The daily business briefing: April 12,, 2016

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1. Goldman Sachs to pay $5 billion in risky mortgages settlement
2. Fitch downgrades Saudi Arabia over low oil prices
3. Stocks shake off Alcoa's lackluster earnings-season kick-off
4. Texas attorney general charged with securities fraud
5. Peru stocks rise as two pro-business candidates make presidential run-off

published 12 April 2016

1. Goldman Sachs to pay $5 billion in risky mortgages settlement

Goldman Sachs has agreed to pay $5 billion to settle claims that it misled investors about residential mortgage-backed securities between 2007 and 2009, the Justice Department said Monday. The deal requires the investment bank to pay about $2.4 billion in civil penalties, and $1.8 billion to homeowners and other borrowers hit hard by the housing crisis. "We are pleased to put these legacy matters behind us," a Goldman spokesman said.

Fitch Ratings downgraded Saudi Arabia's default rating from AA to AA- on Tuesday as low oil prices dampened the oil-rich kingdom's financial prospects. The major reason for the downgrade was Fitch's lowering of its assumptions for oil prices this year and next, from $45 a barrel down to $35 a barrel. The lower oil prices have "major negative implications" for Saudi Arabia's budget and trade balances. Fitch also gave the country a negative outlook, meaning further downgrades are possible.

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U.S. stock futures pointed to a slightly higher open on Tuesday, as a jump in oil prices helped investors shake off a tough start to earnings season. On Monday, the three U.S. benchmark stock indexes lost earlier gains late in the day before aluminum giant Alcoa's closely watched quarterly earnings report started the season on a disappointing note, with a 92 percent drop in profit. Its shares dropped 4 percent in Tuesday pre-market trading. The earnings season kick-off came as President Obama and Federal Reserve Chairwoman Janet Yellen met in the Oval Office to discuss the health of the economy.

The U.S. Securities and Exchange Commission on Monday filed civil fraud charges against Texas Attorney General Ken Paxton on charges of defrauding wealthy high-tech start-up investors. Paxton is accused of helping Severgy Inc. raise $840,000, and failing to tell investors he was being compensated with stock. Paxton's attorney, Bill Mateja, said his client "vehemently denies" he did anything wrong. Paxton, a Republican, says he will plead not guilty, and won't resign.

Two pro-business candidates appeared headed for a run-off in Peru's presidential election with two-thirds of the ballots counted on Monday. Keiko Fujimori, the conservative daughter of jailed former President Alberto Fujimori, led all candidates with 39 percent of the vote, with former World Bank economist Pedro Pablo Kuczynski in second with 24 percent. The strong showing by free-market candidates sent Peru's select stock index soaring by more than 10 percent, its biggest one-day gain since 2008.

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Harold Maass is a contributing editor at The Week. He has been writing for The Week since the 2001 debut of the U.S. print edition and served as editor of TheWeek.com when it launched in 2008. Harold started his career as a newspaper reporter in South Florida and Haiti. He has previously worked for a variety of news outlets, including The Miami Herald, ABC News and Fox News, and for several years wrote a daily roundup of financial news for The Week and Yahoo Finance.