Banks pull S&P to a rare loss
NEW YORK — U.S. stock indexes edged lower on Monday, pulled down by sinking bank stocks, and the S&P 500 fell for just the third time in the last three weeks.
Goldman Sachs recorded one of the largest losses in the S&P 500 after describing a "muted start to the year." Citigroup also slipped following its earnings report.
The S&P 500 nevertheless remains within 0.9% of its record following its torrid start to the year, after the Federal Reserve said it may not raise interest rates at all in 2019.
"I think we're going to see equities continue to confound their critics and advance," said Margie Patel, senior portfolio manager at Wells Fargo Asset Management.
She expects growth for both the economy and corporate earnings to re-accelerate later this year, in large part because of the Federal Reserve's pledge to hit pause on interest rate hikes. That follows seven increases in the last two years, including the last one in December, that raised worries about a possible recession and helped send the S&P 500 to a nearly 20% loss at one point.
Revived Best Buy names new CEO
NEW YORK — The CEO credited with reviving a struggling Best Buy is stepping aside.
Hubert Joly, 59, is handing leadership of the reinvigorated electronics retailer to longtime executive Corie Barry, 43, as part of the company's succession plan effective June 11. Barry, chief financial and strategic transformation officer, will become the fifth CEO in Best Buy's 53-year history and the company's first female CEO. Joly will become executive chairman of the board after stepping down as CEO.
It was only a few years ago when skeptics were ready to write the obituary of Best Buy. But under Joly, who took over as CEO in 2012, the company is being reinvented, focusing on driving online revenue as well as improving the in-store experience as many traditional retailers face dwindling foot traffic and sales. Online sales now account for about 22% of Best Buy's business.
Best Buy is also working to build deeper relationships and increase total revenue from customers who are shopping both online and in stores. That means reducing the time a customer has to spend at the pickup counter.
It's also means expanding services and is pushing more into the health field, acquiring a company last year called GreatCall that provides emergency response devices for the aging.
Additionally, Best Buy now offers same-day delivery on thousands of items in 40 metropolitan areas and next-day delivery in 60.
Goldman profits fall, hurt by trading
NEW YORK — Goldman Sachs said its first quarter earnings fell by 21% from a year earlier, hurt by a slowdown in trading.
The investment bank earned a profit of $2.25 billion, still beating analysts' expectations.
Goldman's profits were primarily hurt by their trading desks. Once a place of record profitability for the bank, Goldman's trading desks have struggled under lighter trading combined with periods of extreme volatility that are hard to navigate.
Net revenues in Goldman's fixed income, currency and commodities division was $1.84 billion, down 11% from a year ago. Stock trading was even worse, reporting net revenues of $1.77 billion, down 24%.
David Solomon, Goldman's chairman and chief executive officer, described the quarter as a "muted start to the year."
Other parts of Goldman's businesses struggled as well. The bank reported a 12% decline in net revenues in its investment management businesses, and a 14% decline in net revenues in its investing and lending business.
Citigroup 1Q profit beats forecasts
NEW YORK — Banking conglomerate Citigroup said its first quarter profits rose by a relatively quiet 2% from a year earlier, as higher interest and investment banking revenues helped offset a decline in trading.
Citi said Monday that it earned $4.71 billion, or a profit of $1.87 per share, compared with a profit of $4.62 billion, or $1.68 per share, in the same period a year ago. Analysts were looking for Citigroup to report a profit of $1.78 a share, according to Zacks Investment Research.
Citi reported a 24% decline in stock trading revenue, while bond and currency trading revenue fared better, up 1% from a year earlier. Citi's trading operations focus more on currencies and foreign exchange, which was less volatile last quarter than the stock and bond markets. That allowed Citi's trading revenue in that division to do better than its peers.
The bank did well in investment banking, posting significantly higher fees for advisory services and debt underwriting.
Total revenue across Citi was $18.58 billion, down 2% from a year earlier and mostly in line with expectations.
Ex-VW chief charged with fraud
FRANKFURT, Germany — German prosecutors have indicted former Volkswagen CEO Martin Winterkorn and four others on charges of fraud and unfair competition, saying he failed to prevent manipulation of engine software that let Volkswagen cars cheat on diesel emission tests.
