Why the bond market is more fragile than you think
NEW YORK (AP) — A bottleneck is building in the global market for bonds.
Main Street investors have poured a trillion dollars into bonds since the financial crisis, and helped send prices soaring. As fund managers and regulators fret about an inevitable sell-off, the bigger fear is that when people go to unload, there won't be anyone to buy.
Too many funds own the same bonds, making them difficult to sell in a sudden downturn. On top of that, the banks that used to bring bond buyers and sellers together have pulled back from the role. Investors looking to sell would be slow to find buyers, spreading fear through the $100 trillion global bond market and sending prices tumbling.
It's a situation known as "liquidity risk" and some bond pros are scrambling to prepare for it.
GM looks to new vehicles, China to boost profit
MILFORD, Mich. (AP) — General Motors CEO Mary Barra told investors Wednesday that GM plans a raft of new models and a big push to sell more cars in China to drive profits in coming years, as the biggest U.S. automaker tries to shift the spotlight from a mishandled recall of older small cars.
Barra needed to reassure investors that GM has a strong plan going forward. The stock has dropped about 18 percent this year. It rose 1.7 percent in Wednesday trading.
GM recalled 2.6 million small cars worldwide earlier this year to fix faulty ignition switches that are now blamed for at least 23 deaths nationwide. Barra said suppliers have built all the replacement switches, but only about 1.2 million small cars have had the repairs so far.
GM has admitted knowing about the problem for a decade, but only recalled the cars this year. The switches can cause the engine to stall, deactivating the air bags.
Review: Pay by phone or just keep using plastic?
NEW YORK (AP) — PayPal, Apple and others are betting on billions in mobile payments.
But so far, trying to use my phone to pay at restaurants and retailers has been frustrating. It's easier just to pull out my plastic credit card than to figure out which card works with which app and which app works with which store.
In theory, mobile-payment services such as Google Wallet are easy to use. You simply download an app and enter your card information. With Apple Pay, you can even snap a picture of the card or use the one you already use with Apple's iTunes. Then, when you're ready to pay, you typically hold your phone near the store's payment terminal. The transaction is authorized through a special wireless chip embedded in many Android phones and — in the case of Apple Pay — the new iPhone 6 and 6 Plus. PayPal and Square use a different method, but the idea is the same. There's no need to look for the right card in your wallet or purse.
Small businesses scramble to keep top staffers
NEW YORK (AP) — People are quitting their jobs at a faster clip and that's pushing small business owners to work harder to hold onto top talent.
Dance studio owner Andrea Bisconti has experienced the challenge firsthand. When Kellie Love, an instructor there, said she was planning to leave to start a business of her own, Bisconti decided to act. Love inspires students to keep coming back for more lessons and brings in more than a quarter of the studio's revenue, says Bisconti, owner of a Fred Astaire Dance Studio in Willoughby, Ohio.
As the economy and job market improve, keeping the best employees is becoming vital for small businesses. Forty-three percent of owners are working to keep top staffers, according to a recent survey by Principal Financial Group. The reason: A growing number of employees are giving notice. The Labor Department reported more than 2.5 million people quit their jobs in July, up from 2.3 million a year earlier.
Ways to prepare for possible long-term care costs
Many of us hold on to an idyllic vision of our golden years, imagining we'll be in good health and living self-sufficiently in our own home.
But that scenario is likely to get dashed. On average, nearly 70 percent of 65 year-olds will eventually need some form of long-term care, according to the U.S. Department of Health & Human Services. And HHS estimates that 20 percent will need it for more than five years.
Whether that means round-the-clock supervision or a caregiver dropping by your home to help you with personal care and other tasks, it pays to prepare financially well before you retire.
Saudi overhaul reshapes Islam's holiest city Mecca
MECCA, Saudi Arabia (AP) — As a child, Osama al-Bar would walk from his home past Islam's holiest site, the Kaaba, to the market of spice and fabric merchants where his father owned a store. At that time, Mecca was so small, pilgrims could sit at the cube-shaped Kaaba and look out at the serene desert mountains where the Prophet Muhammad once walked.
Now the market and the homes are gone. Monumental luxury hotel towers crowd around the Grand Mosque where the Kaaba is located, dwarfing it. Steep rocky hills overlooking the mosque have been leveled and are now covered with cranes building more towers in row after row.
As Muslims from around the world stream into Mecca for the annual hajj pilgrimage this week, they come to a city undergoing the biggest transformation in its history.
US companies added 213,000 jobs in September
WASHINGTON (AP) — U.S. businesses added 213,000 jobs in September, stepping up hiring for the sixth straight month, according to a private survey.
Payroll processer ADP said Wednesday that the pace of hiring by private employers was up slightly from 202,000 in August. Job gains above 200,000 are usually enough to lower the unemployment rate.
The figures suggest the government's jobs report on Friday could reveal a rebound in hiring. The government said employers added only 142,000 jobs in August. But the ADP numbers cover only private businesses and sometimes diverge from the government's more comprehensive report. ADP's August figure was much higher than the government's.
Economists surveyed by FactSet forecast that the government's report will show 215,000 jobs were added in September, while the unemployment rate remained 6.1 percent.
A decade after welcoming wind, states reconsider
CALUMET, Okla. (AP) — A decade ago, states offered wind-energy developers an open-armed embrace, envisioning a bright future for an industry that would offer cheap electricity, new jobs and steady income for large landowners, especially in rural areas with few other economic prospects.
To ensure the opportunity didn't slip away, lawmakers promised little or no regulation and generous tax breaks.
But now that wind turbines stand tall across many parts of the nation's windy heartland, some leaders in Oklahoma and other states fear their efforts succeeded too well, attracting an industry that gobbles up huge subsidies, draws frequent complaints and uses its powerful lobby to resist any reforms. The tension could have broad implications for the expansion of wind power in other parts of the country.
By The Associated Press=
The Dow Jones Industrial average lost 238.19 points, or 1.4 percent, to 16,804.71. The Standard & Poor's 500 index lost 26.13 points, or 1.3 percent, to 1,946.16. The Nasdaq composite dropped 71.30 points, or 1.6 percent, to 4,422.09.
Benchmark U.S. crude fell 43 cents to close at $90.73 a barrel on the New York Mercantile Exchange. Brent crude, a benchmark for international oils used by many U.S. refineries, fell 51 cents to close at $94.16 on the ICE Futures exchange in London. Wholesale gasoline rose 1.3 cents to close at $2.450 a gallon. Heating oil rose 0.5 cent to close at $2.656 a gallon. Natural gas fell 9.8 cents to close at $4.023 per 1,000 cubic feet.