BUSINESS NEWS JANUARY 22nd 2016
EXISTING U.S. HOME SALES RISE IN DECEMBER
U.S. stocks recorded their first weekly gain of the new year today as oil futures surged. Existing-home sales rose 14.7% in December from the prior month to a seasonally adjusted annual rate of 5.46 mn, according to The National Association of Realtors. For the entire calendar year 2015, sales reached 5.26 mn, the highest annual level since 2006. However new-home construction hasn’t kept pace with demand, leading to tight supplies and rising prices.
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GOLDMAN SACHS PROFITS DECLINE ON LEGAL COSTS
Goldman Sachs’s fourth-quarter revenue beat analysts’ estimates as fees from advising on mergers jumped 27%. Net income declined by 65% on costs to settle a mortgage probe. Revenue fell 5% to $7.27 bn. A U.S. investigation into the bank’s handling of mortgage-backed securities reduced earnings by $1.54 bn.
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OIL PRICES WEIGH ON GE'S CORE BUSINESS
General Electric reported lower profit across most of its industrial businesses in the fourth quarter. Profit fell in five of GE’s eight industrial-business units, including by 10% in its power-turbine business and by 8% in its health-care unit. Overall for the period ended December 31st, GE reported a profit of $6.28 bn compared to a profit of $5.15 bn. Revenue rose by a marginal 1.4% to $33.89 bn.
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AMERICAN EXPRESS ISSUES A WEAK OUTLOOK
Credit card company American Express has issued a weak outlook for 2016 & 2017 in its latest earnings report. The company reported a 38% decline in fourth-quarter earnings. It reported earnings per share of $0.89 on sales of $8.4 bn in line with estimates. The company also announced plans to reduce costs by $1 bn by the end of 2017. American Express shares have fallen about 36% over the last year. Last March, Costco announced that it was ending its deal with American Express and replacing the company with Visa and Citi beginning this April.
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