Update on the latest business

Posted September 16


Stocks fall

Banks and energy companies are leading a broad decline in midday trading on Wall Street.

U.S.-listed shares of Germany's Deutsche (DOY'-chuh) Bank plunged 9 percent after the Department of Justice said the bank should pay $14 billion to settle claims over its handing of mortgage-backed securities.

Major U.S. banks also fell. JPMorgan Chase and Citigroup each lost 1 percent.

Business software maker Oracle dropped 4 percent after its earnings fell short of analysts' forecasts.


Americans' household wealth rises to $89.1 trillion

U.S. household wealth rose at a solid pace in the April-June quarter, pushed by steady gains in home values and stock portfolios.

The Federal Reserve says net worth climbed 1.2 percent to $89.1 trillion, led by a $474 billion increase in housing wealth. Americans' stock and mutual portfolios climbed by $452 billion. Money in checking and saving accounts also rose slightly.

Americans are also taking on more debt, particularly mortgages, which suggests they are more confident in their economic futures and their ability to handle the debts. Mortgage debt rose 2.5 percent, the most since the recession.

Household wealth, or net worth, reflects the value of homes, stocks and other assets minus mortgages, credit card debt and other borrowing. The Fed's figures aren't adjusted for population growth or inflation.


US consumer prices tick up in August

U.S. consumer prices edged up in August as a surge in medical care offset flat readings for food and energy.

The Labor Department says consumer prices rose 0.2 percent in August after no change in July. Core inflation, which excludes the volatile categories of food and energy, rose 0.3 percent. It was the biggest monthly increase since February. The climb in core inflation was led by a record jump in drug prices and the biggest rise in doctor and hospital charges in a quarter-century.

Over the past 12 months, core inflation is up 2.3 percent but overall inflation has risen a more moderate 1.1 percent, still well below the Federal Reserve's 2 percent target for annual increases in inflation.


AP, other media sue FBI for details on iPhone hacking tool

The Associated Press and two other news organizations have sued the FBI to learn who was paid to hack into a locked iPhone as part of a California terrorism investigation, and how much the FBI spent.

The suit was filed Friday in federal court in Washington under the Freedom of Information Act.

It seeks details about the FBI's contract with the unidentified vendor, including the amount it paid for the tool to access the phone of one of the San Bernardino shooters.

The other plaintiffs are Gannett Co. and Vice Media LLC.

The complaint was filed months after the FBI rejected records requests from the news organizations.

The FBI in March said it had accessed the locked phone with the help of an unidentified third-party, but it didn't reveal details.


Judge denies 5-week delay in Trump University trial

A federal judge in San Diego has denied Donald Trump's request for a five-week delay to a trial to determine whether the now-defunct Trump University defrauded customers.

U.S. District Judge Gonzalo Curiel ruled Thursday that the trial will begin Nov. 28, as previously scheduled.

Trump attorney Daniel Petrocelli asked the judge to delay the trial to Jan. 2 because he must be in Los Angeles Nov. 15 for another trial. The judge in that case rejected a delay.

Trump has repeatedly criticized Curiel's handling of the case, noting the judge's Mexican heritage.

Curiel says the class-action lawsuit targeting Trump University is more than six years old and Trump's attorneys did not raise scheduling concerns until late August.

The judge also scheduled a hearing to establish jury instructions for Nov. 10.


House panel to probe Wells Fargo opening of accounts

A House panel says it's starting an investigation of Wells Fargo in its opening of millions of unauthorized accounts that has become a growing scandal.

The House Financial Services Committee on Friday announced an investigation of the allegedly illegal activity by Wells Fargo employees to meet aggressive sales goals as well as the role of federal regulators in the debacle.

California and U.S. regulators fined San Francisco-based Wells Fargo a combined $185 million last Thursday. The bank also will pay restitution to affected customers.

The committee says it will summon Wells Fargo CEO John Stumpf to testify at a hearing this month. Stumpf and several regulators are appearing before the Senate Banking Committee at a separate hearing on Tuesday.


Shares of Deutsche Bank plunge amid US legal dispute

Shares in Deutsche Bank AG have plunged after the company said the U.S. Department of Justice is seeking $14 billion to settle civil claims over its handing of residential mortgage-backed securities.

The bank said early Friday that the Justice Department had proposed a $14 billion settlement and asked for a counterproposal. It said it had "no intent to settle these potential civil claims anywhere near the number cited."

Deutsche Bank is in the middle of a painful transition as it tries to meet tougher regulatory requirements, cut costs and settle multiple legal investigations.


Software maker: Warned Tesla about hands-free Autopilot use

The company that made software that controls Tesla Motors' Autopilot system says it warned the automaker not to allow drivers to take their hands off the steering wheel while using the system but was ignored.

