The news at a glance

Bond-buying program scaled back; Facebook to launch video ads; Glaxo to stop paying doctors; Amazon workers strike in Germany; Loehmann’s files for bankruptcy

Fed: Bond-buying program scaled back

The Federal Reserve said this week that it will reduce its bond-buying program by $10 billion a month, thus “beginning a retreat from its stimulus program,” said Binyamin Appelbaum in The New York Times. The central bank has been spending $85 billion a month since September 2012 in an attempt to bolster U.S. economic growth, but is tapering those purchases back in the face of falling unemployment and what it called “growing underlying strength in the broader economy.” Stocks in the Standard & Poor’s 500 index quickly rose by 1.5 percent as “investors saw the pullback as a vote of confidence in the economy.”

The announcement was “the latest turn in a tumultuous period that started in May,” when Fed Chairman Ben Bernanke first hinted that the bond-buying program would be wound down, said Victoria McGrane and Jon Hilsenrath in The Wall Street Journal. The central bank sought to offset concerns that it was acting too soon by stressing its continued commitment “to keep short-term interest rates low for a long time after the bond-buying program ends.” Those rates have been kept near zero for the last five years, and a strong majority of Fed policymakers said they expected them to stay at or below 1 percent until the end of 2015.

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Tech: Facebook to launch video ads

“After many months of rumors and delays,” Facebook this week announced the launch of video ads in its newsfeed, said Robert Hof in The social networking company said the first ads to air this week, for the upcoming film Divergent, are only a test, but “it seems almost certain that Facebook will eventually launch them broadly.” The ads will appear with running video in individual users’ newsfeeds, but the sound will only be activated if the user clicks on the video. Facebook shares rose sharply after the announcement.

Pharma: Glaxo to stop paying doctors

British drug giant GlaxoSmithKline said this week that it will no longer pay physicians to sell its drugs, said Scott Hensleyin “Doctors talking up drugs to other doctors has been quite lucrative for pharmaceutical companies,” so why is Glaxo forgoing the practice? The company has faced bribery allegations in China, and last year paid $3 billion to settle U.S. Justice Department claims of fraudulent marketing. More importantly, new rules take effect in 2014 requiring companies to reveal payments to all prescribers. Glaxo is the first Big Pharma company to announce a change in the practice.

Labor: Amazon workers strike in Germany

More than 1,000 Amazon workers in Germany went on strike this week for better work conditions, said Brad Stone in, and unions may get a toehold in its U.S. operations. Amazon officials said the limited strike in its second-biggest market would not slow holiday deliveries. Still, it’s part of “a small but growing drumbeat of dissatisfaction” in Amazon’s fast-paced warehouses. Amazon has no unionized U.S. workers but will allow 30 workers at a facility in Delaware to vote next month on joining a union.

Retail: Loehmann’s files for bankruptcy

The discount-clothing chain Loehmann’s “survived the Great Depression and weathered the Great Recession,” said Daniel Beekman in the New York Daily News. This week, however, it filed for bankruptcy, claiming debts of up to 10 times its assets. The New York City–based retailer has filed before and survived. “But this time, the 92-year-old company is likely done for good,” having already signed a contract with liquidation firms. Similar “off-price” retailers Filene’s Basement and Daffy’s failed in recent years.

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