The news at a glance
Energy: BP settles over Gulf oil spill; Apple: Claiming credit for half a million U.S. jobs; Internet: Yelp shares soar in public offering; Telecom: AT&T to slow service for data hogs; Housing: Fannie Mae needs more cash
Energy: BP settles over Gulf oil spill
BP has settled with victims of the 2010 Gulf of Mexico oil spill for $7.8 billion, said Ed Crooks and Sylvia Pfeifer in the Financial Times, but the company’s legal woes are far from over. The settlement, which must be approved by a federal judge, will grant roughly 116,000 individuals and businesses compensation from a BP fund for economic losses and medical injuries. While that is a “significant step” toward ending BP’s financial uncertainty since the spill, the oil giant and its drilling partners, including Transocean and Halliburton, still face claims for damages from the U.S. government. Penalties under the Clean Water Act could total more than $17.5 billion, but ongoing settlement talks with the federal government and states could reduce that figure substantially.
Nearly two years after millions of gallons of oil gushed into the Gulf, deepwater drilling there “has regained momentum,” said Clifford Krauss and John M. Broder in The New York Times. Oil exploration and production in the Gulf “will soon surpass the levels attained before the accident,” thanks to the high demand for energy around the world. “We need the oil,” says Amy Myers Jaffe of Rice University. “The public will have to deal with the risk of drilling in deep waters or get out of their cars.”
Apple: Claiming credit for half a million U.S. jobs
Apple, the world’s most valuable company, says it has “created or supported” 514,000 American jobs, said Nick Wingfield in The New York Times. Under fire for sending manufacturing jobs to overseas contractors with questionable labor practices, Apple commissioned a study that found that, in addition to its 47,000 U.S. employees, it supports another 257,000 jobs at firms like Corning, which supplies Apple parts, and UPS, which delivers Apple goods. Another 210,000 people are employed by companies that create apps for Apple devices such as the iPhone and the iPad, a new version of which was launched this week.
Internet: Yelp shares soar in public offering
Yelp, a website for customer reviews of restaurants and businesses, fared well in its initial public offering last week, said Lynn Cowan and Geoffrey A. Fowler in The Wall Street Journal. Shares of the Internet company soared 64 percent on their first day of trading, helping to allay concerns that Wall Street’s “appetite for new issues of fast-growing technology companies” has waned. Yelp has yet to be profitable, but its business, based on selling ads to local businesses, is considered to be a promising one.
Telecom: AT&T to slow service for data hogs
AT&T wireless customers who use lots of data face slower service, said Scott Moritz in Bloomberg.com. The telecom company said last week that it would slow download speeds for its heaviest data users if they exceeded a new monthly usage cap of 3 gigabytes. That data limit is equal to about an hour of streaming video or 3.5 hours of music each day, according to AT&T. The move, which affects some 17 million smartphone subscribers who signed up for unlimited data plans, reflects AT&T’s struggle to accommodate rising data traffic.
Housing: Fannie Mae needs more cash
Fannie Mae, the taxpayer-owned mortgage giant, is asking the federal government for nearly $4.6 billion to cover fourth-quarter losses, said Derek Kravitz in the Associated Press. Fannie attributed the losses to an increase in defaults and to homeowners paying less interest on their mortgage loans after refinancing at historically low rates. Including this latest request, the company will have received more than $116 billion in taxpayer aid since being rescued in September 2008. It has paid back nearly $20 billion to the government in dividends.