Mobileye of Israel made the statement Friday, escalating a spat between the companies that surfaced after a May crash in Florida that killed a driver who was using Autopilot.

Mobileye says its chairman warned Tesla CEO Elon Musk in May of 2015 against hands-free use of Autopilot, and was assured the system would be "hands-on." But the product Tesla released allowed drivers to take their hands off the wheel for minutes at a time.

Tesla says Mobileye's account is inaccurate.

Government investigators are looking into Autopilot's role in the Florida crash.


Agency says driverless cars will need OK once Uber charges

The state agency that regulates taxicabs and transportation businesses in Pennsylvania says it doesn't have jurisdiction over free trips in self-driving cars being offered by Uber, but it will once the company starts charging money.

The Public Utility Commission said Thursday that it wants a review of the regulatory, legal and technical issues raised by autonomous vehicles.

Uber began a test program of the vehicles in Pittsburgh on Wednesday.

The regulatory agency says any business that wants to transport people for money has to prove it's safe and get approval before starting the service.

The ride-hailing company is offering free rides by invitation, with human drivers along as a safety precaution.

The state Transportation Department is currently looking at the issues through the Autonomous Vehicle Task Force, established in June.


FAA contemplating whether millions of drones will fill skies

Federal aviation officials say so many people are registering drones and applying for drone pilot licenses, they wonder if there will eventually be millions of drones crowding the nation's skies.

Earl Lawrence is director of the Federal Aviation Administration. Lawrence told a government-industry committee Friday that 550,000 drones have been registered with the agency in the 9 months since the registration process was created. He says new registrations are coming in at a rate of 2,000 a day.

By comparison, the FAA says there are 260,165 manned aircraft registered in the U.S.

The FAA began issuing drone pilot licenses less than a month ago. Already, 13,710 people have applied to take the pilot exam, and 5,080 have passed it.

The FAA had previously forecast 1,343 drone pilots by 2020.


Money for bone-marrow donors? Company says yes; feds say no

A D.C. startup company and a Virginia law firm are hoping some Hollywood storytelling will help them win a years-long legal battle over whether bone-marrow donors can be paid.

The company, Hemeos, recruits potential donors. Under its business model, the donors would be paid and the company would make money by linking donors up with hospitals.

Paying bone-marrow donors was once illegal, but federal courts ruled that compensation could be permitted in most cases. Now, though, the federal government is considering a regulatory change that would again criminalize payments.

The Arlington-based Institute for Justice is a libertarian-leaning public-interest law firm. Institute attorneys say they'll sue if the rule change goes through. In the meantime, they've produced a short movie featuring Hollywood actors, "Everything," to try to win the public-opinion battle.


Intel expects higher revenue on improving PC demand

Intel said Friday that it sees signs of improving demand for personal computers, and the chipmaker now expects to make more revenue in the current quarter than it previously expected.

The Santa, Clara, California, company has been hurt by slowing sales of personal computers that use its chips. In April, the company said it would cut 12,000 jobs as it reorganizes its business. Intel has been trying to grow other segments, such as its data center management unit.

On Friday, Intel said it now expects third-quarter revenue of $15.6 billion, plus or minus $300 million. It previously expected revenue of $14.9 billion, plus or minus $500 million. Wall Street analysts expected revenue of $14.9 billion, according to FactSet.


Some sit-down chains suffer as diners opt for convenience

Customers have been walking away from sit-down chains as convenience and affordability take precedence.

Ruby Tuesday said this week its CEO is resigning, and the chain forecast another quarter of lower sales as it closes locations. It's among several restaurant players that are trying to adapt as people have more food choices all around them.

Those suffering the most appear to be ones where people sit down for waiter service and pay more. Darren Tristano, president of the tracking firm Technomic, says younger people in particular are on the go and want their food to be, too.

One advantage big fast-food chains have is that they're still more convenient and affordable. Wendy's CEO Todd Penegor says he thinks fast food will keep taking market share from sit-down restaurants.


Strange brews: Making beer with Boston river water

Some of New England's leading breweries are competing to see who can turn the questionable water of Boston's Charles River into the tastiest suds.

Six area breweries have signed on for the first ever "Brew the Charles" challenge. The competition is a highlight of HUBweek, a weeklong Boston-area festival celebrating innovation in art, science and technology, starting Sept. 25.

Sponsors hope the competition helps spotlight the importance of water conservation and water-saving technologies.

Samuel Adams brewer Jennifer Glanville says the Boston beer maker is submitting a German "helles" lager to "showcase" the river water's unique character.

The Charles River Watershed Association applauds the spirit of the competition, but cautions that it's not always safe to swim in the Charles, let alone drink from it untreated.


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