Prosecutors in Braunschweig said Monday that Winterkorn knew about the deceptive software since 2014.
The prosecutors' statement said that the defendants faced from six months to 10 years imprisonment if convicted, and that bonuses earned due to sales based on the deception could be forfeited.
DFW Airport to add 6th terminal
FORT WORTH, Texas — Talks are expected to begin this spring on adding a sixth passenger terminal at Dallas-Fort Worth International Airport, the main hub for American Airlines, aviation officials said.
Airport authorities said there's a good chance Terminal F could be built with design standards that allow more airplanes to park in a smaller space, the Fort Worth Star-Telegram reported.
Terminal F will probably not be the same shape as other terminals at DFW. Some 60% of DFW passengers are connecting for another flight, and the half-moon terminal design is not the best shape for connecting customers, said Sean Donohue, DFW Airport chief executive officer.
While the discussions around the construction of Terminal F are still introductory, it's likely the new terminal could be created without a parking garage, officials said, citing data indicating that about a quarter of car traffic at the airport comes from ride-share services such as Lyft and Uber.
Microsoft revamps behavior probes
REDMOND, Wash. — Microsoft is revamping its practices for investigating workplace allegations after a group of women shared stories of discrimination and sexual harassment.
CEO Satya Nadella sent a letter to employees about the changes Monday.
Nadella says the company is increasing support services for workers who say they've experienced misbehavior, including a new "Employee Advocacy Team" to help guide employees through investigations.
He says Microsoft will also require inclusivity training for all its roughly 16,000 managers, set new and more consistent disciplinary guidelines and create more transparency about the outcome of investigations.
The changes follow a large internal email chain started last month by employees sharing personal stories of experiencing misconduct. That caught the attention of top executives.
Lyft pulls electric bikes off road
NEW YORK — Lyft has pulled 3,000 electric bikes from the streets of New York, San Francisco and Washington, D.C., after customers complained the bikes were braking too hard.
A spokeswoman with the ride-hailing company said Monday they are aware of reports of injuries, but wouldn't specify the number of complaints it received. On Twitter, riders complained of being thrown over the handlebars.
Lyft removed the majority of its electric bikes, which can go up to 18 miles per hour, from the three cities on Sunday. Lyft is working with an engineering firm to determine the cause and did not estimate when the electric bikes would be back on the road.
The electric bikes in question were designed by Motivate, the largest bike share operator in the U.S., which Lyft bought in November. Motivate operates in New York City as Citi Bike, San Francisco as Ford GoBike and Washington D.C. as Capital Bikeshare.
Ga. displaced as top US pecan state
CARLSBAD, N.M. — New Mexico became the national leader in pecan production last year after Hurricane Michael struck down large swaths of Georgia's crop, new U.S. Department of Agriculture numbers show.
New Mexico produced about 90 million pounds of pecans in 2018 compared to Georgia's 56 million, the Carlsbad Current-Argus reports .
Georgia, traditionally the largest pecan-producing state, saw its crop crippled by the storm, cutting production by almost half from 107 million pounds.
Lenny Wells, associate professor of Horticulture with a focus on pecans at the University of Georgia, said 17 percent of the state's pecan acreage was lost to the storm.
Georgia lost about $100 million in pecan crops, $260 million in trees, and up to $200 million in future income, Wells said.
Russian firm to invest in Ky. mill
FRANKFORT, Ky. — An aluminum company planning to build a $1.7 billion plant in Appalachia is forming a partnership with a Russian company that until recently faced U.S. sanctions.
Russian aluminum giant Rusal wants to invest $200 million in an aluminum rolling mill that Braidy Industries intends to build near Ashland, Kentucky.
Rusal says it would assume a 40 percent ownership share in the mill in return for the investment. Braidy Industries would hold the other 60 percent share.
Braidy announced plans for the mill two years ago, but the project stalled as it worked to complete financing. Kentucky Gov. Matt Bevin, who is seeking re-election this year, touts the project as evidence of his leadership in bringing jobs to Appalachia.
The U.S. Treasury Department removed Rusal from its sanctions list in January.