Feature

The news at a glance

Retail: New records for online sales; Airlines: American Airlines files for bankruptcy; Banks: Judge rejects SEC-Citigroup settlement; Banks: Trillions in secret loans from the Fed; Telecom: AT&T merger with T-Mobile in jeopardy

Retail: New records for online sales
Cyber Monday delivered the goods for U.S. retailers, said Karen Talley in The Wall Street Journal. Shoppers spent a record $1.25 billion online, 22 percent more than last year. Deal-hungry consumers spent an average of $198.26 on each online purchase, and electronics flew off the digital shelves. Retailers enticed buyers with steep discounts, “but it also felt like there was pent-up demand after Black Friday weekend,” said John Squire of IBM’s data division, Coremetrics.

For all the crowds in brick-and-mortar stores, Black Friday itself was also a big day for Web sales, said Alistair Barr in Reuters.com. Online spending hit $816 million, a fraction of the day’s total $11.4 billion haul, but a 26 percent jump over last year’s Black Friday Web total. Fifty million Americans shopped online on the day after Thanksgiving, with the top five Web retailers—Amazon, Wal-Mart, Best Buy, Target, and Apple—enjoying double-digit percentage gains in visitors. Some major retailers are hoping to extend the buying mood by continuing to offer online deals. But thanks to perennial procrastinators, they can likely expect the usual shopping lull from now until shortly before the holidays.

Airlines: American Airlines files for bankruptcy
The parent company of American Airlines this week filed for bankruptcy, making it the last of the major U.S. airlines to seek Chapter 11 protection, said Matt Daily in Reuters.com. AMR Corp. said that rising labor and fuel costs have left it with an “uncompetitive cost structure.” American, the third-biggest U.S. airline, had recently been negotiating with its unions to reduce its labor costs, the industry’s highest. Bankruptcy proceedings should let the company rewrite labor contracts and shed some of its $29.6 billion in debt.

Banks: Judge rejects SEC-Citigroup settlement
A federal judge issued a stinging rebuke to the Securities and Exchange Commission this week for not holding Citigroup accountable for misleading investors, said David S. Hilzenrath in The Washington Post. U.S. District Judge Jed S. Rakoff threw out the agency’s proposed $285 million settlement with the bank over mortgage securities fraud, calling it “neither fair, nor reasonable, nor adequate, nor in the public interest.” The Wall Street watchdog was wrong to support a settlement in which Citigroup neither admitted nor denied wrongdoing, Rakoff said, ordering the two sides to prepare for a trial.

Banks: Trillions in secret loans from the Fed
U.S. banks made an estimated $13 billion in profits thanks to secret loans from the Federal Reserve during the financial crisis, said Bob Ivry in Bloomberg Markets. The Fed provided big banks with $7.8 trillion in loans and other guarantees without Congress’s knowledge between August 2007 and March 2009—even as lawmakers fiercely fought over the Troubled Asset Relief Program, which was less than a tenth of that amount. The Fed says the loans incurred no losses, but Markets estimates that the Fed’s low rates were responsible for nearly a quarter of the profits that the six biggest U.S. banks turned during that period.

Telecom: AT&T merger with T-Mobile in jeopardy
The plan to marry AT&T and T-Mobile is in trouble, said Steve Lohr in The New York Times. The second- and fourth-largest U.S. cellphone carriers last week withdrew their $39 billion merger application after the Federal Communications Commission signaled that it would reject the bid. AT&T also announced that it would take a $4 billion charge this quarter, the amount it agreed to pay T-Mobile’s parent company if the deal was scrapped. The companies still seek to merge, but analysts said anti-trust authorities would demand “a drastically scaled-down deal.”

Recommended

Civilian death toll in Ukraine tops 4,000, U.N. says
Bombed school in Luhansk
fighting to survive

Civilian death toll in Ukraine tops 4,000, U.N. says

10 things you need to know today: May 28, 2022
Protesters outside the NRA convention
Daily briefing

10 things you need to know today: May 28, 2022

Strong earthquake hits southern Peru
Peru.
shaken up

Strong earthquake hits southern Peru

Fire kills 11 newborn babies in Senegal hospital
Senegal hospital fire
tragedy

Fire kills 11 newborn babies in Senegal hospital

Most Popular

Is the war shifting in Russia's favor?
Vladimir Putin.
Opinion

Is the war shifting in Russia's favor?

CDC identifies 9 monkeypox cases across 7 states
Monkeypox virus.
more pox

CDC identifies 9 monkeypox cases across 7 states

Jury begins deliberations in Johnny Depp-Amber Heard libel trial
Johnny Depp
you heard it here

Jury begins deliberations in Johnny Depp-Amber Heard libel trial