel in New York.
Written on 04/01/2015, 1:22 pm by CANDICE CHOI, AP Food Industry Writer
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Written on 04/01/2015, 1:20 pm by MICHELLE CHAPMAN, AP Business Writer
(AP) — A bevy of big-name businesses including Apple, Gap and Levi Strauss are publicly speaking out against religious-objections legislation in states such as Indiana and Arkansas. The world's largest retailer and America's largest private employer, Wal-Mart Stores Inc., waded into the debate Tuesday when its CEO urged Arkansas Gov. Asa Hutchinson to veto a bill in Arkansas that critics said would open the door to discrimination against gays and lesbians. On Wednesday Hutchinson called for changes to the bill. Separately, a group of technology executives from companies such as Yelp and Twitter signed on to a joint statement supporting the addition of non-discrimination protections for lesbian, gay, bisexual and transgender people to civil rights laws. In early 2014, a similar corporate outcry used threats of reduced business to help convince Arizona Gov. Jan Brewer to veto legislation that would have allowed businesses to refuse service to gays based on the owner's religious beliefs. Here are some reasons corporate America is raising its voice on this issue: SOCIAL MEDIA MACHINE Gone are the days when companies could just sit tight and hope that hot-button topics would blow over without them having to make a statement about it. These days businesses get instant feedback from customers on how they feel about an issue, thanks to social media platforms such as Facebook and Twitter. Social media catapulted objections to Indiana's law to the forefront fast, said Laura Ries, president of marketing strategy firm Ries & Ries. That helped force companies to make their voices heard publicly, she said. The companies can't stay silent because many customers would see that as tacit support of the laws, she said. In addition, many of the companies that have weighed in deal directly with consumers. Because so much of the debate centers on whether businesses can deny services to certain groups, Wal-Mart and other retailers could feel the need to forcefully send a message that they're open to all customers. John Challenger, CEO of outplacement firm Challenger, Gray & Christmas, said that speaking out on the religious-objections legislation may not have been too difficult for some companies because it is not as divisive as some previous hot topics in the U.S., such as gun control. "This issue seems to so many to be such a wrong," he said. Dan Eaton, an instructor in business ethics and employment law at San Diego State University, said that since the religious-objections legislation is a law that is perceived to exclude people, companies may feel a broader obligation to speak out. IT'S ABOUT CUSTOMERS AND WORKERS Companies know that they have to continuously appeal to the concerns and interests of both employees and customers. That keeps customers coming back to spend money, workers happy and both groups loyal. Increasingly, companies feel they have to speak up on social issues that could prompt backlash from customers or make companies lose out on talented employees, Challenger said. "Big U.S. companies realize that their customers and employees care that the company is doing the right thing," he said. Among the companies speaking out is Aetna, which sent a letter to Indiana Gov. Mike Pence on Monday, arguing that the state's religious-objections law would hurt its ability to attract and retain talent. The insurer has about 500 employees in Indiana. Aetna, which says it has a long history of supporting the LGBT community, also launched a website and marketing campaign this week that targets that community. With the public becoming more supportive of gay rights, Ries says businesses are seeing that they need to keep pace with evolving views. "Companies want to be ready for the future and supportive of employees and consumers," she said. Nancy Rafuse, Practice Group Chair for Labor & Employment at Atlanta's Polsinelli, said today's businesses want to be inclusive and have a "diversity of people and thoughts and ideas" that will help the business appeal to customers who are also diverse. For example, Wal-Mart joined many other companies in offering domestic partner benefits to same-sex couples, in 2013. THE BIG ECONOMIC PICTURE Businesses are also worried about the economic impact of threatened boycotts of states that pass such laws. That can hurt tourism or cause companies to cut back on business in the state — and those effects can reverberate through a regional economy quickly. In the case of Arizona in 2014, for example, American Airlines CEO Doug Parker suggested his airline would cut flights if the state's business, tourism and convention industry didn't remain healthy. "An economic boycott is how you get folks to listen," Rafuse said.
Written on 04/01/2015, 12:16 pm by FENIT NIRAPPIL, Associated Press
(AP) — California Gov. Jerry Brown ordered state officials Wednesday to impose mandatory water restrictions for the first time in history as the state grapples with a serious drought. In an executive order, Brown ordered the state water board to implement measures in cities and towns that cut usage by 25 percent. "We're in a historic drought and that demands unprecedented action," Brown said at a news conference in the Sierra Nevada, where dry, brown grass surrounded a site that normally would be snow-covered at this time of year. "We have to pull together and save water in every way we can." The move will affect residents, businesses, farmers and other users. Brown's order also will require campuses, golf courses, cemeteries and other large landscapes to significantly cut water use; order local governments to replace 50 million square feet of lawns on throughout the state with drought-tolerant landscaping; and create a temporary rebate program for consumers who replace old water-sucking appliances with more efficient ones. The snowpack has been in decline all year, with electronic measurements in March showing the statewide snow water equivalent at 19 percent of the historical average for that date. There was no snow at the site of the Wednesday snow survey. Snow supplies about a third of the state's water, and a higher snowpack translates to more water in California reservoirs to meet demand in summer and fall. Officials say the snowpack is already far below the historic lows of 1977 and 2014, when it was 25 percent of normal on April 1 — the time when the snowpack is generally at its peak. Brown declared a drought emergency and stressed the need for sustained water conservation. The Department of Water Resources will conduct its final manual snow survey at a spot near Echo Summit, about 90 miles east of Sacramento. Electronic measurements are taken in a number of other places.
Written on 04/01/2015, 12:06 pm by Business Journal staff
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Latest State News

Written on 04/01/2015, 1:46 pm by The Associated Press
(AP) — A woman walking on the airfield...
Written on 04/01/2015, 1:27 pm by RYAN NAKASHIMA, AP Business Writer
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Written on 04/01/2015, 12:16 pm by FENIT NIRAPPIL, Associated Press
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